As filed on September 29, 2000 File No. 002-26125
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
Pre-Effective Amendment No. _
Post-Effective Amendment No. 59 X
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
Amendment No. 33 X
INVESCO STOCK FUNDS, INC.
(Exact Name of Registrant as Specified in Charter)
7800 E. Union Avenue, Denver, Colorado 80237
(Address of Principal Executive Offices)
P.O. Box 173706, Denver, Colorado 80217-3706
(Mailing Address)
Registrant's Telephone Number, including Area Code: (303) 930-6300
Glen A. Payne, Esq.
7800 E. Union Avenue
Denver, Colorado 80237
(Name and Address of Agent for Service)
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Copies to:
Clifford J. Alexander, Esq. Ronald M. Feiman, Esq.
Kirkpatrick & Lockhart LLP Mayer, Brown & Platt
1800 Massachusetts Avenue, N.W. 1675 Broadway
Second Floor New York, New York 10019-5820
Washington, D.C. 20036-1800
------------
Approximate Date of Proposed Public Offering: As soon as practicable after this
post-effective amendment becomes effective.
It is proposed that this filing will become effective (check appropriate box)
___ immediately upon filing pursuant to paragraph (b)
___ on _____________, pursuant to paragraph (b)
X 60 days after filing pursuant to paragraph (a)(1)
___ on _____________, pursuant to paragraph (a)(1)
___ 75 days after filing pursuant to paragraph (a)(2)
___ on _____________, pursuant to paragraph (a)(2) of rule 485
If appropriate, check the following box:
___ this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
<PAGE>
PROSPECTUS | November 30, 2000
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YOU SHOULD KNOW WHAT INVESCO KNOWS(R)
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INVESCO STOCK FUNDS, INC.
INVESCO BLUE CHIP GROWTH FUND - CLASS K
INVESCO DYNAMICS FUND - CLASS K
INVESCO ENDEAVOR FUND - CLASS K
INVESCO GROWTH & INCOME Fund - CLASS K
INVESCO S&P 500 Index FUND - CLASS K
INVESCO VALUE EQUITY FUND - CLASS K
SIX MUTUAL FUNDS DESIGNED FOR INVESTORS SEEKING LONG-TERM CAPITAL APPRECIATION.
CLASS K SHARES ARE SOLD TO QUALIFIED RETIREMENT PLANS, RETIREMENT SAVINGS
PROGRAMS, EDUCATIONAL SAVINGS PROGRAMS AND WRAP PROGRAMS PRIMARILY THROUGH THIRD
PARTIES, SUCH AS BROKERS, BANKS AND FINANCIAL PLANNERS.
TABLE OF CONTENTS
Investment Goals, Strategies And Risks...............................3
Fund Performance.....................................................7
Fees And Expenses...................................................10
Investment Risks....................................................12
Principal Risks Associated With The Funds...........................12
Temporary Defensive Positions.......................................15
Portfolio Turnover..................................................15
Fund Management.....................................................15
Portfolio Managers..................................................16
Potential Rewards...................................................18
Share Price.........................................................18
How To Buy Shares...................................................19
Your Account Services...............................................21
How To Sell Shares..................................................22
Taxes...............................................................24
Dividends And Capital Gain Distributions............................24
Financial Highlights................................................26
No dealers, sales person, or any other person has been authorized to give any
information or to make any representations other than those contained in this
Prospectus, and you should not rely on such other information or
representations.
[INVESCO ICON] INVESCO FUNDS
The Securities and Exchange Commission has not approved or disapproved the
shares of these Funds. Likewise, the Commission has not determined if this
Prospectus is truthful or complete. Anyone who tells you otherwise is committing
a federal crime.
<PAGE>
INVESCO Funds Group, Inc. ("INVESCO") is the investment adviser for the Funds.
Together with our affiliated companies, we at INVESCO direct all aspects of the
management and sale of the Funds.
This Prospectus contains important information about the Funds' Class K shares,
which are sold to qualified retirement plans, retirement savings programs,
educational savings programs and wrap programs primarily through third parties,
such as brokers, banks and financial planners. Each Fund also offers one or more
additional classes of shares through separate prospectuses. Each of the Fund's
classes has varying expenses, with resulting effects on their performance. You
can choose the class of shares that is best for you, based on how much you plan
to invest and other relevant factors discussed in "How To Buy Shares." To obtain
additional information about other classes of shares, contact INVESCO
Distributors, Inc. ("IDI") at 1-800-________, or your broker, bank or financial
planner who is offering the Class K shares offered in this Prospectus.
THIS PROSPECTUS WILL TELL YOU MORE ABOUT:
[KEY ICON] INVESTMENT GOALS & STRATEGIES
[ARROWS ICON] POTENTIAL INVESTMENT RISKS
[GRAPH ICON] PAST PERFORMANCE
[INVESCO ICON] WORKING WITH INVESCO
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[KEY ICON][ARROWS ICON] INVESTMENT GOALS, STRATEGIES AND RISKS
FACTORS COMMON TO ALL THE FUNDS
FOR MORE DETAILS ABOUT EACH FUND'S CURRENT INVESTMENTS AND MARKET OUTLOOK,
PLEASE SEE THE MOST RECENT ANNUAL OR SEMIANNUAL REPORT.
All of the Funds attempt to make your investment grow. The Funds (except for S&P
500 Index Fund) are aggressively managed. The Funds invest primarily in equity
securities that INVESCO believes will rise in price faster than other
securities, as well as in options and other investments whose values are based
upon the values of equity securities.
All of the Funds (except S&P 500 Index and Value Equity Funds) are managed in
the growth style. At INVESCO, growth investing starts with research from the
"bottom up," and focuses on company fundamentals and growth prospects.
<PAGE>
We require that securities purchased for the Funds meet the following standards:
o EXCEPTIONAL GROWTH: The markets and industries they represent are growing
significantly faster than the economy as a whole.
o LEADERSHIP: They are leaders-- or emerging leaders-- in these markets,
securing their position through technology, marketing, distribution or some
other innovative means.
o FINANCIAL VALIDATION: Their returns -- in the form of sales unit growth,
rising operating margins, internal funding and other factors -- demonstrate
exceptional growth and leadership.
Growth investing may be more volatile than other investment styles because
growth stocks are more sensitive to investor perceptions of an issuing company's
growth potential. Growth-oriented funds typically will underperform
value-oriented funds when investor sentiment favors the value investing style.
S&P 500 Index Fund is passively managed to track the composition and performance
of the S&P 500 Stock Index.
Value Equity Fund is managed in the value style. That means we seek securities,
particularly stocks, that are currently undervalued by the market -- companies
that are performing well, or have solid management and products, but whose stock
prices do not reflect that value. Through our value process, we seek to provide
reasonably consistent returns over a variety of market cycles.
In addition to the risks outlined in the following sections for each Fund, the
Funds are subject to other principal risks such as market, liquidity,
counterparty, foreign securities, lack of timely information and portfolio
turnover risks. These risks are described and discussed later in the Prospectus
under the headings "Investment Risks" and "Principal Risks Associated With The
Funds." An investment in a Fund is not a deposit of any bank and is not insured
or guaranteed by the Federal Deposit Insurance Corporation ("FDIC") or any other
government agency. As with any mutual fund, there is always a risk that you may
lose money on your investment in a Fund.
[KEY ICON] INVESCO BLUE CHIP GROWTH FUND - CLASS K
The Fund seeks to make your investment grow. It also seeks current income.
The Fund invests primarily in common stocks of large companies that, at the time
of purchase, have market capitalizations of more than $15 billion and that have
a history of consistent earnings growth regardless of business cycles. In
addition, INVESCO tries to identify companies that have - or are expected to
have - growing earnings, revenues and strong cash flows. INVESCO also examines a
variety of industries and businesses, and seeks to purchase the securities of
companies that we believe are best situated to grow in their industry
categories. We also consider the dividend payment records of the companies whose
securities the Fund buys. The Fund also may invest in preferred stocks (which
generally pay higher dividends than common stocks) and debt instruments that are
convertible into common stocks, as well as in securities of foreign companies.
<PAGE>
In recent years, the core of the Fund's investments has been concentrated in the
securities of three or four dozen large, high quality companies.
Although the Fund is subject to a number of risks that could affect its
performance, its principal risk is market risk - that is, that the prices of the
securities in its portfolio will rise and fall due to price movements in the
securities markets, and that the securities held in the Fund's portfolio may
decline in value more than the overall securities markets.
[KEY ICON] INVESCO DYNAMICS FUND - CLASS K
The Fund attempts to make your investment grow. It invests primarily in common
stocks of mid-sized companies -- those with market capitalizations between $2
billion and $15 billion at the time of purchase -- but also has the flexibility
to invest in other types of securities including preferred stocks, convertible
securities and bonds.
The core of the Fund's portfolio is invested in securities of established
companies that are leaders in attractive growth markets with a history of strong
returns. The remainder of the portfolio is invested in securities of companies
that show accelerating growth, driven by product cycles, favorable industry or
sector conditions and other factors that INVESCO believes will lead to rapid
sales or earnings growth.
The Fund's strategy relies on many short-term factors including current
information about a company, investor interest, price movements of a company's
securities and general market and monetary conditions. Consequently, the Fund's
investments are usually bought and sold relatively frequently.
While the Fund generally invests in mid-sized companies, the Fund sometimes
invests in the securities of smaller companies. The prices of these securities
tend to move up and down more rapidly than the securities prices of larger, more
established companies, and the price of Fund shares tends to fluctuate more than
it would if the Fund invested in the securities of larger companies.
[KEY ICON] INVESCO ENDEAVOR FUND - CLASS K
The Fund attempts to make your investment grow. It uses an aggressive strategy
and invests primarily in common stocks. The Fund invests in companies of all
sizes and also has the flexibility to invest in other types of securities,
including preferred stocks, convertible securities, warrants, bonds and other
debt securities.
The Fund's strategy relies on many short-term factors including current
information about a company, investor interest, price movements of a company's
securities and general market and monetary conditions. Consequently, the Fund's
investments are usually bought and sold relatively frequently.
The Fund's investments are not limited to companies of a particular size. It
invests in the securities of smaller companies, including companies just
entering the securities marketplace with initial public offerings. The prices of
these securities tend to move up and down more rapidly than the securities
prices of larger, more established companies. When the Fund concentrates its
<PAGE>
investments in the securities of smaller companies, the price of Fund shares
tends to fluctuate more than it would if the Fund invested in the securities of
larger companies.
[KEY ICON] INVESCO GROWTH & INCOME FUND - CLASS K
The Fund attempts to obtain a high rate of total return. Income on investments
(dividends and interest), plus increases in the value of investments, make up
total return. The Fund invests most of its assets in common stocks, preferred
stocks and securities convertible into common stocks. The Fund's core
investments are in well-established, large growth companies with a strong record
of paying dividends. The Fund may also invest in securities which do not pay
dividends but that INVESCO believes have the potential to increase in value,
regardless of the potential for dividends.
The Fund's strategy relies on many short-term factors including current
information about a company, investor interest, price movements of a company's
securities and general market and monetary conditions. Consequently, the Fund's
investments are usually bought and sold relatively frequently.
The Fund's portfolio is presently concentrated in the stocks of approximately 50
companies. Although INVESCO believes that this level of diversification is
appropriate, the Fund is not as diversified as some other mutual funds.
[KEY ICON] INVESCO S&P 500 INDEX FUND - CLASS K
The Fund seeks price performance and income comparable to the Standard & Poor's
500 Composite Stock Price Index ("S&P 500" or "Index"). The Fund invests in the
stocks that make up the Index, in approximately the same proportions.
The Fund is not sponsored, endorsed, sold or promoted by S&P. S&P makes no
representation or warranty, express or implied, to the shareholders or the
general public regarding the advisability of investing in the Fund or the
ability of the S&P 500 to track general stock performance. S&P has no direct
relationship with the Fund other than the licensing of certain trademarks and
trade names of S&P and the S&P 500 Index which is composed by S&P without regard
to the Fund.
The Fund is not actively managed; instead, the Fund seeks to track the
performance of the S&P 500. Therefore, when the S&P 500 drops, the value of
shares of the Fund drops accordingly. The Fund makes no effort to hedge against
price movements in the S&P 500. Due to purchases and sales of portfolio
securities to meet investor purchases and redemptions, the Fund will not have a
100% correlation to the performance of the Index. However, under normal
circumstances, the Fund expects to have at least a 95% correlation to the
performance of the S&P 500.
<PAGE>
[KEY ICON] INVESCO VALUE EQUITY FUND - CLASS K
The Fund seeks high total return from capital appreciation and current income.
The portfolio emphasizes high-quality, larger-capitalization companies which are
temporarily out of favor with investors. Our value-based process evaluates
numerous factors on a current and historical basis, seeking undiscovered values
in the market. The philosophy of value investing is based upon the belief that
certain securities are undervalued by the market. As such, when the market
"discovers" these securities, their value should increase.
Although the Fund is subject to a number of risks, its principal risk is market
risk. Undervalued stocks may not realize their perceived value for extended
periods of time. Value-oriented funds may underperform when another investing
style is in favor.
[GRAPH ICON] FUND PERFORMANCE
Since the Funds' Class K shares were not offered until __________, 2000, the bar
charts below show the Funds' Investor Class shares' actual yearly performance
for the years ended December 31 (commonly known as their "total return") over
the past decade or since inception. Investor Class shares are not offered in
this Prospectus. INVESTOR CLASS AND CLASS K RETURNS WOULD BE SIMILAR BECAUSE
BOTH CLASSES OF SHARES INVEST IN THE SAME PORTFOLIO OF SECURITIES. THE RETURNS
OF THE CLASSES WOULD DIFFER, HOWEVER, TO THE EXTENT OF DIFFERING LEVELS OF
EXPENSES. IN THIS REGARD, THE BAR CHART DOES NOT REFLECT AN ASSET BASED SALES
CHARGE IN EXCESS OF 0.25% OF NET ASSETS; IF IT DID, THE TOTAL RETURN SHOWN WOULD
BE LOWER. The table below shows average annual total returns for various periods
ended December 31, 1999 for each Fund's Investor Class shares compared to the
S&P MidCap 400 Index and S&P 500 Composite Index. The information in the charts
and table illustrates the variability of each Fund's Investor Class shares's
total return and how its performance compared to a broad measure of market
performance. Remember, past performance does not indicate how a Fund will
perform in the future.
<PAGE>
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BLUE CHIP GROWTH FUND -- INVESTOR CLASS
ACTUAL ANNUAL TOTAL RETURN(1),(2),(3)
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'90 '91 '92 '93 '94 '95 '96 '97 '98 '99
(1.18%) 42.05% 2.88% 18.01% (8.80%) 29.54% 20.96% 27.22% 41.72% 38.49%
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Best Calendar Qtr. _____% _____%
Worst Calendar Qtr. _____% _____%
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DYNAMICS FUND -- INVESTOR CLASS
ACTUAL ANNUAL TOTAL RETURN(1),(2),(3)
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'90 '91 '92 '93 '94 '95 '96 '97 '98 '99
(6.35%) 67.00% 13.15% 19.10% (1.95%) 37.55% 15.65% 24.09% 23.25% 71.80%
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Best Calendar Qtr. _____% _____%
Worst Calendar Qtr. _____% _____%
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INVESCO ENDEAVOR FUND -- INVESTOR CLASS
ACTUAL ANNUAL TOTAL RETURN(1),(2),(3),(4)
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1999
84.21%
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Best Calendar Qtr. _____% _____%
Worst Calendar Qtr. _____% _____%
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GROWTH & INCOME FUND -- INVESTOR CLASS
ACTUAL ANNUAL TOTAL RETURN(1),(2),(3),(5)
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1999
43.48%
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Best Calendar Qtr. _____% _____%
Worst Calendar Qtr. _____% _____%
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<PAGE>
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S&P 500 INDEX FUND -- INVESTOR CLASS
ACTUAL ANNUAL TOTAL RETURN(1),(2),(3),(6)
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1998 1999
29.85% ____%
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Best Calendar Qtr. _____% _____%
Worst Calendar Qtr. _____% _____%
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VALUE EQUITY FUND -- INVESTOR CLASS
ACTUAL ANNUAL TOTAL RETURN(1),(2),(3)
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'90 '91 '92 '93 '94 '95 '96 '97 '98 '99
(5.80%) 35.84% 4.98% 10.43% 4.04% 30.60% 18.48% 28.00% 15.05% 1.12%
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Best Calendar Qtr. _____% _____%
Worst Calendar Qtr. _____% _____%
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AVERAGE ANNUAL TOTAL RETURN(1),(2),(3)
AS OF 12/31/99
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10 YEARS
1 YEAR 5 YEARS OR SINCE INCEPTION
Dynamics Fund - Investor Class ____% ____% ____%
S&P MidCap 400 Index(7) ____% ____% ____%
Blue Chip Growth Fund - Investor Class ____% ____% ____%
INVESCO Endeavor Fund - Investor Class ____% N/A ____%(4)
Growth & Income Fund - Investor Class ____% N/A ____%(5)
Value Equity Fund - Investor Class ____% ____% ____%
S&P 500 Index Fund - Investor Class ____% N/A ____%(6)
S&P 500 Composite Index(7) ____% ____% ____%
<PAGE>
(1) Total return figures include reinvested dividends and capital gain
distributions and the effect of each Fund's expenses.
(2) The returns are for Investor Class shares that are not offered in this
Prospectus. Total returns of Class K shares will differ only to the extent that
the classes do not have the same expenses.
(3) The returns for Investor Class shares of Blue Chip Growth, Dynamics, INVESCO
Endeavor, Growth & Income, S&P 500 Index and Value Equity Funds were ___%, ___%,
___%, ___%, ___%, and ___%, respectively, year-to-date as of the calendar
quarter ended September 30, 2000.
(4) The Fund commenced operations on October 28, 1998.
(5) The Fund commenced operations on July 1, 1998.
(6) The Fund commenced operations on December 23, 1997.
(7) The S&P MidCap 400 is an unmanaged index indicative of domestic
mid-capitalization stock prices. The S&P 500 Composite Index is an unmanaged
index considered representative of the performance of the broad U.S. stock
market. Please keep in mind that the indexes do not pay brokerage, management,
administrative or distribution expenses, all of which are paid by the Funds and
are reflected in their annual returns.
FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
shares of the Funds.
SHAREHOLDER FEES PAID DIRECTLY FROM YOUR ACCOUNT
You pay no fees to purchase Fund shares, to exchange to another INVESCO fund, or
to sell your shares. Accordingly, no fees are paid directly from your
shareholder account.
ANNUAL FUND OPERATING EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS
BLUE CHIP GROWTH FUND-CLASS K
Management Fees ____%
Distribution (12b-1) Fees(1) 0.25%
Service (12b-1) Fees(1) 0.20%
Other Expenses(2) ____%
Total Annual Fund Operating Expenses(2)
=====
DYNAMICS FUND-CLASS K
Management Fees ____%
Distribution (12b-1) Fees(1) 0.25%
Service (12b-1) Fees(1) 0.20%
Other Expenses(2) ____%
Total Annual Fund Operating Expenses(2)
=====
INVESCO ENDEAVOR FUND-CLASS K
Management Fees ____%
Distribution (12b-1) Fees(1) 0.25%
Service (12b-1) Fees(1) 0.20%
Other Expenses(2) ____%
Total Annual Fund Operating Expenses(2)
=====
<PAGE>
GROWTH & INCOME FUND-CLASS K
Management Fees ____%
Distribution (12b-1) Fees(1) 0.25%
Service (12b-1) Fees(1) 0.20%
Other Expenses(2) ____%
Total Annual Fund Operating Expenses(2)
=====
S&P 500 INDEX FUND-CLASS K
Management Fees ____%
Distribution (12b-1) Fees(1) 0.25%
Service (12b-1) Fees(1) 0.20%
Other Expenses(2) ____%
Total Annual Fund Operating Expenses(2)
=====
VALUE EQUITY FUND-CLASS K
Management Fees ____%
Distribution (12b-1) Fees(1) 0.25%
Service (12b-1) Fees(1) 0.20%
Other Expenses(2) ____%
Total Annual Fund Operating Expenses(2)
=====
(1) Because the Funds' Class K shares pay 12b-1 distribution and service fees
which are based upon each Fund's assets, if you own shares of a Fund for a
long period of time, you 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.
(2) Based on estimated expenses for the current fiscal year which may be more
or less than actual expenses. Actual expenses are not provided because the
Funds' Class K shares were not offered until ________, 2000. Certain
expenses of Dynamics, INVESCO Endeavor, Growth & Income, S&P 500 Index and
Value Equity Funds will be voluntarily absorbed by INVESCO in order to
ensure that expenses for the Funds' Class K shares will not exceed ___%,
___%, ___%, ___%, and ___%, respectively, of each Fund's average net assets
attributable to Class K shares pursuant to commitments between the Funds
and INVESCO. These commitments may be changed at any time following
consultation with the board of directors.
EXAMPLE
The Example is intended to help you compare the cost of investing in the Funds
to the cost of investing in other mutual funds.
The Example assumes that you invested $10,000 in a Fund for the time periods
indicated and redeemed all of your shares at the end of each period. The Example
also assumes that your investment had a hypothetical 5% return each year and
that a Fund's operating expenses remained the same. Although the actual costs
and performance of a Fund may be higher or lower, based on these assumptions
your costs would have been:
<PAGE>
1 year 3 years 5 years 10 years
Blue Chip Growth Fund - Class K $____ $____ $____ $____
Dynamics Fund - Class K $____ $____ $____ $____
INVESCO Endeavor Fund - Class K $____ $____ $____ $____
Growth & Income Fund - Class K $____ $____ $____ $____
S&P 500 Index Fund - Class K $____ $____ $____ $____
Value Equity Fund - Class K $____ $____ $____ $____
[ARROWS ICON] INVESTMENT RISKS
BEFORE INVESTING IN A FUND, YOU SHOULD DETERMINE THE LEVEL OF RISK WITH WHICH
YOU ARE COMFORTABLE. TAKE INTO ACCOUNT FACTORS LIKE YOUR AGE, CAREER, INCOME
LEVEL, AND TIME HORIZON.
You should determine the level of risk with which you are comfortable before you
invest. The principal risks of investing in any mutual fund, including these
Funds, are:
NOT INSURED. Mutual funds are not insured by the FDIC or any other government
agency, unlike bank deposits such as CDs or savings accounts.
NO GUARANTEE. Nomutual fund can guarantee that it will meet its investment
objectives.
POSSIBLE LOSS OF INVESTMENT. A mutual fund cannot guarantee its performance, nor
assure you that the market value of your investment will increase. You may lose
the money you invest, and the Funds will not reimburse you for any of these
losses.
VOLATILITY. The price of your mutual fund shares will increase or decrease with
changes in the value of a Fund's underlying investments and changes to the
equity markets as a whole.
NOT A COMPLETE INVESTMENT PLAN. An investment in any mutual fund does not
constitute a complete investment plan. The Funds are designed to be only a part
of your personal investment plan.
[ARROWS ICON] PRINCIPAL RISKS ASSOCIATED WITH THE FUNDS
You should consider the special factors associated with the policies discussed
below in determining the appropriateness of investing in a Fund. See the
Statement of Additional Information for a discussion of additional risk factors.
MARKET RISK
Equity stock prices vary and may fall, thus reducing the value of your Fund's
investments. Certain stocks selected for any Fund's portfolio may decline in
value more than the overall stock market. In general, the securities of large
businesses with outstanding securities worth $15 billion or more have less
<PAGE>
volatility than those of mid-size businesses with outstanding securities worth
more than $2 billion, or small businesses with outstanding securities worth less
than $2 billion.
LIQUIDITY RISK
A Fund's portfolio is liquid if the Fund is able to sell the securities it owns
at a fair price within a reasonable time. Liquidity is generally related to the
market trading volume for a particular security. Investments in smaller
companies or in foreign companies or companies in emerging markets are subject
to a variety of risks, including potential lack of liquidity.
COUNTERPARTY RISK
This is a risk associated primarily with repurchase agreements and some
derivatives transactions. It is the risk that the other party in the transaction
will not fulfill its contractual obligation to complete the transaction with a
Fund.
FOREIGN SECURITIES RISKS
Investments in foreign and emerging markets carry special risks, including
currency, political, regulatory and diplomatic risks. Each Fund may invest up to
25% of its respective assets in securities of non-U.S. issuers. Securities of
Canadian issuers and American Depository Receipts are not subject to this 25%
limitation.
CURRENCY RISK. A change in the exchange rate between U.S. dollars and a
foreign currency may reduce the value of a Fund's investment in a security
valued in the foreign currency, or based on that currency value.
POLITICAL RISK. Political actions, events or instability may result in
unfavorable changes in the value of a security.
REGULATORY RISK. Government regulations may affect the value of a security.
In foreign countries, securities markets that are less regulated than those
in the U.S. may permit trading practices that are not allowed in the U.S.
DIPLOMATIC RISK. A change in diplomatic relations between the U.S. and a
foreign country could affect the value or liquidity of investments.
EUROPEAN ECONOMIC AND MONETARY UNION. Austria, Belgium, Finland, France,
Germany, Ireland, Italy, Luxembourg, The Netherlands, Portugal and Spain
are presently members of the European Economic and Monetary Union (the
"EMU") which as of January 1, 1999, adopted the euro as a common currency.
The national currencies will be sub-currencies of the euro until July 1,
2002, at which time these currencies will disappear entirely. Other
European countries may adopt the euro in the future.
As the euro is implemented, there may be changes in the relative strength
and value of the U.S. dollar and other major currencies, as well as
possible adverse tax consequences. The euro transition by EMU countries may
affect the fiscal and monetary levels of those participating countries. The
outcome of theseuncertainties could have unpredictable effects on trade and
commerce and result in increased volatility for all financial markets.
<PAGE>
LACK OF TIMELY INFORMATION RISK
Timely information about a security or its issuer may be unavailable, incomplete
or inaccurate. This risk is more common to securities issued by foreign
companies and companies in emerging markets than it is to the securities of
U.S.-based companies.
PORTFOLIO TURNOVER RISK
A Fund's investments may be bought and sold relatively frequently. A high
turnover rate may result in higher brokerage commissions and taxable capital
gain distributions to a Fund's shareholders.
------------------------------------------
Although each Fund generally invests in publicly-traded equity securities of
growing companies, the Funds also may invest in other types of securities and
other financial instruments, indicated in the chart below. Although these
investments typically are not part of any Fund's principal investment strategy,
they may constitute a significant portion of a Fund's portfolio, thereby
possibly exposing a Fund and its investors to the following additional risks.
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INVESTMENT RISKS APPLIES TO THESE FUNDS
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AMERICAN DEPOSITORY Market, Information, Blue Chip Growth
RECEIPTS (ADRs) Political, Dynamics
These are securities Regulatory, INVESCO Endeavor
issued by U.S. banks Diplomatic, Growth & Income
that represent shares Liquidity and Value Equity
of foreign Currency Risks
corporations held by
those banks. Although
traded in U.S.
securities markets and
valued in U.S.
dollars, ADRs carry
most of the risks of
investing directly in
foreign securities.
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REPURCHASE AGREEMENT Counterparty Risk Blue Chip Growth
A contract under which Dynamics
the seller of a INVESCO Endeavor
security agrees to buy Growth & Income
it back at an S&P 500 Index
agreed-upon price and Value Equity
time in the future.
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<PAGE>
[ARROWS ICON] TEMPORARY DEFENSIVE POSITIONS
When securities markets or economic conditions are unfavorable or unsettled, we
might try to protect the assets of a Fund by investing in securities that are
highly liquid such as high quality money market instruments like short-term U.S.
government obligations, commercial paper or repurchase agreements even though
that is not the normal investment strategy of any Fund. We have the right to
invest up to 100% of a Fund's assets in these securities, although we are
unlikely to do so. Even though the securities purchased for defensive purposes
often are considered the equivalent of cash, they also have their own risks.
Investments that are highly liquid or comparatively safe tend to offer lower
returns. Therefore, a Fund's performance could be comparatively lower if it
concentrates in defensive holdings.
[ARROWS ICON] PORTFOLIO TURNOVER
With the exception of S&P 500 Index Fund, we actively manage and trade the
Funds' portfolios. Therefore, the Funds may have a higher portfolio turnover
rate compared to many other mutual funds. The Funds with higher than average
portfolio turnover rates for the fiscal year ended July 31, 2000 were:
INVESCO Blue Chip Growth Fund ____%
INVESCO Dynamics Fund ____%
INVESCO Endeavor Fund ____%
INVESCO Growth & Income Fund ____%
INVESCO Value Equity Fund ____%
A portfolio turnover rate of 200%, for example, is equivalent to a Fund buying
and selling all of the securities in its portfolio two times in the course of a
year. A comparatively high turnover rate may result in higher brokerage
commissions and taxable capital gain distributions to a Fund's shareholders.
[INVESCO ICON] FUND MANAGEMENT
INVESCO IS A SUBSIDIARY OF AMVESCAP PLC, AN INTERNATIONAL INVESTMENT MANAGEMENT
COMPANY THAT MANAGES MORE THAN $___ BILLION IN ASSETS WORLDWIDE. AMVESCAP IS
BASED IN LONDON, WITH MONEY MANAGERS LOCATED IN EUROPE, NORTH AND SOUTH AMERICA,
AND THE FAR EAST.
INVESTMENT ADVISER
INVESCO, located at 7800 East Union Avenue, Denver, Colorado, is the investment
adviser of the Funds. INVESCO was founded in 1932 and manages over $____ billion
for more than _________ shareholders of __ INVESCO mutual funds. INVESCO
performs a wide variety of other services for the Funds, including
administrative and transfer agency functions (the processing of purchases, sales
and exchanges of Fund shares).
World Asset Management ("World"), located at 255 Brown Street Centre, 2nd Floor,
Birmingham, Michigan, is the sub-adviser to S&P 500 Index Fund. INVESCO Capital
<PAGE>
Management, Inc. ("ICM"), a division of INVESCO, Inc., located at 1360 Peachtree
Street, N.E., Suite 100, Atlanta, Georgia, is the sub-adviser to Value Equity
Fund.
A wholly owned subsidiary of INVESCO, IDI is the Funds' distributor and is
responsible for the sale of the Funds' shares.
INVESCO, ICM and IDI are subsidiaries of AMVESCAP PLC.
World is a general partnership organized by Munder Capital Management, a general
partnership formed in December 1994 which engages in investment management and
advisory services.
The following table shows the fees the Funds paid to INVESCO for its advisory
services in the fiscal year ended July 31, 2000:
--------------------------------------------------------------------------------
ADVISORY FEE AS A PERCENTAGE OF
AVERAGE ANNUAL NET ASSETS UNDER MANAGEMENT
--------------------------------------------------------------------------------
Blue Chip Growth Fund ____%
Dynamics Fund ____%
INVESCO Endeavor Fund ____%
Growth & Income Fund ____%
S&P 500 Index Fund ____%
Value Equity Fund ____%
[INVESCO ICON] PORTFOLIO MANAGERS
S&P 500 Index Fund is managed by a team of World portfolio managers that is
collectively responsible for the investment decisions relating to the Fund.
The following individuals are primarily responsible for the day-to-day
management of their respective Fund's or Funds' portfolio holdings:
FUND PORTFOLIO MANAGER(S)
Blue Chip Growth Trent E. May
Douglas J. McEldowney
Dynamics Timothy J. Miller
Thomas Wald
INVESCO Endeavor Trent E. May
Growth & Income Trent E. May
Fritz Meyer
Value Equity Michael C. Harhai
Terrence Irrgang
S&P 500 Index World Asset Management
MICHAEL C. HARHAI, an executive vice president of ICM, is the lead portfolio
manager of Value Equity Fund. Before joining ICM in 1992, Michael was a senior
<PAGE>
vice president with Sovran Capital Management Corp. and a vice president with
C&S National Bank. He is a Chartered Financial Analyst. Michael holds an M.B.A.
from the University of Central Florida and a B.A. from the University of South
Florida.
TERRENCE IRRGANG, a vice president of ICM, is the co-portfolio manager of Value
Equity Fund. Before joining ICM in 1992, Terrence was a consultant for Towers,
Perrin, Forster & Crosby. He is a Chartered Financial Analyst. Terrence holds an
M.B.A. from Temple University and a B.A. from Gettysburg College.
TRENT E. MAY, a senior vice president of INVESCO, is the lead portfolio manager
of Blue Chip Growth Fund and INVESCO Endeavor Fund and a co-portfolio manager of
Growth & Income Fund. Before joining INVESCO in 1996, Trent was with Munder
Capital Management and SunBank Capital Management. He is a Chartered Financial
Analyst. Trent holds an M.B.A. from Rollins College and a B.S. in Engineering
from Florida Institute of Technology.
DOUGLAS J. MCELDOWNEY, a vice president of INVESCO, is the co-portfolio manager
of Blue Chip Growth Fund. Before joining INVESCO in 1999, Doug was with Bank of
America Investment Management, Inc. and SunTrust Banks, Inc. He is a Chartered
Financial Analyst and a Certified Public Accountant. Doug holds an M.B.A. from
the Crummer Graduate School at Rollins College and a B.B.A. in Finance from the
University of Kentucky.
FRITZ MEYER, a vice president of INVESCO, is the lead portfolio manager of
Growth & Income Fund. Before joining INVESCO in 1996, Fritz was an executive
vice president and portfolio manager with Nelson, Benson & Zellmer, Inc. He
holds an M.B.A. from Amos Tuck School -- Dartmouth College and an B.A. with a
distinction in Economics from Dartmouth College.
TIMOTHY J. MILLER, Chief Investment Officer and a director and senior vice
president of INVESCO, is the lead portfolio manager of Dynamics Fund. Before
joining INVESCO in 1992, Tim was a portfolio manager with Mississippi Valley
Advisors. He is a Chartered Financial Analyst. Tim holds an M.B.A. from the
University of Missouri -- St. Louis and a B.S.B.A. from St. Louis University.
THOMAS WALD, a vice president of INVESCO, is the co-portfolio manager of
Dynamics Fund. Before joining INVESCO in 1997, Tom was an analyst with Munder
Capital Management, Duff & Phelps and Prudential Investment Corp. He is a
Chartered Financial Analyst. Tom holds an M.B.A. from the Wharton School at the
University of Pennsylvania and a B.A. from Tulane University.
Trent May, Doug McEldowney, Fritz Meyer and Tom Wald are members of the INVESCO
Growth Team, which is led by Tim Miller.
<PAGE>
[INVESCO ICON] POTENTIAL REWARDS
NO SINGLE FUND SHOULD REPRESENT YOUR COMPLETE INVESTMENT PROGRAM NOR SHOULD YOU
ATTEMPT TO USE THE FUNDS FOR SHORT-TERM TRADING PURPOSES.
The Funds offer shareholders the potential to increase the value of their
capital over time; Blue Chip Growth, Growth & Income and Value Equity Funds also
offer the opportunity for current income. Like most mutual funds, each Fund
seeks to provide higher returns than the market or its competitors, but cannot
guarantee that performance. Each Fund seeks to minimize risk by investing in
many different companies in a variety of industries.
SUITABILITY FOR INVESTORS
Only you can determine if an investment in a Fund is right for you based upon
your own economic situation, the risk level with which you are comfortable and
other factors. In general, the Funds are most suitable for investors who:
o are willing to grow their capital over the long term (at least five years).
o understand that shares of a Fund can, and likely will, have daily price
fluctuations.
o are investing tax-deferred retirement accounts, such as traditional and
Roth Individual Retirement Accounts ("IRAs"), as well as employer-sponsored
qualified retirement plans, including 401(k)s and 403(b)s, all of which have
longer investment horizons.
You probably do not want to invest in the Funds if you are:
o primarily seeking current dividend income.
o unwilling to accept potentially significant changes in the price of Fund
shares.
o speculating on short-term fluctuations in the stock markets.
[INVESCO ICON] SHARE PRICE
CURRENT MARKET VALUE OF FUND ASSETS
+ ACCRUED INTEREST AND DIVIDENDS
- FUND DEBTS,
INCLUDING ACCRUED EXPENSES
-----------------------------------
/ NUMBER OF SHARES
= YOUR SHARE PRICE (NAV).
The value of your Fund shares is likely to change daily. This value is known as
the Net Asset Value per share, or NAV. INVESCO determines the market value of
each investment in each Fund's portfolio each day that the New York Stock
Exchange ("NYSE") is open, at the close of the regular trading day on that
exchange (normally 4:00 p.m. Eastern time). Therefore, shares of the Funds are
not priced on days when the NYSE is closed, which generally is on weekends and
national holidays in the U.S.
NAV is calculated by adding together the current market price of all of a Fund's
investments and other assets, including accrued interest and dividends;
subtracting the Fund's debts, including accrued expenses; and dividing that
dollar amount by the total number of the Fund's outstanding shares.
All purchases, sales and exchanges of Fund shares are made by INVESCO at the NAV
next calculated after INVESCO receives proper instructions from you to purchase,
redeem or exchange shares of a Fund. Your instructions must be received by
INVESCO no later than the close of the NYSE to effect transactions at that day's
<PAGE>
NAV. If INVESCO hears from you after that time, your instructions will be
processed at the NAV calculated at the end of the next day that the NYSE is
open.
Foreign securities exchanges, which set the prices for foreign securities held
by the Funds, are not always open the same days as the NYSE, and may be open for
business on days the NYSE is not. For example, Thanksgiving Day is a holiday
observed by the NYSE and not by overseas exchanges. In this situation, the Funds
would not calculate NAV on Thanksgiving Day (and INVESCO would not buy, sell or
exchange shares for you on that day), even though activity on foreign exchanges
could result in changes in the value of investments held by the Funds on that
day.
HOW TO BUY SHARES
TO BUY SHARES AT THAT DAY'S CLOSING PRICE, YOU MUST CONTACT US BEFORE THE CLOSE
OF THE NYSE, NORMALLY 4:00 P.M. EASTERN TIME.
The Funds offer multiple classes of shares. The chart in this section shows
several convenient ways to invest in the Funds. A share of each class represents
an identical interest in a Fund and has the same rights, except that each class
bears its own distribution and shareholder servicing charges, and other
expenses. The income attributable to each class and the dividends payable on the
shares of each class will be reduced by the amount of the distribution fee or
service fee, if applicable, and the other expenses payable by that class.
There is no charge to invest, exchange or redeem shares when you make
transactions directly through INVESCO. However, if you invest in a Fund through
a securities broker, you may be charged a commission or transaction fee for
either purchases or sales of Fund shares. For all new accounts, please send a
completed application form, and specify the fund or funds and the class or
classes of shares you wish to purchase.
INVESCO reserves the right to increase, reduce or waive each Fund's minimum
investment requirements in its sole discretion, if it determines this action is
in the best interests of that Fund's shareholders. INVESCO also reserves the
right in its sole discretion to reject any order to buy the Funds' Class K
shares, including purchases by exchange.
QUALIFIED RETIREMENT PLAN.
Minimum Total Plan Assets $_____________
Minimum Initial Investment $_____________
Minimum Balance $_____________
Minimum Subsequent Investment $_____________
EXCHANGE POLICY. You may exchange your shares in any of the Funds for shares of
the same class in another INVESCO fund on the basis of their respective NAVs at
the time of the exchange.
<PAGE>
FUND EXCHANGES CAN BE A CONVENIENT WAY FOR YOU TO DIVERSIFY YOUR INVESTMENTS, OR
TO REALLOCATE YOUR INVESTMENTS WHEN YOUR OBJECTIVES CHANGE.
Before making any exchange, be sure to review the prospectuses of the funds
involved and consider the differences between the funds. Also, be certain that
you qualify to purchase certain classes of shares in the new fund. An exchange
is the sale of shares from one fund immediately followed by the purchase of
shares in another. Therefore, any gain or loss realized on the exchange is
recognizable for federal income tax purposes (unless, of course, you or your
account qualifies as tax-deferred under the Internal Revenue Code). If the
shares of the fund you are selling have gone up in value since you bought them,
the sale portion of an exchange may result in taxable income to you.
We have the following policies governing exchanges:
o Both fund accounts involved in the exchange must be registered in exactly
the same name(s) and Social Security or federal tax I.D. number(s).
o You may make up to four exchanges out of each Fund per 12-month period.
o Each Fund reserves the right to reject any exchange request, or to modify or
terminate the exchange policy, if it is in the best interests of the Fund
and its shareholders. Notice of all such modifications or terminations that
affect all shareholders of the Fund will be given at least 60 days prior to
the effective date of the change, except in unusual instances, including a
suspension of redemption of the exchanged security under Section 22(e) of
the Investment Company Act of 1940.
In addition, the ability to exchange may be temporarily suspended at any time
that sales of the fund into which you wish to exchange are temporarily stopped.
Please remember that if you pay by check, Automated Clearing House ("ACH") or
wire and your funds do not clear, you will be responsible for any related loss
to a Fund or INVESCO. If you are already an INVESCO funds shareholder, the Fund
may seek reimbursement for any loss from your existing account(s).
CHOOSING A SHARE CLASS. Each Fund has multiple classes of shares, each class
representing an interest in the same portfolio of investments. In deciding which
class of shares to purchase, you should consider, among other things, (i) the
length of time you expect to hold your shares, (ii) the provisions of the
distribution plan applicable to that class, if any, (iii) the eligibility
requirements that apply to purchases of a particular class, and (iv) any
services you may receive in making your investment determination. Your
investment representative can help you decide among the various classes. Please
contact your investment representative for several convenient ways to invest in
the Funds. Class K shares are available only to qualified retirement plans,
retirement savings programs, educational savings programs and wrap programs
through your investment representative.
<PAGE>
<TABLE>
<CAPTION>
METHOD INVESTMENT MINIMUM PLEASE REMEMBER
-----------------------------------------------------------------------------------------------------
<S> <C> <C>
BY CHECK Please refer to investment Class K shares of the Funds are
Mail to: minimums described on offered only to qualified retire-
INVESCO Funds Group, Inc., page ____. ment plans, retirement savings
P.O. Box ________, programs, educational savings pro-
Denver, CO 80217-____. grams and wrap programs.
You may send your check
by overnight courier to:
7800 E. Union Ave.
Denver, CO 80237.
-----------------------------------------------------------------------------------------------------
BY WIRE Please refer to investment Class K shares of the Funds are
You may send your payment by minimums described on offered only to qualified retire-
bank wire (call 1-800-___-_____ page _____. ment plans, retirement savings
for instructions). programs, educational savings
programs and wrap programs.
-----------------------------------------------------------------------------------------------------
BY EXCHANGE Please refer to investment Class K shares of the Funds are
Between the same class of any minimums described on offered only to qualified retire-
two INVESCO funds. Call page _____. ment plans, retirement savings
1-800-_____ for prospectuses of programs, educational savings
other INVESCO funds. Exchanges programs and wrap programs.
may be in writing or by See "Exchange Policy."
telephone. You may also
establish an automatic monthly
exchange service two INVESCO
funds; call us for further
details and the correct form.
</TABLE>
DISTRIBUTION EXPENSES. We have adopted a Plan and Agreement of Distribution -
Class K (commonly known as a "12b-1 Plan") for the Funds' Class K shares. The
12b-1 fee paid by each Fund's Class K shares is used to pay distribution and
service fees to IDI for the sale and distribution of the Funds' shares and fees
for services provided to shareholders, all or a substantial portion of which are
paid to the dealer of record. Because the Funds' Class K shares pay these fees
out of their assets on an ongoing basis, these fees increase the cost of your
investment.
YOUR ACCOUNT SERVICES
SHAREHOLDER ACCOUNTS. INVESCO maintains your share account, which contains your
current Fund holdings. The Funds do not issue share certificates.
<PAGE>
INVESCO PROVIDES YOU WITH SERVICES DESIGNED TO MAKE IT SIMPLE FOR YOU TO BUY,
SELL OR EXCHANGE YOUR SHARES OF ANY INVESCO MUTUAL FUND.
QUARTERLY INVESTMENT SUMMARIES. Each calendar quarter, you will receive a
written statement which consolidates and summarizes account activity and value
at the beginning and end of the period for each of your INVESCO funds.
TRANSACTION CONFIRMATIONS. You will receive detailed confirmations of individual
purchases, exchanges and sales. If you choose certain recurring transaction
plans (for instance, EasiVest), your transactions are confirmed on your
quarterly Investment Summaries.
TELEPHONE TRANSACTIONS. You may buy, exchange and sell Fund shares by telephone,
unless you specifically decline these privileges when you fill out the INVESCO
new account application.
YOU CAN CONDUCT MOST TRANSACTIONS AND CHECK ON YOUR ACCOUNT THROUGH OUR
TOLL-FREE TELEPHONE NUMBER. YOU MAY ALSO ACCESS PERSONAL ACCOUNT INFORMATION AT
OUR WEB SITE, INVESCOFUNDS.COM.
Unless you decline the telephone transaction privileges, when you fill out and
sign the new account Application, a Telephone Transaction Authorization Form, or
use your telephone transaction privileges, you lose certain rights if someone
gives fraudulent or unauthorized instructions to INVESCO that result in a loss
to you. In general, if INVESCO has followed reasonable procedures, such as
recording telephone instructions and sending written transaction confirmations,
INVESCO is not liable for following telephone instructions that it believes to
be genuine. Therefore, you have the risk of loss due to unauthorized or
fraudulent instructions.
HOUSEHOLDING. To save money for the Funds, INVESCO will send only one copy of a
prospectus or financial report to each household address. This process, known as
"householding," is used for most required shareholder mailings. It does not
apply to account statements. You may, of course, request an additional copy of a
prospectus or financial report at any time by calling or writing INVESCO. You
may also request that householding be eliminated from all of your required
mailings.
IRAS AND OTHER RETIREMENT PLANS. Shares of any INVESCO mutual fund may be
purchased for IRAs and many other types of tax-deferred retirement plans. Please
call INVESCO for information and forms to establish or transfer your existing
retirement plan or account.
[INVESCO ICON] HOW TO SELL SHARES
The chart in this section shows several convenient ways to sell your Fund
shares. Shares of the Funds may be sold at any time at the next NAV calculated
after your request to sell in proper form is received by INVESCO. Depending on
Fund performance, the NAV at the time you sell your shares may be more or less
than the price you paid to purchase your shares.
<PAGE>
TO SELL SHARES AT THAT DAY'S CLOSING PRICE, YOU MUST CONTACT US BEFORE
4:00 P.M. EASTERN TIME.
If you own shares in more than one INVESCO fund, please specify the fund whose
shares you wish to sell and specify the class of shares. Remember that any sale
or exchange of shares in a non-retirement account will likely result in a
taxable gain or loss.
While INVESCO attempts to process telephone redemptions promptly, there may be
times - particularly in periods of severe economic or market disruption - when
you may experience delays in redeeming shares by telephone.
INVESCO usually forwards the proceeds from the sale of fund shares within seven
days after we receive your request to sell in proper form. However, payment may
be postponed under unusual circumstances -- for instance, if normal trading is
not taking place on the NYSE, or during an emergency as defined by the
Securities and Exchange Commission. If your INVESCO fund shares were purchased
by a check which has not yet cleared, payment will be made promptly when your
purchase check does clear; that can take up to 12 business days.
<TABLE>
<CAPTION>
METHOD MINIMUM REDEMPTION PLEASE REMEMBER
-----------------------------------------------------------------------------------------------------
<S> <C> <C>
BY TELEPHONE $250 (or, if less, full INVESCO's telephone redemption
Call us toll-free at: liquidation of the account) privileges may be modified or
1-800-___-____. for a redemption check. terminated in the future at
INVESCO's discretion. The
maximum amount which may be
redeemed by telephone is generally
$25,000.
-----------------------------------------------------------------------------------------------------
IN WRITING Any amount. The redemption request must be
Mail your request to INVESCO signed by all registered account
Funds Group, Inc., P.O. Box owners. Payment will be mailed to
_____, Denver, CO 80217-____. your address as it appears on
You may also send your request by INVESCO's records, or to a bank
overnight courier to 7800 E. designated by you in writing.
Union Ave., Denver, CO 80237.
-----------------------------------------------------------------------------------------------------
PAYMENT TO THIRD PARTY Any amount. All registered account owners
Mail your request to INVESCO must sign the request, with
Funds Group, Inc., P.O. Box signature guarantees from an
_____, Denver, CO 80217-____. eligible guarantor financial
institution, such as a commercial
bank or a recognized national or
regional securities firm.
</TABLE>
<PAGE>
[GRAPH ICON] TAXES
TO AVOID BACKUP WITHHOLDING, BE SURE WE HAVE YOUR CORRECT SOCIAL SECURITY OR
TAXPAYER IDENTIFICATION NUMBER.
Everyone's tax status is unique. We encourage you to consult your own tax
adviser on the tax impact to you of investing in the Funds.
Each Fund customarily distributes to its shareholders substantially all of its
net investment income, net capital gains and net gains from foreign currency
transactions, if any. You receive a proportionate part of these distributions,
depending on the percentage of each Fund's shares that you own. These
distributions are required under federal tax laws governing mutual funds. It is
the policy of each Fund to distribute all investment company taxable income and
net capital gains. As a result of this policy and each Fund's qualification as a
regulated investment company, it is anticipated that none of the Funds will pay
any federal income or excise taxes. Instead, each Fund will be accorded conduit
or "pass through" treatment for federal income tax purposes.
However, unless you are (or your account is) exempt from income taxes, you must
include all dividends and capital gain distributions paid to you by a Fund in
your taxable income for federal, state and local income tax purposes. You also
may realize capital gains or losses when you sell shares of a Fund at more or
less than the price you originally paid. An exchange is treated as a sale, and
is a taxable event. Dividends and other distributions usually are taxable
whether you receive them in cash or automatically reinvest them in shares of the
distributing Fund(s) or other INVESCO funds.
If you have not provided INVESCO with complete, correct tax information, the
Funds are required by law to withhold 31% of your distributions and any money
that you receive from the sale of shares of the Funds as a backup withholding
tax.
We will provide you with detailed information every year about your dividends
and capital gain distributions. Depending on the activity in your individual
account, we may also be able to assist with cost basis figures for shares you
sell.
[GRAPH ICON] DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS
The Funds earn ordinary or investment income from dividends and interest on
their investments. The Funds expect to distribute substantially all of this
investment income, less Fund expenses, to shareholders annually with respect to
Blue Chip Growth, Dynamics and INVESCO Endeavor Funds, and quarterly with
respect to Growth & Income, S&P 500 Index and Value Equity Funds, or at such
other times as the Funds may elect.
<PAGE>
NET INVESTMENT INCOME AND NET REALIZED CAPITAL GAINS ARE DISTRIBUTED TO
SHAREHOLDERS AT LEAST ANNUALLY. DISTRIBUTIONS ARE TAXABLE WHETHER REINVESTED IN
ADDITIONAL SHARES OR PAID TO YOU IN CASH (EXCEPT FOR TAX-EXEMPT ACCOUNTS).
A Fund also realizes capital gains and losses when it sells securities in its
portfolio for more or less than it had paid for them. If total gains on sales
exceed total losses (including losses carried forward from previous years), a
Fund has a net realized capital gain. Net realized capital gains, if any, are
distributed to shareholders at least annually, usually in November.
Under present federal income tax laws, capital gains may be taxable at different
rates, depending on how long a Fund has held the underlying investment.
Short-term capital gains which are derived from the sale of assets held one year
or less are taxed as ordinary income. Long-term capital gains which are derived
from the sale of assets held for more than one year are taxed at the maximum
capital gains rate, currently 20% for individuals.
Dividends and capital gain distributions are paid to you if you hold shares on
the record date of the distribution regardless of how long you have held your
shares. A Fund's NAV will drop by the amount of the distribution on the day the
distribution is made. If you buy shares of a Fund just before a distribution,
you may wind up "buying a dividend." This means that if the Fund makes a
dividend or capital gain distribution shortly after you buy, you will receive
some of your investment back as a taxable distribution. Most shareholders want
to avoid this. And, if you sell your shares at a loss for tax purposes and
purchase a substantially identical investment within 30 days before or after
that sale, the transaction is usually considered a "wash sale" and you will not
be able to claim a tax loss.
Dividends and capital gain distributions paid by each Fund are automatically
reinvested in additional Fund shares at the NAV on the ex-dividend date, unless
you choose to have them automatically reinvested in another INVESCO fund or paid
to you by check or electronic funds transfer. Dividends and other distributions,
whether received in cash or reinvested in additional Fund shares, may be subject
to federal income tax.
<PAGE>
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the financial
performance of Investor Class shares of each Fund for the past five years (or,
if shorter, the period of the Fund's operations). Certain information reflects
financial results for a single Investor Class share. Since Class K shares are
new, financial information is not available for this class as of the date of
this Prospectus. The total returns in the table represent the annual percentages
that an investor would have earned (or lost) on an investment in Investor Class
shares of a Fund (assuming reinvestment of all dividends and distributions).
This information has been audited by PricewaterhouseCoopers LLP, independent
accountants, whose report, along with the financial statements, is included in
INVESCO Stock Funds, Inc.'s 2000 Annual Report to Shareholders, which is
incorporated by reference into the Statement of Additional Information. This
Report is available without charge by contacting IDI at the address or telephone
number on the back cover of this Prospectus.
<TABLE>
<CAPTION>
YEAR PERIOD
ENDED ENDED
JULY 31 JULY 31 YEAR ENDED AUGUST 31
--------------------------------------------------------------------------------------------------------------------------
2000 1999(a) 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C> <C>
BLUE CHIP GROWTH FUND
- INVESTOR CLASS
PER SHARE DATA
Net Asset Value--Beginning of Period $ 5.15 $ 6.06 $ 5.44 $ 5.33 $ 5.34
--------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income(b) 0.00 0.02 0.01 0.03 0.05
Net Gains on Securities
(Both Realized and Unrealized) 2.11 0.69 1.39 0.95 0.49
--------------------------------------------------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS 2.11 0.71 1.40 0.98 0.54
--------------------------------------------------------------------------------------------------------------------------
Less Distributions
Dividends from Net Investment
Income(c) 0.00 0.02 0.01 0.03 0.05
Distributions from Capital Gains 0.51 1.60 0.77 0.84 0.50
--------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS 0.51 1.62 0.78 0.87 0.55
--------------------------------------------------------------------------------------------------------------------------
Net Asset Value--End of Period $ 6.75 $ 5.15 $ 6.06 $ 5.44 $ 5.33
==========================================================================================================================
TOTAL RETURN 42.06%(d) 13.42% 28.14% 20.23% 12.05%
RATIOS
Net Assets-End of Period
($000 Omitted) $1,232,908 $747,739 $709,220 $596,726 $501,285
Ratio of Expenses to Average 1.03%(e)(f) 1.04%(e) 1.07%(e) 1.05%(e) 1.06%
Net Assets
Ratio of Net Investment Income to
Average Net Assets (0.08%)(f) 0.37% 0.22% 0.64% 1.07%
Portfolio Turnover Rate 134%(d) 153% 286% 207% 111%
</TABLE>
<PAGE>
(a) From September 1, 1998 to July 31, 1999.
(b) Net Investment Income for the year ended July 31, 2000 and for the period
ended July 31, 1999, aggregated less than $0.01 on a per share basis.
(c) Distributions in excess of net investment income for the year ended July
31, 2000, for the period ended July 31, 1999 and for the year ended August
31, 1995, aggregated less than $0.01 on a per share basis.
(d) Based on operations for the period shown and, accordingly, are not
representative of a full year.
(e) Ratio is based on total expenses of the class, which is before any expense
offset arrangements (which may include custodian, distribution and transfer
agent).
(f) Annualized.
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
YEAR PERIOD
ENDED ENDED
JULY 31 JULY 31 YEAR ENDED APRIL 30
--------------------------------------------------------------------------------------------------------------------------
2000 1999(a) 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C> <C>
DYNAMICS FUND -
INVESTOR CLASS
PER SHARE DATA
Net Asset Value--Beginning of Period $ 18.15 $ 16.41 $ 12.02 $ 13.61 $ 11.38
--------------------------------------------------------------------------------------------------------------------------
INCOME FROM
INVESTMENT OPERATIONS
Net Investment Income (Loss)(b) 0.00 0.00 (0.05) (0.04) 0.02
Net Gains or Losses on Securities
(Both Realized and Unrealized) 1.24 3.04 6.39 (0.19) 3.94
--------------------------------------------------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS 1.24 3.04 6.34 (0.23) 3.96
--------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
Dividends from Net Investment
Income(c) 0.00 0.00 0.00 0.00 0.02
Distributions from Capital Gains 0.00 1.30 1.95 1.36 1.71
In Excess of Capital Gains 0.00 0.00 0.00 0.00 0.00
--------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS 0.00 1.30 1.95 1.36 1.73
--------------------------------------------------------------------------------------------------------------------------
Net Asset Value--End of Period $ 19.39 $ 18.15 $ 16.41 $ 12.02 $ 13.61
==========================================================================================================================
TOTAL RETURN 6.83%(d) 20.83% 56.42% (2.34%) 36.32%
RATIOS
Net Assets--End of Period
($000 Omitted) $2,471,482 $2,044,321 $1,340,299 $762,396 $778,416
Ratio of Expenses to
Average Net Assets(e) 1.03%(f) 1.05% 1.08% 1.16% 1.14%
Ratio of Net Investment Income (0.32%)(f) (0.41%) (0.43%) (0.31%) 0.16%
(Loss) to Average Net Assets
Portfolio Turnover Rate 23%(d) 129% 178% 204% 196%
</TABLE>
(a) From May 1, 1999 to July 31, 1999.
(b) Net Investment Income (Loss) aggregated less than $0.01 on a per share
basis for the year ended July 31, 2000, for the period ended July 31, 1999
and for the year ended April 30, 1999.
(c) Distributions in excess of net investment income for the year ended April
30, 1996, aggregated less than $0.01 on a per share basis.
(d) Based on operations for the period shown and, accordingly, are not
representative of a full year.
(e) Ratio is based on total expenses of the class, which is before any expense
offset arrangements (which may include custodian, distribution and transfer
agent fees).
(f) Annualized.
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
YEAR ENDED PERIOD ENDED PERIOD ENDED
JULY 31 JULY 31 APRIL 30
--------------------------------------------------------------------------------
INVESCO ENDEAVOR FUND - 2000 1999(a) 1999(b)
INVESTOR CLASS
PER SHARE DATA
Net Asset Value--Beginning of Period $ 16.32 $ 10.00
--------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS(c)
Net Investment Loss(d) (0.03) (0.03)
Net Gains on Securities (Both
Realized and Unrealized) 0.32 6.35
--------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS 0.29 6.32
--------------------------------------------------------------------------------
LESS DISTRIBUTIONS
Dividends from Capital Gains 0.00 0.00
In Excess of Capital Gains 0.00 0.00
--------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS 0.00 0.00
--------------------------------------------------------------------------------
Net Asset Value-End of Period $16.61 $16.32
================================================================================
TOTAL RETURN 1.78%(e) 63.20%(e)
RATIOS
Net Assets--End of Period ($000 Omitted) $109,532 $72,592
Ratio of Expenses to Average
Net Assets(f) 1.49%(g) 1.43%(g)
Ratio of Net Investment Loss to
Average Net Assets (0.83%)(g) (0.55%)(g)
Portfolio Turnover Rate 47%(e) 107%(e)
(a) From May 1, 1999 to July 31, 1999.
(b) From October 28, 1998, commencement of investment operations, to April 30,
1999.
(c) The per share information was computed based on average shares for the
period ended April 30, 1999.
(d) Net investment loss aggregated less than $0.01 on a per share basis for the
year ended July 31, 2000.
(e) Based on operations for the period shown and, accordingly, are not
representative of a full year.
(f) Ratio is based on total expenses of the class, which is before any expense
offset arrangements (which may include custodian fees).
(g) Annualized.
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
YEAR ENDED PERIOD ENDED PERIOD ENDED
JULY 31 JULY 31 APRIL 30
--------------------------------------------------------------------------------
GROWTH & INCOME FUND - 2000 1999(a) 1999(b)
INVESTOR CLASS
PER SHARE DATA
Net Asset Value--Beginning of Period $ 14.54 $ 10.00
--------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Loss(c) 0.00 0.00
Net Gains on Securities (Both
Realized and Unrealized) 0.83 5.22
--------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS 0.83 5.22
--------------------------------------------------------------------------------
LESS DISTRIBUTIONS
Distributions from Capital Gains 0.00 0.68
--------------------------------------------------------------------------------
Net Asset Value-End of Period $ 15.37 $ 14.54
================================================================================
TOTAL RETURN 5.71%(d) 53.07%(d)
RATIOS
Net Assets--End of Period ($000 Omitted) $61,316 $53,994
Ratio of Expenses to Average
Net Assets(e)(f) 1.52%(g) 1.52%(g)
Ratio of Net Investment Loss to
Average Net Assets (f) (0.45%)(g) (0.25%)(g)
Portfolio Turnover Rate 46%(d) 121%(d)
(a) From May 1, 1999 to July 31, 1999.
(b) From July 1, 1998, commencement of investment operations, to April 30,
1999.
(c) Net Investment Loss aggregated less than $0.01 on a per share basis for the
year ended July 31, 2000 and for the periods ended July 31, 1999 and April
30, 1999.
(d) Based on operations for the period shown and, accordingly, are not
representative of a full year.
(e) Ratio is based on total expenses of the class, less expenses absorbed by
INVESCO, if applicable, which is before any expense offset arrangements
(which may include custodian fees).
(f) Various expenses of the class were voluntarily absorbed by INVESCO for the
year ended July 31, 2000 and the periods ended July 31, 1999 and April 30,
1999. If such expenses had not been voluntarily absorbed, ratio of expenses
to average net assets would have been ___%, 1.75% (annualized) and 1.71%
(annualized) respectively, and ratio of net investment loss to average net
assets would have been ___%, (0.68%) (annualized) and (0.44%) (annualized),
respectively.
(g) Annualized.
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
PERIOD ENDED
YEAR ENDED JULY 31 JULY 31
--------------------------------------------------------------------------------
S&P 500 INDEX FUND - INVESTOR CLASS 2000 1999 1998(a)
PER SHARE DATA
Net Asset Value Beginning of Period $ 12.14 $ 10.00
--------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.14 0.07
Net Gains on Securities (Both
Realized and Unrealized) 2.29 2.14
--------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS 2.43 2.21
--------------------------------------------------------------------------------
LESS DISTRIBUTIONS
Dividends from Net Investment Income 0.13 0.07
Distributions from Capital Gains 0.05 0.00
In Excess of Capital Gains 0.00 0.00
--------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS 0.18 0.07
--------------------------------------------------------------------------------
Net Asset Value-End of Period $ 14.39 $ 12.14
================================================================================
TOTAL RETURN(b) 20.09% 22.11%(c)
RATIOS
Net Assets--End of Period ($000 Omitted) $64,613 $15,065
Ratio of Expenses to Average Net Assets(d)(e) 0.60% 0.62%(f)
Ratio of Net Investment Income
to Average Net Assets(e) 1.06% 1.52%(f)
Portfolio Turnover Rate 2% 0%(c)(g)
(a) From December 23, 1997, commencement of investment operations, through July
31, 1998.
(b) The applicable redemption fees are not included in the Total Return
calculation.
(c) Based on operations for the period shown and, accordingly, are not
representative of a full year.
(d) Ratio is based on total expenses of the class, less expenses absorbed by
INVESCO, if applicable, which is before any expense offset arrangements
(which may include custodian fees).
(e) Various expenses of the class were voluntarily absorbed by INVESCO for the
years ended July 31, 2000 and 1999 and the period ended July 31, 1998. If
such expenses had not been voluntarily absorbed, ratio of expenses to
average net assets would have been ___%, 0.99% and 1.71% (annualized),
respectively, and ratio of net investment income (loss) to average net
assets would have been ___%, 0.67% and 0.42% (annualized), respectively.
(f) Annualized.
(g) Portfolio Turnover Rate calculated to less than 0.10% for the period ended
July 31, 1998.
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
YEAR PERIOD
ENDED ENDED
JULY 31 JULY 31 YEAR ENDED AUGUST 31
--------------------------------------------------------------------------------------------------------------------------
2000 1999(a) 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C> <C>
VALUE EQUITY FUND -
INVESTOR CLASS
PER SHARE DATA
Net Asset Value--Beginning of Period $ 25.68 $ 28.30 $ 22.24 $ 19.53 $ 18.12
--------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.17 0.26 0.35 0.35 0.39
Net Gains or (Losses) on Securities
(Both Realized and Unrealized) 6.25 (0.43) 6.62 3.09 2.58
--------------------------------------------------------------------------------------------------------------------------
TOTAL FROM INVESTMENT
OPERATIONS 6.42 (0.17) 6.97 3.44 2.97
--------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
Dividends from Net Investment
Income(b) 0.17 0.26 0.35 0.35 0.39
Distributions from Capital Gains 2.32 2.19 0.56 0.38 1.17
--------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS 2.49 2.45 0.91 0.73 1.56
--------------------------------------------------------------------------------------------------------------------------
Net Asset Value-End of Period $ 29.61 $ 25.68 $ 28.30 $ 22.24 $ 19.53
==========================================================================================================================
TOTAL RETURN 25.41%(c) (1.06%) 32.04% 17.77% 17.84%
RATIOS
Net Assets--End of Period
($000 Omitted) $369,982 $349,984 $369,766 $200,046 $153,171
Ratio of Expenses to
Average Net Assets(d) 1.27%(e)(f) 1.15%(e) 1.04%(e) 1.01%(e) 0.97%
Ratio of Net Investment Income to
Average Net Assets(d) 0.63%(f) 0.86% 1.35% 1.64% 2.17%
Portfolio Turnover Rate 22%(c) 48% 37% 27% 34%
</TABLE>
(a) From September 1, 1998 to July 31, 1999.
(b) Distributions in excess of net investment income for the year ended July
31, 2000, for the period ended July 31, 1999 and for the year ended August
31, 1998, aggregated less than $0.01 on a per share basis.
(c) Based on operations for the period shown and, accordingly, are not
representative of a full year.
(d) Various expenses of the class were voluntarily absorbed by INVESCO for the
year ended July 31, 2000 and the period ended July 31, 1999 and the year
ended August 31, 1998. If such expenses had not been voluntarily absorbed,
ratio of expenses to average net assets would have been ___%, 1.38%
(annualized) and 1.19%, respectively, and ratio of net investment income to
average net assets would have been ___%, 0.52% (annualized) and 0.82%,
respectively.
(e) Ratio is based on total expenses of the class, less expenses absorbed by
INVESCO, if applicable, which is before any expense offset arrangements
(which may include custodian and transfer agent fees).
(f) Annualized.
<PAGE>
NOVEMBER 30, 2000
INVESCO STOCK FUNDS, INC.
INVESCO BLUE CHIP GROWTH FUND - CLASS K
INVESCO DYNAMICS FUND - CLASS K
INVESCO ENDEAVOR FUND - CLASS K
INVESCO GROWTH & INCOME FUND - CLASS K
INVESCO S&P 500 INDEX FUND - CLASS K
INVESCO VALUE EQUITY FUND - CLASS K
You may obtain additional information about the Funds from several sources.
FINANCIAL REPORTS. Although this Prospectus describes the Funds' anticipated
investments and operations, the Funds also prepare annual and semiannual reports
that detail the Funds' actual investments at the report date. These reports
include discussion of each Fund's recent performance, as well as market and
general economic trends affecting each Fund's performance. The annual report
also includes the report of the Funds' independent accountants.
STATEMENT OF ADDITIONAL INFORMATION. The SAI dated November 30, 2000 is a
supplement to this Prospectus and has detailed information about the Funds and
their investment policies and practices. A current SAI for the Funds is on file
with the Securities and Exchange Commission and is incorporated into this
Prospectus by reference; in other words, the SAI is legally a part of this
Prospectus, and you are considered to be aware of the contents of the SAI.
INTERNET. The current Prospectus of the Funds may be accessed through the
INVESCO Web site at invescofunds.com. In addition, the Prospectus, SAI, annual
report and semiannual report of the Funds are available on the SEC Web site at
www.sec.gov.
To obtain a free copy of the current Prospectus, SAI, annual report or
semiannual report, write to INVESCO Distributors, Inc., P.O. Box _____ , Denver,
Colorado 80217-____; or call 1-800-___-____. Copies of these materials are also
available (with a copying charge) from the SEC's Public Reference Section at 450
Fifth Street, N.W., Washington, D.C., 20549-0102. This information can be
obtained by electronic request at the following E-mail address:
[email protected], or by calling 1-202-942-8090. The SEC file numbers for the
Funds are 811-1474 and 002-26125.
811-1474
<PAGE>
PROSPECTUS | November 30, 2000
--------------------------------------------------------------------------------
YOU SHOULD KNOW WHAT INVESCO KNOWS(R)
--------------------------------------------------------------------------------
INVESCO STOCK FUNDS, INC.
INVESCO BLUE CHIP GROWTH FUND - INVESTOR CLASS
INVESCO DYNAMICS FUND - INVESTOR CLASS
INVESCO ENDEAVOR FUND - INVESTOR CLASS
INVESCO GROWTH & INCOME FUND - INVESTOR CLASS
INVESCO SMALL COMPANY GROWTH FUND - INVESTOR CLASS
INVESCO S&P 500 INDEX FUND - INVESTOR CLASS
INVESCO VALUE EQUITY FUND - INVESTOR CLASS
SEVEN NO-LOAD CLASSES OF SHARES OF MUTUAL FUNDS DESIGNED FOR INVESTORS SEEKING
LONG-TERM CAPITAL APPRECIATION.
TABLE OF CONTENTS
Investment Goals, Strategies And Risks................................35
Fund Performance......................................................40
Fees And Expenses.....................................................42
Investment Risks......................................................44
Principal Risks Associated With The Funds.............................44
Temporary Defensive Positions.........................................47
Portfolio Turnover....................................................47
Fund Management.......................................................48
Portfolio Managers....................................................48
Potential Rewards.....................................................50
Share Price...........................................................51
How To Buy Shares.....................................................51
Your Account Services.................................................56
How To Sell Shares....................................................57
Taxes.................................................................59
Dividends And Capital Gain Distributions..............................59
Financial Highlights..................................................61
[INVESCO ICON] INVESCO FUNDS
The Securities and Exchange Commission has not approved or disapproved the
shares of these Funds. Likewise, the Commission has not determined if this
Prospectus is truthful or complete. Anyone who tells you otherwise is committing
a federal crime.
<PAGE>
INVESCO Funds Group, Inc. ("INVESCO") is the investment adviser for the Funds.
Together with our affiliated companies, we at INVESCO direct all aspects of the
management of the Funds.
This Prospectus contains important information about the Funds' Investor Class
shares. Each Fund also offers one or more additional classes of shares through
separate prospectuses. Each of the Fund's classes has varying expenses, with
resulting effects on their performance. You can choose the class of shares that
is best for you, based on how much you plan to invest and other relevant factors
discussed in "How To Buy Shares." To obtain additional information about other
classes of shares, contact INVESCO Distributors, Inc. ("IDI") at 1-800-328-2234.
THIS PROSPECTUS WILL TELL YOU MORE ABOUT:
[KEY ICON] INVESTMENT GOALS & STRATEGIES
[ARROWS ICON] POTENTIAL INVESTMENT RISKS
[GRAPH ICON] PAST PERFORMANCE
[INVESCO ICON] WORKING WITH INVESCO
--------------------------------------------------------------------------------
[KEY ICON][ARROWS ICON] INVESTMENT GOALS, STRATEGIES AND RISKS
FACTORS COMMON TO ALL THE FUNDS
FOR MORE DETAILS ABOUT EACH FUND'S CURRENT INVESTMENTS AND MARKET OUTLOOK,
PLEASE SEE THE MOST RECENT ANNUAL OR SEMIANNUAL REPORT.
The Funds attempt to make your investment grow. The Funds (except for S&P 500
Index Fund) are aggressively managed. The Funds invest primarily in equity
securities that INVESCO believes will rise in price faster than other
securities, as well as in options and other investments whose values are based
upon the values of equity securities.
All of the Funds (except S&P 500 Index and Value Equity Funds) are managed in
the growth style. At INVESCO, growth investing starts with research from the
"bottom up," and focuses on company fundamentals and growth prospects.
We require that securities purchased for the Funds meet the following standards:
o EXCEPTIONAL GROWTH: The markets and industries they represent are growing
significantly faster than the economy as a whole.
o LEADERSHIP: They are leaders -- or emerging leaders -- in these markets,
securing their position through technology, marketing, distribution or some
other innovative means.
<PAGE>
o FINANCIAL VALIDATION: Their returns -- in the form of sales unit growth,
rising operating margins, internal funding and other factors -- demonstrate
exceptional growth and leadership.
Growth investing may be more volatile than other investment styles because
growth stocks are more sensitive to investor perceptions of an issuing company's
growth potential. Growth-oriented funds typically will underperform
value-oriented funds when investor sentiment favors the value investing style.
S&P 500 Index Fund is passively managed to track the composition and performance
of the S&P 500 Stock Index.
Value Equity Fund is managed in the value style. That means we seek securities,
particularly stocks, that are currently undervalued by the market -- companies
that are performing well, or have solid management and products, but whose stock
prices do not reflect that value. Through our value process, we seek to provide
reasonably consistent returns over a variety of market cycles.
In addition to the risks outlined in the following sections for each Fund, the
Funds are subject to other principal risks such as market, liquidity,
counterparty, foreign securities, lack of timely information and portfolio
turnover risks. These risks are described and discussed later in the Prospectus
under the headings "Investment Risks" and "Principal Risks Associated With The
Funds." An investment in a Fund is not a deposit of any bank and is not insured
or guaranteed by the Federal Deposit Insurance Corporation ("FDIC") or any other
government agency. As with any mutual fund, there is always a risk that you may
lose money on your investment in a Fund.
[KEY ICON] INVESCO BLUE CHIP GROWTH FUND - INVESTOR CLASS
The Fund seeks to make your investment grow. It also seeks current income.
The Fund invests primarily in common stocks of large companies that, at the time
of purchase, have market capitalizations of more than $15 billion and that have
a history of consistent earnings growth regardless of business cycles. In
addition, INVESCO tries to identify companies that have - or are expected to
have - growing earnings, revenues and strong cash flows. INVESCO also examines a
variety of industries and businesses, and seeks to purchase the securities of
companies that we believe are best situated to grow in their industry
categories. We also consider the dividend payment records of the companies whose
securities the Fund buys. The Fund also may invest in preferred stocks (which
generally pay higher dividends than common stocks) and debt instruments that are
convertible into common stocks, as well as in securities of foreign companies.
<PAGE>
In recent years, the core of the Fund's investments has been concentrated in the
securities of three or four dozen large, high quality companies.
Although the Fund is subject to a number of risks that could affect its
performance, its principal risk is market risk - that is, that the prices of the
securities in its portfolio will rise and fall due to price movements in the
securities markets, and that the securities held in the Fund's portfolio may
decline in value more than the overall securities markets.
[KEY ICON] INVESCO DYNAMICS FUND - INVESTOR CLASS
The Fund attempts to make your investment grow. It invests primarily in common
stocks of mid-sized companies -- those with market capitalizations between $2
billion and $15 billion at the time of purchase -- but also has the flexibility
to invest in other types of securities including preferred stocks, convertible
securities and bonds.
The core of the Fund's portfolio is invested in securities of established
companies that are leaders in attractive growth markets with a history of strong
returns. The remainder of the portfolio is invested in securities of companies
that show accelerating growth, driven by product cycles, favorable industry or
sector conditions and other factors that INVESCO believes will lead to rapid
sales or earnings growth.
The Fund's strategy relies on many short-term factors including current
information about a company, investor interest, price movements of a company's
securities and general market and monetary conditions. Consequently, the Fund's
investments are usually bought and sold relatively frequently.
While the Fund generally invests in mid-sized companies, the Fund sometimes
invests in the securities of smaller companies. The prices of these securities
tend to move up and down more rapidly than the securities prices of larger, more
established companies, and the price of Fund shares tends to fluctuate more than
it would if the Fund invested in the securities of larger companies.
[KEY ICON] INVESCO ENDEAVOR FUND - INVESTOR CLASS
The Fund attempts to make your investment grow. It uses an aggressive strategy
and invests primarily in common stocks. The Fund invests in companies of all
sizes and also has the flexibility to invest in other types of securities,
including preferred stocks, convertible securities, warrants, bonds and other
debt securities.
The Fund's strategy relies on many short-term factors including current
information about a company, investor interest, price movements of a company's
securities and general market and monetary conditions. Consequently, the Fund's
investments are usually bought and sold relatively frequently.
<PAGE>
The Fund's investments are not limited to companies of a particular size. It
invests in the securities of smaller companies, including companies just
entering the securities marketplace with initial public offerings. The prices of
these securities tend to move up and down more rapidly than the securities
prices of larger, more established companies. When the Fund concentrates its
investments in the securities of smaller companies, the price of Fund shares
tends to fluctuate more than it would if the Fund invested in the securities of
larger companies.
[KEY ICON] INVESCO GROWTH & INCOME FUND - INVESTOR CLASS
The Fund attempts to obtain a high rate of total return. Income on investments
(dividends and interest), plus increases in the value of investments, make up
total return. The Fund invests most of its assets in common stocks, preferred
stocks and securities convertible into common stocks. The Fund's core
investments are in well-established, large growth companies with a strong record
of paying dividends. The Fund may also invest in securities which do not pay
dividends but that INVESCO believes have the potential to increase in value,
regardless of the potential for dividends.
The Fund's strategy relies on many short-term factors including current
information about a company, investor interest, price movements of a company's
securities and general market and monetary conditions. Consequently, the Fund's
investments are usually bought and sold relatively frequently.
The Fund's portfolio is presently concentrated in the stocks of approximately 50
companies. Although INVESCO believes that this level of diversification is
appropriate, the Fund is not as diversified as some other mutual funds.
[KEY ICON] INVESCO SMALL COMPANY GROWTH FUND - INVESTOR CLASS
The Fund seeks long-term capital growth. Most holdings are in
small-capitalization companies -- those with market capitalizations under $2
billion at the time of purchase. We are primarily looking for companies in the
developing stages of their life cycles, which are currently priced below our
estimation of their potential, have earnings which may be expected to grow
faster than the U.S. economy in general, and/or offer the potential for
accelerated earnings growth due to rapid growth of sales, new products,
management changes, or structural changes in the economy.
Investments in small, developing companies carry greater risk than investments
in larger, more established companies. Developing companies generally face
<PAGE>
intense competition, and have a higher rate of failure than larger companies. On
the other hand, large companies were once small companies themselves, and the
growth opportunities of some small companies may be quite high.
[KEY ICON] INVESCO S&P 500 INDEX FUND - INVESTOR CLASS
The Fund seeks price performance and income comparable to the Standard & Poor's
500 Composite Stock Price Index ("S&P 500" or "Index"). The Fund invests in the
stocks that make up the Index, in approximately the same proportions.
The Fund is not sponsored, endorsed, sold or promoted by S&P. S&P makes no
representation or warranty, express or implied, to the shareholders or the
general public regarding the advisability of investing in the Fund or the
ability of the S&P 500 to track general stock performance. S&P has no direct
relationship with the Fund other than the licensing of certain trademarks and
trade names of S&P and the S&P 500 Index which is composed by S&P without regard
to the Fund.
The Fund is not actively managed; instead, the Fund seeks to track the
performance of the S&P 500. Therefore, when the S&P 500 drops, the value of
shares of the Fund drops accordingly. The Fund makes no effort to hedge against
price movements in the S&P 500. Due to purchases and sales of portfolio
securities to meet investor purchases and redemptions, the Fund will not have a
100% correlation to the performance of the Index. However, under normal
circumstances, the Fund expects to have at least a 95% correlation to the
performance of the S&P 500.
[KEY ICON] INVESCO VALUE EQUITY FUND - INVESTOR CLASS
The Fund seeks high total return from capital appreciation and current income.
The portfolio emphasizes high-quality, larger-capitalization companies which are
temporarily out of favor with investors. Our value-based process evaluates
numerous factors on a current and historical basis, seeking undiscovered values
in the market. The philosophy of value investing is based upon the belief that
certain securities are undervalued by the market. As such, when the market
"discovers" these securities, their value should increase.
Although the Fund is subject to a number of risks, its principal risk is market
risk. Undervalued stocks may not realize their perceived value for extended
periods of time. Value-oriented funds may underperform when another investing
style is in favor.
<PAGE>
[GRAPH ICON] FUND PERFORMANCE
The bar charts below show the Funds' actual yearly performance for the years
ended December 31 (commonly known as their "total return") over the past decade
or since inception. The table below shows average annual total returns for
various periods ended December 31, 1999 for each Fund compared to the S&P MidCap
400 Index, S&P 500 Composite Index and Russell 2000 Index. The information in
the charts and table illustrates the variability of each Fund's total return and
how its performance compared to a broad measure of market performance. Remember,
past performance does not indicate how a Fund will perform in the future.
--------------------------------------------------------------------------------
BLUE CHIP GROWTH FUND -- INVESTOR CLASS
ACTUAL ANNUAL TOTAL RETURN(1),(2)
--------------------------------------------------------------------------------
'90 '91 '92 '93 '94 '95 '96 '97 '98 '99
(1.18%) 42.05% 2.88% 18.01% (8.80%) 29.54% 20.96% 27.22% 41.72% 38.49%
--------------------------------------------------------------------------------
Best Calendar Qtr. _____% _____%
Worst Calendar Qtr. _____% _____%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
DYNAMICS FUND -- INVESTOR CLASS
ACTUAL ANNUAL TOTAL RETURN(1),(2)
--------------------------------------------------------------------------------
'90 '91 '92 '93 '94 '95 '96 '97 '98 '99
(6.35%) 67.00% 13.15% 19.10% (1.95%) 37.55% 15.65% 24.09% 23.25% 71.80%
--------------------------------------------------------------------------------
Best Calendar Qtr. _____% _____%
Worst Calendar Qtr. _____% _____%
--------------------------------------------------------------------------------
-------------------------------------------------------
INVESCO ENDEAVOR FUND -- INVESTOR CLASS
ACTUAL ANNUAL TOTAL RETURN(1),(2),(3)
------------------------------------------------------
1999
84.21%
-------------------------------------------------------
Best Calendar Qtr. _____% _____%
Worst Calendar Qtr. _____% _____%
-------------------------------------------------------
-------------------------------------------------------
GROWTH & INCOME FUND -- INVESTOR CLASS
ACTUAL ANNUAL TOTAL RETURN(1),(2),(4)
-------------------------------------------------------
1999
43.48%
-------------------------------------------------------
Best Calendar Qtr. _____% _____%
Worst Calendar Qtr. _____% _____%
-------------------------------------------------------
<PAGE>
--------------------------------------------------------------------------------
SMALL COMPANY GROWTH FUND -- INVESTOR CLASS
ACTUAL ANNUAL TOTAL RETURN(1),(2),(5)
--------------------------------------------------------------------------------
'92 '93 '94 '95 '96 '97 '98 '99
25.75% 23.38% (3.74%) 30.02% 23.38% 11.62% 18.31% 81.64%
--------------------------------------------------------------------------------
Best Calendar Qtr. _____% _____%
Worst Calendar Qtr. _____% _____%
--------------------------------------------------------------------------------
-------------------------------------------------------
S&P 500 INDEX FUND -- INVESTOR CLASS
ACTUAL ANNUAL TOTAL RETURN(1),(2),(6)
-------------------------------------------------------
1998 1999
29.85% ____%
-------------------------------------------------------
Best Calendar Qtr. _____% _____%
Worst Calendar Qtr. _____% _____%
-------------------------------------------------------
--------------------------------------------------------------------------------
VALUE EQUITY FUND -- INVESTOR CLASS
ACTUAL ANNUAL TOTAL RETURN(1),(2)
--------------------------------------------------------------------------------
'90 '91 '92 '93 '94 '95 '96 '97 '98 '99
(5.80%) 35.84% 4.98% 10.43% 4.04% 30.60% 18.48% 28.00% 15.05% 1.12%
--------------------------------------------------------------------------------
Best Calendar Qtr. _____% _____%
Worst Calendar Qtr. _____% _____%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN(1),(2)
AS OF 12/31/99
--------------------------------------------------------------------------------
10 YEARS
1 YEAR 5 YEARS OR SINCE INCEPTION
Dynamics Fund - Investor Class ____% ____% ____%
S&P MidCap 400 Index(7) ____% ____% ____%
Blue Chip Growth Fund - Investor Class ____% ____% ____%
INVESCO Endeavor Fund - Investor Class ____% N/A ____%(3)
Growth & Income Fund - Investor Class ____% N/A ____%(4)
Value Equity Fund - Investor Class ____% ____% ____%
S&P 500 Index Fund - Investor Class ____% N/A ____%(6)
S&P 500 Composite Index(7) ____% ____% ____%
S&P Company Growth Fund - Investor Class ____% ____% ____%(5)
Russell 2000 Index(7) ____% ____% ____%
(1) Total return figures include reinvested dividends and capital gain
distributions and the effect of each Fund's expenses.
(2) Returns for Investor Class shares of Blue Chip Growth, Dynamics, INVESCO
Endeavor, Growth & Income, Small Company Growth, S&P 500 Index and Value
Equity Funds were ____%, _____%,_____%,_____%, _____%, _____% and _____%,
respectively, year-to-date as of the calendar quarter ended September 30,
2000.
(3) The Fund commenced investment operations on October 28, 1998.
<PAGE>
(4) The Fund commenced investment operations on July 1, 1998.
(5) The Fund commenced investment operations on December 27, 1991.
(6) The Fund commenced investment operations on December 23, 1997.
(7) The S&P MidCap 400 is an unmanaged index indicative of domestic
mid-capitalization stock prices. The S&P 500 Composite Index is an unmanaged
index considered representative of the performance of the broad U.S. stock
market. The Russell 2000 Index is an unmanaged index indicative of small
capitalization stocks. Please keep in mind that the indexes do not pay
brokerage, management, administrative or distribution expenses, all of which
are paid by the Funds and are reflected in their annual returns.
FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
shares of the Funds.
SHAREHOLDER FEES PAID DIRECTLY FROM YOUR ACCOUNT
S&P 500 INDEX FUND - INVESTOR CLASS
Redemption Fee (as a percentage of amount redeemed) 1.00%(1)
Exchange Fee 1.00%(1)
ANNUAL FUND OPERATING EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS
BLUE CHIP GROWTH FUND - INVESTOR CLASS
Management Fees 0.55%
Distribution and Service (12b-1) Fees(2) 0.25%
Other Expenses(3),(4) ____%
Total Annual Fund Operating Expenses(3),(4)
=====
DYNAMICS FUND - INVESTOR CLASS
Management Fees 0.52%
Distribution and Service (12b-1) Fees(2) 0.25%
Other Expenses(3),(4),(5) ____%
Total Annual Fund Operating Expenses(3),(4),(5)
=====
INVESCO ENDEAVOR FUND - INVESTOR CLASS
Management Fees 0.75%
Distribution and Service (12b-1) Fees(2) 0.25%
Other Expenses(3),(4),(5) ____%
Total Annual Fund Operating Expenses(3),(4),(5)
=====
GROWTH & INCOME FUND - INVESTOR CLASS
Management Fees 0.75%
Distribution and Service (12b-1) Fees(2) 0.25%
Other Expenses(3),(4),(5) ____%
Total Annual Fund Operating Expenses(3),(4),(5)
=====
<PAGE>
SMALL COMPANY GROWTH FUND - INVESTOR CLASS
Management Fees 0.72%
Distribution and Service (12b-1) Fees(2) 0.25%
Other Expenses(3),(4),(5) ____%
Total Annual Fund Operating Expenses(3),(4),(5)
=====
S&P 500 INDEX FUND - INVESTOR CLASS
Management Fees 0.25%
Distribution and Service (12b-1) Fees(2) 0.25%
Other Expenses(3),(4),(5) ____%
Total Annual Fund Operating Expenses(3),(4),(5)
=====
VALUE EQUITY FUND - INVESTOR CLASS
Management Fees 0.75%
Distribution and Service (12b-1) Fees(2) 0.25%
Other Expenses(3),(4),(5) ____%
Total Annual Fund Operating Expenses(3),(4),(5)
=====
(1) A 1% fee shall be imposed on redemptions or exchanges of shares held three
months or less.
(2) Because the Funds pay 12b-1 distribution fees which are based upon each
Fund's assets, if you own shares of a Fund for a long period of time, you
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.
(3) Each Fund's actual Other Expenses and Total Annual Fund Operating Expenses
were lower than the figures shown, because their custodian and transfer
agency fees were reduced under expense offset arrangements.
(4) The expense information presented in the table has been restated from the
financial statements to reflect a change in the administrative services and
transfer agency fees.
(5) Certain expenses of Dynamics, INVESCO Endeavor, Growth & Income, Small
Company Growth, S&P 500 Index and Value Equity Funds were absorbed
voluntarily by INVESCO pursuant to commitments between those Funds and
INVESCO. These commitments may be changed at any time following
consultation with the board of directors. After absorption, but excluding
any expense offset arrangements, Dynamics Fund's Other Expenses and Total
Annual Fund Operating Expenses were _____% and _____%, respectively, of the
Fund's average net assets; INVESCO Endeavor Fund's Other Expenses and Total
Annual Fund Operating Expenses were _____% and _____%, respectively, of the
Fund's average net assets; Growth & Income Fund's Other Expenses and Total
Annual Fund Operating Expenses were _____% and _____%, respectively, of the
Fund's average net assets; Small Company Growth Fund's Other Expenses and
Total Annual Fund Operating Expenses were _____% and _____%, respectively,
of the Fund's average net assets; S&P 500 Index Fund 's Other Expenses and
Total Annual Fund Operating Expenses were _____% and _____%, respectively,
of the Fund's average net assets; and Value Equity Fund's Other Expenses
and Total Annual Fund Operating Expenses were ______% and _____%
respectively, of the Fund's average net assets.
EXAMPLE
The Example is intended to help you compare the cost of investing in the Funds
to the cost of investing in other mutual funds.
The Example assumes that you invested $10,000 in a Fund for the time periods
indicated and redeemed all of your shares at the end of each period. The Example
also assumes that your investment had a hypothetical 5% return each year and
that a Fund's operating expenses remained the same. Although the actual costs
<PAGE>
and performance of a Fund may be higher or lower, based on these assumptions
your costs would have been:
1 year 3 years 5 years 10 years
Blue Chip Growth Fund - Investor Class $____ $____ $____ $____
Dynamics Fund - Investor Class $____ $____ $____ $____
INVESCO Endeavor Fund - Investor Class $____ $____ $____ $____
Growth & Income Fund - Investor Class $____ $____ $____ $____
S&P 500 Index Fund - Investor Class $____ $____ $____ $____
Value Equity Fund - Investor Class $____ $____ $____ $____
[ARROWS ICON] INVESTMENT RISKS
BEFORE INVESTING IN A FUND, YOU SHOULD DETERMINE THE LEVEL OF RISK WITH WHICH
YOU ARE COMFORTABLE. TAKE INTO ACCOUNT FACTORS LIKE YOUR AGE, CAREER, INCOME
LEVEL, AND TIME HORIZON.
You should determine the level of risk with which you are comfortable before you
invest. The principal risks of investing in any mutual fund, including these
Funds, are:
NOT INSURED. Mutual funds are not insured by the FDIC or any other government
agency, unlike bank deposits such as CDs or savings accounts.
NO GUARANTEE. No mutual fund can guarantee that it will meet its investment
objectives.
POSSIBLE LOSS OF INVESTMENT. A mutual fund cannot guarantee its performance, nor
assure you that the market value of your investment will increase. You may lose
the money you invest, and the Funds will not reimburse you for any of these
losses.
VOLATILITY. The price of your mutual fund shares will increase or decrease with
changes in the value of a Fund's underlying investments and changes to the
equity markets as a whole.
NOT A COMPLETE INVESTMENT PLAN. An investment in any mutual fund does not
constitute a complete investment plan. The Funds are designed to be only a part
of your personal investment plan.
[ARROWS ICON] PRINCIPAL RISKS ASSOCIATED WITH THE FUNDS
You should consider the special factors associated with the policies discussed
below in determining the appropriateness of investing in a Fund. See the
Statement of Additional Information for a discussion of additional risk factors.
<PAGE>
MARKET RISK
Equity stock prices vary and may fall, thus reducing the value of your Fund's
investments. Certain stocks selected for any Fund's portfolio may decline in
value more than the overall stock market. In general, the securities of large
businesses with outstanding securities worth $15 billion or more have less
volatility than those of mid-size businesses with outstanding securities worth
more than $2 billion, or small businesses with outstanding securities worth less
than $2 billion.
LIQUIDITY RISK
A Fund's portfolio is liquid if the Fund is able to sell the securities it owns
at a fair price within a reasonable time. Liquidity is generally related to the
market trading volume for a particular security. Investments in smaller
companies or in foreign companies or companies in emerging markets are subject
to a variety of risks, including potential lack of liquidity.
COUNTERPARTY RISK
This is a risk associated primarily with repurchase agreements and some
derivatives transactions. It is the risk that the other party in the transaction
will not fulfill its contractual obligation to complete the transaction with a
Fund.
FOREIGN SECURITIES RISKS
Investments in foreign and emerging markets carry special risks, including
currency, political, regulatory and diplomatic risks. Each Fund may invest up to
25% of its respective assets in securities of non-U.S. issuers. Securities of
Canadian issuers and American Depository Receipts are not subject to this 25%
limitation.
CURRENCY RISK. A change in the exchange rate between U.S. dollars and a
foreign currency may reduce the value of a Fund's investment in a security
valued in the foreign currency, or based on that currency value.
POLITICAL RISK. Political actions, events or instability may result in
unfavorable changes in the value of a security.
REGULATORY RISK. Government regulations may affect the value of a security.
In foreign countries, securities markets that are less regulated than those
in the U.S. may permit trading practices that are not allowed in the U.S.
DIPLOMATIC RISK. A change in diplomatic relations between the U.S. and a
foreign country could affect the value or liquidity of investments.
EUROPEAN ECONOMIC AND MONETARY UNION. Austria, Belgium, Finland, France,
Germany, Ireland, Italy, Luxembourg, The Netherlands, Portugal and Spain
are presently members of the European Economic and Monetary Union (the
"EMU") which as of January 1, 1999, adopted the euro as a common currency.
The national currencies will be sub-currencies of the euro until July 1,
2002, at which time these currencies will disappear entirely. Other
European countries may adopt the euro in the future.
<PAGE>
As the euro is implemented, there may be changes in the relative strength
and value of the U.S. dollar and other major currencies, as well as
possible adverse tax consequences. The euro transition by EMU countries may
affect the fiscal and monetary levels of those participating countries. The
outcome of these uncertainties could have unpredictable effects on trade
and commerce and result in increased volatility for all financial markets.
LACK OF TIMELY INFORMATION RISK
Timely information about a security or its issuer may be unavailable, incomplete
or inaccurate. This risk is more common to securities issued by foreign
companies and companies in emerging markets than it is to the securities of
U.S.-based companies.
PORTFOLIO TURNOVER RISK
A Fund's investments may be bought and sold relatively frequently. A high
turnover rate may result in higher brokerage commissions and taxable capital
gain distributions to a Fund's shareholders.
------------------------------------------------------
Although each Fund generally invests in publicly-traded equity securities of
growing companies, the Funds also may invest in other types of securities and
other financial instruments, indicated in the chart below. Although these
investments typically are not part of any Fund's principal investment strategy,
they may constitute a significant portion of a Fund's portfolio, thereby
possibly exposing a Fund and its investors to the following additional risks.
--------------------------------------------------------------------------------
INVESTMENT RISKS APPLIES TO THESE FUNDS
--------------------------------------------------------------------------------
AMERICAN DEPOSITORY
RECEIPTS (ADRs)
These are securities Market, Information, Blue Chip Growth
issued by U.S. banks Political, Dynamics
that represent shares Regulatory, INVESCO Endeavor
of foreign Diplomatic, Growth & Income
corporations held by Liquidity and Small Company Growth
those banks. Although Currency Risks Value Equity
traded in U.S.
securities markets and
valued in U.S.
dollars, ADRs carry
most of the risks of
investing directly in
foreign securities.
--------------------------------------------------------------------------------
<PAGE>
--------------------------------------------------------------------------------
INVESTMENT RISKS APPLIES TO THESE FUNDS
--------------------------------------------------------------------------------
REPURCHASE AGREEMENT
A contract under which Counterparty Risk Blue Chip Growth
the seller of a Dynamics
security agrees to buy INVESCO Endeavor
it back at an Growth & Income
agreed-upon price and Small Company Growth
time in the future. S&P 500 Index
Value Equity
--------------------------------------------------------------------------------
[ARROWS ICON] TEMPORARY DEFENSIVE POSITIONS
When securities markets or economic conditions are unfavorable or unsettled, we
might try to protect the assets of a Fund by investing in securities that are
highly liquid such as high quality money market instruments like short-term U.S.
government obligations, commercial paper or repurchase agreements even though
that is not the normal investment strategy of any Fund. We have the right to
invest up to 100% of a Fund's assets in these securities, although we are
unlikely to do so. Even though the securities purchased for defensive purposes
often are considered the equivalent of cash, they also have their own risks.
Investments that are highly liquid or comparatively safe tend to offer lower
returns. Therefore, a Fund's performance could be comparatively lower if it
concentrates in defensive holdings.
[ARROWS ICON] PORTFOLIO TURNOVER
With the exception of S&P 500 Index Fund, we actively manage and trade the
Funds' portfolios. Therefore, the Funds may have a higher portfolio turnover
rate compared to many other mutual funds. The Funds with higher than average
portfolio turnover rates for the fiscal year ended July 31, 2000 were:
INVESCO Blue Chip Growth Fund _____%
INVESCO Dynamics Fund _____%
INVESCO Endeavor Fund _____%
INVESCO Growth & Income Fund _____%
INVESCO Small Company Growth Fund _____%
INVESCO Value Equity Fund _____%
A portfolio turnover rate of 200%, for example, is equivalent to a Fund buying
and selling all of the securities in its portfolio two times in the course of a
year. A comparatively high turnover rate may result in higher brokerage
commissions and taxable capital gain distributions to a Fund's shareholders.
<PAGE>
[INVESCO ICON] FUND MANAGEMENT
INVESCO IS A SUBSIDIARY OF AMVESCAP PLC, AN INTERNATIONAL INVESTMENT MANAGEMENT
COMPANY THAT MANAGES MORE THAN $____ BILLION IN ASSETS WORLDWIDE. AMVESCAP IS
BASED IN LONDON, WITH MONEY MANAGERS LOCATED IN EUROPE, NORTH AND SOUTH AMERICA,
AND THE FAR EAST.
INVESTMENT ADVISER
INVESCO, located at 7800 East Union Avenue, Denver, Colorado, is the investment
adviser of the Funds. INVESCO was founded in 1932 and manages over $____ billion
for more than _______ shareholders of ___ INVESCO mutual funds. INVESCO performs
a wide variety of other services for the Funds, including administrative and
transfer agency functions (the processing of purchases, sales and exchanges of
Fund shares).
World Asset Management ("World"), located at 255 Brown Street Centre, 2nd Floor,
Birmingham, Michigan, is the sub-adviser to S&P 500 Index Fund. INVESCO Capital
Management, Inc. ("ICM"), a division of INVESCO, Inc., located at 1360 Peachtree
Street, N.E., Suite 100, Atlanta, Georgia, is the sub-adviser to Value Equity
Fund.
A wholly owned subsidiary of INVESCO, IDI is the Funds' distributor and is
responsible for the sale of the Funds' shares.
INVESCO, ICM and IDI are subsidiaries of AMVESCAP PLC.
World is a general partnership organized by Munder Capital Management, a general
partnership formed in December 1994 which engages in investment management and
advisory services.
The following table shows the fees the Funds paid to INVESCO for its advisory
services in the fiscal year ended July 31, 2000:
--------------------------------------------------------------------------------
ADVISORY FEE AS A PERCENTAGE OF
AVERAGE ANNUAL NET ASSETS UNDER MANAGEMENT
--------------------------------------------------------------------------------
Blue Chip Growth Fund ____%
Dynamics Fund ____%
INVESCO Endeavor Fund ____%
Growth & Income Fund ____%
Small Company Growth Fund ____%
S&P 500 Index Fund ____%
Value Equity Fund ____%
[INVESCO ICON] PORTFOLIO MANAGERS
S&P 500 Index Fund is managed by a team of World portfolio managers that is
collectively responsible for the investment decisions relating to the Fund.
<PAGE>
The following individuals are primarily responsible for the day-to-day
management of their respective Fund's or Funds' portfolio holdings:
FUND PORTFOLIO MANAGER(S)
Blue Chip Growth Trent E. May
Douglas J. McEldowney
Dynamics Timothy J. Miller
Thomas Wald
INVESCO Endeavor Trent E. May
Growth & Income Trent E. May
Fritz Meyer
Small Company Growth Stacie Cowell
Value Equity Michael C. Harhai
Terrence Irrgang
S&P 500 Index World Asset Management
STACIE COWELL, a vice president of INVESCO, is the lead portfolio manager of
Small Company Growth Fund. Before joining INVESCO in 1997, Stacie was senior
equity analyst with Founders Asset Management and a capital markets and trading
analyst with Chase Manhattan Bank in New York. She is a Chartered Financial
Analyst. Stacie holds an M.S. in Finance from the University of Colorado and a
B.A. in Economics from Colgate University.
MICHAEL C. HARHAI, an executive vice president of ICM, is the lead portfolio
manager of Value Equity Fund. Before joining ICM in 1992, Michael was a senior
vice president with Sovran Capital Management Corp. and a vice president with
C&S National Bank. He is a Chartered Financial Analyst. Michael holds an M.B.A.
from the University of Central Florida and a B.A. from the University of South
Florida.
TERRENCE IRRGANG, a vice president of ICM, is the co-portfolio manager of Value
Equity Fund. Before joining ICM in 1992, Terrence was a consultant for Towers,
Perrin, Forster & Crosby. He is a Chartered Financial Analyst. Terrence holds an
M.B.A. from Temple University and a B.A. from Gettysburg College.
TRENT E. MAY, a senior vice president of INVESCO, is the lead portfolio manager
of Blue Chip Growth Fund and INVESCO Endeavor Fund and a co-portfolio manager of
Growth & Income Fund. Before joining INVESCO in 1996, Trent was with Munder
Capital Management and SunBank Capital Management. He is a Chartered Financial
Analyst. Trent holds an M.B.A. from Rollins College and a B.S. in Engineering
from Florida Institute of Technology.
DOUGLAS J. MCELDOWNEY, a vice president of INVESCO, is the co-portfolio manager
of Blue Chip Growth Fund. Before joining INVESCO in 1999, Doug was with Bank of
America Investment Management, Inc. and SunTrust Banks, Inc. He is a Chartered
Financial Analyst and Certified Public Accountant. Doug holds an M.B.A. from the
<PAGE>
Crummer Graduate School at Rollins College and a B.B.A. in Finance from the
University of Kentucky.
FRITZ MEYER, a vice president of INVESCO, is the lead portfolio manager of
Growth & Income Fund. Before joining INVESCO in 1996, Fritz was an executive
vice president and portfolio manager with Nelson, Benson & Zellmer, Inc. He
holds an M.B.A. from Amos Tuck School -- Dartmouth College and a B.A. with a
distinction in Economics from Dartmouth College.
TIMOTHY J. MILLER, Chief Investment Officer and a director and senior vice
president of INVESCO, is the lead portfolio manager of Dynamics Fund. Before
joining INVESCO in 1992, Tim was a portfolio manager with Mississippi Valley
Advisors. He is a Chartered Financial Analyst. Tim holds an M.B.A. from the
University of Missouri-- St. Louis and a B.S.B.A. from St. Louis University.
THOMAS WALD, a vice president of INVESCO, is the co-portfolio manager of
Dynamics Fund. Before joining INVESCO in 1997, Tom was an analyst with Munder
Capital Management, Duff & Phelps and Prudential Investment Corp. He is a
Chartered Financial Analyst. Tom holds an M.B.A. from the Wharton School at the
University of Pennsylvania and a B.A. from Tulane University.
Stacie Cowell, Trent May, Doug McEldowney, Fritz Meyer and Tom Wald are members
of the INVESCO Growth Team, which is led by Tim Miller.
[INVESCO ICON] POTENTIAL REWARDS
NO SINGLE FUND SHOULD REPRESENT YOUR COMPLETE INVESTMENT PROGRAM NOR SHOULD YOU
ATTEMPT TO USE THE FUNDS FOR SHORT-TERM TRADING PURPOSES.
The Funds offer shareholders the potential to increase the value of their
capital over time; Blue Chip Growth, Growth & Income and Value Equity Funds also
offer the opportunity for current income. Like most mutual funds, each Fund
seeks to provide higher returns than market or its competitors, but cannot
guarantee that performance. Each Fund seeks to minimize risk by investing in
many different companies in a variety of industries.
SUITABILITY FOR INVESTORS
Only you can determine if an investment in a Fund is right for you based upon
your own economic situation, the risk level with which you are comfortable and
other factors. In general, the Funds are most suitable for investors who:
o are willing to grow their capital over the long term (at least five years).
o understand that shares of a Fund can, and likely will, have daily price
fluctuations.
o are investing tax-deferred retirement accounts, such as traditional and Roth
Individual Retirement Accounts ("IRAs"), as well as employer-sponsored
qualified retirement plans, including 401(k)s and 403(b)s, all of which have
longer investment horizons.
You probably do not want to invest in the Funds if you are:
o primarily seeking current dividend income.
<PAGE>
o unwilling to accept potentially significant changes in the price of Fund
shares.
o speculating on short-term fluctuations in the stock markets.
[INVESCO ICON] SHARE PRICE
CURRENT MARKET VALUE OF FUND ASSETS
+ ACCRUED INTEREST AND DIVIDENDS
- FUND DEBTS,
INCLUDING ACCRUED EXPENSES
-----------------------------------
/ NUMBER OF SHARES
= YOUR SHARE PRICE (NAV).
The value of your Fund shares is likely to change daily. This value is known as
the Net Asset Value per share, or NAV. INVESCO determines the market value of
each investment in each Fund's portfolio each day that the New York Stock
Exchange ("NYSE") is open, at the close of the regular trading day on that
exchange (normally 4:00 p.m. Eastern time). Therefore, shares of the Funds are
not priced on days when the NYSE is closed, which generally is on weekends and
national holidays in the U.S.
NAV is calculated by adding together the current market price of all of a Fund's
investments and other assets, including accrued interest and dividends;
subtracting the Fund's debts, including accrued expenses; and dividing that
dollar amount by the total number of the Fund's outstanding shares.
All purchases, sales and exchanges of Fund shares are made by INVESCO at the NAV
next calculated after INVESCO receives proper instructions from you to purchase,
redeem or exchange shares of a Fund. Your instructions must be received by
INVESCO no later than the close of the NYSE to effect transactions at that day's
NAV. If INVESCO hears from you after that time, your instructions will be
processed at the NAV calculated at the end of the next day that the NYSE is
open.
Foreign securities exchanges, which set the prices for foreign securities held
by the Funds, are not always open the same days as the NYSE, and may be open for
business on days the NYSE is not. For example, Thanksgiving Day is a holiday
observed by the NYSE and not by overseas exchanges. In this situation, the Funds
would not calculate NAV on Thanksgiving Day (and INVESCO would not buy, sell or
exchange shares for you on that day), even though activity on foreign exchanges
could result in changes in the value of investments held by the Funds on that
day.
[INVESCO ICON] HOW TO BUY SHARES
TO BUY SHARES AT THAT DAY'S CLOSING PRICE, YOU MUST CONTACT US BEFORE THE CLOSE
OF THE NYSE, NORMALLY 4:00 P.M. EASTERN TIME.
The Funds offer multiple classes of shares. The chart in this section shows
several convenient ways to invest in the Funds. A share of each class represents
an identical interest in a Fund and has the same rights, except that each class
bears its own distribution and shareholder servicing charges, and other
expenses. The income attributable to each class and the dividends payable on the
<PAGE>
shares of each class will be reduced by the amount of the distribution fee or
service fee, if applicable, and the other expenses payable by that class.
There is no charge to invest directly through INVESCO. With regard to all Funds,
except S&P 500 Index Fund - Investor Class, there is no charge to exchange or
redeem shares when you do so directly through INVESCO. However, with respect to
S&P 500 Index Fund - Investor Class, upon a redemption or an exchange of shares
held three months or less (other than shares acquired through reinvestment of
dividends or other distributions), a fee of 1% of the current net asset value of
the shares being exchanged will be assessed and retained by that Fund for the
benefit of the remaining shareholders. If you invest in a Fund through a
securities broker, you may be charged a commission or transaction fee for either
purchases or sales of Fund shares. For all new accounts, please send a completed
application form, and specify the fund or funds and class or classes of shares
you wish to purchase. If you do not specify a fund or funds, your initial
investment and any subsequent purchases will automatically go into INVESCO Cash
Reserves Fund - Investor Class, a series of INVESCO Money Market Funds, Inc. You
will receive a confirmation of this transaction and may contact INVESCO to
exchange it into the fund you choose.
INVESCO reserves the right to increase, reduce or waive each Fund's minimum
investment requirements in its sole discretion, if it determines this action is
in the best interests of that Fund's shareholders. INVESCO also reserves the
right in its sole discretion to reject any order to buy Fund shares, including
purchases by exchange.
MINIMUM INITIAL INVESTMENT. $1,000, which is waived for regular investment
plans, including EasiVest and Direct Payroll Purchase, and certain retirement
plans, including IRAs. $5,000 for S&P 500 Index Fund - Investor Class.
MINIMUM SUBSEQUENT INVESTMENT. $50 (Minimums are lower for certain retirement
plans.) $1,000 for S&P 500 Index Fund - Investor Class.
EXCHANGE POLICY. You may exchange your shares in any of the Funds for shares of
the same class in another INVESCO fund on the basis of their respective NAVs at
the time of the exchange.
FUND EXCHANGES CAN BE A CONVENIENT WAY FOR YOU TO DIVERSIFY YOUR INVESTMENTS, OR
TO REALLOCATE YOUR INVESTMENTS WHEN YOUR OBJECTIVES CHANGE.
Before making any exchange, be sure to review the prospectuses of the funds
involved and consider the differences between the funds. Also, be certain that
you qualify to purchase certain classes of shares in the new fund. An exchange
is the sale of shares from one fund immediately followed by the purchase of
shares in another. Therefore, any gain or loss realized on the exchange is
recognizable for federal income tax purposes (unless, of course, you or your
account qualifies as tax-deferred under the Internal Revenue Code). If the
shares of the fund you are selling have gone up in value since you bought them,
the sale portion of an exchange may result in taxable income to you.
We have the following policies governing exchanges:
o Both fund accounts involved in the exchange must be registered in exactly
the same name(s) and Social Security or federal tax I.D. number(s).
<PAGE>
o You may make up to four exchanges out of each Fund per 12-month period, but
you may be subject to the redemption fee described below.
o Each Fund reserves the right to reject any exchange request, or to modify or
terminate the exchange policy, if it is in the best interests of the Fund
and its shareholders. Notice of all such modifications or terminations that
affect all shareholders of the Fund will be given at least 60 days prior to
the effective date of the change, except in unusual instances, including a
suspension of redemption of the exchanged security under Section 22(e) of
the Investment Company Act of 1940.
In addition, the ability to exchange may be temporarily suspended at any time
that sales of the Fund into which you wish to exchange are temporarily stopped.
REDEMPTION FEE (S&P 500 INDEX FUND - INVESTOR CLASS ONLY). If you exchange
shares of S&P 500 Index Fund after holding them three months or less (other than
shares acquired through reinvestment of dividends or other distributions), a fee
of 1% of the current net asset value of the shares being exchanged will be
assessed and retained by the Fund for the benefit of the remaining shareholders.
This fee is intended to encourage long-term investment in S&P 500 Index Fund, to
avoid transaction and other expenses caused by early redemptions, and to
facilitate portfolio management. The fee is currently waived for institutional,
qualified retirement plan and other shareholders investing through omnibus
accounts, due to certain economies associated with these accounts. However, S&P
500 Index Fund reserves the right to impose redemption fees on shares held by
such shareholders at any time if warranted by the Fund's future cost of
processing redemptions. The redemption fee may be modified or discontinued at
any time or from time to time. This fee is not a deferred sales charge, is not a
commission paid to INVESCO and does not benefit INVESCO in any way. The fee
applies to redemptions from the Fund and exchanges into any of the other no-load
mutual funds which are also advised by INVESCO and distributed by IDI. S&P 500
Index Fund will use the "first-in, first-out" method to determine your holding
period. Under this method, the date of redemption or exchange will be compared
with the earliest purchase date of shares held in your account. If your holding
period is less than three months, the redemption/exchange fee will be assessed
on the current net asset value of those shares.
Please remember that if you pay by check, Automated Clearing House ("ACH") or
wire and your funds do not clear, you will be responsible for any related loss
to a Fund or INVESCO. If you are already an INVESCO funds shareholder, the Fund
may seek reimbursement for any loss from your existing account(s).
CHOOSING A SHARE CLASS. Each Fund has multiple classes of shares, each class
representing an interest in the same portfolio of investments. In deciding which
class of shares to purchase, you should consider, among other things, (i) the
length of time you expect to hold your shares, (ii) the provisions of the
distribution plan applicable to the class, if any, (iii) the eligibility
requirements that apply to purchases of a particular class and (iv) any services
you may receive in making your investment determination.
INTERNET TRANSACTION. Investors in any of the Investor Class or Class C shares
of any INVESCO fund may open new accounts, exchange and redeem shares through
the INVESCO Web site. To use this service, you will need a Web browser
(presently Netscape version 4.0 or higher, Microsoft Internet Explorer version
<PAGE>
4.0 or higher, or AOL version 5.0 or higher) and the ability to use the INVESCO
Web site. INVESCO will accept Internet purchase instructions only for exchanges
or if the purchase price is paid to INVESCO through debiting your bank account.
Internet cash redemptions will be paid only to the same bank account from which
the payment to INVESCO originated. INVESCO imposes a limit of $25,000 on
Internet purchase and redemption transactions. Other minimum transaction amounts
are discussed in this Prospectus. You may also download an application to open
an account from the Web site, complete it by hand, and mail it to INVESCO, along
with a check.
INVESCO employs reasonable procedures to confirm that transactions entered into
over the Internet are genuine. These procedures include the use of alphanumeric
passwords, secure socket layering, encryption and other precautions reasonably
designed to protect the integrity, confidentiality and security of shareholder
information. In order to enter into a transaction on the INVESCO Web site, you
will need an account number, your Social Security Number and an alphanumeric
password. If INVESCO follows these procedures, neither INVESCO, its affiliates
nor any INVESCO fund will be liable for any loss, liability, cost or expense for
following instructions communicated via the Internet that are reasonably
believed to be genuine or that follow INVESCO's security procedures. By entering
into the user's agreement with INVESCO to open an account through our Web site,
you lose certain rights if someone gives fraudulent or unauthorized instructions
to INVESCO that result in a loss to you.
<TABLE>
<CAPTION>
METHOD INVESTMENT MINIMUM PLEASE REMEMBER
-----------------------------------------------------------------------------------------------------
<S> <C> <C>
BY CHECK $1,000 for regular accounts; INVESCO does not accept a third
Mail to: $250 for an IRA; $50 for each party check unless it is from
INVESCO Funds Group, Inc., subsequent investment. S&P anotherfinancial institution
P.O. Box 173706, 500 Index Fund - Investor related to aretirement plan
Denver, CO 80217-3706. Class - $5,000 for regular transfer.
You may send your accounts; $2,000 for an IRA;
check by overnight courier $1,000 for each subsequent
to: 7800 E. Union Ave. investment.
Denver, CO 80237.
-----------------------------------------------------------------------------------------------------
BY WIRE $1,000 for regular accounts;
You may send your payment by $250 for an IRA; $50 for each
bank wire (call 1-800-525-8085 subsequent investment. S&P
for instructions). 500 Index Fund - Investor
Class - $5,000 for regular
accounts; $2,000 for an IRA;
$1,000 for each subsequent
investment.
<PAGE>
METHOD INVESTMENT MINIMUM PLEASE REMEMBER
-----------------------------------------------------------------------------------------------------
BY TELEPHONE WITH ACH $1,000 for regular accounts; You must forward your bank
Call 1-800-525-8085 to request $250 for an IRA; $50 for each account information to INVESCO
your purchase. Upon your subsequent investment. S&P prior to using this option.
telephone instructions, INVESCO 500 Index Fund - Investor Class
will move money from your - $5,000 for regular accounts;
designated bank/credit union $2,000 for an IRA; $1,000 for
checking or savings account each subsequent investment.
in order to purchase shares.
-----------------------------------------------------------------------------------------------------
BY INTERNET $1,000 for regular accounts; You will need a Web browser
Go to the INVESCO Web $250 for an IRA; $50 for each to use this service. Internet
site at invescofunds.com. subsequent investment. S&P purchase transactions are
500 Index Fund - Investor limited to a maximum of
Class - $5,000 for regular $25,000.
accounts; $2,000 for an IRA;
$1,000 for each subsequent
investment.
-----------------------------------------------------------------------------------------------------
REGULAR INVESTING WITH EASIVEST $50 per month for EasiVest; Like all regular investment
OR DIRECT PAYROLL PURCHASE $50 per pay period for Direct plans, neither EasiVest nor
You may enroll on your fund Payroll Purchase. You may Direct Payroll Purchase
application, or call us for a start or stop your regular ensures a profit or protects
separate form and more details. investment plan at any time, against loss in a falling
Investing the same amount on a with two weeks' notice to market. Because you'll invest
monthly basis allows you to buy INVESCO. S&P 500 Index - continually, regardless of
more shares when prices are low Investor Class - $5,000 for varying price levels,
and fewer when prices are high. regular accounts; $2,000 for consider your financial
This "dollar cost averaging" an IRA; $1,000 for each ability to keep buying
may help offset market subsequent investment. through low price levels. And
fluctuations. Over a period of remember that you will lose
time, your average cost per share money if you redeem your
may be less than the actual shares when the market value
average market value per share. of all your shares is less
than their cost.
-----------------------------------------------------------------------------------------------------
BY PERSONAL ACCOUNT LINE $50 for subsequent You must forward your bank
Automated transactions by investments. S&P 500 Index account information to
telephone are available for Fund-Investor Class - $1,000 INVESCO prior to using this
subsequent purchases and for subsequent investments. option. Auto mated
exchanges 24 hours a day. transactions are limited to a
Simply call 1-800-424-8085. maximum of $25,000.
-----------------------------------------------------------------------------------------------------
BY EXCHANGE $1,000 for regular accounts; See "Exchange Policy."
Between the same class of any $250 for an IRA; $50 for each
two INVESCO funds. Call subsequent investment. S&P 500
1-800-525-8085 for Index - Investor Class - $5,000
prospectuses of other INVESCO for regular accounts; $2,000
funds. Exchanges may be made for an IRA; $1,000 for each
in writing or by telephone, subsequent investment.
or at our Web site at
invescofunds.com. You may
also establish an automatic
monthly exchange service
between two INVESCO funds;
call us for further details
and the correct form.
</TABLE>
<PAGE>
DISTRIBUTION EXPENSES. We have adopted a Plan and Agreement of Distribution -
Investor Class (commonly known as a "12b-1 Plan") for the Funds. The 12b-1 fees
paid by each Fund are used to defray all or part of the cost of preparing and
distributing prospectuses and promotional materials, as well as to pay for
certain distribution-related and other services. These services include
compensation to third party brokers, financial advisers and financial services
companies that sell Fund shares and/or service shareholder accounts.
Under the Plan, each Fund's payments are limited to an amount computed at an
annual rate of 0.25% of the Fund's average net assets. If distribution expenses
for a Fund exceed these computed amounts, INVESCO pays the difference.
[INVESCO ICON] YOUR ACCOUNT SERVICES
SHAREHOLDER ACCOUNTS. INVESCO maintains your share account, which contains your
current Fund holdings. The Funds do not issue share certificates.
INVESCO PROVIDES YOU WITH SERVICES DESIGNED TO MAKE IT SIMPLE FOR YOU TO BUY,
SELL OR EXCHANGE YOUR SHARES OF ANY INVESCO MUTUAL FUND.
QUARTERLY INVESTMENT SUMMARIES. Each calendar quarter, you will receive a
written statement which consolidates and summarizes account activity and value
at the beginning and end of the period for each of your INVESCO funds.
TRANSACTION CONFIRMATIONS. You will receive detailed confirmations of individual
purchases, exchanges and sales. If you choose certain recurring transaction
plans (for instance, EasiVest), your transactions are confirmed on your
quarterly Investment Summaries.
TELEPHONE TRANSACTIONS. You may buy, exchange and sell Fund shares by telephone,
unless you specifically decline these privileges when you fill out the INVESCO
new account application.
YOU CAN CONDUCT MOST TRANSACTIONS AND CHECK ON YOUR ACCOUNT THROUGH OUR
TOLL-FREE TELEPHONE NUMBER. YOU MAY ALSO ACCESS PERSONAL ACCOUNT INFORMATION AT
OUR WEB SITE, INVESCOFUNDS.COM.
Unless you decline the telephone transaction privileges, when you fill out and
sign the new account Application, a Telephone Transaction Authorization Form, or
use your telephone transaction privileges, you lose certain rights if someone
gives fraudulent or unauthorized instructions to INVESCO that result in a loss
to you. In general, if INVESCO has followed reasonable procedures, such as
recording telephone instructions and sending written transaction confirmations,
INVESCO is not liable for following telephone instructions that it believes to
be genuine. Therefore, you have the risk of loss due to unauthorized or
fraudulent instructions.
<PAGE>
HOUSEHOLDING. To save money for the Funds, INVESCO will send only one copy of a
prospectus or financial report to each household address. This process, known as
"householding," is used for most required shareholder mailings. It does not
apply to account statements. You may, of course, request an additional copy of a
prospectus or financial report at any time by calling or writing INVESCO. You
may also request that householding be eliminated from all of your required
mailings.
IRAS AND OTHER RETIREMENT PLANS. Shares of any INVESCO mutual fund may be
purchased for IRAs and many other types of tax-deferred retirement plans. Please
call INVESCO for information and forms to establish or transfer your existing
retirement plan or account.
[INVESCO ICON] HOW TO SELL SHARES
TO SELL SHARES AT THAT DAY'S CLOSING PRICE, YOU MUST CONTACT US BEFORE 4:00 P.M.
EASTERN TIME.
The chart in this section shows several convenient ways to sell your Fund
shares. Shares of the Funds may be sold at any time at the next NAV calculated
after your request to sell in proper form is received by INVESCO. Depending on
Fund performance, the NAV at the time you sell your shares may be more or less
than the price you paid to purchase your shares.
If you own shares in more than one INVESCO fund, please specify the fund whose
shares you wish to sell and specify the class of shares. Remember that any sale
or exchange of shares in a non-retirement account will likely result in a
taxable gain or loss.
While INVESCO attempts to process telephone redemptions promptly, there may be
times - particularly in periods of severe economic or market disruption - when
you may experience delays in redeeming shares by telephone.
INVESCO usually forwards the proceeds from the sale of fund shares within seven
days after we receive your request to sell in proper form. However, payment may
be postponed under unusual circumstances -- for instance, if normal trading is
not taking place on the NYSE, or during an emergency as defined by the
Securities and Exchange Commission. If your INVESCO fund shares were purchased
by a check which has not yet cleared, payment will be made promptly when your
purchase check does clear; that can take up to 12 business days.
If you participate in EasiVest, the Funds' automatic monthly investment program,
and sell all of the shares in your account, we will not make any additional
EasiVest purchases unless you give us other instructions.
Because of the Funds' expense structure, it costs as much to handle a small
account as it does to handle a large one. If the value of your account in a Fund
falls below $250 as a result of your actions (for example, sale of your Fund
shares), the Fund reserves the right to sell all of your shares, send the
proceeds of the sale to you and close your account. Before this is done, you
will be notified and given 60 days to increase the value of your account to $250
or more.
<PAGE>
<TABLE>
<CAPTION>
METHOD MINIMUM REDEMPTION PLEASE REMEMBER
-----------------------------------------------------------------------------------------------------
<S> <C> <C>
BY TELEPHONE $250 (or, if less, full INVESCO's telephone redemption
Call us toll-free at: liquidation of the account) privileges may be modified or
1-800-525-8085. for a redemption check. terminated in the future at
INVESCO's discretion. The
maximum amount which may be
redeemed by telephone is generally
$25,000.
----------------------------------------------------------------------------------------------------
IN WRITING Any amount. The redemption request must be
Mail your request to INVESCO signed by all registered account
Funds Group, Inc., P.O. Box owners. Payment will be mailed to
173706, Denver, CO 80217-3706. your address as it appears on
You may also send your request by INVESCO's records, or to a bank
overnight courier to 7800 E. designated by you in writing.
Union Ave., Denver, CO 80237.
-----------------------------------------------------------------------------------------------------
BY TELEPHONE WITH ACH $50. IRA redemptions not You must forward your bank account
Call 1-800-525-8085 to request permitted. information to INVESCO prior to
your redemption. using this option. INVESCO will
automatically pay the proceeds into
your designated bank account.
-----------------------------------------------------------------------------------------------------
BY INTERNET $50. IRA redemptions not You will need a Web browser to use
Go to the INVESCO Web site at permitted. this service. Internet purchase
invescofunds.com. transactions are limited to a
maximum of $25,000. INVESCO will
automatically pay the proceeds into
your designated bank account.
-----------------------------------------------------------------------------------------------------
PERIODIC WITHDRAWAL PLAN $100 per payment on a monthly You must have at least $10,000
You may call us to request the or quarterly basis. The total invested with the INVESCO
appropriate form and more redemption check may be funds with at least $5,000 of that
information at 1-800-525-8085. made payable to any party you total invested in the fund from
designate. which withdrawals will be made.
-----------------------------------------------------------------------------------------------------
PAYMENT TO THIRD PARTY Any amount. All registered account owners
Mail your request to INVESCO must sign the request, with
Funds Group, Inc., P.O. Box signature guarantees from an
173706, Denver, CO 80217-3706. eligible guarantor financial
institution, such as a commercial
bank or a recognized national or
regional securities firm.
</TABLE>
<PAGE>
[GRAPH ICON] TAXES
TO AVOID BACKUP WITHHOLDING, BE SURE WE HAVE YOUR CORRECT SOCIAL SECURITY OR
TAXPAYER IDENTIFICATION NUMBER.
Everyone's tax status is unique. We encourage you to consult your own tax
adviser on the tax impact to you of investing in the Funds.
Each Fund customarily distributes to its shareholders substantially all of its
net investment income, net capital gains and net gains from foreign currency
transactions, if any. You receive a proportionate part of these distributions,
depending on the percentage of each Fund's shares that you own. These
distributions are required under federal tax laws governing mutual funds. It is
the policy of each Fund to distribute all investment company taxable income and
net capital gains. As a result of this policy and each Fund's qualification as a
regulated investment company, it is anticipated that none of the Funds will pay
any federal income or excise taxes. Instead, each Fund will be accorded conduit
or "pass through" treatment for federal income tax purposes.
However, unless you are (or your account is) exempt from income taxes, you must
include all dividends and capital gain distributions paid to you by a Fund in
your taxable income for federal, state and local income tax purposes. You also
may realize capital gains or losses when you sell shares of a Fund at more or
less than the price you originally paid. An exchange is treated as a sale, and
is a taxable event. Dividends and other distributions usually are taxable
whether you receive them in cash or automatically reinvest them in shares of the
distributing Fund(s) or other INVESCO funds.
If you have not provided INVESCO with complete, correct tax information, the
Funds are required by law to withhold 31% of your distributions and any money
that you receive from the sale of shares of the Funds as a backup withholding
tax.
We will provide you with detailed information every year about your dividends
and capital gain distributions. Depending on the activity in your individual
account, we may also be able to assist with cost basis figures for shares you
sell.
[GRAPH ICON] DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS
The Funds earn ordinary or investment income from dividends and interest on
their investments. The Funds expect to distribute substantially all of this
investment income, less Fund expenses, to shareholders annually, with respect to
Blue Chip Growth, Dynamics, INVESCO Endeavor and Small Company Growth Funds, and
quarterly, with respect to Growth & Income, S&P 500 Index and Value Equity
Funds, or at such other times as the Funds may elect.
<PAGE>
NET INVESTMENT INCOME AND NET REALIZED CAPITAL GAINS ARE DISTRIBUTED TO
SHAREHOLDERS AT LEAST ANNUALLY. DISTRIBUTIONS ARE TAXABLE WHETHER REINVESTED IN
ADDITIONAL SHARES OR PAID TO YOU IN CASH (EXCEPT FOR TAX-EXEMPT ACCOUNTS).
A Fund also realizes capital gains and losses when it sells securities in its
portfolio for more or less than it had paid for them. If total gains on sales
exceed total losses (including losses carried forward from previous years), a
Fund has a net realized capital gain. Net realized capital gains, if any, are
distributed to shareholders at least annually, usually in November.
Under present federal income tax laws, capital gains may be taxable at different
rates, depending on how long a Fund has held the underlying investment.
Short-term capital gains which are derived from the sale of assets held one year
or less are taxed as ordinary income. Long-term capital gains which are derived
from the sale of assets held for more than one year are taxed at the maximum
capital gains rate, currently 20% for individuals.
Dividends and capital gain distributions are paid to you if you hold shares on
the record date of the distribution regardless of how long you have held your
shares. A Fund's NAV will drop by the amount of the distribution on the day the
distribution is made. If you buy shares of a Fund just before a distribution,
you may wind up "buying a dividend." This means that if the Fund makes a
dividend or capital gain distribution shortly after you buy, you will receive
some of your investment back as a taxable distribution. Most shareholders want
to avoid this. And, if you sell your shares at a loss for tax purposes and
purchase a substantially identical investment within 30 days before or after
that sale, the transaction is usually considered a "wash sale" and you will not
be able to claim a tax loss.
Dividends and capital gain distributions paid by each Fund are automatically
reinvested in additional Fund shares at the NAV on the ex-dividend date, unless
you choose to have them automatically reinvested in another INVESCO fund or paid
to you by check or electronic funds transfer. If you choose to be paid by check,
the minimum amount of the check must be at least $10; amounts less than that
will be automatically reinvested. Dividends and other distributions, whether
received in cash or reinvested in additional Fund shares, may be subject to
federal income tax.
<PAGE>
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the financial
performance of each Fund for the past five years (or, if shorter, the period of
the Fund's operations). Certain information reflects financial results for a
single Fund share. The total returns in the table represent the annual
percentages that an investor would have earned (or lost) on an investment in a
Fund (assuming reinvestment of all dividends and distributions). This
information has been audited by PricewaterhouseCoopers LLP, independent
accountants, whose report, along with the financial statements, is included in
INVESCO Stock Funds, Inc.'s 2000 Annual Report to Shareholders, which is
incorporated by reference into the Statement of Additional Information. This
Report is available without charge by contacting IDI at the address or telephone
number on the back cover of this Prospectus.
<TABLE>
<CAPTION>
YEAR PERIOD
ENDED ENDED
JULY 31 JULY 31 YEAR ENDED AUGUST 31
--------------------------------------------------------------------------------------------------------------------------
2000 1999(a) 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C> <C>
BLUE CHIP GROWTH FUND -
INVESTOR CLASS
PER SHARE DATA
Net Asset Value--Beginning of Period $ 5.15 $ 6.06 $ 5.44 $ 5.33 $ 5.34
--------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income(b) 0.00 0.02 0.01 0.03 0.05
Net Gains on Securities
(Both Realized and Unrealized) 2.11 0.69 1.39 0.95 0.49
--------------------------------------------------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS 2.11 0.71 1.40 0.98 0.54
--------------------------------------------------------------------------------------------------------------------------
Less Distributions
Dividends from Net Investment
Income(c) 0.00 0.02 0.01 0.03 0.05
Distributions from Capital Gains 0.51 1.60 0.77 0.84 0.50
--------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS 0.51 1.62 0.78 0.87 0.55
--------------------------------------------------------------------------------------------------------------------------
Net Asset Value--End of Period $ 6.75 $ 5.15 $ 6.06 $ 5.44 $ 5.33
==========================================================================================================================
TOTAL RETURN 42.06%(d) 13.42% 28.14% 20.23% 12.05%
RATIOS
Net Assets--End of Period
($000 Omitted) $1,232,908 $747,739 $709,220 $596,726 $501,285
Ratio of Expenses to Average Net Assets 1.03%(e)(f) 1.04%(e) 1.07%(e) 1.05%(e) 1.06%
Ratio of Net Investment Income to
Average Net Assets (0.08%)(f) 0.37% 0.22% 0.64% 1.07%
Portfolio Turnover Rate 134%(d) 153% 286% 207% 111%
</TABLE>
<PAGE>
(a) From September 1, 1998 to July 31, 1999.
(b) Net Investment Income for the year ended July 31, 2000 and for the period
ended July 31, 1999, aggregated less than $0.01 on a per share basis.
(c) Distributions in excess of net investment income for the year ended July
31, 2000, for the period ended July 31, 1999 and for the year ended August
31, 1995, aggregated less than $0.01 on a per share basis.
(d) Based on operations for the period shown and, accordingly, are not
representative of a full year.
(e) Ratio is based on total expenses of the class, which is before any expense
offset arrangements (which may include custodian, distribution and transfer
agent).
(f) Annualized.
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
YEAR PERIOD
ENDED ENDED
JULY 31 JULY 31 YEAR ENDED APRIL 30
--------------------------------------------------------------------------------------------------------------------------
2000 1999(a) 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C> <C>
DYNAMICS FUND -
INVESTOR CLASS
PER SHARE DATA
Net Asset Value--
Beginning of Period $ 18.15 $ 16.41 $ 12.02 $ 13.61 $ 11.38
--------------------------------------------------------------------------------------------------------------------------
INCOME FROM
INVESTMENT OPERATIONS
Net Investment Income (Loss)(b) 0.00 0.00 (0.05) (0.04) 0.02
Net Gains or Losses on Securities
(Both Realized and Unrealized) 1.24 3.04 6.39 (0.19) 3.94
--------------------------------------------------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS 1.24 3.04 6.34 (0.23) 3.96
--------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
Dividends from Net Investment
Income (c) 0.00 0.00 0.00 0.00 0.02
Distributions from Capital Gains 0.00 1.30 1.95 1.36 1.71
In Excess of Capital Gains 0.00 0.00 0.00 0.00 0.00
--------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS 0.00 1.30 1.95 1.36 1.73
--------------------------------------------------------------------------------------------------------------------------
Net Asset Value--End of Period $ 19.39 $ 18.15 $ 16.41 $ 12.02 $ 13.61
==========================================================================================================================
TOTAL RETURN 6.83%(d) 20.83% 56.42% (2.34%) 36.32%
RATIOS
Net Assets End of Period
($000 Omitted) $2,471,482 $2,044,321 $1,340,299 $762,396 $778,416
Ratio of Expenses to Average Net
Assets(e) 1.03%(f) 1.05% 1.08% 1.16% 1.14%
Ratio of Net Investment Income
(Loss) to Average Net Assets (0.32%)(f) (0.41%) (0.43%) (0.31%) 0.16%
Portfolio Turnover Rate 23%(d) 129% 178% 204% 196%
</TABLE>
(a) From May 1, 1999 to July 31, 1999.
(b) Net Investment Income (Loss) aggregated less than $0.01 on a per share
basis for the year ended July 31, 2000, for the period ended July 31, 1999
and for the year ended April 30, 1999.
(c) Distributions in excess of net investment income for the year ended April
30, 1996, aggregated less than $0.01 on a per share basis.
(d) Based on operations for the period shown and, accordingly, are not
representative of a full year.
(e) Ratio is based on total expenses of the class, which is before any expense
offset arrangements (which may include custodian, distribution and transfer
agent fees).
(f) Annualized.
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
YEAR ENDED PERIOD ENDED PERIOD ENDED
JULY 31 JULY 31 APRIL 30
--------------------------------------------------------------------------------
INVESCO ENDEAVOR FUND - 2000 1999(a) 1999(b)
INVESTOR CLASS
PER SHARE DATA
Net Asset Value Beginning of Period $ 16.32 $ 10.00
--------------------------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS(c)
Net Investment Loss(d) (0.03) (0.03)
Net Gains on Securities (Both
Realized and Unrealized) 0.32 6.35
--------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS 0.29 6.32
--------------------------------------------------------------------------------
LESS DISTRIBUTIONS
Dividends from Capital Gains 0.00 0.00
In Excess of Capital Gains 0.00 0.00
--------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS 0.00 0.00
--------------------------------------------------------------------------------
Net Asset Value--End of Period $ 16.61 $ 16.32
================================================================================
TOTAL RETURN 1.78%(e) 63.20%(e)
RATIOS
Net Assets--End of Period ($000 Omitted) $109,532 $72,592
Ratio of Expenses to Average Net Assets(f) 1.49%(g) 1.43%(g)
Ratio of Net Investment Loss to
Average Net Assets (0.83%)(g) ((0.55%)(g)
Portfolio Turnover Rate 47%(e) 107%(e)
(a) From May 1, 1999 to July 31, 1999.
(b) From October 28, 1998, commencement of investment operations, to April 30,
1999.
(c) The per share information was computed based on average shares for the
period ended April 30, 1999.
(d) Net Investment Loss aggregated less than $0.01 on a per share basis for the
year ended July 31, 2000.
(e) Based on operations for the period shown and, accordingly, are not
representative of a full year.
(f) Ratio is based on total expenses of the class, which is before any expense
offset arrangements (which may include custodian fees).
(g) Annualized.
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
YEAR ENDED PERIOD ENDED PERIOD ENDED
JULY 31 JULY 31 APRIL 30
--------------------------------------------------------------------------------
GROWTH & INCOME FUND - INVESTOR CLASS 2000 1999(a) 1999(b)
PER SHARE DATA
Net Asset Value--Beginning of Period $ 14.54 $ 10.00
--------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Loss (c) 0.00 0.00
Net Gains on Securities (Both
Realized and Unrealized) 0.83 5.22
--------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS 0.83 5.22
--------------------------------------------------------------------------------
LESS DISTRIBUTIONS
Distributions from Capital Gains 0.00 0.68
--------------------------------------------------------------------------------
Net Asset Value--End of Period $ 15.37 $ 14.54
================================================================================
TOTAL RETURN 5.71%(d) 53.07%(d)
RATIOS
Net Assets--End of Period ($000 Omitted) $61,316 $53,994
Ratio of Expenses to Average Net
Assets(e)(f) 1.52%(g) 1.52%(g)
Ratio of Net Investment Loss to
Average Net Assets(f) (0.45%)(g) (0.25%)(g)
Portfolio Turnover Rate 46%(d) 121%(d)
(a) From May 1, 1999 to July 31, 1999.
(b) From July 1, 1998, commencement of investment operations, to April 30,
1999.
(c) Net Investment Loss aggregated less than $0.01 on a per share basis for the
year ended July 31, 2000 and for the periods ended July 31, 1999 and April
30, 1999.
(d) Based on operations for the period shown and, accordingly, are not
representative of a full year.
(e) Ratio is based on total expenses of the class, less expenses absorbed by
INVESCO, if applicable, which is before any expense offset arrangements
(which may include custodian fees).
(f) Various expenses of the class were voluntarily absorbed by INVESCO for the
year ended July 31, 2000 and the periods ended July 31, 1999 and April 30,
1999. If such expenses had not been voluntarily absorbed, ratio of expenses
to average net assets would have been ___%, 1.75% (annualized) and 1.71%
(annualized) respectively, and ratio of net investment loss to average net
assets would have been ___%, (0.68%) (annualized) and (0.44%) (annualized),
respectively.
(g) Annualized.
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
YEAR PERIOD
ENDED ENDED
JULY 31 JULY 31 YEAR ENDED MAY 31
--------------------------------------------------------------------------------------------------------------------------
2000 1999(a) 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C> <C>
SMALL COMPANY GROWTH
FUND - INVESTOR CLASS
PER SHARE DATA
Net Asset Value Beginning of Period $12.08 $11.90 $12.82 $14.38 $9.37
--------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income (Loss)(b) 0.00 0.00 (0.06) (0.07) (0.06)
Net Gains or (Losses) on
Securities (Both Realized and
Unrealized) 1.53 1.35 2.56 (0.96) 5.25
--------------------------------------------------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS 1.53 1.35 2.50 (1.03) 5.19
--------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
Dividends from Net Investment Income 0.00 0.00 0.00 0.00 0.00
Distributions from Capital Gains 0.00 1.17 3.42 0.53 0.18
--------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS 0.00 1.17 3.42 0.53 0.18
--------------------------------------------------------------------------------------------------------------------------
Net Asset Value End of Period $ 13.61 $ 12.08 $ 11.90 $ 12.82 $ 14.38
==========================================================================================================================
TOTAL RETURN 12.67%(c) 12.91% 22.65% (7.08%) 55.78%
RATIOS
Net Assets--End of Period
($000 Omitted) $452,861 $318,109 $272,619 $294,259 $370,029
Ratio of Expenses to Average
Net Assets(d)(e) 1.50%(f) 1.51% 1.48% 1.52% 1.48%
Ratio of Net Investment Income
(Loss) to Average Net Assets(d) (0.69%)(f) (0.58%) (0.42%) (0.55%) (0.78%)
Portfolio Turnover Rate 41%(c) 203% 158% 216% 221%
</TABLE>
<PAGE>
(a) From June 1, 1999 to July 31, 1999.
(b) Net Investment Income (Loss) for the year ended July 31, 2000 and for the
period ended July 31, 1999 and the year ended May 31, 1999 aggregated less
than $0.01 on a per share basis.
(c) Based on operations for the period shown and, accordingly, are not
representative of a full year.
(d) Various expenses of the class were voluntarily absorbed by INVESCO for the
year ended July 31, 2000 and the period ended July 31, 1999 and for the
years ended May 31, 1999 and 1997. If such expenses had not been
voluntarily absorbed, ratio of expenses to average net assets would have
been _____%, 1.62% (annualized), 1.59% and 1.54%, respectively, and ratio
of net investment income (loss) to average net assets would have been
_____%, (0.81%) (annualized), (0.66%) and (0.57%), respectively.
(e) Ratio is based on total expenses of the class, less expenses absorbed by
INVESCO, if applicable, which is before any expense offset arrangements
(which may include custodian, distribution and transfer agent fees).
(f) Annualized.
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
PERIOD ENDED
YEAR ENDED JULY 31 JULY 31
--------------------------------------------------------------------------------
S&P 500 INDEX FUND - INVESTOR 2000 1999 1998(a)
CLASS
PER SHARE DATA
Net Asset Value--Beginning of Period $ 12.14 $10.00
--------------------------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income 0.14 0.07
Net Gains on Securities (Both
Realized and Unrealized) 2.29 2.14
--------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS 2.43 2.21
--------------------------------------------------------------------------------
LESS DISTRIBUTIONS
Dividends from Net Investment
Income 0.13 0.07
Distributions from Capital Gains 0.05 0.00
In Excess of Capital Gains 0.00 0.00
--------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS 0.18 0.07
--------------------------------------------------------------------------------
Net Asset Value--End of Period $ 14.39 $ 12.14
================================================================================
TOTAL RETURN(b) 20.09% 22.11%(c)
RATIOS
Net Assets--End of Period
($000 Omitted) $64,613 $15,065
Ratio of Expenses to Average Net
Assets(d)(e) 0.60% 0.62%(f)
Ratio of Net Investment Income
to Average Net Assets(e) 1.06% 1.52%(f)
Portfolio Turnover Rate 2% 0%(c)(g)
(a) From December 23, 1997, commencement of investment operations, through July
31, 1998.
(b) The applicable redemption fees are not included in the Total Return
calculation.
(c) Based on operations for the period shown and, accordingly, are not
representative of a full year.
(d) Ratio is based on total expenses of the class, less expenses absorbed by
INVESCO, if applicable, which is before any expense offset arrangements
(which may include custodian fees).
(e) Various expenses of the class were voluntarily absorbed by INVESCO for the
years ended July 31, 2000 and 1999 and the period ended July 31, 1998. If
such expenses had not been voluntarily absorbed, ratio of expenses to
average net assets would have been ___%, 0.99% and 1.71% (annualized),
respectively, and ratio of net investment income (loss) to average net
assets would have been ___%, 0.67% and 0.42% (annualized), respectively.
(f) Annualized.
(g) Portfolio Turnover Rate calculated to less than 0.10% for the period ended
July 31, 1998.
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
YEAR PERIOD
ENDED ENDED
JULY 31 JULY 31 YEAR ENDED AUGUST 31
--------------------------------------------------------------------------------------------------------------------------
2000 1999(a) 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C> <C>
VALUE EQUITY FUND -
INVESTOR CLASS
PER SHARE DATA
Net Asset Value--
Beginning of Period $ 25.68 $ 28.30 $ 22.24 $ 19.53 $ 18.12
--------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income 0.17 0.26 0.35 0.35 0.39
Net Gains or (Losses) on Securities
(Both Realized and Unrealized) 6.25 (0.43) 6.62 3.09 2.58
--------------------------------------------------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS 6.42 (0.17) 6.97 3.44 2.97
--------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
Dividends from Net Investment
Income(b) 0.17 0.26 0.35 0.35 0.39
Distributions from Capital Gains 2.32 2.19 0.56 0.38 1.17
--------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS 2.49 2.45 0.91 0.73 1.56
--------------------------------------------------------------------------------------------------------------------------
Net Asset Value--End of Period $ 29.61 $ 25.68 $ 28.30 $ 22.24 $ 19.53
==========================================================================================================================
TOTAL RETURN 25.41%(c) (1.06%) 32.04% 17.77% 17.84%
RATIOS
Net Assets End of Period
($000 Omitted) $369,982 $349,984 $369,766 $200,046 $153,171
Ratio of Expenses to Average
Net Assets(d) 1.27%(e)(f) 1.15%(e) 1.04%(e) 1.01%(e) 0.97%
Ratio of Net Investment Income to
Average Net Assets(d) 0.63%(f) 0.86% 1.35% 1.64% 2.17%
Portfolio Turnover Rate 22%(c) 48% 37% 27% 34%
</TABLE>
(a) From September 1, 1998 to July 31, 1999.
(b) Distributions in excess of net investment income for the year ended July
31, 2000, for the period ended July 31, 1999 and for the year ended August
31, 1998, aggregated less than $0.01 on a per share basis.
(c) Based on operations for the period shown and, accordingly, are not
representative of a full year.
(d) Various expenses of the class were voluntarily absorbed by INVESCO for the
year ended July 31, 2000 and the period ended July 31, 1999 and the year
ended August 31, 1998. If such expenses had not been voluntarily absorbed,
ratio of expenses to average net assets would have been ___%, 1.38%
(annualized) and 1.19%, respectively, and ratio of net investment income to
average net assets would have been ___%, 0.52% (annualized) and 0.82%,
respectively.
(e) Ratio is based on total expenses of the class, less expenses absorbed by
INVESCO, if applicable, which is before any expense offset arrangements
(which may include custodian and transfer agent fees).
(f) Annualized.
<PAGE>
NOVEMBER 30, 2000
INVESCO STOCK FUNDS, INC.
INVESCO BLUE CHIP GROWTH FUND - INVESTOR CLASS
INVESCO DYNAMICS FUND - INVESTOR CLASS
INVESCO ENDEAVOR FUND - INVESTOR CLASS
INVESCO GROWTH & INCOME FUND - INVESTOR CLASS
INVESCO SMALL COMPANY GROWTH FUND - INVESTOR CLASS
INVESCO S&P 500 INDEX FUND - INVESTOR CLASS
INVESCO VALUE EQUITY FUND - INVESTOR CLASS
You may obtain additional information about the Funds from several sources.
FINANCIAL REPORTS. Although this Prospectus describes the Funds' anticipated
investments and operations, the Funds also prepare annual and semiannual reports
that detail the Funds' actual investments at the report date. These reports
include discussion of each Fund's recent performance, as well as market and
general economic trends affecting each Fund's performance. The annual report
also includes the report of the Funds' independent accountants.
STATEMENT OF ADDITIONAL INFORMATION. The SAI dated November 30, 2000 is a
supplement to this Prospectus, and has detailed information about the Funds and
their investment policies and practices. A current SAI for the Funds is on file
with the Securities and Exchange Commission and is incorporated into this
Prospectus by reference; in other words, the SAI is legally a part of this
Prospectus, and you are considered to be aware of the contents of the SAI.
INTERNET. The current Prospectus of the Funds may be accessed through the
INVESCO Web site at invescofunds.com. In addition, the Prospectus, SAI, annual
report and semiannual report of the Funds are available on the SEC Web site at
www.sec.gov.
To obtain a free copy of the current Prospectus, SAI, annual report or
semiannual report, write to INVESCO Distributors, Inc., P.O. Box 173706, Denver,
Colorado 80217-3706; or call 1-800-525-8085. Copies of these materials are also
available (with a copying charge) from the SEC's Public Reference Section at 450
Fifth Street, N.W., Washington, D.C. 20549-0102. This information can be
obtained by electronic request at the following E-mail address:
[email protected], or by calling 1-202-942-8090. The SEC file numbers for the
Funds are 811-1474 and 002-26125.
811-1474
<PAGE>
PROSPECTUS | November 30, 2000
--------------------------------------------------------------------------------
YOU SHOULD KNOW WHAT INVESCO KNOWS(R)
--------------------------------------------------------------------------------
INVESCO STOCK FUNDS, INC.
INVESCO DYNAMICS FUND - INSTITUTIONAL CLASS
A NO-LOAD CLASS OF SHARES OF A MUTUAL FUND DESIGNED FOR INVESTORS SEEKING
CAPITAL APPRECIATION.
TABLE OF CONTENTS
Investment Goals, Strategies And Risks................................72
Fund Performance......................................................73
Fees And Expenses.....................................................75
Investment Risks......................................................76
Principal Risks Associated With The Fund..............................76
Temporary Defensive Positions.........................................78
Portfolio Turnover....................................................78
Fund Management.......................................................79
Portfolio Managers....................................................79
Potential Rewards.....................................................80
Share Price...........................................................80
How To Buy Shares.....................................................81
Your Account Services.................................................83
How To Sell Shares....................................................84
Taxes.................................................................85
Dividends And Capital Gain Distributions..............................86
Financial Highlights..................................................87
[INVESCO ICON] INVESCO FUNDS
The Securities and Exchange Commission has not approved or disapproved the
shares of this Fund. Likewise, the Commission has not determined if this
Prospectus is truthful or complete. Anyone who tells you otherwise is committing
a federal crime.
<PAGE>
INVESCO Funds Group, Inc. ("INVESCO") is the investment adviser for the Fund.
Together with our affiliated companies, we at INVESCO direct all aspects of the
management of the Fund.
This Prospectus contains important information about the Fund's Institutional
Class shares, which are offered only to institutional investors and qualified
retirement plans. The Fund also offers one or more additional classes of shares
through separate prospectuses. Each of the Fund's classes has varying expenses,
with resulting effects on their performance. You can choose the class of shares
that is best for you, based on how much you plan to invest and other relevant
factors discussed in "How To Buy Shares." To obtain additional information about
other classes of shares, contact INVESCO Distributors, Inc. ("IDI") at
1-800-328-2234.
THIS PROSPECTUS WILL TELL YOU MORE ABOUT:
[KEY ICON] INVESTMENT GOALS & STRATEGIES
[ARROWS ICON] POTENTIAL INVESTMENT RISKS
[GRAPH ICON] PAST PERFORMANCE
[INVESCO ICON] WORKING WITH INVESCO
--------------------------------------------------------------------------------
[KEY ICON] [ARROWS ICON] INVESTMENT GOALS & STRATEGIES AND RISKS
FOR MORE DETAILS ABOUT THE FUND'S CURRENT INVESTMENTS AND MARKET OUTLOOK, PLEASE
SEE THE MOST RECENT ANNUAL OR SEMIANNUAL REPORT.
The Fund attempts to make your investment grow. It is actively managed. The Fund
invests primarily in equity securities that INVESCO believes will rise in price
faster than other securities, as well as in options and other investments whose
values are based upon the values of these securities.
The Fund invests primarily in common stocks of mid-sized companies -- those with
market capitalizations between $2 billion and $15 billion at the time of
purchase -- but also has the flexibility to invest in other types of securities,
including preferred stocks, convertible securities and bonds.
The core of the Fund's portfolio is invested in securities of established
companies that are leaders in attractive growth markets with a history of strong
returns. The remainder of the portfolio is invested in securities of companies
that show accelerating growth, driven by product cycles, favorable industry or
sector conditions and other factors that INVESCO believes will lead to rapid
sales or earnings growth.
The Fund is managed in the growth style. At INVESCO, growth investing starts
with research from the "bottom up," and focuses on company fundamentals and
growth prospects.
<PAGE>
We require that securities purchased for the Fund meet the following standards:
o EXCEPTIONAL GROWTH: The markets and industries they represent are
growing significantly faster than the economy as a whole.
o LEADERSHIP: They are leaders -- or emerging leaders -- in these markets,
securing their positions through technology, marketing, distribution or
some other innovative means.
o FINANCIAL VALIDATION: Their returns -- in the form of sales unit growth,
rising operating margins, internal funding and other factors --
demonstrate exceptional growth and leadership.
Growth investing may be more volatile than other investment styles because
growth stocks are more sensitive to investor perceptions of an issuing company's
growth potential. Growth-oriented funds typically will underperform
value-oriented funds when investor sentiment favors the value investing style.
The Fund's strategy relies on many short-term factors including current
information about a company, investor interest, price movements of a company's
securities and general market and monetary conditions. While the Fund generally
invests in mid-sized companies, the Fund sometimes invests in the securities of
smaller companies. The prices of these securities tend to move up and down more
rapidly than the securities prices of larger, more established companies, and
the price of Fund shares tends to fluctuate more than it would if the Fund
invested in the securities of larger companies.
The Fund is subject to other principal risks such as market, counterparty,
foreign securities, lack of timely information and portfolio turnover risks.
These risks are described and discussed later in the Prospectus under the
headings "Investment Risks" and "Principal Risks Associated With The Fund." An
investment in the Fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation ("FDIC") or any other
government agency. As with any mutual fund, there is always a risk that you may
lose money on your investment in the Fund.
[GRAPH ICON] FUND PERFORMANCE
Since the Fund's Institutional Class shares were not offered until May 19, 2000,
the bar chart below shows the Fund's Investor Class share's actual yearly
performance for the years ended December 31 (commonly known as its "total
return") since inception. Investor Class shares are not offered in this
Prospectus. INVESTOR CLASS AND INSTITUTIONAL CLASS RETURNS WOULD BE SIMILAR
BECAUSE BOTH CLASSES OF SHARES INVEST IN THE SAME PORTFOLIO OF SECURITIES. THE
RETURNS OF THE CLASSES WOULD DIFFER, HOWEVER, TO THE EXTENT OF DIFFERING LEVELS
OF EXPENSES. IN THIS REGARD, THE BAR CHART REFLECTS AN ASSET BASED SALES CHARGE
OF 0.25% OF NET ASSETS THAT IS NOT APPLICABLE TO THE INSTITUTIONAL CLASS. The
table below shows average annual total returns for various periods ended
December 31, 1999 for the Fund's Investor Class shares compared to the S&P
MidCap 400 Index.
<PAGE>
The information in the charts and table illustrates the variability of the
Fund's Investor Class shares' total return and how its performance compared to a
broad measure of market performance. Remember, past performance does not
indicate how the Fund will perform in the future.
--------------------------------------------------------------------------------
DYNAMICS FUND - INVESTOR CLASS
ACTUAL ANNUAL TOTAL RETURN(1),(2),(3)
--------------------------------------------------------------------------------
'90 '91 '92 '93 '94 '95 '96 '97 '98 '99
(6.35%) 67.00% 13.15% 19.10% (1.95%) 37.55% 15.65% 24.09% 23.25% 71.80%
--------------------------------------------------------------------------------
Best Calendar Qtr. ____ ____%
Worst Calendar Qtr. ____ ____%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN(1),(2),(3)
AS OF 12/31/99
--------------------------------------------------------------------------------
1 YEAR 5 YEARS 10 YEARS
Dynamics Fund - Investor Class ____% ____% ____%
S&P MidCap 400 Index(4) ____% ____% ____%
(1) Total return figures include reinvested dividends and capital gain
distributions and the effect of the Fund's expenses.
(2) The returns are for Investor Class shares that are not offered in this
Prospectus. Total returns of Institutional Class shares will differ only to the
extent that the classes do not have the same expenses.
(3) Return for Investor Class shares of Dynamics Fund was ____% year-to-date as
of the calendar quarter ended September 30, 2000.
(4) The S&P MidCap 400 Index is an unmanaged index indicative of domestic
mid-capitalization stocks. Please keep in mind that the Index does not pay
brokerage, management, administrative or distribution expenses, all of which are
paid by the Fund and are reflected in its annual returns.
<PAGE>
FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund.
SHAREHOLDER FEES PAID DIRECTLY FROM YOUR ACCOUNT
You pay no fees to purchase Fund shares, to exchange to another INVESCO fund, or
to sell your shares. Accordingly, no fees are paid directly from your
shareholder account.
ANNUAL FUND OPERATING EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS
DYNAMICS FUND-INSTITUTIONAL CLASS
Management Fees 0.52%
Distribution and Service (12b-1) Fees None
Other Expenses(1),(2),(3) ____%
Total Annual Fund Operating Expenses(1),(2),(3)
=====
(1) The Fund's actual Other Expenses and Total Annual Fund Operating Expenses
were lower than the figures shown because its custodian fees were reduced under
an expense offset arrangement.
(2) The expense information presented in the table has been restated from the
financial statements to reflect a change in the administrative services and
transfer agency fees.
(3) Certain expenses of the Fund were absorbed voluntarily by INVESCO pursuant
to a commitment between the Fund and INVESCO. This commitment may be changed at
any time following consultation with the board of directors. After absorption,
but excluding any expense offset arrangements, the Fund's Other Expenses and
Total Annual Fund Operating Expenses were __% and __%, respectively, of the
Fund's average net assets.
EXAMPLE
The Example is intended to help you compare the cost of investing in the
Institutional Class shares of the Fund to the cost of investing in other mutual
funds.
The Example assumes that you invested $10,000 in the Institutional Class shares
of the Fund for the time periods indicated and redeemed all of your shares at
the end of each period. The Example also assumes that your investment had a
hypothetical 5% return each year and that the Fund's Institutional Class shares'
operating expenses remained the same. Although the actual costs and performance
of the Fund's Institutional Class shares may be higher or lower, based on these
assumptions your costs would have been:
1 year 3 years 5 years 10 years
$_____ $______ $______ $______
<PAGE>
[ARROWS ICON] INVESTMENT RISKS
BEFORE INVESTING IN THE FUND, YOU SHOULD DETERMINE THE LEVEL OF RISK WITH WHICH
YOU ARE COMFORTABLE. TAKE INTO ACCOUNT FACTORS LIKE YOUR AGE, CAREER, INCOME
LEVEL, AND TIME HORIZON.
You should determine the level of risk with which you are comfortable before you
invest. The principal risks of investing in any mutual fund, including the Fund,
are:
NOT INSURED. Mutual funds are not insured by the FDIC or any other government
agency, unlike bank deposits such as CDs or savings accounts.
NO GUARANTEE. No mutual fund can guarantee that it will meet its investment
objectives.
POSSIBLE LOSS OF INVESTMENT. A mutual fund cannot guarantee its performance, nor
assure you that the market value of your investment will increase. You may lose
the money you invest, and the Fund will not reimburse you for any of these
losses.
VOLATILITY. The price of your mutual fund shares will increase or decrease with
changes in the value of the Fund's underlying investments and changes in the
equity markets as a whole.
NOT A COMPLETE INVESTMENT PLAN. An investment in any mutual fund does not
constitute a complete investment plan. The Fund is designed to be only a part of
your personal investment plan.
[ARROWS ICON] PRINCIPAL RISKS ASSOCIATED WITH THE FUND
You should consider the special factors associated with the policies discussed
below in determining the appropriateness of investing in the Fund. See the
Statement of Additional Information for a discussion of additional risk factors.
MARKET RISK
Equity stock prices vary and may fall, thus reducing the value of
the Fund's investments. Certain stocks selected for the Fund's portfolio may
decline in value more than the overall stock market. In general, the securities
of large businesses with outstanding securities worth $15 billion or more are
less volatile than those of mid-size businesses with outstanding securities
worth more than $2 billion, or small businesses with outstanding securities
worth less than $2 billion.
COUNTERPARTY RISK
This is a risk associated primarily with repurchase agreements and some
derivatives transactions. It is the risk that the other party in the transaction
will not fulfill its contractual obligation to complete the transaction with the
Fund.
<PAGE>
FOREIGN SECURITIES RISKS
Investments in foreign and emerging markets carry special risks, including
currency, political, regulatory and diplomatic risks. The Fund may invest up to
25% of its assets in securities of non-U.S. issuers. Securities of Canadian
issuers and American Depository Receipts are not subject to this 25% limitation.
CURRENCY RISK. A change in the exchange rate between U.S. dollars and a
foreign currency may reduce the value of the Fund's investment in a
security valued in the foreign currency, or based on that currency value.
POLITICAL RISK. Political actions, events or instability may result in
unfavorable changes in the value of a security.
REGULATORY RISK. Government regulations may affect the value of a security.
In foreign countries, securities markets that are less regulated than those
in the U.S. may permit trading practices that are not allowed in the U.S.
DIPLOMATIC RISK. A change in diplomatic relations between the U.S. and a
foreign country could affect the value or liquidity of investments.
EUROPEAN ECONOMIC AND MONETARY UNION. Austria, Belgium, Finland, France,
Germany, Ireland, Italy, Luxembourg, The Netherlands, Portugal and Spain
are presently members of the European Economic and Monetary Union (the
"EMU") which as of January 1, 1999, adopted the euro as a common currency.
The national currencies will be sub-currencies of the euro until July 1,
2002, at which time these currencies will disappear entirely. Other
European countries may adopt the euro in the future.
As the euro is implemented, there may be changes in the relative strength
and value of the U.S. dollar and other major currencies, as well as
possible adverse tax consequences. The euro transition by EMU countries may
affect the fiscal and monetary levels of those participating countries. The
outcome of these and other uncertainties could have unpredictable effects
on trade and commerce and result in increased volatility for all financial
markets.
LACK OF TIMELY INFORMATION RISK
Timely information about a security or its issuer may be unavailable, incomplete
or inaccurate. This risk is more common to securities issued by foreign
companies and companies in emerging markets than it is to the securities of
U.S.-based companies.
PORTFOLIO TURNOVER RISK
The Fund's investments may be bought and sold relatively frequently. A high
turnover rate may result in higher brokerage commissions and taxable capital
gain distributions to the Fund's shareholders.
--------------------------------------------------
Although the Fund generally invests in publicly-traded equity securities, the
Fund also may invest in other types of securities and other financial
instruments, indicated in the chart below. Although these investments typically
<PAGE>
are not part of the Fund's principal investment strategy, they may constitute a
significant portion of the Fund's portfolio, thereby possibly exposing the Fund
and its investors to the following additional risks.
--------------------------------------------------------------------------------
INVESTMENT RISKS
--------------------------------------------------------------------------------
AMERICAN DEPOSITORY RECEIPTS (ADRS)
These are securities issued by U.S. banks that Market, Information,
represent shares of foreign corporations held by Political, Regulatory,
those banks. Although traded in U.S. securities Diplomatic, Liquidity
markets and valued in U.S. dollars, ADRs carry and Currency Risks
most of the risks of investing directly in
foreign securities.
--------------------------------------------------------------------------------
REPURCHASE AGREEMENTS
A contract under which the seller of a Counterparty Risk
security agrees to buy it back at an
agreed-upon price and time in the future.
--------------------------------------------------------------------------------
[ARROWS ICON] TEMPORARY DEFENSIVE POSITIONS
When securities markets or economic conditions are unfavorable or unsettled, we
might try to protect the assets of the Fund by investing in securities that are
highly liquid, such as high quality money market instruments like short-term
U.S. government obligations, commercial paper or repurchase agreements, even
though that is not the normal investment strategy of the Fund. We have the right
to invest up to 100% of the Fund's assets in these securities, although we are
unlikely to do so. Even though the securities purchased for defensive purposes
often are considered the equivalent of cash, they also have their own risks.
Investments that are highly liquid or comparatively safe tend to offer lower
returns. Therefore, the Fund's performance could be comparatively lower if it
concentrates in defensive holdings.
[ARROWS ICON] PORTFOLIO TURNOVER
We actively manage and trade the Fund's portfolio. Therefore, the Fund may have
a higher portfolio turnover rate compared to many other mutual funds. The Fund's
portfolio turnover rate for the fiscal year ended July 31, 2000 was ____%.
A portfolio turnover rate of 200%, for example, is equivalent to the Fund buying
and selling all of the securities in its portfolio two times in the course of a
year. A comparatively high turnover rate may result in higher brokerage
commissions and taxable capital gain distributions to the Fund's shareholders.
<PAGE>
[INVESCO ICON] FUND MANAGEMENT
INVESCO IS A SUBSIDIARY OF AMVESCAP PLC, AN INTERNATIONAL INVESTMENT MANAGEMENT
COMPANY THAT MANAGES MORE THAN $____ BILLION IN ASSETS WORLDWIDE. AMVESCAP IS
BASED IN LONDON, WITH MONEY MANAGERS LOCATED IN EUROPE, NORTH AND SOUTH AMERICA,
AND THE FAR EAST.
INVESTMENT ADVISER
INVESCO, located at 7800 East Union Avenue, Denver, Colorado, is the investment
adviser of the Fund. INVESCO was founded in 1932 and manages over $___ billion
for more than __________ shareholders of __ INVESCO mutual funds. INVESCO
performs a wide variety of other services for the Fund, including administrative
and transfer agency functions (the processing of purchases, sales and exchanges
of Fund shares).
A wholly owned subsidiary of INVESCO, IDI is the Fund's distributor and is
responsible for the sale of the Fund's shares.
INVESCO and IDI are subsidiaries of AMVESCAP PLC.
The following table shows the fee the Fund paid to INVESCO for its advisory
services in the fiscal year ended July 31, 2000:
--------------------------------------------------------------------------------
ADVISORY FEE AS A PERCENTAGE OF
AVERAGE ANNUAL NET ASSETS UNDER MANAGEMENT
--------------------------------------------------------------------------------
INVESCO Dynamics Fund ____%
[INVESCO ICON] PORTFOLIO MANAGERS
The following individuals are primarily responsible for the day-to-day
management of the Fund's portfolio holdings:
TIMOTHY J. MILLER, Chief Investment Officer and a director and senior vice
president of INVESCO, is the lead portfolio manager of the Fund. Before joining
INVESCO in 1992, Tim was a portfolio manager with Mississippi Valley Advisors.
He is a Chartered Financial Analyst. Tim holds an M.B.A. from the University of
Missouri--St. Louis and a B.S.B.A. from St. Louis University.
THOMAS WALD, a vice president of INVESCO, is the co-portfolio manager of the
Fund. Before joining INVESCO in 1997, Tom was an analyst with Munder Capital
Management, Duff & Phelps and Prudential Investment Corp. He is a Chartered
Financial Analyst. Tom holds an M.B.A. from the Wharton School at the University
of Pennsylvania and a B.A. from Tulane University.
Tom Wald is a member of INVESCO's Growth Team, which is led by Tim Miller.
<PAGE>
[INVESCO ICON] POTENTIAL REWARDS
NO SINGLE FUND SHOULD REPRESENT YOUR COMPLETE INVESTMENT PROGRAM NOR SHOULD YOU
ATTEMPT TO USE THE FUND FOR SHORT-TERM TRADING PURPOSES.
The Fund offers shareholders the potential to increase the value of their
capital over time. Like most mutual funds, the Fund seeks to provide higher
returns than the market or its competitors, but cannot guarantee that
performance. The Fund seeks to minimize risk by investing in many different
companies in a variety of industries.
SUITABILITY FOR INVESTORS
Only you can determine if an investment in the Fund is right for you based upon
your own economic situation, the risk level with which you are comfortable and
other factors. In general, the Fund is most suitable for investors who:
o are willing to grow their capital over the long-term (at least five
years).
o understand that shares of the Fund can, and likely will, have daily price
fluctuations.
o are investing in tax-deferred retirement accounts, such as Traditional
and Roth Individual Retirement Accounts ("IRAs"), as well as employer-
sponsored qualified retirement plans, including 401(k)s and 403(b)s,
all of which have longer investment horizons.
You probably do not want to invest in the Fund if you are:
o primarily seeking current dividend income.
o unwilling to accept potential daily changes in the price of Fund shares.
o speculating on short-term fluctuations in the stock markets.
[INVESCO ICON] SHARE PRICE
CURRENT MARKET VALUE OF FUND ASSETS
+ ACCRUED INTEREST AND DIVIDENDS
- FUND DEBTS,
INCLUDING ACCRUED EXPENSES
-----------------------------------
/ NUMBER OF SHARES
= YOUR SHARE PRICE (NAV).
The value of your Fund shares is likely to change daily. This value is known as
the Net Asset Value per share, or NAV. INVESCO determines the market value of
each investment in the Fund's portfolio each day that the New York Stock
Exchange ("NYSE") is open, at the close of the regular trading day on that
exchange (normally 4:00 p.m. Eastern time). Therefore, shares of the Fund are
not priced on days when the NYSE is closed, which generally is on weekends and
national holidays in the U.S.
NAV is calculated by adding together the current market price of all of the
Fund's investments and other assets, including accrued interest and dividends;
subtracting the Fund's debts, including accrued expenses; and dividing that
dollar amount by the total number of the Fund's outstanding shares.
All purchases, sales and exchanges of Fund shares are made by INVESCO at the NAV
next calculated after INVESCO receives proper instructions from you to purchase,
<PAGE>
redeem or exchange shares of the Fund. Your instructions must be received by
INVESCO no later than the close of the NYSE to effect transactions at that day's
NAV. If INVESCO hears from you after that time, your instructions will be
processed at the NAV calculated at the end of the next day that the NYSE is
open.
Foreign securities exchanges, which set the prices for foreign securities held
by the Fund, are not always open the same days as the NYSE, and may be open for
business on days the NYSE is not. For example, Thanksgiving Day is a holiday
observed by the NYSE and not by overseas exchanges. In this situation, the Fund
would not calculate NAV on Thanksgiving Day (and INVESCO would not buy, sell or
exchange shares for you on that day), even though activity on foreign exchanges
could result in changes in the value of investments held by the Fund on that
day.
[INVESCO ICON] HOW TO BUY SHARES
TO BUY SHARES AT THAT DAY'S CLOSING PRICE, YOU MUST CONTACT US BEFORE THE CLOSE
OF THE NYSE, NORMALLY, 4:00 P.M. EASTERN TIME.
The Fund offers multiple classes of shares. The chart in this section shows
several convenient ways to invest in the Fund. A share of each class represents
an identical interest in the Fund and has the same rights, except that each
class bears its own distribution and shareholder servicing charges, and other
expenses. The income attributable to each class and the dividends payable on the
shares of each class will be reduced by the amount of the distribution fee or
service fee, if applicable, and the other expenses payable by that class.
There is no charge to invest, exchange or redeem shares when you make
transactions directly through INVESCO. However, if you invest in the Fund
through a securities broker, you may be charged a commission or transaction fee
for either purchases or sales of Fund shares. For all new accounts, please send
a completed application form, and specify the fund or funds and the class or
classes of shares you wish to purchase.
INVESCO reserves the right to increase, reduce or waive the Fund's minimum
investment requirements in its sole discretion if it determines this action is
in the best interest of the Fund's shareholders. INVESCO will aggregate all of
an institutional investor's accounts and sub-accounts for the purpose of meeting
the Institutional Class' minimum investment requirements. INVESCO reserves the
right in its sole discretion to reject any order to buy the Fund's Institutional
Class of shares, including purchases by exchange.
INSTITUTIONAL INVESTORS
Minimum Initial Investment $ 10,000,000
Minimum Balance $ 5,000,000
Minimum Subsequent Investment $ 1,000,000
RETIREMENT PLANS OR EMPLOYEE BENEFIT PLANS
Minimum Total Plan Assets $100,000,000
Minimum Initial Investment $ 10,000,000
Minimum Balance $ 5,000,000
Minimum Subsequent Investment $ 1,000,000
<PAGE>
FUND EXCHANGES CAN BE A CONVENIENT WAY FOR YOU TO DIVERSIFY YOUR INVESTMENTS, OR
TO REALLOCATE YOUR INVESTMENTS WHEN YOUR OBJECTIVES CHANGE.
EXCHANGE POLICY. You may exchange your shares in the Fund for shares of the same
class in another INVESCO fund on the basis of their respective NAVs at the time
of the exchange.
Before making any exchange, be sure to review the prospectuses of the funds
involved and consider the differences between the funds. Also, be certain that
you qualify to purchase certain classes of shares in the new fund. An exchange
is the sale of shares from one fund immediately followed by the purchase of
shares in another. Therefore, any gain or loss realized on the exchange is
recognizable for federal income tax purposes (unless, of course, you or your
account qualifies as tax-deferred under the Internal Revenue Code). If the
shares of the fund you are selling have gone up in value since you bought them,
the sale portion of an exchange may result in taxable income to you.
We have the following policies governing exchanges:
o Both fund accounts involved in the exchange must be registered in exactly
the same name(s) and Social Security or federal tax I.D. number(s).
o You may make up to four exchanges out of the Fund per 12-month period.
o The Fund reserves the right to reject any exchange request, or to modify
or terminate the exchange policy, if it is in the best interests of the
Fund and its shareholders. Notice of all such modifications or
terminations that affect all shareholders of the Fund will be given at
least 60 days prior to the effective date of the change, except in
unusual instances, including a suspension of redemption of the exchanged
security under Section 22(e) of the Investment Company Act of 1940.
In addition, the ability to exchange may be temporarily suspended at any time
that sales of the fund into which you wish to exchange are temporarily stopped.
Please remember that if you pay by check, Automated Clearing House ("ACH"), or
wire and your funds do not clear, you will be responsible for any related loss
to the Fund or INVESCO. If you are already an INVESCO funds shareholder, the
Fund may seek reimbursement for any loss from your existing account(s).
CHOOSING A SHARE CLASS. The Fund has multiple classes of shares, each class
representing an interest in the same portfolio of investments. In deciding which
class of shares to purchase, you should consider, among other things, (i) the
length of time you expect to hold your shares, (ii) the provisions of the
distribution plan applicable to the class, if any, and (iii) the eligibility
requirements that apply to purchases of a particular class. Institutional Class
shares are intended for use by institutions such as employee benefit plans,
retirement plan sponsors and banks acting for themselves or in a fiduciary or
similar capacity. Institutional Class shares of the Fund are available for the
collective and common trust funds of banks, banks investing for their own
accounts and banks investing for the accounts of public entities (e.g.,
Taft-Hartley funds, states, cities or government agencies) that do not pay
commissions or distribution fees.
<PAGE>
METHOD INVESTMENT MINIMUM PLEASE REMEMBER
--------------------------------------------------------------------------------
BY CHECK Please refer to the This Fund is offered
Mail to: investment minimums only to institutional
INVESCO Funds Group, Inc. described on page 81. investors and qualified
P.O. Box 173706, retirement plans.
Denver, Co 80217-3706. This Fund is not
You may send your check available to retail
by overnight courier to: investors.
7800 E. Union Ave.
Denver, CO 80237.
--------------------------------------------------------------------------------
BY WIRE Please refer to the This Fund is offered
You may send your payment investment minimums only to institutional
by bank wire (call described on page 81. investors and qualified
1-800-328-2234 for retirement plans.
instructions). This Fund is not
available to retail
investors.
--------------------------------------------------------------------------------
BY TELEPHONE WITH ACH Please refer to the This Fund is offered
Call 1-800-328-2234 to investment minimums only to institutional
request your purchase. described on page 81. investors and qualified
Upon your telephone retirement plans.
instruc tions, INVESCO This Fund is not
will move money from available to retail
your designated investors. You must
bank/credit union forward your bank
checking or savings account information to
account in order to INVESCO prior to
purchase shares.
--------------------------------------------------------------------------------
BY EXCHANGE Please refer to the See "Exchange Policy."
Between the same class of investment minimums
any two INVESCO funds. described on page 81.
Call 1-800-328-2234 for
prospectuses of other
other INVESCO funds.
Exchanges may be made in
writing or by telephone.
You may also establish
an automatic monthly
exchange service between
two INVESCO funds; call
us for further details
and the correct form.
[INVESCO ICON] YOUR ACCOUNT SERVICES
INVESCO PROVIDES YOU WITH SERVICES DESIGNED TO MAKE IT SIMPLE FOR YOU TO BUY,
SELL OR EXCHANGE YOUR SHARES OF ANY INVESCO MUTUAL FUND.
SHAREHOLDER ACCOUNTS. INVESCO maintains your share account, which contains your
current Fund holdings. The Fund does not issue share certificates.
QUARTERLY INVESTMENT SUMMARIES. Each calendar quarter, you will receive a
written statement which consolidates and summarizes account activity and value
at the beginning and end of the period for each of your INVESCO funds.
<PAGE>
TRANSACTION CONFIRMATIONS. You will receive detailed confirmations of individual
purchases, exchanges and sales. If you choose certain recurring transaction
plans, your transactions are confirmed on your quarterly Investment Summaries.
TELEPHONE TRANSACTIONS. You may buy, exchange and sell Fund shares by telephone,
unless you specifically decline these privileges when you fill out the INVESCO
new account Application.
YOU CAN CONDUCT MOST TRANSACTIONS AND CHECK ON YOUR ACCOUNT THROUGH OUR
TOLL-FREE TELEPHONE NUMBER. YOU MAY ALSO ACCESS PERSONAL ACCOUNT INFORMATION AT
OUR WEB SITE, INVESCOFUNDS.COM.
Unless you decline the telephone transaction privileges, when you fill out and
sign the new account Application, a Telephone Transaction Authorization Form, or
use your telephone transaction privileges, you lose certain rights if someone
gives fraudulent or unauthorized instructions to INVESCO that result in a loss
to you. In general, if INVESCO has followed reasonable procedures, such as
recording telephone instructions and sending written transaction confirmations,
INVESCO is not liable for following telephone instructions that it believes to
be genuine. Therefore, you have the risk of loss due to unauthorized or
fraudulent instructions.
IRAS AND OTHER RETIREMENT PLANS. Shares of any INVESCO mutual fund may be
purchased for IRAs and many other types of tax-deferred retirement plans. Please
call INVESCO for information and forms to establish or transfer your existing
retirement plan or account.
[INVESCO ICON] HOW TO SELL SHARES
TO SELL SHARES AT THAT DAY'S CLOSING PRICE, YOU MUST CONTACT US BEFORE 4:00 P.M.
EASTERN TIME.
The chart in this section shows several convenient ways to sell your Fund
shares. Shares of the Fund may be sold at any time at the next NAV calculated
after your request to sell in proper form is received by INVESCO. Depending on
Fund performance, the NAV at the time you sell your shares may be more or less
than the price you paid to purchase your shares.
If you own shares in more than one INVESCO fund, please specify the fund whose
shares you wish to sell and specify the class of shares. Remember that any sale
or exchange of shares in a non-retirement account will likely result in a
taxable gain or loss.
While INVESCO attempts to process telephone redemptions promptly, there may be
times-- particularly in periods of severe economic or market disruption-- when
you may experience delays in redeeming shares by telephone.
INVESCO usually forwards the proceeds from the sale of Fund shares within seven
days after we receive your request to sell in proper form. However, payment may
be postponed under unusual circumstances--for instance, if normal trading is not
taking place on the NYSE, or during an emergency as defined by the Securities
and Exchange Commission. If your INVESCO fund shares were purchased by a check
which has not yet cleared, payment will be made promptly when your purchase
check does clear; that can take up to 12 business days.
<PAGE>
METHOD REDEMPTION MINIMUM PLEASE REMEMBER
--------------------------------------------------------------------------------
BY TELEPHONE $250 (or, if less, full INVESCO's telephone
Call us toll-free at: liquidation of the redemption privileges
1-800-328-2234 the account) for a may be modified or
redemption check. terminated in the
future at INVESCO's
discretion. The
maximum amount which
may be redeemed by
telephone is
generally $25,000.
--------------------------------------------------------------------------------
IN WRITING Any amount. The redemption request
Mail your request to must be signed by all
INVESCO Funds Group, registered account
Inc., P.O. Box owners. Payment will
173706, Denver, CO be mailed to your
80217-3706. You may address as it appears
also send your on INVESCO's records,
request by overnight or to a bank designated
courier to 7800 E. by you in writing.
Union Ave., Denver,
CO 80237.
--------------------------------------------------------------------------------
PAYMENT TO THIRD PARTY Any amount. All registered account
Mail your request to owners must sign the
INVESCO Funds Group, Inc., request, with signature
P.O. Box 173706, guarantees from an
Denver, CO 80217-3706. eligible guarantor
financial institution,
such as a commercial
bank or a recognized
national or regional
securities firm.
[GRAPH ICON] TAXES
Everyone's tax status is unique. We encourage you to consult your own tax
adviser on the tax impact to you of investing in the Fund.
TO AVOID BACKUP WITHHOLDING, BE SURE WE HAVE YOUR CORRECT SOCIAL SECURITY OR
TAXPAYER IDENTIFICATION NUMBER.
The Fund customarily distributes to its shareholders substantially all of its
net investment income, net capital gains and net gains from foreign currency
transactions, if any. You receive a proportionate part of these distributions,
depending on the percentage of the Fund's shares that you own. These
distributions are required under federal tax laws governing mutual funds. It is
the policy of the Fund to distribute all investment company taxable income and
net capital gains. As a result of this policy and the Fund's qualification as a
regulated investment company, it is anticipated that the Fund will not pay any
federal income or excise taxes. Instead, the Fund will be accorded conduit or
"pass through" treatment for federal income tax purposes.
However, unless you are (or your account is) exempt from income taxes, you must
include all dividends and capital gain distributions paid to you by the Fund in
your taxable income for federal, state and local income tax purposes. You also
may realize capital gains or losses when you sell shares of the Fund at more or
<PAGE>
less than the price you originally paid. An exchange is treated as a sale, and
is a taxable event. Dividends and other distributions usually are taxable
whether you receive them in cash or automatically reinvest them in shares of the
Fund or other INVESCO funds.
If you have not provided INVESCO with complete, correct tax information, the
Fund is required by law to withhold 31% of your distributions and any money that
you receive from the sale of shares of the Fund as a backup withholding tax.
We will provide you with detailed information every year about your dividends
and capital gain distributions. Depending on the activity in your individual
account, we may also be able to assist with cost basis figures for shares you
sell.
[GRAPH ICON] DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS
The Fund earns ordinary or investment income from dividends and interest on its
investments. The Fund expects to distribute substantially all of this investment
income, less Fund expenses, to shareholders annually or at such other times as
the Fund may elect.
NET INVESTMENT INCOME AND NET REALIZED CAPITAL GAINS ARE DISTRIBUTED TO
SHAREHOLDERS AT LEAST ANNUALLY. DISTRIBUTIONS ARE TAXABLE WHETHER REINVESTED IN
ADDITIONAL SHARES OR PAID TO YOU IN CASH (EXCEPT FOR TAX-EXEMPT ACCOUNTS).
The Fund also realizes capital gains or losses when it sells securities in its
portfolio for more or less than it had paid for them. If total gains on sales
exceed total losses (including losses carried forward from previous years), the
Fund has a net realized capital gain. Net realized capital gains, if any, are
distributed to shareholders at least annually, usually in November.
Under present federal income tax laws, capital gains may be taxable at different
rates, depending on how long the Fund has held the underlying investment.
Short-term capital gains which are derived from the sale of assets held one year
or less are taxed as ordinary income. Long-term capital gains which are derived
from the sale of assets held for more than one year are taxed at up to the
maximum capital gains rate, currently 20% for individuals.
Dividends and capital gain distributions are paid to you if you hold shares on
the record date of the distribution regardless of how long you have held your
shares. The Fund's NAV will drop by the amount of the distribution on the day
the distribution is declared. If you buy shares of the Fund just before a
distribution is declared, you may wind up "buying a distribution." This means
that if the Fund declares a dividend or capital gain distribution shortly after
you buy, you will receive some of your investment back as a taxable
distribution. Most shareholders want to avoid this. And, if you sell your shares
at a loss for tax purposes and purchase a substantially identical investment
within 30 days before or after that sale, the transaction is usually considered
a "wash sale" and you will not be able to claim a tax loss.
Dividends and capital gain distributions paid by the Fund are automatically
reinvested in additional Fund shares at the NAV on the ex-distribution date,
unless you choose to have them automatically reinvested in another INVESCO fund
or paid to you by check or electronic funds transfer. Dividends and other
distributions, whether received in cash or reinvested in additional Fund shares,
may be subject to federal income tax.
<PAGE>
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the financial
performance of the Fund for the past five years (or if shorter, the period of
the Fund's operations). Certain information reflects financial results for a
single Fund share. The total returns in the table represent the annual
percentages that an investor would have earned (or lost) on an investment in the
Fund (assuming reinvestment of all dividends and distributions). This
information has been audited by PricewaterhouseCoopers LLP, independent
accountants, whose report, along with the financial statements, is included in
INVESCO Stock Funds, Inc.'s 2000 Annual Report to Shareholders, which is
incorporated by reference into the Statement of Additional Information. This
Report is available without charge by contacting IDI at the address or telephone
number on the back cover of this Prospectus.
PERIOD ENDED
JULY 31
----------------------------------------------------------------
DYNAMICS FUND-
INSTITUTIONAL CLASS 2000(a)
PER SHARE DATA
Net Asset Value-
Beginning of Period $
----------------------------------------------------------------
INCOME FROM
INVESTMENT OPERATIONS(b)
Net Investment Income (Loss)
Net Gains or Losses on Securities
(Both Realized and Unrealized)
----------------------------------------------------------------
TOTAL FROM INVESTMENT
OPERATIONS
----------------------------------------------------------------
Net Asset Value - End of Period
================================================================
TOTAL RETURN
RATIOS
Net Assets - End of Period
($000 Omitted)
Ratio of Expenses to Average
Net Assets(d)
Ratio of Net Investment Income
(Loss) to Average Net Assets
Portfolio Turnover Rate
(a) From May 23, 2000, since inception of Institutional Class, to July 31, 2000.
(b) The per share information was computed based on average shares.
(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, which is before any expense
offset arrangements (which may include custodian fees).
(e) Annualized.
(f) Portfolio Turnover is calculated at the Fund level, and therefore represents
the year ended July 31, 2000.
<PAGE>
NOVEMBER 30, 2000
INVESCO STOCK FUNDS, INC.
INVESCO DYNAMICS FUND - INSTITUTIONAL CLASS
You may obtain additional information about the Fund from several sources.
FINANCIAL REPORTS. Although this Prospectus describes the Fund's anticipated
investments and operations, the Fund also prepares annual and semiannual reports
that detail the Fund's actual investments at the report date. These reports
include discussion of the Fund's recent performance, as well as market and
general economic trends affecting the Fund's performance. The annual report also
includes the report of the Fund's independent accountants.
STATEMENT OF ADDITIONAL INFORMATION. The SAI dated November 30, 2000 is a
supplement to this Prospectus and has detailed information about the Fund and
its investment policies and practices. A current SAI for the Fund is on file
with the Securities and Exchange Commission and is incorporated into this
Prospectus by reference; in other words, the SAI is legally a part of this
Prospectus, and you are considered to be aware of the contents of the SAI.
INTERNET. The Prospectus, SAI, annual report and semiannual report of the Fund
are available on the SEC Web site at www.sec.gov.
To obtain a free copy of the current Prospectus, SAI, annual report or
semiannual report, write to INVESCO Distributors, Inc., P.O. Box 173706, Denver,
Colorado 80217-3706; or call 1-800-328-2234. Copies of these materials are also
available (with a copying charge) from the SEC's Public Reference Section at 450
Fifth Street, N.W., Washington, D.C., 20549-0102. This information can be
obtained by electronic request at the following E-mail address:
[email protected], or by calling 1-202-942-8090. The SEC file numbers for the
Fund are 811-1474 and 002-26125.
P120 811-1474
<PAGE>
PROSPECTUS | November 30, 2000
--------------------------------------------------------------------------------
YOU SHOULD KNOW WHAT INVESCO KNOWS (R)
--------------------------------------------------------------------------------
INVESCO STOCK FUNDS, INC.
INVESCO S&P 500 INDEX FUND - INSTITUTIONAL CLASS
A NO-LOAD CLASS OF SHARES OF A MUTUAL FUND DESIGNED FOR INVESTORS SEEKING
LONG-TERM CAPITAL APPRECIATION.
TABLE OF CONTENTS
Investment Goals, Strategies And Risks...............................90
Fund Performance.....................................................91
Fees And Expenses....................................................92
Investment Risks.....................................................92
Principal Risks Associated With The Fund.............................93
Temporary Defensive Positions........................................94
Fund Management......................................................94
Portfolio Managers...................................................95
Potential Rewards....................................................95
Share Price..........................................................95
How To Buy Shares....................................................96
Your Account Services................................................99
How To Sell Shares...................................................99
Taxes...............................................................100
Dividends And Capital Gain Distributions............................101
Financial Highlights................................................102
[INVESCO ICON] INVESCO FUNDS
The Securities and Exchange Commission has not approved or disapproved the
shares of the Fund. Likewise, the Commission has not determined if this
Prospectus is truthful or complete. Anyone who tells you otherwise is committing
a federal crime.
<PAGE>
INVESCO Funds Group, Inc. ("INVESCO") is the investment adviser for the Fund.
Together with our affiliated companies, we at INVESCO direct all aspects of the
management and sale of the Fund.
This Prospectus contains important information about the Fund's Institutional
Class shares, which are offered only to institutional investors and qualified
retirement plans. The Fund also offers one or more additional classes of shares
through separate prospectuses. Each of the Fund's classes has varying expenses,
with resulting effects on performance. You can choose the class of shares that
is best for you, based on how much you plan to invest and other relevant factors
discussed in "How To Buy Shares." To obtain additional information about other
classes of shares, contact INVESCO Distributors, Inc. ("IDI") at 1-800-328-2234.
THIS PROSPECTUS WILL TELL YOU MORE ABOUT:
[KEY ICON] INVESTMENT GOALS & STRATEGIES
[ARROWS ICON] POTENTIAL INVESTMENT RISKS
[GRAPH ICON] PAST PERFORMANCE
[INVESCO ICON] WORKING WITH INVESCO
--------------------------------------------------------------------------------
[KEY ICON] [ARROWS ICON] INVESTMENT GOALS, STRATEGIES AND RISKS
FOR MORE DETAILS ABOUT THE FUND'S CURRENT INVESTMENTS AND MARKET OUTLOOK, PLEASE
SEE THE MOST RECENT ANNUAL OR SEMIANNUAL REPORT.
The Fund seeks price performance and income comparable to the Standard & Poor's
500 Composite Stock Price Index ("S&P 500" or "Index"). The Fund invests in the
stocks that make up the Index, in approximately the same proportions.
The Fund is not sponsored, endorsed, sold or promoted by S&P. S&P makes no
representation or warranty, express or implied, to the shareholders or the
general public regarding the advisability of investing in the Fund or the
ability of the S&P 500 to track general stock performance. S&P has no direct
relationship with the Fund other than the licensing of certain trademarks and
trade names of S&P and the S&P 500 Index which is composed by S&P without regard
to the Fund.
The Fund is not actively managed; instead, the Fund seeks to track the
performance of the S&P 500. Therefore, when the S&P 500 drops, the value of
shares of the Fund drops accordingly. The Fund makes no effort to hedge against
price movements in the S&P 500. Due to purchases and sales of portfolio
securities to meet investor purchases and redemptions, the Fund will not have a
100% correlation to the performance of the Index. However, under normal
circumstances, the Fund expects to have at least a 95% correlation to the
performance of the S&P 500.
The Fund is subject to other principal risks such as market, liquidity and
counterparty risks. These risks are described and discussed later in the
Prospectus under the headings "Investment Risks" and "Principal Risks Associated
With The Fund." An investment in the Fund is not a deposit of any bank and is
not insured or guaranteed by the Federal Deposit Insurance Corporation ("FDIC")
<PAGE>
or any other government agency. As with any other mutual funds, there is always
a risk that you may lose money on your investment in the Fund.
[GRAPH ICON] FUND PERFORMANCE
The bar chart below shows the Fund's actual yearly performance for the year
ended December 31 (commonly known as its "total return") since inception. The
table below shows average annual total return for various periods ended December
31, 1999 for the Fund compared to the S&P 500 Composite Index. The information
in the chart and table illustrates the variability of the Fund's total return
and how its performance compared to a broad measure of market performance.
Remember, past performance does not indicate how the Fund will perform in the
future.
-------------------------------------------------------
S&P 500 INDEX FUND - INSTITUTIONAL CLASS
ACTUAL ANNUAL TOTAL RETURN(1),(2),(3)
-------------------------------------------------------
1998 1999
29.85% _____%
-------------------------------------------------------
Best Calendar Qtr. ____ ____%
Worst Calendar Qtr. ____ ____%
-------------------------------------------------------
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN(1),(2)
AS OF 12/31/99
--------------------------------------------------------------------------------
1 YEAR SINCE INCEPTION
S&P 500 Index Fund--Institutional Class ____% ____%(3)
S&P 500 Composite Index(4) ____% ____%
(1) Total return figures include reinvested dividends and capital gain
distributions and the effect of the Fund's expenses.
(2) Return for the Fund was ____% year-to-date as of the calendar quarter ended
September 30, 2000.
(3) The Fund commenced operations on December 23, 1997.
(4) The S&P 500 Composite Index is an unmanaged index considered representative
of the performance of the broad U.S. stock market. Please keep in mind that
the index does not pay brokerage, management, administrative or distribution
expenses, all of which are paid by the Fund and are reflected in its annual
returns.
<PAGE>
FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund.
SHAREHOLDER FEES PAID DIRECTLY FROM YOUR ACCOUNT
S&P 500 INDEX FUND -- INSTITUTIONAL CLASS
Redemption Fee (as a percentage of amount redeemed) 1.00%(1)
Exchange Fee 1.00%(1)
ANNUAL FUND OPERATING EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS
S&P 500 INDEX FUND -- INSTITUTIONAL CLASS
Management Fees 0.25%
Distribution and Service (12b-1) Fees None
Other Expenses(2),(3),(4) ____%
Total Annual Fund Operating Expenses(2),(3),(4)
=====
(1) A 1% fee shall be imposed on redemptions or exchanges held three months or
less.
(2) The Fund's actual Other Expenses and Total Annual Fund Operating Expenses
were lower than the figures shown because its custodian fees were reduced
under an expense offset arrangement.
(3) The expense information presented in the table has been restated from the
financial statements to reflect a change in the administrative services and
transfer agency fees.
(4) Certain expenses of the Fund were absorbed voluntarily by INVESCO pursuant
to a commitment to the Fund. This commitment may be changed at any time
following consultation with the board of directors. After absorption, but
excluding any expense offset arrangements, the Fund's Other Expenses and
Total Annual Fund Operating Expenses were ___% and ___%, respectively, of
the Fund's average net assets.
EXAMPLE
The Example is intended to help you compare the cost of investing in the Fund to
the cost of investing in other mutual funds.
The Example assumes that you invested $10,000 in the Fund for the time periods
indicated and redeemed all of your shares at the end of each period. The Example
also assumes that your investment had a hypothetical 5% return each year and
that a Fund's operating expenses remained the same. Although the actual costs
and performance of the Fund may be higher or lower, based on these assumptions
your costs would have been:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
$____ $____ $____ $____
[ARROWS ICON] INVESTMENT RISKS
You should determine the level of risk with which you are comfortable before you
invest. The principal risks of investing in any mutual fund, including the Fund,
are:
<PAGE>
BEFORE INVESTING IN THE FUND, YOU SHOULD DETERMINE THE LEVEL OF RISK WITH WHICH
YOU ARE COMFORTABLE. TAKE INTO ACCOUNT FACTORS LIKE YOUR AGE, CAREER, INCOME
LEVEL, AND TIME HORIZON.
NOT INSURED. Mutual funds are not insured by the FDIC or any other government
agency, unlike bank deposits such as CDs or savings accounts.
NO GUARANTEE. No mutual fund can guarantee that it will meet its investment
objectives.
POSSIBLE LOSS OF INVESTMENT. A mutual fund cannot guarantee its performance, nor
assure you that the market value of your investment will increase. You may lose
the money you invest, and the Fund will not reimburse you for any of these
losses.
VOLATILITY. The price of your mutual fund shares will increase or decrease with
changes in the value of the Fund's underlying investments and changes in the
equity markets as a whole.
NOT A COMPLETE INVESTMENT PLAN. An investment in any mutual fund does not
constitute a complete investment plan. The Fund is designed to be only a part of
your personal investment plan.
[ARROWS ICON] PRINCIPAL RISKS ASSOCIATED WITH THE FUND
You should consider the special factors associated with the policies discussed
below in determining the appropriateness of investing in the Fund. See the
Statement of Additional Information for a discussion of additional risk factors.
MARKET RISK
Equity stock prices vary and may fall, thus reducing the value of your Fund's
investments. Certain stocks included in the Fund's portfolio may decline in
value more than the overall stock market.
LIQUIDITY RISK
The Fund's portfolio is liquid if the Fund is able to sell the securities it
owns at a fair price within a reasonable time. Liquidity is generally related to
the market trading volume for a particular security.
COUNTERPARTY RISK
This is a risk associated primarily with repurchase agreements and some
derivatives transactions. It is the risk that the other party in the transaction
will not fulfill its contractual obligation to complete the transaction with the
Fund.
-----------------------------------------
Although the Fund generally invests in publicly-traded equity securities, the
Fund also may invest in other types of securities and other financial
instruments, indicated in the chart below. Although these investments typically
are not part of the Fund's principal investment strategy, they may constitute a
significant portion of the Fund's portfolio, thereby possibly exposing the Fund
and its investors to the following additional risk.
<PAGE>
--------------------------------------------------------------------------------
INVESTMENT RISK
--------------------------------------------------------------------------------
REPURCHASE AGREEMENT
A contract under which the seller Counterparty Risk
of a security agrees to buy it back
at an agreed-upon price and time in
the future.
--------------------------------------------------------------------------------
[ARROWS ICON] TEMPORARY DEFENSIVE POSITIONS
When securities markets or economic conditions are unfavorable or unsettled, we
might try to protect the assets of the Fund by investing in securities that are
highly liquid such as high quality money market instruments like short-term U.S.
government obligations, commercial paper or repurchase agreements. We have the
right to invest up to 100% of the Fund's assets in these securities, although we
are unlikely to do so. Even though the securities purchased for defensive
purposes often are considered the equivalent of cash, they also have their own
risks. Investments that are highly liquid or comparatively safe tend to offer
lower returns. Therefore, the Fund's performance could be comparatively lower if
it concentrates in defensive holdings.
[INVESCO ICON] FUND MANAGEMENT
INVESTMENT ADVISER
INVESCO, located at 7800 East Union Avenue, Denver, Colorado, is the investment
adviser of the Fund. INVESCO was founded in 1932 and manages over $___ billion
for more than _________ shareholders of __ INVESCO mutual funds. INVESCO
performs a wide variety of other services for the Fund, including administrative
and transfer agency functions (the processing of purchases, sales and exchanges
of Fund shares).
INVESCO IS A SUBSIDIARY OF AMVESCAP PLC, AN INTERNATIONAL INVESTMENT MANAGEMENT
COMPANY THAT MANAGES MORE THAN $____ BILLION IN ASSETS WORLDWIDE. AMVESCAP IS
BASED IN LONDON, WITH MONEY MANAGERS LOCATED IN EUROPE, NORTH AND SOUTH AMERICA,
AND THE FAR EAST.
World Asset Management ("World"), located at 255 Brown Street Centre, 2nd Floor,
Birmingham, Michigan, is the sub-adviser to the Fund.
A wholly owned subsidiary of INVESCO, IDI is the Fund's distributor and is
responsible for the sale of the Fund's shares.
INVESCO and IDI are subsidiaries of AMVESCAP PLC.
World is a general partnership organized by Munder Capital Management, a general
partnership formed in December 1994 which engages in investment management and
advisory services.
The following table shows the fee the Fund paid to INVESCO for its advisory
services in the year ended July 31, 2000:
<PAGE>
--------------------------------------------------------------------------------
ADVISORY FEE AS A PERCENTAGE OF
AVERAGE ANNUAL NET ASSETS UNDER MANAGEMENT
--------------------------------------------------------------------------------
INVESCO S&P 500 Fund 0.25%
[INVESCO ICON] PORTFOLIO MANAGERS
The Fund is managed by a team of World portfolio managers that are collectively
responsible for the investment decisions relating to the Fund.
[INVESCO ICON] POTENTIAL REWARDS
NO SINGLE FUND SHOULD REPRESENT YOUR COMPLETE INVESTMENT PROGRAM NOR SHOULD YOU
ATTEMPT TO USE THE FUND FOR SHORT-TERM TRADING PURPOSES.
The Fund is offered only to institutional investors and qualified retirement
plans. The Fund offers shareholders the potential to increase the value of their
capital over time. Like most mutual funds, the Fund seeks price performance and
income comparable to the Standard & Poor's 500 Composite Stock Price Index, but
cannot guarantee that performance.
The Fund seeks to minimize risk by tracking general stock performance.
SUITABILITY FOR INVESTORS
Only you can determine if an investment in the Fund is right for you based upon
your own economic situation, the risk level with which you are comfortable and
other factors. In general, the Fund is most suitable for investors who:
o are willing to grow their capital over the long term (at least five years).
o understand that shares of the Fund can, and likely will, have daily price
fluctuations.
o are investing tax-deferred retirement accounts, such as traditional and Roth
Individual Retirement Accounts ("IRAs"), as well as employer-sponsored
qualified retirement plans, including 401(k)s and 403(b)s, all of which have
longer investment horizons.
You probably do not want to invest in the Fund if you are:
o primarily seeking current dividend income.
o unwilling to accept potentially significant changes in the price of Fund
shares.
o speculating on short-term fluctuations in the stock markets.
[INVESCO ICON] SHARE PRICE
CURRENT MARKET VALUE OF FUND ASSETS
+ ACCRUED INTEREST AND DIVIDENDS
- FUND DEBTS,
INCLUDING ACCRUED EXPENSES
-----------------------------------
/ NUMBER OF SHARES
= YOUR SHARE PRICE (NAV).
The value of your Fund shares is likely to change daily. This value is known as
the Net Asset Value per share, or NAV. INVESCO determines the market value of
each investment in the Fund's portfolio each day that the New York Stock
Exchange ("NYSE") is open, at the close of the regular trading day on that
exchange (normally 4:00 p.m. Eastern time). Therefore, shares of the Fund are
not priced on days when the NYSE is closed, which generally is on weekends and
national holidays in the U.S.
<PAGE>
NAV is calculated by adding together the current market price of all of the
Fund's investments and other assets, including accrued interest and dividends;
subtracting the Fund's debts, including accrued expenses; and dividing that
dollar amount by the total number of the Fund's outstanding shares.
All purchases, sales and exchanges of Fund shares are made by INVESCO at the NAV
next calculated after INVESCO receives proper instructions from you to purchase,
redeem or exchange shares of the Fund. Your instructions must be received by
INVESCO no later than the close of the NYSE to effect transactions at that day's
NAV. If INVESCO hears from you after that time, your instructions will be
processed at the NAV calculated at the end of the next day that the NYSE is
open.
[INVESCO ICON] HOW TO BUY SHARES
TO BUY SHARES AT THAT DAY'S CLOSING PRICE, YOU MUST CONTACT US BEFORE THE CLOSE
OF THE NYSE, NORMALLY 4:00 P.M. EASTERN TIME.
The Fund offers multiple classes of shares. The chart in this section shows
several convenient ways to invest in the Fund. A share of each class represents
an identical interest in the Fund and has the same rights, except that each
class bears its own distribution and shareholder servicing charges, and other
expenses. The income attributable to each class and the dividends payable on the
shares of each class will be reduced by the amount of the distribution fee or
service fee, if applicable, and the other expenses payable by that class.
There is no charge to invest, exchange or redeem shares when you make
transactions directly through INVESCO. However, upon redemption or an exchange
of shares held three months or less (other than shares acquired through
reinvestment of dividends or other distributions), a fee of 1% of the current
net asset value of the shares being redeemed or exchanged will be assessed and
retained by the Fund for the benefit of the remaining shareholders. If you
invest in the Fund through a securities broker, you may be charged a commission
or transaction fee for either purchases or sales of Fund shares. For all new
accounts, please send a completed application form, and specify the fund or
funds and the class or classes of shares you wish to purchase.
INVESCO reserves the right to increase, reduce or waive the Fund's minimum
investment requirements in its sole discretion, if it determines this action is
in the best interests of the Fund's shareholders. INVESCO will aggregate all of
an institutional investor's accounts and sub-accounts for the purpose of meeting
the Institutional Class' minimum investment requirements. INVESCO reserves the
right in its sole discretion to reject any order to buy the Fund's Institutional
class of shares, including purchases by exchange.
INSTITUTIONAL INVESTORS:
Minimum Initial Investment $ 10,000,000
Minimum Balance $ 5,000,000
Minimum Subsequent Investment $ 1,000,000
RETIREMENT PLANS OR EMPLOYEE BENEFIT PLANS:
Minimum Total Plan Assets $100,000,000
Minimum Initial Investment $ 10,000,000
Minimum Balance $ 5,000,000
Minimum Subsequent Investment $ 1,000,000
<PAGE>
EXCHANGE POLICY. You may exchange your shares in the Fund for shares of the same
class in another INVESCO fund on the basis of their respective NAVs at the time
of the exchange.
FUND EXCHANGES CAN BE A CONVENIENT WAY FOR YOU TO DIVERSIFY YOUR INVESTMENTS, OR
TO REALLOCATE YOUR INVESTMENTS WHEN YOUR OBJECTIVES CHANGE.
Before making any exchange, be sure to review the prospectuses of the funds
involved and consider the differences between the funds. Also, be certain you
qualify to purchase certain classes of shares in the new fund. An exchange is
the sale of shares from one fund immediately followed by the purchase of shares
in another. Therefore, any gain or loss realized on the exchange is recognizable
for federal income tax purposes (unless, of course, you or your account
qualifies as tax-deferred under the Internal Revenue Code). If the shares of the
fund you are selling have gone up in value since you bought them, the sale
portion of an exchange may result in taxable income to you.
We have the following policies governing exchanges:
o Both fund accounts involved in the exchange must be registered in exactly the
same name(s) and Social Security or federal tax I.D. number(s).
o You may make up to four exchanges out of the Fund per 12-month period, but
you may be subject to the redemption fee described below.
o The Fund reserves the right to reject any exchange request, or to modify or
terminate the exchange policy, if it is in the best interests of the Fund and
its shareholders. Notice of all such modifications or terminations that
affect all shareholders of the Fund will be given at least 60 days prior to
the effective date of the change, except in unusual instances, including a
suspension of redemption of the exchanged security under Section 22(e) of the
Investment Company Act of 1940.
In addition, the ability to exchange may be temporarily suspended at any time
that sales of the Fund into which you wish to exchange are temporarily stopped.
REDEMPTION FEE. If you exchange shares of the Fund after holding them three
months or less (other than shares acquired through reinvestment of dividends or
other distributions), a fee of 1% of the current net asset value of the shares
being exchanged will be assessed and retained by the Fund for the benefit of the
remaining shareholders. This fee is intended to encourage long-term investment
in the Fund, to avoid transaction and other expenses caused by early
redemptions, and to facilitate portfolio management. The fee is currently waived
for institutional, qualified retirement plan and other shareholders investing
through omnibus accounts, due to certain economies associated with these
accounts. However, S&P 500 Index Fund reserves the right to impose redemption
fees on shares held by such shareholders at any time if warranted by the Fund's
future cost of processing redemptions. The redemption fee may be modified or
discontinued at any time or from time to time. This fee is not a deferred sales
charge, is not a commission paid to INVESCO and does not benefit INVESCO in any
way. The fee applies to redemptions from the Fund and exchanges into any of the
other no-load mutual funds which are also advised by INVESCO and distributed by
IDI. The Fund will use the "first-in, first-out" method to determine your
holding period. Under this method, the date of redemption or exchange will be
compared with the earliest purchase date of shares held in your account. If your
holding period is less than three months, the redemption/exchange fee will be
assessed on the current net asset value of those shares.
<PAGE>
Please remember that if you pay by check, Automated Clearing House ("ACH") or
wire and your funds do not clear, you will be responsible for any related loss
to the Fund or INVESCO. If you are already an INVESCO funds shareholder, the
Fund may seek reimbursement for any loss from your existing account(s).
CHOOSING A SHARE CLASS. The Fund has multiple classes of shares, each class
representing an interest in the same portfolio of investments. In deciding which
class of shares to purchase, you should consider, among other things, (i) the
length of time you expect to hold your shares, (ii) the provisions of the
distribution plan applicable to the class, if any, and (iii) the eligibility
requirements that apply to purchases of a particular class. Institutional Class
shares are intended for use by institutions such as employee benefit plans,
retirement plan sponsors and banks acting for themselves or in a fiduciary or
similar capacity. Institutional Class shares of the Fund are available for the
collective and common trust funds of banks, banks investing for their own
accounts and banks investing for the accounts of public entities (e.g.,
Taft-Hartley funds, states, cities or government agencies) that do not pay
commissions or distribution fees.
--------------------------------------------------------------------------------
METHOD INVESTMENT MINIMUM PLEASE REMEMBER
--------------------------------------------------------------------------------
BY CHECK Please refer to This Fund is offered only
Mail to: the investment to institutional investors
INVESCO Funds Group, minimums described and qualified retirement
Inc., P.O. Box 173706, on page 97. plans. This Fund is not
Denver, CO 80217-3706. available to retail
You may send your check investors.
by overnight courier to:
7800 E. Union Ave.
Denver, CO 80237.
--------------------------------------------------------------------------------
BY WIRE Please refer to This Fund is offered only
You may send your payment the investment to institutional investors
by bank wire (call minimums described and qualified retirement
1-800-328-2234 for on page 97. plans. This Fund is not
instructions). available to retail
investors.
--------------------------------------------------------------------------------
BY TELEPHONE WITH ACH Please refer to This Fund is offered only
Call 1-800-525-8085 to the investment to institutional investors
request your purchase. minimums described and qualified retirement
Upon your telephone on page 97. plans. This Fund is not
instructions, INVESCO available to retail
will move money from your investors. You must
designated bank/credit forward your bank account
union checking or savings information to INVESCO
account in order to prior to using this
purchase shares. option.
--------------------------------------------------------------------------------
BY EXCHANGE Please refer to See "Exchange Policy."
Between the same class of the investment
any two INVESCO funds. minimums described
Call 1-800-525-8085 for on page 97.
prospectuses of other
INVESCO funds. Exchanges
may be made in writing or
by telephone. You may
also establish an auto
matic monthly exchange
service between two
INVESCO funds; call us
for further details and
the correct form.
<PAGE>
[INVESCO ICON] YOUR ACCOUNT SERVICES
SHAREHOLDER ACCOUNTS. INVESCO maintains your share account, which contains your
current Fund holdings. The Fund does not issue share certificates.
INVESCO PROVIDES YOU WITH SERVICES DESIGNED TO MAKE IT SIMPLE FOR YOU TO BUY,
SELL OR EXCHANGE YOUR SHARES OF ANY INVESCO MUTUAL FUND.
QUARTERLY INVESTMENT SUMMARIES. Each calendar quarter, you will receive a
written statement which consolidates and summarizes account activity and value
at the beginning and end of the period for each of your INVESCO funds.
TRANSACTION CONFIRMATIONS. You will receive detailed confirmations of individual
purchases, exchanges and sales. If you choose certain recurring transaction
plans, your transactions are confirmed on your quarterly Investment Summaries.
TELEPHONE TRANSACTIONS. You may buy, exchange and sell Fund shares by telephone,
unless you specifically decline these privileges when you fill out the INVESCO
new account application.
YOU CAN CONDUCT MOST TRANSACTIONS AND CHECK ON YOUR ACCOUNT THROUGH OUR
TOLL-FREE TELEPHONE NUMBER. YOU MAY ALSO ACCESS PERSONAL ACCOUNT INFORMATION AT
OUR WEB SITE, INVESCOFUNDS.COM.
Unless you decline the telephone transaction privileges, when you fill out and
sign the new account Application, a Telephone Transaction Authorization Form, or
use your telephone transaction privileges, you lose certain rights if someone
gives fraudulent or unauthorized instructions to INVESCO that result in a loss
to you. In general, if INVESCO has followed reasonable procedures, such as
recording telephone instructions and sending written transaction confirmations,
INVESCO is not liable for following telephone instructions that it believes to
be genuine. Therefore, you have the risk of loss due to unauthorized or
fraudulent instructions.
IRAs AND OTHER RETIREMENT PLANS. Shares of any INVESCO mutual fund may be
purchased for IRAs and many other types of tax-deferred retirement plans. Please
call INVESCO for information and forms to establish or transfer your existing
retirement plan or account.
[INESCO ICON] HOW TO SELL SHARES
The chart in this section shows several convenient ways to sell your Fund
shares. Shares of the Fund may be sold at any time at the next NAV calculated
after your request to sell in proper form is received by INVESCO. Depending on
Fund performance, the NAV at the time you sell your shares may be more or less
than the price you paid to purchase your shares.
TO SELL SHARES AT THAT DAY'S CLOSING PRICE, YOU MUST CONTACT US BEFORE 4:00 P.M.
EASTERN TIME.
If you own shares in more than one INVESCO fund, please specify the fund whose
shares you wish to sell and specify the class of shares. Remember that any sale
or exchange of shares in a non-retirement account will likely result in a
taxable gain or loss.
<PAGE>
While INVESCO attempts to process telephone redemptions promptly, there may be
times - particularly in periods of severe economic or market disruption - when
you may experience delays in redeeming shares by telephone.
INVESCO usually forwards the proceeds from the sale of fund shares within seven
days after we receive your request to sell in proper form. However, payment may
be postponed under unusual circumstances -- for instance, if normal trading is
not taking place on the NYSE, or during an emergency as defined by the
Securities and Exchange Commission. If your INVESCO fund shares were purchased
by a check which has not yet cleared, payment will be made promptly when your
purchase check does clear; that can take up to 12 business days.
--------------------------------------------------------------------------------
METHOD MINIMUM REDEMPTION PLEASE REMEMBER
--------------------------------------------------------------------------------
BY TELEPHONE $1,000 (or, if less, INVESCO's telephone
Call us toll-free at: full liquidation of redemption privileges may
1-800-328-2234 the account) for a be modified or terminated
redemption check. in the future at INVESCO's
discretion. The maximum
amount which may be
redeemed by telephone is
generally $25,000.
--------------------------------------------------------------------------------
IN WRITING Any amount. The redemption request
Mail your request to must be signed by all
INVESCO Funds Group, registered account owners.
Inc., P.O. Box 173706, Payment will be mailed to
Denver, CO 80217-3706. your address as it appears
You may also send your on INVESCO's records, or
request by overnight to a bank designated by
courier to 7800 E. Union you in writing.
Ave., Denver, CO 80237.
--------------------------------------------------------------------------------
PAYMENT TO THIRD PARTY Any amount. All registered account
Mail your request to owners must sign the
INVESCO Funds Group, request, with signature
Inc., P.O. Box 173706, guarantees from an
Denver, CO 80217-3706. eligible guarantor
financial institution,
such as a commercial bank
or a recognized national
or regional securities
firm.
[GRAPH ICON] TAXES
Everyone's tax status is unique. We encourage you to consult your own tax
adviser on the tax impact to you of investing in the Fund.
TO AVOID BACKUP WITHHOLDING, BE SURE WE HAVE YOUR CORRECT SOCIAL SECURITY OR
TAXPAYER IDENTIFICATION NUMBER.
The Fund customarily distributes to its shareholders substantially all of its
net investment income, net capital gains and net gains from foreign currency
transactions, if any. You receive a proportionate part of these distributions,
depending on the percentage of the Fund's shares that you own. These
distributions are required under federal tax laws governing mutual funds. It is
the policy of the Fund to distribute all investment company taxable income and
net capital gains. As a result of this policy and the Fund's qualification as a
<PAGE>
regulated investment company, it is anticipated that the Fund will not pay any
federal income or excise taxes. Instead, the Fund will be accorded conduit or
"pass through" treatment for federal income tax purposes.
However, unless you are (or your account is) exempt from income taxes, you must
include all dividends and capital gain distributions paid to you by the Fund in
your taxable income for federal, state and local income tax purposes. You also
may realize capital gains or losses when you sell shares of the Fund at more or
less than the price you originally paid. An exchange is treated as a sale, and
is a taxable event. Dividends and other distributions usually are taxable
whether you receive them in cash or automatically reinvest them in shares of the
distributing Fund or other INVESCO funds.
If you have not provided INVESCO with complete, correct tax information, the
Fund is required by law to withhold 31% of your distributions and any money that
you receive from the sale of shares of the Fund as a backup withholding tax.
We will provide you with detailed information every year about your dividends
and capital gain distributions. Depending on the activity in your individual
account, we may also be able to assist with cost basis figures for shares you
sell.
[GRAPH ICON] DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS
The Fund earns ordinary or investment income from dividends and interest on its
investments. The Fund expects to distribute substantially all of this investment
income, less Fund expenses, to shareholders quarterly, or at such other times as
the Fund may elect.
NET INVESTMENT INCOME AND NET REALIZED CAPITAL GAINS ARE DISTRIBUTED TO
SHAREHOLDERS AT LEAST ANNUALLY. DISTRIBUTIONS ARE TAXABLE WHETHER REINVESTED IN
ADDITIONAL SHARES OR PAID TO YOU IN CASH (EXCEPT FOR TAX-EXEMPT ACCOUNTS).
The Fund also realizes capital gains and losses when it sells securities in its
portfolio for more or less than it had paid for them. If total gains on sales
exceed total losses (including losses carried forward from previous years), the
Fund has a net realized capital gain. Net realized capital gains, if any, are
distributed to shareholders at least annually, usually in November.
Under present federal income tax laws, capital gains may be taxable at different
rates, depending on how long the Fund has held the underlying investment.
Short-term capital gains which are derived from the sale of assets held one year
or less are taxed as ordinary income. Long-term capital gains which are derived
from the sale of assets held for more than one year are taxed at the maximum
capital gains rate, currently 20% for individuals.
Dividends and capital gain distributions are paid to you if you hold shares on
the record date of the distribution regardless of how long you have held your
shares. The Fund's NAV will drop by the amount of the distribution on the day
the distribution is made. If you buy shares of the Fund just before a
distribution, you may wind up "buying a dividend." This means that if the Fund
makes a dividend or capital gain distribution shortly after you buy, you will
receive some of your investment back as a taxable distribution. Most
shareholders want to avoid this. And, if you sell your shares at a loss for tax
purposes and purchase a substantially identical investment within 30 days before
or after that sale, the transaction is usually considered a "wash sale" and you
will not be able to claim a tax loss.
Dividends and capital gain distributions paid by the Fund are automatically
reinvested in additional Fund shares at the NAV on the ex-dividend date, unless
you choose to have them automatically reinvested in another INVESCO fund or paid
to you by check or electronic funds transfer. Dividends and other distributions,
whether received in cash or reinvested in additional Fund shares, may be subject
to federal income tax.
<PAGE>
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the financial
performance of the Fund for the past five years (or, if shorter, the period of
the Fund's operations). Certain information reflects financial results for a
single Fund share. The total returns in the table represent the annual
percentage that an investor would have earned (or lost) on an investment in the
Fund (assuming reinvestment of all dividends and distributions). This
information has been audited by PricewaterhouseCoopers LLP, independent
accountants, whose report, along with the financial statements, is included in
the INVESCO Stock Funds, Inc.'s 2000 Annual Report to Shareholders, which is
incorporated by reference into the Statement of Additional Information. This
Report is available without charge by contacting IDI at the address or telephone
number on the back cover of this Prospectus.
PERIOD
ENDED
YEAR ENDED JULY 31 JULY 31
--------------------------------------------------------------------------------
2000 1999 1998(a)
S&P 500 INDEX FUND - INSTITUTIONAL CLASS
PER SHARE DATA
Net Asset Value--Beginning of Period $12.01 $10.00
--------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.18 0.11
Net Gains on Securities (Both
Realized and Unrealized) 2.26 1.98
--------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS 2.44 2.09
--------------------------------------------------------------------------------
LESS DISTRIBUTIONS
Dividends from Net Investment Income 0.19 0.08
Distributions from Capital Gains 0.05 0.00
--------------------------------------------------------------------------------
Total Distributions 0.24 0.08
--------------------------------------------------------------------------------
Net Asset Value--End of Period $14.21 $12.01
================================================================================
TOTAL RETURN(b) 20.40% 20.93%(c)
RATIOS
Net Assets--End of Period ($000 Omitted) $4,420 $3,259
Ratio of Expenses to Average Net Assets(d)(e) 0.35% 0.46%(f)
Ratio of Net Investment Income to Average
Net Assets(e) 1.36% 1.96%(f)
Portfolio Turnover Rate 2% 0%(c)(g)
(a) From December 23, 1997, commencement of operations, to July 31, 1998.
(b) The applicable redemption fees are not included in the Total Return
calculation.
(c) Based on operations for the period shown and, accordingly, are not
representative of a full year.
(d) Ratio is based on total expenses of the class, less expenses absorbed by
INVESCO, if applicable, which is before any expense offset arrangements
(which may include custodian fees).
(e) Various expenses of the class were voluntarily absorbed by INVESCO for the
years ended July 31, 2000 and 1999 and for the period ended July 31, 1998.
If such expenses had not been voluntarily absorbed, ratio of expenses to
average net assets would have been ___%, 1.17% and 2.51% (annualized),
respectively, and ratio of net investment income (loss) to average net
assets would have been ___%, 0.54% and (0.09%) (annualized), respectively.
(f) Annualized.
(g) Portfolio Turnover Rate calculated to less than 0.10% for the period ended
July 31, 1998.
<PAGE>
November 30, 2000
INVESCO STOCK FUNDS, INC.
INVESCO S&P 500 INDEX FUND--INSTITUTIONAL CLASS
You may obtain additional information about the Fund from several sources.
FINANCIAL REPORTS. Although this Prospectus describes the Fund's anticipated
investments and operations, the Fund also prepares annual and semiannual reports
that detail the Fund's actual investments at the report date. These reports
include discussion of the Fund's recent performance, as well as market and
general economic trends affecting the Fund's performance. The annual report also
includes the report of the Fund's independent accountants.
STATEMENT OF ADDITIONAL INFORMATION. The SAI dated November 30, 2000 is a
supplement to this Prospectus, and has detailed information about the Fund and
its investment policies and practices. A current SAI for the Fund is on file
with the Securities and Exchange Commission and is incorporated into this
Prospectus by reference; in other words, the SAI is legally a part of this
Prospectus, and you are considered to be aware of the contents of the SAI.
INTERNET. The Prospectus, SAI, annual report and semiannual report of the Fund
are available on the SEC Web site at www.sec.gov.
To obtain a free copy of the current Prospectus, SAI, annual report or
semiannual report, write to INVESCO Distributors, Inc., P.O. Box 173706, Denver,
Colorado 80217-3706; or call 1-800-525-8085. Copies of these materials are also
available (with a copying charge) from the SEC's Public Reference Section at 450
Fifth Street, N.W., Washington, D.C., 20549-0102. This information can be
obtained by electronic request at the following E-mail address:
[email protected], or by calling 1-202-942-8090. The SEC file numbers for the
Fund are 811-1474 and 002-26125.
811-1474
<PAGE>
PROSPECTUS | November 30, 2000
--------------------------------------------------------------------------------
YOU SHOULD KNOW WHAT INVESCO KNOWS (R)
--------------------------------------------------------------------------------
INVESCO STOCK FUNDS, INC.
INVESCO BLUE CHIP GROWTH FUND - CLASS C
INVESCO DYNAMICS FUND - CLASS C
INVESCO ENDEAVOR FUND - CLASS C
INVESCO GROWTH & INCOME FUND - CLASS C
INVESCO SMALL COMPANY GROWTH FUND - CLASS C
INVESCO VALUE EQUITY FUND - CLASS C
SIX MUTUAL FUNDS DESIGNED FOR INVESTORS SEEKING LONG-TERM CAPITAL APPRECIATION.
CLASS C SHARES ARE SOLD PRIMARILY THROUGH THIRD PARTIES, SUCH AS BROKERS, BANKS,
AND FINANCIAL PLANNERS.
TABLE OF CONTENTS
Investment Goals, Strategies And Risks............................105
Fund Performance..................................................109
Fees And Expenses.................................................112
Investment Risks..................................................114
Principal Risks Associated With The Funds.........................115
Temporary Defensive Positions.....................................117
Portfolio Turnover................................................117
Fund Management...................................................118
Portfolio Managers................................................118
Potential Rewards.................................................120
Share Price.......................................................121
How To Buy Shares.................................................121
How To Sell Shares................................................126
Taxes.............................................................128
Dividends And Capital Gain Distributions..........................128
Financial Highlights..............................................130
No dealer, sales person, or any other person has been authorized to give any
information or to make any representations other than those contained in this
Prospectus, and you should not rely on such other information or
representations.
[INVESCO ICON] INVESCO FUNDS
The Securities and Exchange Commission has not approved or disapproved the
shares of these Funds. Likewise, the Commission has not determined if this
Prospectus is truthful or complete. Anyone who tells you otherwise is committing
a federal crime.
<PAGE>
INVESCO Funds Group, Inc. ("INVESCO") is the investment adviser for the Funds.
Together with our affiliated companies, we at INVESCO direct all aspects of the
management of the Funds.
This Prospectus contains important information about the Funds' Class C shares,
which are sold primarily through third parties, such as brokers, banks, and
financial planners. Each Fund also offers one or more additional classes of
shares through separate prospectuses. Each of the Fund's classes has varying
expenses, with resulting effects on their performance. You can choose the class
of shares that is best for you, based on how much you plan to invest and other
relevant factors discussed in "How To Buy Shares." To obtain additional
information about other classes of shares, contact INVESCO Distributors, Inc.
("IDI") at 1-800-328-2234 or your broker, bank, or financial planner who is
offering the Class C shares offered in this Prospectus.
THIS PROSPECTUS WILL TELL YOU MORE ABOUT:
[KEY ICON] INVESTMENT GOALS & STRATEGIES
[ARROWS ICON] POTENTIAL INVESTMENT RISKS
[GRAPH ICON] PAST PERFORMANCE
[INVESCO ICON] WORKING WITH INVESCO
--------------------------------------------------------------------------------
[KEY ICON] [ARROWS ICON] INVESTMENT GOALS, STRATEGIES AND RISKS
FACTORS COMMON TO ALL THE FUNDS
FOR MORE DETAILS ABOUT EACH FUND'S CURRENT INVESTMENTS AND MARKET OUTLOOK,
PLEASE SEE THE MOST RECENT ANNUAL OR SEMIANNUAL REPORT.
The Funds attempt to make your investment grow. The Funds are actively managed.
The Funds invest primarily in equity securities that INVESCO believes will rise
in price faster than other securities, as well as in options and other
investments whose values are based upon the values of equity securities.
All of the Funds (except Value Equity Fund) are managed in the growth style. At
INVESCO, growth investing starts with research from the "bottom up," and focuses
on company fundamentals and growth prospects.
We require that securities purchased for the Funds meet the following standards:
o EXCEPTIONAL GROWTH: The markets and industries they represent are growing
significantly faster than the economy as a whole.
<PAGE>
o LEADERSHIP: They are leaders -- or emerging leaders -- in these markets,
securing their position through technology, marketing, distribution or some
other innovative means.
o FINANCIAL VALIDATION: Their returns -- in the form of sales unit growth,
rising operating margins, internal funding and other factors -- demonstrate
exceptional growth and leadership.
Growth investing may be more volatile than other investment styles because
growth stocks are more sensitive to investor perceptions of an issuing company's
growth potential. Growth-oriented funds typically will underperform
value-oriented funds when investor sentiment favors the value investing style.
Value Equity Fund is managed in the value style. That means we seek securities,
particularly stocks, that are currently undervalued by the market -- companies
that are performing well, or have solid management and products, but whose stock
prices do not reflect that value. Through our value process, we seek to provide
reasonably consistent returns over a variety of market cycles.
In addition to the risks outlined in the following sections for each Fund, the
Funds are subject to other principal risks such as market, liquidity,
counterparty, foreign securities, lack of timely information and portfolio
turnover risks. These risks are described and discussed later in the Prospectus
under the headings "Investment Risks" and "Principal Risks Associated With The
Funds." An investment in a Fund is not a deposit of any bank and is not insured
or guaranteed by the Federal Deposit Insurance Corporation ("FDIC") or any other
government agency. As with any mutual fund, there is always a risk that you may
lose money on your investment in a Fund.
[KEY ICON] INVESCO BLUE CHIP GROWTH FUND -- CLASS C
The Fund seeks to make your investment grow. It also seeks current income.
The Fund invests primarily in common stocks of large companies that, at the time
of purchase, have market capitalizations of more than $15 billion and that have
a history of consistent earnings growth regardless of business cycles. In
addition, INVESCO tries to identify companies that have -- or are expected to
have -- growing earnings, revenues and strong cash flows. INVESCO also examines
a variety of industries and businesses, and seeks to purchase the securities of
companies that we believe are best situated to grow in their industry
categories. We also consider the dividend payment records of the companies whose
securities the Fund buys. The Fund also may invest in preferred stocks (which
generally pay higher dividends than common stocks) and debt instruments that are
convertible into common stocks, as well as securities of foreign companies. In
recent years, the core of the Fund's investments has been concentrated in the
securities of three or four dozen large, high quality companies.
Although the Fund is subject to a number of risks that could affect its
performance, its principal risk is market risk -- that is, that the prices of
the securities in its portfolio will rise and fall due to price movements in the
<PAGE>
securities markets, and that the securities held in the Fund's portfolio may
decline in value more than the overall securities markets.
[KEY ICON] INVESCO DYNAMICS FUND -- CLASS C
The Fund attempts to make your investment grow. It invests primarily in common
stocks of mid-sized companies -- those with market capitalizations between $2
billion and $15 billion at the time of purchase -- but also has the flexibility
to invest in other types of securities, including preferred stocks, convertible
securities and bonds.
The core of the Fund's portfolio is invested in securities of established
companies that are leaders in attractive growth markets with a history of strong
returns. The remainder of the portfolio is invested in securities of companies
that show accelerating growth, driven by product cycles, favorable industry or
sector conditions and other factors that INVESCO believes will lead to rapid
sales or earnings growth.
The Fund's strategy relies on many short-term factors including current
information about a company, investor interest, price movements of a company's
securities and general market and monetary conditions. Consequently, the Fund's
investments are usually bought and sold relatively frequently.
While the Fund generally invests in mid-sized companies, the Fund sometimes
invests in the securities of smaller companies. The prices of these securities
tend to move up and down more rapidly than the securities prices of larger, more
established companies, and the price of Fund shares tends to fluctuate more than
it would if the Fund invested in the securities of larger companies.
[KEY ICON] INVESCO ENDEAVOR FUND -- CLASS C
The Fund attempts to make your investment grow. It uses an aggressive strategy
and invests primarily in common stocks. The Fund invests in companies of all
sizes and also has the flexibility to invest in other types of securities,
including preferred stocks, convertible securities, warrants, bonds and other
debt securities.
The Fund's strategy relies on many short-term factors including current
information about a company, investor interest, price movements of a company's
securities and general market and monetary conditions. Consequently, the Fund's
investments are usually bought and sold relatively frequently.
The Fund's investments are not limited to companies of a particular size. It
invests in the securities of smaller companies, including companies just
entering the securities marketplace with initial public offerings. The prices of
these securities tend to move up and down more rapidly than the securities
prices of larger, more established companies. When the Fund concentrates its
investments in the securities of smaller companies, the price of Fund shares
tends to fluctuate more than it would if the Fund invested in the securities of
larger companies.
<PAGE>
[KEY ICON] INVESCO GROWTH & INCOME FUND -- CLASS C
The Fund attempts to obtain a high rate of total return. Income on investments
(dividends and interest), plus increases in the value of investments, make up
total return. The Fund invests most of its assets in common stocks, preferred
stocks and securities convertible into common stocks. The Fund's core
investments are in well-established, large growth companies with a strong record
of paying dividends. The Fund may also invest in securities which do not pay
dividends but that INVESCO believes have the potential to increase in value,
regardless of the potential for dividends.
The Fund's strategy relies on many short-term factors including current
information about a company, investor interest, price movements of a company's
securities and general market and monetary conditions. Consequently, the Fund's
investments are usually bought and sold relatively frequently.
The Fund's portfolio is presently concentrated in the stocks of approximately 50
companies. Although INVESCO believes that this level of diversification is
appropriate, the Fund is not as diversified as some other mutual funds.
[KEY ICON] INVESCO SMALL COMPANY GROWTH FUND -- CLASS C
The Fund seeks long-term capital growth. Most holdings are in
small-capitalization companies -- those with market capitalizations under $2
billion at the time of purchase. We are primarily looking for companies in the
developing stages of their life cycles, which are currently priced below our
estimation of their potential, have earnings which may be expected to grow
faster than the U.S. economy in general, and/or offer the potential for
accelerated earnings growth due to rapid growth of sales, new products,
management changes, and/or structural changes in the economy.
Investments in small, developing companies carry greater risk than investments
in larger, more established companies. Developing companies generally face
intense competition, and have a higher rate of failure than larger companies. On
the other hand, large companies were once small companies themselves, and the
growth opportunities of some small companies may be quite high.
<PAGE>
[KEY ICON] INVESCO VALUE EQUITY FUND -- CLASS C
The Fund seeks high total return from capital appreciation and current income.
The portfolio emphasizes high-quality, larger-capitalization companies which are
temporarily out of favor with investors. Our value-based process evaluates
numerous factors on a current and historical basis, seeking undiscovered values
in the market. The philosophy of value investing is based upon the belief that
certain securities are undervalued by the market. As such, when the market
"discovers" these securities, their value should increase.
Although the Fund is subject to a number of risks, its principal risk is market
risk. Undervalued stocks may not realize their perceived value for extended
periods of time. Value-oriented funds may underperform when another investing
style is in favor.
<PAGE>
[GRAPH ICON] FUND PERFORMANCE
Since the Funds' Class C shares were not offered until February 15, 2000, the
bar charts below show the Funds' Investor Class shares' actual yearly
performance for the years ended December 31 (commonly known as their "total
return") over the past decade or since inception. INVESTOR CLASS SHARES ARE NOT
OFFERED IN THIS PROSPECTUS. INVESTOR CLASS AND CLASS C RETURNS WOULD BE SIMILAR
BECAUSE BOTH CLASSES OF SHARES INVEST IN THE SAME PORTFOLIO OF SECURITIES. THE
RETURNS OF THE CLASSES WOULD DIFFER, HOWEVER, TO THE EXTENT OF DIFFERING LEVELS
OF EXPENSES. IN THIS REGARD, THE BAR CHARTS DO NOT REFLECT CONTINGENT DEFERRED
SALES CHARGES OR ASSET BASED SALES CHARGES IN EXCESS OF 0.25% OF NET ASSETS; IF
THEY DID, THE TOTAL RETURNS SHOWN WOULD BE LOWER. The table below shows average
annual total returns for various periods ended December 31, 1999 for each Fund's
Investor Class shares compared to the relevant following indexes: S&P MidCap 400
Index, S&P 500 Composite Index and Russell 2000 Index. The information in the
charts and table illustrates the variability of each Fund's Investor Class
shares' total return and how its performance compared to a broad measure of
market performance. Remember, past performance does not indicate how a Fund will
perform in the future.
<PAGE>
--------------------------------------------------------------------------------
BLUE CHIP GROWTH FUND -- INVESTOR CLASS
ACTUAL ANNUAL TOTAL RETURN(1),(2)
--------------------------------------------------------------------------------
'90 '91 '92 '93 '94 '95 '96 '97 '98 '99
(1.18%) 42.05% 2.88% 18.01% (8.80%) 29.54% 20.96% 27.22% 41.72% 38.49%
--------------------------------------------------------------------------------
Best Calendar Qtr. _____% _____%
Worst Calendar Qtr. _____% _____%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
DYNAMICS FUND -- INVESTOR CLASS
ACTUAL ANNUAL TOTAL RETURN(1),(2)
--------------------------------------------------------------------------------
'90 '91 '92 '93 '94 '95 '96 '97 '98 '99
(6.35%) 67.00% 13.15% 19.10% (1.95%) 37.55% 15.65% 24.09% 23.25% 71.80%
--------------------------------------------------------------------------------
Best Calendar Qtr. _____% _____%
Worst Calendar Qtr. _____% _____%
--------------------------------------------------------------------------------
-------------------------------------------------------
INVESCO ENDEAVOR FUND -- INVESTOR CLASS
ACTUAL ANNUAL TOTAL RETURN(1),(2),(3),(4)
------------------------------------------------------
1999
84.21%
-------------------------------------------------------
Best Calendar Qtr. _____% _____%
Worst Calendar Qtr. _____% _____%
-------------------------------------------------------
-------------------------------------------------------
GROWTH & INCOME FUND -- INVESTOR CLASS
ACTUAL ANNUAL TOTAL RETURN(1),(2),(3),(5)
-------------------------------------------------------
1999
43.48%
-------------------------------------------------------
Best Calendar Qtr. _____% _____%
Worst Calendar Qtr. _____% _____%
-------------------------------------------------------
<PAGE>
--------------------------------------------------------------------------------
SMALL COMPANY GROWTH FUND -- INVESTOR CLASS
ACTUAL ANNUAL TOTAL RETURN(1),(2),(3),(6)
--------------------------------------------------------------------------------
'92 '93 '94 '95 '96 '97 '98 '99
25.75% 23.38% (3.74%) 30.02% 23.38% 11.62% 18.31% 81.64%
--------------------------------------------------------------------------------
Best Calendar Qtr. _____% _____%
Worst Calendar Qtr. _____% _____%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
VALUE EQUITY FUND -- INVESTOR CLASS
ACTUAL ANNUAL TOTAL RETURN(1),(2),(3)
--------------------------------------------------------------------------------
'90 '91 '92 '93 '94 '95 '96 '97 '98 '99
(5.80%) 35.84% 4.98% 10.43% 4.04% 30.60% 18.48% 28.00% 15.05% 1.12%
--------------------------------------------------------------------------------
Best Calendar Qtr. _____% _____%
Worst Calendar Qtr. _____% _____%
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN(1),(2),(3)
AS OF 12/31/99
--------------------------------------------------------------------------------
10 YEARS OR
1 YEAR 5 YEARS SINCE INCEPTION
Dynamics Fund-Investor Class ____% ____% ____%
S&P MidCap 400 Index(7) ____% ____% ____%
Blue Chip Growth Fund--Investor Class ____% ____% ____%
INVESCO Endeavor Fund--Investor Class ____% N/A ____%(4)
Growth & Income Fund--Investor Class ____% N/A ____%(5)
Value Equity Fund--Investor Class ____% ____% ____%
S&P 500 Composite Index(7) ____% ____% ____%
Small Company Growth Fund--Investor Class ____% ____% ____%(6)
Russell 2000 Index(7) ____% ____% ____%
<PAGE>
(1) Total return figures include reinvested dividends and capital gain
distributions and the effect of each Fund's expenses.
(2) The returns are for Investor Class shares that are not offered in this
Prospectus. Total returns of Class C shares will differ only to the extent
that the classes do not have the same expenses.
(3) Returns for Investor Class shares of Blue Chip Growth, Dynamics, INVESCO
Endeavor, Growth & Income, Small Company Growth and Value Equity Funds were
___%, ___%, ___%, ____%, ____% and ____%, respectively, year-to-date as of
the calendar quarter ended September 30, 2000.
(4) The Fund commenced investment operations on October 28, 1998.
(5) The Fund commenced investment operations on July 1, 1998.
(6) The Fund commenced investment operations on December 27, 1991.
(7) The S&P MidCap 400 Index is an unmanaged index indicative of domestic
mid-capitalization stocks. The S&P 500 Composite Index is an unmanaged index
considered representative of the performance of the broad U.S. stock market.
The Russell 2000 Index is an unmanaged index indicative of small
capitalization stocks. Please keep in mind that the Indexes do not pay
brokerage, management, administrative or distribution expenses, all of which
are paid by the Funds and are reflected in their annual returns.
FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy and hold
shares of the Funds.
SHAREHOLDER FEES PAID DIRECTLY FROM YOUR ACCOUNT
CLASS C SHARES
Maximum Deferred Sales Charge (Load) 1.00%(1)
ANNUAL FUND OPERATING EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS
BLUE CHIP GROWTH FUND--CLASS C
Management Fees 0.55%
Distribution and Service (12b-1) Fees(2) 1.00%
Other Expenses(3) ____%
Total Annual Fund Operating Expenses(3)
=====
DYNAMICS FUND--CLASS C
Management Fees 0.52%
Distribution and Service (12b-1) Fees(2) 1.00%
Other Expenses(3),(4) ____%
Total Annual Fund Operating Expenses(3),(4)
=====
INVESCO ENDEAVOR FUND--CLASS C
Management Fees 0.75%
Distribution and Service (12b-1) Fees(2) 1.00%
Other Expenses(3),(4) ____%
Total Annual Fund Operating Expenses(3),(4)
=====
<PAGE>
GROWTH & INCOME FUND--CLASS C
Management Fees 0.75%
Distribution and Service (12b-1) Fees(2) 1.00%
Other Expenses(3),(4) ____%
Total Annual Fund Operating Expenses(3),(4)
=====
SMALL COMPANY GROWTH FUND--CLASS C
Management Fees 0.72%
Distribution and Service (12b-1) Fees(2) 1.00%
Other Expenses(3),(4) ____%
Total Annual Fund Operating Expenses(3),(4)
=====
VALUE EQUITY FUND--CLASS C
Management Fees 0.75%
Distribution and Service (12b-1) Fees(2) 1.00%
Other Expenses(3),(4) ____%
Total Annual Fund Operating Expenses(3),(4)
=====
(1) A 1% contingent deferred sales charge may be charged on redemptions or
exchanges of shares held thirteen months or less, other than shares acquired
through reinvestment of dividends and other distributions.
(2) Because the Funds' Class C shares pay 12b-1 distribution and service fees
which are based upon each Fund's assets, if you own shares of a Fund for a
long period of time, you 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.
(3) Each Fund's actual Other Expenses and Total Annual Fund Operating Expenses
were lower than the figures shown, because their custodian and transfer
agency fees were reduced under expense offset arrangements.
(4) Certain expenses of Dynamics, INVESCO Endeavor, Growth & Income, Small
Company Growth and Value Equity Funds were absorbed voluntarily by INVESCO
pursuant to commitments between those Funds and INVESCO. These commitments
may be changed at any time following consultation with the board of
directors. After absorption, but excluding any expense offset arrangements,
Dynamics Fund's Other Expenses and Total Annual Fund Operating Expenses were
___% and ___%, respectively, of the Fund's average net assets; INVESCO
Endeavor Fund's Other Expenses and Total Annual Fund Operating Expenses were
___% and ___%, respectively, of the Fund's average net assets; Growth &
Income Fund's Other Expenses and Total Annual Fund Operating Expenses were
___% and ___%, respectively, of the Fund's average net assets; Small Company
Growth Fund's Other Expenses and Total Annual Fund Operating Expenses were
___% and ___%, respectively, of the Fund's average net assets; and Value
Equity Fund's Other Expenses and Total Annual Fund Operating Expenses were
___% and ___%, respectively, of the Fund's average net assets.
EXAMPLES
The Examples are intended to help you compare the cost of investing in the Funds
to the cost of investing in other mutual funds.
The Examples assume that you invested $10,000 in Class C shares of a Fund for
the time periods indicated. The first Example assumes that you redeem all of
your shares at the end of each period. The second Example assumes that you keep
your shares. Both Examples also assume that your investment had a hypothetical
5% return each year and that a Fund's Class C shares' operating expenses
<PAGE>
remained the same. Although the actual costs and performance of a Fund's Class C
shares may be higher or lower, based on these assumptions your costs would have
been:
IF SHARES ARE REDEEMED 1 year 3 years 5 years 10 years
Blue Chip Growth Fund--Class C $____ $____ $____ $____
Dynamics Fund--Class C $____ $____ $____ $____
INVESCO Endeavor Fund--Class C $____ $____ $____ $____
Growth & Income Fund--Class C $____ $____ $____ $____
Small Company Growth Fund -- Class C $____ $____ $____ $____
Value Equity Fund--Class C $____ $____ $____ $____
IF SHARES ARE NOT REDEEMED 1 year 3 years 5 years 10 years
Blue Chip Growth Fund--Class C $____ $____ $____ $____
Dynamics Fund --Class C $____ $____ $____ $____
INVESCO Endeavor Fund--Class C $____ $____ $____ $____
Growth & Income Fund--Class C $____ $____ $____ $____
Small Company Growth Fund--Class C $____ $____ $____ $____
Value Equity Fund--Class C $____ $____ $____ $____
[ARROWS ICON] INVESTMENT RISKS
You should determine the level of risk with which you are comfortable before you
invest. The principal risks of investing in any mutual fund, including these
Funds, are:
BEFORE INVESTING IN A FUND, YOU SHOULD DETERMINE THE LEVEL OF RISK WITH WHICH
YOU ARE COMFORTABLE. TAKE INTO ACCOUNT FACTORS LIKE YOUR AGE, CAREER, INCOME
LEVEL, AND TIME HORIZON.
NOT INSURED. Mutual funds are not insured by the FDIC or any other government
agency, unlike bank deposits such as CDs or savings accounts.
NO GUARANTEE. Nomutual fund can guarantee that it will meet its investment
objectives.
POSSIBLE LOSS OF INVESTMENT. A mutual fund cannot guarantee its performance, nor
assure you that the market value of your investment will increase. You may lose
the money you invest, and the Funds will not reimburse you for any of these
losses.
VOLATILITY. The price of your mutual fund shares will increase or decrease with
changes in the value of a Fund's underlying investments and changes in the
equity markets as a whole.
NOT A COMPLETE INVESTMENT PLAN. An investment in any mutual fund does not
constitute a complete investment plan. The Funds are designed to be only a part
of your personal investment plan.
<PAGE>
[ARROWS ICON] PRINCIPAL RISKS ASSOCIATED WITH THE FUNDS
You should consider the special factors associated with the policies discussed
below in determining the appropriateness of investing in a Fund. See the
Statement of Additional Information for a discussion of additional risk factors.
MARKET RISK
Equity stock prices vary and may fall, thus reducing the value of a Fund's
investments.Certain stocks selected for any Fund's portfolio may decline in
value more than the overall stock market. In general, the securities of large
businesses with outstanding securities worth $15 billion or more have less
volatility than those of mid-size businesses with outstanding securities worth
more than $2 billion, or small businesses with outstanding securities worth less
than $2 billion.
LIQUIDITY RISK
A Fund's portfolio is liquid if the Fund is able to sell the securities it owns
at a fair price within a reasonable time. Liquidity is generally related to the
market trading volume for a particular security. Investments in smaller
companies or in foreign companies or companies in emerging markets are subject
to a variety of risks, including potential lack of liquidity.
COUNTERPARTY RISK
This is a risk associated primarily with repurchase agreements and some
derivatives transactions. It is the risk that the other party in the transaction
will not fulfill its contractual obligation to complete the transaction with a
Fund.
FOREIGN SECURITIES RISKS
Investments in foreign and emerging markets carry special risks, including
currency, political, regulatory and diplomatic risks. Each Fund may invest up to
25% of its respective assets in securities of non-U.S. issuers. Securities of
Canadian issuers and American Depository Receipts are not subject to this 25%
limitation.
CURRENCY RISK. A change in the exchange rate between U.S. dollars and a
foreign currency may reduce the value of a Fund's investment in a security
valued in the foreign currency, or based on that currency value.
POLITICAL RISK. Political actions, events or instability may result in
unfavorable changes in the value of a security.
REGULATORY RISK. Government regulations may affect the value of a security.
In foreign countries, securities markets that are less regulated than those
in the U.S. may permit trading practices that are not allowed in the U.S.
DIPLOMATIC RISK. A change in diplomatic relations between the U.S. and a
foreign country could affect the value or liquidity of investments.
EUROPEAN ECONOMIC AND MONETARY UNION. Austria, Belgium, Finland, France,
Germany, Ireland, Italy, Luxembourg, The Netherlands, Portugal and Spain
are presently members of the European Economic and Monetary Union (the
<PAGE>
"EMU") which as of January 1, 1999, adopted the euro as a common currency.
The national currencies will be sub-currencies of the euro until July 1,
2002, at which time these currencies will disappear entirely. Other
European countries may adopt the euro in the future.
As the euro is implemented, there may be changes in the relative strength
and value of the U.S. dollar and other major currencies, as well as
possible adverse tax consequences. The euro transition by EMU countries may
affect the fiscal and monetary levels of those participating countries. The
outcome of these uncertainties could have unpredictable effects on trade
and commerce and result in increased volatility for all financial markets.
LACK OF TIMELY INFORMATION RISK
Timely information about a security or its issuer may be unavailable, incomplete
or inaccurate. This risk is more common to securities issued by foreign
companies and companies in emerging markets than it is to the securities of
U.S.-based companies.
PORTFOLIO TURNOVER RISK
A Fund's investments may be bought and sold relatively frequently. A high
turnover rate may result in higher brokerage commissions and taxable capital
gain distributions to a Fund's shareholders.
------------------------------------------
Although each Fund generally invests in publicly-traded equity securities of
growing companies, the Funds also may invest in other types of securities and
other financial instruments, indicated in the chart below. Although these
investments typically are not part of any Fund's principal investment strategy,
they may constitute a significant portion of a Fund's portfolio, thereby
possibly exposing a Fund and its investors to the following additional risks.
--------------------------------------------------------------------------------
INVESTMENT RISKS APPLIES TO THESE FUNDS
--------------------------------------------------------------------------------
AMERICAN DEPOSITORY Market, Blue Chip Growth
RECEIPTS (ADRs) Information, Dynamics
These are securities Political, INVESCO Endeavor
issued by U.S. banks that Regulatory, Growth & Income
represent shares of Diplomatic, Small Company Growth
foreign corporations held Liquidity and Value Equity
by those banks. Although Currency Risks
traded in U.S. securities
markets and valued in
U.S. dollars, ADRs carry
most of the risks of
investing directly in
foreign securities.
--------------------------------------------------------------------------------
<PAGE>
--------------------------------------------------------------------------------
INVESTMENT RISKS APPLIES TO THESE FUNDS
--------------------------------------------------------------------------------
REPURCHASE AGREEMENT Counterparty Blue Chip Growth
A contract under which Risk Dynamics
the seller of a security INVESCO Endeavor
agrees to buy it back at Growth & Income
an agreed-upon price and Small Company Growth
time in the future. Value Equity
--------------------------------------------------------------------------------
[ARROWS ICON] TEMPORARY DEFENSIVE POSITIONS
When securities markets or economic conditions are unfavorable or unsettled, we
might try to protect the assets of a Fund by investing in securities that are
highly liquid, such as high quality money market instruments like short-term
U.S. government obligations, commercial paper or repurchase agreements, even
though that is not the normal investment strategy of any Fund. We have the right
to invest up to 100% of a Fund's assets in these securities, although we are
unlikely to do so. Even though the securities purchased for defensive purposes
often are considered the equivalent of cash, they also have their own risks.
Investments that are highly liquid or comparatively safe tend to offer lower
returns. Therefore, a Fund's performance could be comparatively lower if it
concentrates in defensive holdings.
[ARROWS ICON] PORTFOLIO TURNOVER
We actively manage and trade the Funds' portfolios. Therefore, the Funds may
have a higher portfolio turnover rate compared to many other mutual funds. The
Funds with higher than average portfolio turnover rates for the fiscal year
ended July 31, 2000 were:
Blue Chip Growth Fund ___%
Dynamics Fund ___%
INVESCO Endeavor Fund ___%
Growth & Income Fund ___%
Small Company Growth Fund ___%
Value Equity Fund ___%
A portfolio turnover rate of 200%, for example, is equivalent to a Fund buying
and selling all of the securities in its portfolio two times in the course of a
year. A comparatively high turn-over rate may result in higher brokerage
commissions and taxable capital gain distributions to a Fund's shareholders.
<PAGE>
[INVESCO ICON] FUND MANAGEMENT
INVESCO IS A SUBSIDIARY OF AMVESCAP PLC, AN INTERNATIONAL INVESTMENT MANAGEMENT
COMPANY THAT MANAGES MORE THAN $___ BILLION IN ASSETS WORLDWIDE. AMVESCAP IS
BASED IN LONDON, WITH MONEY MANAGERS LOCATED IN EUROPE, NORTH AND SOUTH AMERICA,
AND THE FAR EAST.
INVESTMENT ADVISER
INVESCO, located at 7800 East Union Avenue, Denver, Colorado, is the investment
adviser of the Funds. INVESCO was founded in 1932 and manages over $___ billion
for more than _______, shareholders of ___ INVESCO mutual funds. INVESCO
performs a wide variety of other services for the Funds, including
administrative and transfer agency functions (the processing of purchases, sales
and exchanges of Fund shares).
INVESCO Capital Management ("ICM"), a division of INVESCO, Inc., located at 1360
Peachtree Street, N.E., Suite 100, Atlanta, Georgia, is the sub-adviser to Value
Equity Fund.
A wholly owned subsidiary of INVESCO, IDI is the Funds' distributor and is
responsible for the sale of the Funds' shares.
INVESCO, ICM and IDI are subsidiaries of AMVESCAP PLC.
The following table shows the fees the Funds paid to INVESCO for its advisory
services in the fiscal year ended July 31, 2000:
--------------------------------------------------------------------------------
ADVISORY FEE AS A PERCENTAGE OF
AVERAGE ANNUAL NET ASSETS UNDER MANAGEMENT
--------------------------------------------------------------------------------
INVESCO Blue Chip Growth Fund ___%
INVESCO Dynamics Fund ___%
INVESCO Endeavor Fund ___%
INVESCO Growth & Income Fund ___%
INVESCO Small Company Growth Fund ___%
INVESCO Value Equity Fund ___%
[INVESCO ICON] PORTFOLIO MANAGERS
The following individuals are primarily responsible for the day-to-day
management of their respective Fund's or Funds' portfolio holdings:
<PAGE>
FUND PORTFOLIO MANAGER(S)
Blue Chip Growth Trent E. May
Douglas J. McEldowney
Dynamics Timothy J. Miller
Thomas Wald
INVESCO Endeavor Trent E. May
Growth & Income Trent E. May
Fritz Meyer
Small Company Growth Stacie Cowell
Value Equity Michael C. Harhai
Terrence Irrgang
STACIE COWELL, a vice president of INVESCO, is the lead portfolio manager of
Small Company Growth Fund. Before joining INVESCO in 1997, Stacie was senior
equity analyst with Founders Asset Management and a capital markets and trading
analyst with Chase Manhattan Bank in New York. She is a Chartered Financial
Analyst. Stacie holds an M.S. in Finance from the University of Colorado and a
B.A. in Economics from Colgate University.
MICHAEL C. HARHAI, an executive vice president of ICM, is the lead portfolio
manager of Value Equity Fund. Before joining ICM in 1992, Michael was a senior
vice president with Sovran Capital Management Corp. and a vice president with
C&S National Bank. He is a Chartered Financial Analyst. Michael holds an M.B.A.
from the University of Central Florida and a B.A. from the University of South
Florida.
TERRENCE IRRGANG, a vice president of ICM, is the co-portfolio manager of Value
Equity Fund. Before joining ICM in 1992, Terrence was a consultant for Towers,
Perrin, Forster & Crosby. He is a Chartered Financial Analyst. Terrence holds an
M.B.A. from Temple University and a B.A. from Gettysburg College.
TRENT E. MAY, a senior vice president of INVESCO, is the lead portfolio manager
of Blue Chip Growth Fund and INVESCO Endeavor Fund and the co-portfolio manager
of Growth & Income Fund. Before joining INVESCO in 1996, Trent was with Munder
Capital Management and SunBank Capital Management. He is a Chartered Financial
Analyst. Trent holds an M.B.A. from Rollins College and a B.S. in Engineering
from Florida Institute of Technology.
DOUGLAS J. MCELDOWNEY, a vice president of INVESCO, is the co-portfolio manager
of Blue Chip Growth Fund. Before joining INVESCO in 1999, Doug was with Bank of
America Investment Management, Inc. and SunTrust Banks, Inc. He is a Chartered
Financial Analyst and Certified Public Accountant. Doug holds an M.B.A. from the
Crummer Graduate School at Rollins College and a B.B.A. in Finance from the
University of Kentucky.
FRITZ MEYER, a vice president of INVESCO, is the lead portfolio manager of
Growth & Income Fund. Before joining INVESCO in 1996, Fritz was an executive
vice president and portfolio manager with Nelson, Benson & Zellmer, Inc. He
<PAGE>
holds an M.B.A. from Amos Tuck School -- Dartmouth College and a B.A. with a
distinction in Economics from Dartmouth College.
TIMOTHY J. MILLER, Chief Investment Officer and a director and senior vice
president of INVESCO, is the lead portfolio manager of Dynamics Fund. Before
joining INVESCO in 1992, Tim was a portfolio manager with Mississippi Valley
Advisors. He is a Chartered Financial Analyst. Tim holds an M.B.A. from the
University of Missouri-- St. Louis and a B.S.B.A. from St. Louis University.
THOMAS WALD, a vice president of INVESCO, is the co-portfolio manager of
Dynamics Fund. Before joining INVESCO in 1997, Tom was an analyst with Munder
Capital Management, Duff & Phelps and Prudential Investment Corp. He is a
Chartered Financial Analyst. Tom holds an M.B.A. from the Wharton School at the
University of Pennsylvania and a B.A. from Tulane University.
Stacie Cowell, Trent May, Doug McEldowney, Fritz Meyer and Tom Wald are members
of the INVESCO Growth Team, which is led by Tim Miller.
[INVESCO ICON] POTENTIAL REWARDS
NO SINGLE FUND SHOULD REPRESENT YOUR COMPLETE INVESTMENT PROGRAM NOR SHOULD YOU
ATTEMPT TO USE THE FUNDS FOR SHORT-TERM TRADING PURPOSES.
The Funds offer shareholders the potential to increase the value of their
capital over time; Blue Chip Growth, Growth & Income and Value Equity Funds also
offer the opportunity for current income. Like most mutual funds, each Fund
seeks to provide higher returns than the market or its competitors, but cannot
guarantee that performance. Each Fund seeks to minimize risk by investing in
many different companies in a variety of industries.
SUITABILITY FOR INVESTORS
Only you can determine if an investment in a Fund is right for you based upon
your own economic situation, the risk level with which you are comfortable and
other factors. In general, the Funds are most suitable for investors who:
o are willing to grow their capital over the long term (at least five years).
o understand that shares of a Fund can, and likely will, have daily price
fluctuations.
o are investing tax-deferred retirement accounts, such as traditional and Roth
Individual Retirement Accounts ("IRAs"), as well as employer-sponsored
qualified retirement plans, including 401(k)s and 403(b)s, all of which have
longer investment horizons.
You probably do not want to invest in the Funds if you are:
o primarily seeking current dividend income.
o unwilling to accept potentially significant changes in the price of Fund
shares.
o speculating on short-term fluctuations in the stock markets.
<PAGE>
[INVESCO ICON] SHARE PRICE
CURRENT MARKET VALUE OF FUND ASSETS
+ ACCRUED INTEREST AND DIVIDENDS
- FUND DEBTS,
INCLUDING ACCRUED EXPENSES
-----------------------------------
/ NUMBER OF SHARES
= YOUR SHARE PRICE (NAV).
The value of your Fund shares is likely to change daily. This value is known as
the Net Asset Value per share, or NAV. INVESCO determines the market value of
each investment in each Fund's portfolio each day that the New York Stock
Exchange ("NYSE") is open, at the close of the regular trading day on that
exchange (normally 4:00 p.m. Eastern time). Therefore, shares of the Funds are
not priced on days when the NYSE is closed, which generally is on weekends and
national holidays in the U.S.
NAV is calculated by adding together the current market price of all of a Fund's
investments and other assets, including accrued interest and dividends;
subtracting the Fund's debts, including accrued expenses; and dividing that
dollar amount by the total number of the Fund's outstanding shares.
All purchases, sales and exchanges of Fund shares are made by INVESCO at the NAV
next calculated after INVESCO receives proper instructions from you to purchase,
redeem or exchange shares of a Fund. Your instructions must be received by
INVESCO no later than the close of the NYSE to effect transactions at that day's
NAV. If INVESCO hears from you after that time, your instructions will be
processed at the NAV calculated at the end of the next day that the NYSE is
open.
Foreign securities exchanges, which set the prices for foreign securities held
by the Funds, are not always open the same days as the NYSE, and may be open for
business on days the NYSE is not. For example, Thanksgiving Day is a holiday
observed by the NYSE and not by overseas exchanges. In this situation, the Funds
would not calculate NAV on Thanksgiving Day (and INVESCO would not buy, sell or
exchange shares for you on that day), even though activity on foreign exchanges
could result in changes in the value of investments held by the Funds on that
day.
[INVESCO ICON] HOW TO BUY SHARES
TO BUY SHARES AT THAT DAY'S CLOSING PRICE, YOU MUST CONTACT US BEFORE THE CLOSE
OF THE NYSE, NORMALLY, 4:00 P.M. EASTERN TIME.
The Funds offer multiple classes of shares. The chart in this section shows
several convenient ways to invest in the Funds. A share of each class represents
an identical interest in a Fund and has the same rights, except that each class
bears its own distribution and shareholder servicing charges, and other
expenses. The income attributable to each class and the dividends payable on the
shares of each class will be reduced by the amount of the distribution fee or
service fee, if applicable, and the other expenses payable by that class.
<PAGE>
There is no charge to invest directly through INVESCO. However, with respect to
Class C shares, upon redemption or exchange of Class C shares held thirteen
months or less (other than Class C shares acquired through reinvestment of
dividends or other distributions, or Class C shares exchanged for Class C shares
of another INVESCO Fund), a contingent deferred sales charge of 1% of the amount
of the total original cost of the Class C shares may be assessed. If you invest
in a Fund through a securities broker, you may be charged a commission or
transaction fee for either purchases or sales of Fund shares. For all new
accounts, please send a completed application form, and specify the fund or
funds and class or classes of shares you wish to purchase.
INVESCO reserves the right to increase, reduce or waive each Fund's minimum
investment requirements in its sole discretion, if it determines this action is
in the best interests of that Fund's shareholders. INVESCO also reserves the
right in its sole discretion to reject any order to buy Fund shares, including
purchases by exchange.
MINIMUM INITIAL INVESTMENT. $1,000, which is waived for regular investment
plans, including EasiVest and Direct Payroll Purchase, and certain retirement
plans, including IRAs.
MINIMUM SUBSEQUENT INVESTMENT. $50 (Minimums are lower for certain retirement
plans.)
EXCHANGE POLICY. You may exchange your shares in any of the Funds for shares of
the same class in another INVESCO fund on the basis of their respective NAVs at
the time of the exchange.
FUND EXCHANGES CAN BE A CONVENIENT WAY FOR YOU TO DIVERSIFY YOUR INVESTMENTS, OR
TO REALLOCATE YOUR INVESTMENTS WHEN YOUR OBJECTIVES CHANGE.
Before making any exchange, be sure to review the prospectuses of the funds
involved and consider the differences between the funds. Also, be certain that
you qualify to purchase certain classes of shares in the new fund. An exchange
is the sale of shares from one fund immediately followed by the purchase of
shares in another. Therefore, any gain or loss realized on the exchange is
recognizable for federal income tax purposes (unless, of course, you or your
account qualifies as tax-deferred under the Internal Revenue Code). If the
shares of the fund you are selling have gone up in value since you bought them,
the sale portion of an exchange may result in taxable income to you.
We have the following policies governing exchanges:
o Both fund accounts involved in the exchange must be registered in exactly the
same name(s) and Social Security or federal tax I.D. number(s).
o You may make up to four exchanges out of each Fund per 12-month period, but
you may be subject to the contingent deferred sales charge, described below.
o Each Fund reserves the right to reject any exchange request, or to modify or
terminate the exchange policy, if it is in the best interests of the Fund and
its shareholders. Notice of all such modifications or terminations that
affect all shareholders of the Fund will be given at least 60 days prior to
the effective date of the change, except in unusual instances, including a
<PAGE>
suspension of redemption of the exchanged security under Section 22(e) of the
Investment Company Act of 1940.
In addition, the ability to exchange may be temporarily suspended at any time
that sales of the fund into which you wish to exchange are temporarily stopped.
Please remember that if you pay by check, Automated Clearing House ("ACH"), or
wire and your funds do not clear, you will be responsible for any related loss
to a Fund or INVESCO. If you are already an INVESCO funds shareholder, the Fund
may seek reimbursement for any loss from your existing account(s).
CHOOSING A SHARE CLASS. Each Fund has multiple classes of shares, each class
representing an interest in the same portfolio of investments. In deciding which
class of shares to purchase, you should consider, among other things, (i) the
length of time you expect to hold your shares, (ii) the provisions of the
distribution plan applicable to that class, if any, (iii) the eligibility
requirements that apply to purchases of a particular class, and (iv) any
services you may receive in making your investment determination. Your
investment representative can help you decide among the various classes. Please
contact your investment representative for several convenient ways to invest in
the Funds. Class C shares are available only through your investment
representative.
CONTINGENT DEFERRED SALES CHARGE (CDSC). If you redeem or exchange Class C
shares of any Fund after holding them thirteen months or less (other than shares
acquired through reinvestment of dividends or other distributions), a CDSC of 1%
of the total original cost of the shares being redeemed or exchanged may be
assessed. The fee applies to redemptions from a Fund and exchanges (other than
exchanges into Class C shares) into any of the other mutual funds which are also
advised by INVESCO and distributed by IDI. We will use the "first-in, first-out"
method to determine your holding period. Under this method, the date of
redemption or exchange will be compared with the earliest purchase date of
shares held in your account.
You will not pay a CDSC:
o if you redeem Class C shares held for more than 13 months; [ ]
o if you redeem shares acquired through reinvestment of dividends and
distributions;
o on increases in the net asset value of your shares;
o if you are participating in the periodic withdrawal program and would like to
withdraw, on an annual basis, up to 10% of your principal;
o to pay account fees;
o for IRA distributions due to death, disability or periodic distributions
based on life expectancy;
o to return excess contributions (and earnings, if applicable) from retirement
plan accounts;
o or for redemptions following the death of a shareholder or beneficial owner.
INTERNET TRANSACTION. Investors in any of the Investor Class or Class C shares
of any INVESCO fund may open new accounts, exchange and redeem shares through
the INVESCO Web site. To use this service, you will need a Web browser
(presently Netscape version 4.0 or higher, Internet Explorer version 4.0 or
higher, or AOL version 5.0 or higher) and the ability to use the INVESCO Web
<PAGE>
site. INVESCO will accept Internet purchase instructions only for exchanges or
if the purchase price is paid to INVESCO through debiting your bank account.
Internet cash redemptions will be paid only to the same bank account from which
the payment to INVESCO originated. INVESCO imposes a limit of $25,000 on
Internet purchase and redemption transactions. Other minimum transaction amounts
are discussed in this Prospectus. You may also download an application to open
an account from the Web site, complete it by hand, and mail it to INVESCO, along
with a check.
INVESCO employs reasonable procedures to confirm that transactions entered into
over the Internet are genuine. These procedures include the use of alphanumeric
passwords, secure socket layering, encryption and other precautions reasonably
designed to protect the integrity, confidentiality and security of shareholder
information. In order to enter into a transaction on the INVESCO Web site, you
will need an account number, your Social Security Number and an alphanumeric
password. If INVESCO follows these procedures, neither INVESCO, its affiliates
nor any INVESCO fund will be liable for any loss, liability, cost or expense for
following instructions communicated via the Internet that are reasonably
believed to be genuine or that follow INVESCO's security procedures. By entering
into the user's agreement with INVESCO to open an account through our Web site,
you lose certain rights if someone gives fraudulent or unauthorized instructions
to INVESCO that result in a loss to you.
METHOD INVESTMENT MINIMUM PLEASE REMEMBER
--------------------------------------------------------------------------------
BY CHECK $1,000 for regular INVESCO does not accept a
Mail to: INVESCO Funds accounts; third party check unless
Group, Inc., P.O. Box $250 for an IRA; it is from another
17970, Denver, CO 80217. $50 for each financial institution
You may send your check subsequent related to a retirement
by overnight courier to: investment. plan transfer.
7800 E. Union Ave.
Denver, CO 80237.
--------------------------------------------------------------------------------
BY WIRE $1,000 for regular
You may send your payment accounts;
by bank wire (call $250 for an IRA;
1-800-328-2234 for $50 for each
instructions). subsequent
investment.
--------------------------------------------------------------------------------
BY TELEPHONE WITH ACH $1,000 for regular You must forward your bank
Call 1-800-328-2234 to accounts; account information to
request your purchase. $250 for an IRA; INVESCO prior to using
Upon your telephone $50 for each this option.
instructions, INVESCO subsequent
will move money from your investment.
designated bank/credit
union checking or savings
account in order to
purchase shares.
<PAGE>
METHOD INVESTMENT MINIMUM PLEASE REMEMBER
--------------------------------------------------------------------------------
BY INTERNET $1,000 for regular You will need a Web
Go to the INVESCO accounts; browser to use this
Web site at $250 for an IRA; service. Internet
invescofunds.com $50 for each transactions are limited
subsequent to a maximum of $25,000.
investment.
--------------------------------------------------------------------------------
REGULAR INVESTING WITH $50 per month for Like all regular
EASIVEST OR DIRECT EasiVest; $50 per investment plans, neither
PAYROLL PURCHASE pay period for EasiVest nor Direct
You may enroll on your Direct Payroll Payroll Purchase ensures a
fund application, or call Purchase. You may profit or protects against
us for a separate form start or stop your loss in a falling market.
and more details. regular investment Because you'll invest
Investing the same plan at any time, continually, regardless of
amount on a monthly with two weeks' varying price levels,
basis allows you to notice to INVESCO. consider your financial
buy more shares when ability to keep buying
prices are low and through low price levels.
fewer shares when And remember that you will
prices are high. lose money if you redeem
This "dollar cost your shares when the
averaging" may help market value of all your
offset market shares is less than their
fluctuations. Over cost.
a period of time,
your average cost
per share may be
less than the actual
average market value
per share.
--------------------------------------------------------------------------------
BY PERSONAL ACCOUNT $50 for subsequent You must forward your bank
Line Automated investments. account information to
transactions by telephone INVESCO prior to using
are available for subse this option. Automated
quent purchases and transactions are limited
exchanges 24 hours a day. to a maximum of $25,000.
Simply call
1-800-424-8085.
--------------------------------------------------------------------------------
BY EXCHANGE $1,000 for regular See "Exchange Policy."
Between the same class of accounts; $250 for an
any two INVESCO funds. IRA; $50 for each
Call 1-800-328-2234 subsequent investment.
for prospectuses of
other INVESCO funds.
Exchanges may be made
in writing, by
telephone or at
our Web site at
invesco-funds.com.
You may also establish
an automatic monthly
exchange service
between two INVESCO
funds; call us for
further details and
the correct form.
DISTRIBUTION EXPENSES. We have adopted a Master Distribution Plan and Agreement
(commonly known as a "12b-1 Plan") for the Funds' Class C shares. The 12b-1 fees
paid by each Fund's Class C shares are used to pay distribution fees to IDI for
the sale and distribution of each Fund's shares and fees for services provided
to shareholders, all or a substantial portion of which are paid to the dealer of
record. Because the Funds' Class C shares pay these fees out of their assets on
an ongoing basis, these fees increase the cost of your investment.
<PAGE>
HOUSEHOLDING. To save money for the Funds, INVESCO will send only one copy of a
prospectus or financial report to each household address. This process, known as
"householding," is used for most required shareholder mailings. It does not
apply to account statements. You may, of course, request an additional copy of a
prospectus or financial report at any time by calling or writing INVESCO. You
may also request that householding be eliminated from all your required
mailings.
[INVESCO ICON] HOW TO SELL SHARES
The chart in this section shows several convenient ways to sell your Fund
shares. Shares of the Funds may be sold at any time at the next NAV calculated
after your request to sell in proper form is received by INVESCO. Depending on
Fund performance, the NAV at the time you sell your shares may be more or less
than the price you paid to purchase your shares.
TO SELL SHARES AT THAT DAY'S CLOSING PRICE, YOU MUST CONTACT US BEFORE 4:00 P.M.
EASTERN TIME.
If you own shares in more than one INVESCO fund, please specify the fund whose
shares you wish to sell and specify the class of shares. Remember that any sale
or exchange of shares in a non-retirement account will likely result in a
taxable gain or loss.
While INVESCO attempts to process telephone redemptions promptly, there may be
times -- particularly in periods of severe economic or market disruption -- when
you may experience delays in redeeming shares by telephone.
INVESCO usually forwards the proceeds from the sale of Fund shares within seven
days after we receive your request to sell in proper form. However, payment may
be postponed under unusual circumstances -- for instance, if normal trading is
not taking place on the NYSE, or during an emergency as defined by the
Securities and Exchange Commission. If your INVESCO fund shares were purchased
by a check which has not yet cleared, payment will be made promptly when your
purchase check does clear; that can take up to 12 business days.
If you participate in EasiVest, the Funds' automatic monthly investment program,
and sell all of the shares in your account, we will not make any additional
EasiVest purchases unless you give us other instructions.
Because of the Funds' expense structure, it costs as much to handle a small
account as it does to handle a large one. If the value of your account in a Fund
falls below $250 as a result of your actions (for example, sale of your Fund
shares), the Fund reserves the right to sell all of your shares, send the
proceeds of the sale to you and close your account. Before this is done, you
will be notified and given 60 days to increase the value of your account to $250
or more.
REDEMPTION FEE. Except for any applicable CDSC, we will not charge you any fees
to redeem your shares; however, your broker or financial consultant may charge
service fees for handling these transaction.
<PAGE>
METHOD REDEMPTION MINIMUM PLEASE REMEMBER
--------------------------------------------------------------------------------
BY TELEPHONE $250 (or, if less, INVESCO's telephone
Call us toll-free at: full liquidation redemption privileges may
1-800-328-2234 of the account) be modified or terminated
for a redemption in the future at INVESCO's
check. discretion. The maximum
amount which may be
redeemed by telephone is
generally $25,000.
--------------------------------------------------------------------------------
IN WRITING Any amount. The redemption request
Mail your request to must be signed by all
INVESCO Funds Group, registered account owners.
Inc., P.O. Box 17970, Payment will be mailed to
Denver, CO 80217. your address as it appears
You may also send on INVESCO's records, or
your request by to a bank designated by
overnight courier to you in writing.
7800 E. Union Ave.,
Denver, CO 80237.
--------------------------------------------------------------------------------
BY TELEPHONE WITH ACH $50. IRA You must forward your bank
Call 1-800-328-2234 redemptions not account information to
to request your permitted. INVESCO prior to using
redemption. this option. INVESCO will
automatically pay the
proceeds into your
designated bank account.
--------------------------------------------------------------------------------
PERIODIC WITHDRAWAL PLAN $100 per payment You must have at least
You may call us to on a monthly or $10,000 total invested
request the appropriate quarterly basis. with the INVESCO funds
form and more information The redemption with at least $5,000 of
at 1-800-328-2234. check may be made that total invested in the
payable to any fund from which
party you withdrawals will be made.
designate.
--------------------------------------------------------------------------------
PAYMENT TO THIRD PARTY Any amount. All registered account
Mail your request to owners must sign the
INVESCO Funds Group, request, with signature
Inc., P.O. Box 17970 guarantees from an
Denver, CO 80217. eligible guarantor
financial institution,
such as a commercial bank
or a recognized national
or regional securities
firm.
<PAGE>
[GRAPH ICON] TAXES
Everyone's tax status is unique. We encourage you to consult your own tax
adviser on the tax impact to you of investing in the Funds.
TO AVOID BACKUP WITHHOLDING, BE SURE WE HAVE YOUR CORRECT SOCIAL SECURITY OR
TAXPAYER IDENTIFICATION NUMBER.
Each Fund customarily distributes to its shareholders substantially all of its
net investment income, net capital gains and net gains from foreign currency
transactions, if any. You receive a proportionate part of these distributions,
depending on the percentage of each Fund's shares that you own. These
distributions are required under federal tax laws governing mutual funds. It is
the policy of each Fund to distribute all investment company taxable income and
net capital gains. As a result of this policy and each Fund's qualification as a
regulated investment company, it is anticipated that none of the Funds will pay
any federal income or excise taxes. Instead, each Fund will be accorded conduit
or "pass through" treatment for federal income tax purposes.
However, unless you are (or your account is) exempt from income taxes, you must
include all dividends and capital gain distributions paid to you by a Fund in
your taxable income for federal, state and local income tax purposes. You also
may realize capital gains or losses when you sell shares of a Fund at more or
less than the price you originally paid. An exchange is treated as a sale, and
is a taxable event. Dividends and other distributions usually are taxable
whether you receive them in cash or automatically reinvest them in shares of the
distributing Fund(s) or other INVESCO funds.
If you have not provided INVESCO with complete, correct tax information, the
Funds are required by law to withhold 31% of your distributions and any money
that you receive from the sale of shares of the Funds as a backup withholding
tax.
We will provide you with detailed information every year about your dividends
and capital gain distributions. Depending on the activity in your individual
account, we may also be able to assist with cost basis figures for shares you
sell.
[GRAPH ICON] DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS
The Funds earn ordinary or investment income from dividends and interest on
their investments. The Funds expect to distribute substantially all of this
investment income, less Fund expenses, to shareholders annually, with respect to
Blue Chip Growth, Dynamics, Endeavor and Small Company Growth Funds, and
quarterly, with respect to Growth & Income and Value Equity Funds, or at such
other times as the Funds may elect.
<PAGE>
NET INVESTMENT INCOME AND NET REALIZED CAPITAL GAINS ARE DISTRIBUTED TO
SHAREHOLDERS AT LEAST ANNUALLY. DISTRIBUTIONS ARE TAXABLE WHETHER REINVESTED IN
ADDITIONAL SHARES OR PAID TO YOU IN CASH (EXCEPT FOR TAX-EXEMPT ACCOUNTS).
A Fund also realizes capital gains or losses when it sells securities in its
portfolio for more or less than it had paid for them. If total gains on sales
exceed total losses (including losses carried forward from previous years), a
Fund has a net realized capital gain. Net realized capital gains, if any, are
distributed to shareholders at least annually, usually in November.
Under present federal income tax laws, capital gains may be taxable at different
rates, depending on how long a Fund has held the underlying investment.
Short-term capital gains which are derived from the sale of assets held one year
or less are taxed as ordinary income. Long-term capital gains which are derived
from the sale of assets held for more than one year are taxed at up to the
maximum capital gains rate, currently 20% for individuals.
Dividends and capital gain distributions are paid to you if you hold shares on
the record date of the distribution regardless of how long you have held your
shares. A Fund's NAV will drop by the amount of the distribution on the day the
distribution is declared. If you buy shares of a Fund just before a distribution
is declared, you may wind up "buying a distribution." This means that if the
Fund declares a dividend or capital gain distribution shortly after you buy, you
will receive some of your investment back as a taxable distribution. Most
shareholders want to avoid this. And, if you sell your shares at a loss for tax
purposes and purchase a substantially identical investment within 30 days before
or after that sale, the transaction is usually considered a "wash sale" and you
will not be able to claim a tax loss.
Dividends and capital gain distributions paid by each Fund are automatically
reinvested in additional Fund shares at the NAV on the ex-distribution date,
unless you choose to have them automatically reinvested in another INVESCO fund
or paid to you by check or electronic funds transfer. If you choose to be paid
by check, the minimum amount of the check must be at least $10; amounts less
than that will be automatically reinvested. Dividends and other distributions,
whether received in cash or reinvested in additional Fund shares, may be subject
to federal income tax.
<PAGE>
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the financial
performance of each Fund for the past five years (or, if shorter, the period of
the Fund's operations). Certain information reflects financial results for a
single Fund share. The total returns in the table represent the annual
percentages that an investor would have earned (or lost) on an investment in a
Fund (assuming reinvestment of all dividends and distributions). This
information has been audited by PricewaterhouseCoopers LLP, independent
accountants, whose report, along with the financial statements, is included in
INVESCO Stock Funds, Inc.'s 2000 Annual Report to Shareholders, which is
incorporated by reference into the Statement of Additional Information. This
Report is available without charge by contacting IDI at the address or telephone
number on the back cover of this Prospectus.
Period Ended
July 31
-------------
2000(a)
BLUE CHIP GROWTH FUND--CLASS C
PER SHARE DATA
Net Asset Value--Beginning of Period
--------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS(b)
Net Investment Loss
Net Gains on Securities
(Both Realized and Unrealized)
--------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS
--------------------------------------------------------------------------------
Net Asset Value--End of Period
================================================================================
TOTAL RETURN (c)
RATIOS
Net Assets--End of Period ($000 Omitted)
Ratio of Expenses to Average Net Assets
Ratio of Net Investment Loss to Average
Net Assets(e)
Portfolio Turnover Rate
(a) From February 15, 2000, since inception of Class C shares, to July 31, 2000.
(b) The per share information was computed based on average shares.
(c) The applicable CDSC fees are not included in the total return calculations.
(d) Based on operations for the period shown and, accordingly, is not
representative of a full year.
(e) Ratio is based on total expenses of the class, which is before any expense
offset arrangements (which may include custodian fees).
(f) Annualized.
(g) Portfolio turnover is calculated at the Fund level, and therefore represents
the year ended July 31, 2000.
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
Period Ended
July 31
-------------
2000(a)
DYNAMICS FUND--CLASS C
PER SHARE DATA
Net Asset Value--Beginning of Period
--------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS(b)
Net Investment Loss
Net Gains on Securities
(Both Realized and Unrealized)
--------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS
--------------------------------------------------------------------------------
Net Asset Value--End of Period
================================================================================
TOTAL RETURN(c)
RATIOS
Net Assets--End of Period ($000 Omitted)
Ratio of Expenses to Average Net Assets
Ratio of Net Investment Loss to Average
Net Assets(e)
Portfolio Turnover Rate
(a) From February 15, 2000, since inception of Class C shares, to July 31, 2000.
(b) The per share information was computed based on average shares.
(c) The applicable CDSC fees are not included in the total return calculations.
(d) Based on operations for the period shown and, accordingly, is not
representative of a full year.
(e) Ratio is based on total expenses of the class, which is before any expense
offset arrangements (which may include custodian fees).
(f) Annualized.
(g) Portfolio turnover is calculated at the Fund level, and therefore represents
the year ended July 31, 2000.
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
Period Ended
July 31
-------------
2000(a)
INVESCO ENDEAVOR FUND--CLASS C
PER SHARE DATA
Net Asset Value--Beginning of Period
--------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS(b)
Net Investment Loss
Net Gains on Securities
(Both Realized and Unrealized)
--------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS
--------------------------------------------------------------------------------
Net Asset Value--End of Period
================================================================================
TOTAL RETURN(c)
RATIOS
Net Assets--End of Period ($000 Omitted)
Ratio of Expenses to Average Net Assets
Ratio of Net Investment Loss to Average
Net Assets(e)
Portfolio Turnover Rate
(a) From February 15, 2000, since inception of Class C shares, to July 31, 2000.
(b) The per share information was computed based on average shares.
(c) The applicable CDSC fees are not included in the total return calculations.
(d) Based on operations for the period shown and, accordingly, is not
representative of a full year.
(e) Ratio is based on total expenses of the class, which is before any expense
offset arrangements (which may include custodian fees).
(f) Annualized.
(g) Portfolio turnover is calculated at the Fund level, and therefore represents
the year ended July 31, 2000.
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
Period Ended
July 31
-------------
2000(a)
GROWTH & INCOME FUND--CLASS C
PER SHARE DATA
Net Asset Value--Beginning of Period
--------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS(b)
Net Investment Loss
Net Gains on Securities
(Both Realized and Unrealized)
--------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS
--------------------------------------------------------------------------------
Net Asset Value--End of Period
================================================================================
TOTAL RETURN(c)
RATIOS
Net Assets--End of Period ($000 Omitted)
Ratio of Expenses to Average Net Assets
Ratio of Net Investment Loss to Average
Net Assets(e)
Portfolio Turnover Rate
(a) From February 15, 2000, since inception of Class C shares, to July 31, 2000.
(b) The per share information was computed based on average shares.
(c) The applicable CDSC fees are not included in the total return calculations.
(d) Based on operations for the period shown and, accordingly, is not
representative of a full year.
(e) Ratio is based on total expenses of the class, which is before any expense
offset arrangements (which may include custodian fees).
(f) Annualized.
(g) Portfolio turnover is calculated at the Fund level, and therefore represents
the year ended July 31, 2000.
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
Period Ended
July 31
-------------
2000(a)
SMALL COMPANY GROWTH FUND--CLASS C
PER SHARE DATA
Net Asset Value--Beginning of Period
--------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS(b)
Net Investment Loss
Net Gains on Securities
(Both Realized and Unrealized)
--------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS
--------------------------------------------------------------------------------
Net Asset Value--End of Period
================================================================================
TOTAL RETURN(c)
RATIOS
Net Assets--End of Period ($000 Omitted)
Ratio of Expenses to Average Net Assets
Ratio of Net Investment Loss to Average
Net Assets(e)
Portfolio Turnover Rate
(a) From February 15, 2000, since inception of Class C shares, to July 31, 2000.
(b) Net Investment Loss for the year ended July 31, 2000 aggregated less than
$0.01 on a per share basis.
(c) The applicable CDSC fees are not included in the total return calculation.
(d) Based on operations for the period shown and, accordingly, is not
representative of a full year.
(e) Ratio is based on total expenses of the class, which is before any expense
offset arrangements (which may include custodian fees).
(f) Annualized.
(g) Portfolio turnover is calculated at the Fund level, and therefore represents
the year ended July 31, 2000.
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
Period Ended
July 31
-------------
2000(a)
VALUE EQUITY FUND--CLASS C
PER SHARE DATA
Net Asset Value--Beginning of Period
--------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS(b)
Net Investment Loss
Net Gains on Securities
(Both Realized and Unrealized)
--------------------------------------------------------------------------------
TOTAL FROM INVESTMENT OPERATIONS
--------------------------------------------------------------------------------
Net Asset Value--End of Period
================================================================================
TOTAL RETURN(c)
RATIOS
Net Assets--End of Period ($000 Omitted)
Ratio of Expenses to Average Net Assets(e)(f)
Ratio of Net Investment Loss to Average
Net Assets(e)
Portfolio Turnover Rate
(a) From February 15, 2000, since inception of Class C shares, to July 31, 2000.
(b) Distributions in excess of net investment income for the period ended July
31, 2000, aggregated less than $0.01 on a per share basis.
(c) The applicable CDSC fees are not included in the total return calculation.
(d) Based on operations for the period shown and, accordingly, is not
representative of a full year.
(e) Various expenses of the class were voluntarily absorbed by INVESCO for the
period ended July 31, 2000. If such expenses had not been voluntarily
absorbed, ratio of expenses to average net assets would have been ____%
(annualized) and ratio of net investment loss to average net assets would
have been ____% (annualized).
(f) Ratio is based on total expenses of the class, which is before any expense
offset arrangements (which may include custodian fees).
(g) Annualized.
(h) Portfolio turnover is calculated at the Fund level, and therefore represents
the year ended July 31, 2000.
<PAGE>
NOVEMBER 30, 2000
INVESCO STOCK FUNDS, INC.
INVESCO BLUE CHIP GROWTH FUND--CLASS C
INVESCO DYNAMICS FUND--CLASS C
INVESCO ENDEAVOR FUND--CLASS C
INVESCO GROWTH & INCOME FUND--CLASS C
INVESCO SMALL COMPANY GROWTH FUND--CLASS C
INVESCO VALUE EQUITY FUND--CLASS C
You may obtain additional information about the Funds from several sources.
FINANCIAL REPORTS. Although this Prospectus describes the Funds' anticipated
investments and operations, the Funds also prepare annual and semiannual reports
that detail the Funds' actual investments at the report date. These reports
include discussion of each Fund's recent performance, as well as market and
general economic trends affecting each Fund's performance. The annual report
also includes the report of the Funds' independent accountants.
STATEMENT OF ADDITIONAL INFORMATION. The SAI dated November 30, 2000 is a
supplement to this Prospectus and has detailed information about the Funds and
their investment policies and practices. A current SAI for the Funds is on file
with the Securities and Exchange Commission and is incorporated into this
Prospectus by reference; in other words, the SAI is legally a part of this
Prospectus, and you are considered to be aware of the contents of the SAI.
INTERNET. The current Prospectus of the Funds may be accessed through the
INVESCO Web site at invescofunds.com. In addition, the Prospectus, SAI, annual
report and semiannual report of the Funds are available on the SEC Web site at
www.sec.gov.
To obtain a free copy of the current Prospectus, SAI, annual report or
semiannual report, write to INVESCO Distributors, Inc., P.O. Box 17970, Denver,
Colorado 80217; or call 1-800-328-2234. Copies of these materials are also
available (with a copying charge) from the SEC's Public Reference Section at 450
Fifth Street, N.W., Washington, D.C., 20549-0102. This information can be
obtained by electronic request at the following E-mail address:
[email protected], or by calling 1-202-942-8090. The SEC file numbers for the
Funds are 811-1474 and 002-26125.
811-1474
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
INVESCO STOCK FUNDS, INC.
INVESCO Blue Chip Growth Fund - Investor Class, Class C and Class K
INVESCO Dynamics Fund - Investor Class, Institutional Class, Class C and Class K
INVESCO Endeavor Fund - Investor Class, Class C and Class K
INVESCO Growth & Income Fund - Investor Class, Class C and Class K
INVESCO Small Company Growth Fund - Investor Class and Class C
INVESCO S&P 500 Index Fund - Investor Class, Institutional Class and Class K
INVESCO Value Equity Fund - Investor Class, Class C and Class K
Address: Mailing Address:
7800 E. Union Ave., Denver, CO 80237 P.O. Box 173706, Denver, CO 80217-3706
Telephone:
In continental U.S., 1-800-525-8085
November 30, 2000
--------------------------------------------------------------------------------
A Prospectus for the Investor Class shares of INVESCO Blue Chip Growth, INVESCO
Dynamics, INVESCO Endeavor, INVESCO Growth & Income, INVESCO Small Company
Growth, INVESCO S&P 500 Index and INVESCO Value Equity Funds; a Prospectus for
INVESCO Dynamics Fund - Institutional Class; a Prospectus for INVESCO S&P 500
Index Fund - Institutional Class; a Prospectus for the Class C shares of INVESCO
Blue Chip Growth, INVESCO Dynamics, INVESCO Endeavor, INVESCO Growth & Income,
INVESCO Small Company Growth, and INVESCO Value Equity Funds; and a Prospectus
for Class K shares of INVESCO Blue Chip Growth, INVESCO Dynamics, INVESCO
Endeavor, INVESCO Growth & Income, INVESCO S&P 500 Index and INVESCO Equity
Income Funds, each dated November 30, 2000, provide the basic information you
should know before investing in a Fund. This Statement of Additional Information
("SAI") is incorporated by reference into the Funds' Prospectuses; in other
words, this SAI is legally part of the Funds' Prospectuses. Although this SAI is
not a prospectus, it contains information in addition to that set forth in the
Prospectuses. It is intended to provide additional information regarding the
activities and operations of the Funds and should be read in conjunction with
the Prospectuses.
<PAGE>
You may obtain, without charge, the current Prospectuses, SAI and annual and
semiannual reports of the Funds by writing to INVESCO Distributors, Inc., P.O.
Box 173706, Denver, CO 80217-3706 , or by calling 1-800-525-8085. The
Prospectuses of the Investor Class and Class C shares of the Funds are also
available through the INVESCO Web site at invescofunds.com.
<PAGE>
TABLE OF CONTENTS
The Company..................................................................141
Investments, Policies and Risks..............................................142
Investment Restrictions......................................................161
Management of the Funds......................................................164
Other Service Providers......................................................200
Brokerage Allocation and Other Practices.....................................200
Capital Stock................................................................203
Tax Consequences of Owning Shares of a Fund..................................204
Performance..................................................................207
Code of Ethics...............................................................210
Financial Statements.........................................................210
Appendix A...................................................................211
<PAGE>
THE COMPANY
The Company was incorporated under the laws of Maryland as INVESCO Dynamics
Fund, Inc. on April 2, 1993. On July 1, 1993, the Company assumed all of the
assets and liabilities of Financial Dynamics Fund, Inc. ("FDF"), which was
incorporated in Colorado on February 17, 1967. All financial and other
information about the Company for periods prior to July 1, 1993 relates to FDF.
On June 26, 1997, the Company changed its name to INVESCO Capital Appreciation
Funds, Inc. and designated two series of shares of common stock of the Company
as the INVESCO Dynamics Fund and the INVESCO Growth & Income Fund. On August 28,
1998, the Company changed its name to INVESCO Equity Funds, Inc. and designated
a third series of shares of common stock of the Company as the INVESCO Endeavor
Fund. On October 29, 1998 the Company changed its name to INVESCO Stock Funds,
Inc. On July 15, 1999, the Company assumed all of the assets and liabilities of
INVESCO Blue Chip Growth Fund, a series of INVESCO Growth Fund, Inc.; INVESCO
Small Company Growth Fund, a series of INVESCO Emerging Opportunity Funds, Inc.;
INVESCO S&P 500 Index Fund, a series of INVESCO Specialty Funds, Inc.; and
INVESCO Value Equity Fund, a series of INVESCO Value Trust.
The Company is an open-end, diversified, management investment company currently
consisting of seven portfolios of investments: INVESCO Blue Chip Growth Fund -
Investor Class, Class C and Class K, INVESCO Dynamics Fund - Investor Class,
Institutional Class, Class C and Class K, INVESCO Endeavor Fund - Investor
Class, Class C and Class K, INVESCO Growth & Income Fund - Investor Class, Class
C and Class K, INVESCO Small Company Growth Fund - Investor Class and Class C,
INVESCO S&P 500 Index Fund - Investor Class, Institutional Class and Class K and
INVESCO Value Equity Fund - Investor Class, Class C and Class K (each a "Fund"
and collectively the "Funds"). Additional funds may be offered in the future.
"Open-end" means that each Fund issues an indefinite number of shares which it
continuously offers to redeem at net asset value per share ("NAV"). A
"management" investment company actively buys and sells securities for the
portfolio of each Fund at the direction of a professional manager. Open-end
management investment companies (or one or more series of such companies, such
as the Funds) are commonly referred to as mutual funds.
Although S&P 500 Index Fund attempts to mirror the performance of the S&P 500
Composite Stock Price Index ("S&P 500"), the Fund is not affiliated in any way
with Standard & Poor's ("S&P"). S&P is not involved in the determination of the
prices and amount of the securities bought by the Fund, the sale of Fund shares
or the calculation of the equation by which Fund shares are to be converted into
cash.
S&P does not guarantee the accuracy and/or the completeness of the S&P 500 or
any data included therein and S&P shall have no liability for any errors,
omissions or interruptions therein. S&P makes no warranty, express or implied,
as to results to be obtained by the Company, shareholders of the Fund or any
other person or entity from the use of the S&P 500 or any data included therein.
S&P makes no express or implied warranty, and expressly disclaims all warranties
of merchantability or fitness for a particular purpose or use with respect to
the S&P 500 or any data included therein. Without limiting any of the foregoing,
in no event shall S&P have any liability for any special, punitive, indirect or
<PAGE>
consequential damages (including lost profits), even if notified of the
possibility of such damages.
INVESTMENTS, POLICIES AND RISKS
The principal investments and policies of the Funds are discussed in the
Prospectuses of the Funds. The Funds also may invest in the following securities
and engage in the following practices.
ADRs -- American Depository Receipts, or ADRs, are securities issued by American
banks. ADRs are receipts for the shares of foreign corporations that are held by
the bank issuing the receipt. An ADR entitles its holder to all dividends and
capital gains on the underlying foreign securities, less any fees paid to the
bank. Purchasing ADRs gives a Fund the ability to purchase the functional
equivalent of foreign securities without going to the foreign securities markets
to do so. ADRs are bought and sold in U.S. dollars, not foreign currencies. An
ADR that is "sponsored" means that the foreign corporation whose shares are
represented by the ADR is actively involved in the issuance of the ADR, and
generally provides material information about the corporation to the U.S.
market. An "unsponsored" ADR program means that the foreign corporation whose
shares are held by the bank is not obligated to disclose material information in
the United States, and, therefore, the market value of the ADR may not reflect
important facts known only to the foreign company. Since they mirror their
underlying foreign securities, ADRs generally have the same risks as investing
directly in the underlying foreign securities.
CERTIFICATES OF DEPOSIT IN FOREIGN BANKS AND U.S. BRANCHES OF FOREIGN BANKS --
The Funds may maintain time deposits in and invest in U.S. dollar denominated
certificates of deposit issued by foreign banks and U.S. branches of foreign
banks. The Funds limit investments in foreign bank obligations to U.S. dollar
denominated obligations of foreign banks which have more than $10 billion in
assets, have branches or agencies in the U.S., and meet other criteria
established by the board of directors. Investments in foreign securities involve
special considerations. There is generally less publicly available information
about foreign issuers since many foreign countries do not have the same
disclosure and reporting requirements as are imposed by the U.S. securities
laws. Moreover, foreign issuers are generally not bound by uniform accounting
and auditing and financial reporting requirements and standards of practice
comparable to those applicable to domestic issuers. Such investments may also
entail the risks of possible imposition of dividend withholding or confiscatory
taxes, possible currency blockage or transfer restrictions, expropriation,
nationalization or other adverse political or economic developments, and the
difficulty of enforcing obligations in other countries.
The Funds may also invest in bankers' acceptances, time deposits and
certificates of deposit of U.S. branches of foreign banks and foreign branches
of U.S. banks. Investments in instruments of U.S. branches of foreign banks will
be made only with branches that are subject to the same regulations as U.S.
banks. Investments in instruments issued by a foreign branch of a U.S. bank will
be made only if the investment risk associated with such investment is the same
as that involving an investment in instruments issued by the U.S. parent, with
the U.S. parent unconditionally liable in the event that the foreign branch
fails to pay on the investment for any reason.
<PAGE>
COMMERCIAL PAPER -- Commercial paper is the term for short-term promissory notes
issued by domestic corporations to meet current working capital needs.
Commercial paper may be unsecured by the corporation's assets but may be backed
by a letter of credit from a bank or other financial institution. The letter of
credit enhances the paper's creditworthiness. The issuer is directly responsible
for payment but the bank "guarantees" that if the note is not paid at maturity
by the issuer, the bank will pay the principal and interest to the buyer.
INVESCO Funds Group, Inc. ("INVESCO"), the Funds' investment adviser, will
consider the creditworthiness of the institution issuing the letter of credit,
as well as the creditworthiness of the issuer of the commercial paper, when
purchasing paper enhanced by a letter of credit. Commercial paper is sold either
in an interest-bearing form or on a discounted basis, with maturities not
exceeding 270 days.
DEBT SECURITIES -- Debt securities include bonds, notes and other securities
that give the holder the right to receive fixed amounts of principal, interest,
or both on a date in the future or on demand. Debt securities also are often
referred to as fixed-income securities, even if the rate of interest varies over
the life of the security.
Debt securities are generally subject to credit risk and market risk. Credit
risk is the risk that the issuer of the security may be unable to meet interest
or principal payments or both as they come due. Market risk is the risk that the
market value of the security may decline for a variety of reasons, including
changes in interest rates. An increase in interest rates tends to reduce the
market values of debt securities in which a Fund has invested. A decline in
interest rates tends to increase the market values of debt securities in which a
Fund has invested.
Moody's Investors Service, Inc. ("Moody's") and Standard & Poor's ("S&P")
ratings provide a useful guide to the credit risk of many debt securities. The
lower the rating of a debt security, the greater the credit risk the rating
service assigns to the security. To compensate investors for accepting that
greater risk, lower-rated debt securities tend to offer higher interest rates.
Growth & Income Fund may invest up to 25% of its portfolio in lower-rated debt
securities, which are often referred to as "junk bonds." Increasing the amount
of Fund assets invested in unrated or lower-grade straight debt securities may
increase the yield produced by the Fund's debt securities but will also increase
the credit risk of those securities. A debt security is considered lower-grade
if it is rated Ba or less by Moody's or BB or less by S&P. Lower-rated and
non-rated debt securities of comparable quality are subject to wider
fluctuations in yields and market values than higher-rated debt securities and
may be considered speculative. Although a Fund may invest in debt securities
assigned lower grade ratings by S&P or Moody's, at the time of purchase, the
Funds are not permitted to invest in bonds that are in default or are rated CCC
or below by S&P or Caa or below by Moody's or, if unrated, are judged by INVESCO
to be of equivalent quality. Debt securities rated lower than B by either S&P or
Moody's are usually considered to be speculative. At the time of purchase,
INVESCO will limit Fund investments to debt securities which INVESCO believes
are not highly speculative and which are rated at least B by S&P and Moody's.
A significant economic downturn or increase in interest rates may cause issuers
of debt securities to experience increased financial problems which could
adversely affect their ability to pay principal and interest obligations, to
meet projected business goals, and to obtain additional financing. These
conditions more severely impact issuers of lower-rated debt securities. The
<PAGE>
market for lower-rated straight debt securities may not be as liquid as the
market for higher-rated straight debt securities. Therefore, INVESCO attempts to
limit purchases of lower-rated securities to securities having an established
secondary market.
Debt securities rated Caa by Moody's may be in default or may present risks of
non-payment of principal or interest. Lower-rated securities by S&P (categories
BB and B) include those which are predominantly speculative because of the
issuer's perceived capacity to pay interest and repay principal in accordance
with their terms; BB indicates the lowest degree of speculation and B a higher
degree of speculation. While such bonds will likely have some quality and
protective characteristics, these are usually outweighed by large uncertainties
or major risk exposures to adverse conditions.
Although bonds in the lowest investment grade debt category (those rated BBB by
S&P, Baa by Moody's or the equivalent) are regarded as having adequate
capability to pay principal and interest, they have speculative characteristics.
Adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity to make principal and interest payments than is the case for
higher-rated bonds. Lower-rated bonds by Moody's (categories Ba, B or Caa) are
of poorer quality and also have speculative characteristics. Bonds rated Caa may
be in default or there may be present elements of danger with respect to
principal or interest. Lower-rated bonds by S&P (categories BB, B or CCC)
include those that are regarded, on balance, as predominantly speculative with
respect to the issuer's capacity to pay interest and repay principal in
accordance with their terms; BB indicates the lowest degree of speculation and
CCC a high degree of speculation. While such bonds likely will have some quality
and protective characteristics, these are outweighed by large uncertainties or
major risk exposures to adverse conditions. Bonds having equivalent ratings from
other ratings services will have characteristics similar to those of the
corresponding S&P and Moody's ratings. For a specific description of S&P and
Moody's corporate bond rating categories, please refer to Appendix A.
The Funds, except for S&P 500 Index Fund, may invest in zero coupon bonds and
step-up bonds. Zero coupon bonds do not make regular interest payments. Zero
coupon bonds are sold at a discount from face value. Principal and accrued
discount (representing interest earned but not paid) are paid at maturity in the
amount of the face value. Step-up bonds initially make no (or low) cash interest
payments but begin paying interest (or a higher rate of interest) at a fixed
time after issuance of the bond. The market values of zero coupon and step-up
bonds generally fluctuate more in response to changes in interest rates than
interest-paying securities of comparable term and quality. A Fund may be
required to distribute income recognized on these bonds, even though no cash may
be paid to the Fund until the maturity or call date of a bond, in order for the
Fund to maintain its qualification as a regulated investment company. These
required distributions could reduce the amount of cash available for investment
by a Fund.
DOMESTIC BANK OBLIGATIONS -- U.S. banks (including their foreign branches) issue
certificates of deposit ("CDs") and bankers' acceptances which may be purchased
by the Funds if an issuing bank has total assets in excess of $5 billion and the
bank otherwise meets the Funds' credit rating requirements. CDs are issued
against deposits in a commercial bank for a specified period and rate and are
normally negotiable. Eurodollar CDs are certificates issued by a foreign branch
(usually London) of a U.S. domestic bank, and, as such, the credit is deemed to
<PAGE>
be that of the domestic bank. Bankers' acceptances are short-term credit
instruments evidencing the promise of the bank (by virtue of the bank's
"acceptance") to pay at maturity a draft which has been drawn on it by a
customer (the "drawer"). Bankers' acceptances are used to finance the import,
export, transfer, or storage of goods and reflect the obligation of both the
bank and the drawer to pay the face amount. Both types of securities are subject
to the ability of the issuing bank to meet its obligations, and are subject to
risks common to all debt securities. In addition, banker's acceptances may be
subject to foreign currency risk and certain other risks of investment in
foreign securities.
EQUITY SECURITIES -- The Funds may invest in common, preferred and convertible
preferred stocks, and securities whose values are tied to the price of stocks,
such as rights, warrants and convertible debt securities. Common stocks and
preferred stocks represent equity ownership in a corporation. Owners of stock,
such as the Funds, share in a corporation's earnings through dividends which may
be declared by the corporation, although the receipt of dividends is not the
principal benefit that the Funds seek when they invest in stocks and similar
instruments.
Instead, the Funds seek to invest in stocks that will increase in market value
and may be sold for more than a Fund paid to buy them. Market value is based
upon constantly changing investor perceptions of what the company is worth
compared to other companies. Although dividends are a factor in the changing
market value of stocks, many companies do not pay dividends, or pay
comparatively small dividends. The principal risk of investing in equity
securities is that their market values fluctuate constantly, often due to
factors entirely outside the control of the Funds or the company issuing the
stock. At any given time, the market value of an equity security may be
significantly higher or lower than the amount paid by a Fund to acquire it.
Owners of preferred stocks are entitled to dividends payable from the
corporation's earnings, which in some cases may be "cumulative" if prior
dividends on the preferred stock have not been paid. Dividends payable on
preferred stock have priority over distributions to holders of common stock, and
preferred stocks generally have a priority on the distribution of assets in the
event of the corporation's liquidation. Preferred stocks may be "participating,"
which means that they may be entitled to dividends in excess of the stated
dividend in certain cases. The holders of a company's debt securities generally
are entitled to be paid by the company before it pays anything to its
stockholders.
Rights and warrants are securities which entitle the holder to purchase the
securities of a company (usually, its common stock) at a specified price during
a specified time period. The value of a right or warrant is affected by many of
the same factors that determine the prices of common stocks. Rights and warrants
may be purchased directly or acquired in connection with a corporate
reorganization or exchange offer.
The Funds also may purchase convertible securities including convertible debt
obligations and convertible preferred stock. A convertible security entitles the
holder to exchange it for a fixed number of shares of common stock (or other
equity security), usually at a fixed price within a specified period of time.
Until conversion, the owner of convertible securities usually receives the
interest paid on a convertible bond or the dividend preference of a preferred
stock.
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A convertible security has an "investment value" which is a theoretical value
determined by the yield it provides in comparison with similar securities
without the conversion feature. Investment value changes are based upon
prevailing interest rates and other factors. It also has a "conversion value,"
which is the market value the convertible security would have if it were
exchanged for the underlying equity security. Convertible securities may be
purchased at varying price levels above or below their investment values or
conversion values.
Conversion value is a simple mathematical calculation that fluctuates directly
with the price of the underlying security. However, if the conversion value is
substantially below the investment value, the market value of the convertible
security is governed principally by its investment value. If the conversion
value is near or above the investment value, the market value of the convertible
security generally will rise above the investment value. In such cases, the
market value of the convertible security may be higher than its conversion
value, due to the combination of the convertible security's right to interest
(or dividend preference) and the possibility of capital appreciation from the
conversion feature. However, there is no assurance that any premium above
investment value or conversion value will be recovered because prices change
and, as a result, the ability to achieve capital appreciation through conversion
may be eliminated.
EUROBONDS AND YANKEE BONDS (All Funds, except S&P 500 Index Fund) -- Bonds
issued by foreign branches of U.S. banks ("Eurobonds") and bonds issued by a
U.S. branch of a foreign bank and sold in the United States ("Yankee bonds").
These bonds are bought and sold in U.S. dollars, but generally carry with them
the same risks as investing in foreign securities.
FOREIGN SECURITIES -- Investments in the securities of foreign companies, or
companies that have their principal business activities outside the United
States, involve certain risks not associated with investments in U.S. companies.
Non-U.S. companies generally are not subject to the same uniform accounting,
auditing and financial reporting standards that apply to U.S. companies.
Therefore, financial information about foreign companies may be incomplete, or
may not be comparable to the information available on U.S. companies. There may
also be less publicly available information about a foreign company.
Although the volume of trading in foreign securities markets is growing,
securities of many non-U.S. companies may be less liquid and have greater swings
in price than securities of comparable U.S. companies. The costs of buying and
selling securities on foreign securities exchanges are generally significantly
higher than similar costs in the United States. There is generally less
government supervision and regulation of exchanges, brokers and issuers in
foreign countries than there is in the United States. Investments in non-U.S.
securities may also be subject to other risks different from those affecting
U.S. investments, including local political or economic developments,
expropriation or nationalization of assets, confiscatory taxation, and
imposition of withholding taxes on dividends or interest payments. If it becomes
necessary, it may be more difficult for a Fund to obtain or to enforce a
judgment against a foreign issuer than against a domestic issuer.
Securities traded on foreign markets are usually bought and sold in local
currencies, not in U.S. dollars. Therefore, the market value of foreign
securities acquired by a Fund can be affected -- favorably or unfavorably -- by
changes in currency rates and exchange control regulations. Costs are incurred
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in converting money from one currency to another. Foreign currency exchange
rates are determined by supply and demand on the foreign exchange markets.
Foreign exchange markets are affected by the international balance of payments
and other economic and financial conditions, government intervention,
speculation and other factors, all of which are outside the control of each
Fund. Generally, the Funds' foreign currency exchange transactions will be
conducted on a cash or "spot" basis at the spot rate for purchasing or selling
currency in the foreign currency exchange markets.
FUTURES, OPTIONS AND OTHER FINANCIAL INSTRUMENTS
GENERAL. As discussed in the Prospectuses, the adviser and/or sub-adviser may
use various types of financial instruments, some of which are derivatives, to
attempt to manage the risk of a Fund's investments or, in certain circumstances,
for investment (E.G., as a substitute for investing in securities). These
financial instruments include options, futures contracts (sometimes referred to
as "futures"), forward contracts, swaps, caps, floors and collars (collectively,
"Financial Instruments"). The policies in this section do not apply to other
types of instruments sometimes referred to as derivatives, such as indexed
securities, mortgage-backed and other asset-backed securities, and stripped
interest and principal of debt.
Hedging strategies can be broadly categorized as "short" hedges and "long" or
"anticipatory" hedges. A short hedge involves the use of a Financial Instrument
in order to partially or fully offset potential variations in the value of one
or more investments held in a Fund's portfolio. A long or anticipatory hedge
involves the use of a Financial Instrument in order to partially or fully offset
potential increases in the acquisition cost of one or more investments that the
Fund intends to acquire. In an anticipatory hedge transaction, the Fund does not
already own a corresponding security. Rather, it relates to a security or type
of security that the Fund intends to acquire. If the Fund does not eliminate the
hedge by purchasing the security as anticipated, the effect on the Fund's
portfolio is the same as if a long position were entered into. Financial
Instruments may also be used, in certain circumstances, for investment (E.G., as
a substitute for investing in securities).
Financial Instruments on individual securities generally are used to attempt to
hedge against price movements in one or more particular securities positions
that a Fund already owns or intends to acquire. Financial Instruments on
indexes, in contrast, generally are used to attempt to hedge all or a portion of
a portfolio against price movements of the securities within a market sector in
which the Fund has invested or expects to invest.
The use of Financial Instruments is subject to applicable regulations of the
Securities and Exchange Commission ("SEC"), the several exchanges upon which
they are traded, and the Commodity Futures Trading Commission ("CFTC"). In
addition, the Funds' ability to use Financial Instruments will be limited by tax
considerations. See "Tax Consequences of Owning Shares of a Fund."
In addition to the instruments and strategies described below, the adviser
and/or sub-adviser may use other similar or related techniques to the extent
that they are consistent with a Fund's investment objective and permitted by its
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investment limitations and applicable regulatory authorities. The Funds'
Prospectuses or SAI will be supplemented tothe extent that new products or
techniques become employed involving materially different risks than those
described below or in the Prospectuses.
SPECIAL RISKS. Financial Instruments and their use involve special
considerations and risks, certain of which are described below.
(1) Financial Instruments may increase the volatility of a Fund. If the adviser
and/or sub-adviser employs a Financial Instrument that correlates imperfectly
with a Fund's investments, a loss could result, regardless of whether or not the
intent was to manage risk. In addition, these techniques could result in a loss
if there is not a liquid market to close out a position that a Fund has entered.
(2) There might be imperfect correlation between price movements of a Financial
Instrument and price movement of the investment(s) being hedged. For example, if
the value of a Financial Instrument used in a short hedge increased by less than
the decline in value of the hedged investment(s), the hedge would not be fully
successful. This might be caused by certain kinds of trading activity that
distorts the normal price relationship between the security being hedged and the
Financial Instrument. Similarly, the effectiveness of hedges using Financial
Instruments on indexes will depend on the degree of correlation between price
movements in the index and price movements in the securities being hedged.
The Funds are authorized to use options and futures contracts related to
securities with issuers, maturities or other characteristics different from the
securities in which it typically invests. This involves a risk that the options
or futures position will not track the performance of a Fund's portfolio
investments.
The direction of options and futures price movements can also diverge from the
direction of the movements of the prices of their underlying instruments, even
if the underlying instruments match a Fund's investments well. Options and
futures prices are affected by such factors as current and anticipated
short-term interest rates, changes in volatility of the underlying instrument,
and the time remaining until expiration of the contract, which may not affect
security prices the same way. Imperfect correlation may also result from
differing levels of demand in the options and futures markets and the securities
markets, from structural differences in how options and futures and securities
are traded, or from imposition of daily price fluctuation limits or trading
halts. A Fund may take positions in options and futures contracts with a greater
or lesser face value than the securities it wishes to hedge or intends to
purchase in order to attempt to compensate for differences in volatility between
the contract and the securities, although this may not be successful in all
cases.
(3) If successful, the above-discussed hedging strategies can reduce risk of
loss by wholly or partially offsetting the negative effect of unfavorable price
movements of portfolio securities. However, such strategies can also reduce
opportunity for gain by offsetting the positive effect of favorable price
movements. For example, if a Fund entered into a short hedge because the adviser
and/or sub-adviser projected a decline in the price of a security in the Fund's
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portfolio, and the price of that security increased instead, the gain from that
increase would likely be wholly or partially offset by a decline in the value of
the short position in the Financial Instrument. Moreover, if the price of the
Financial Instrument declined by more than the increase in the price of the
security, the Fund could suffer a loss.
(4) A Fund's ability to close out a position in a Financial Instrument prior to
expiration or maturity depends on the degree of liquidity of the market or, in
the absence of such a market, the ability and willingness of the other party to
the transaction (the "counterparty") to enter into a transaction closing out the
position. Therefore, there is no assurance that any position can be closed out
at a time and price that is favorable to a Fund.
(5) As described below, the Funds are required to maintain assets as "cover,"
maintain segregated accounts or make margin payments when they take positions in
Financial Instruments involving obligations to third parties (I.E., Financial
Instruments other than purchased options). If a Fund is unable to close out its
positions in such Financial Instruments, it might be required to continue to
maintain such assets or segregated accounts or make such payments until the
position expired. These requirements might impair a Fund's ability to sell a
portfolio security or make an investment at a time when it would otherwise be
favorable to do so, or require that the Fund sell a portfolio security at a
disadvantageous time.
COVER. Positions in Financial Instruments, other than purchased options, expose
the Funds to an obligation to another party. A Fund will not enter into any such
transaction unless it owns (1) an offsetting ("covered") position in securities,
currencies or other options, futures contracts or forward contracts, or (2) cash
and liquid assets with a value, marked-to-market daily, sufficient to cover its
obligations to the extent not covered as provided in (1) above. The Funds will
comply with SEC guidelines regarding cover for these instruments and will, if
the guidelines so require, designate cash or liquid assets as segregated in the
prescribed amount as determined daily.
Assets used as cover or held as segregated cannot be sold while the position in
the corresponding Financial Instrument is open unless they are replaced with
other appropriate assets. As a result, the commitment of a large portion of a
Fund's assets to cover or to hold as segregated could impede portfolio
management or the Fund's ability to meet redemption requests or other current
obligations.
OPTIONS. Each Fund may engage in certain strategies involving options to attempt
to manage the risk of its investments or, in certain circumstances, for
investment (E.G., as a substitute for investing in securities). A call option
gives the purchaser the right to buy, and obligates the writer to sell the
underlying investment at the agreed-upon exercise price during the option
period. A put option gives the purchaser the right to sell, and obligates the
writer to buy the underlying investment at the agreed-upon exercise price during
the option period. Purchasers of options pay an amount, known as a premium, to
the option writer in exchange for the right under the option contract. See
"Options on Indexes" below with regard to cash settlement of option contracts on
index values.
The purchase of call options can serve as a hedge against a price rise of the
underlier and the purchase of put options can serve as a hedge against a price
decline of the underlier. Writing call options can serve as a limited short
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hedge because declines in the value of the hedged investment would be offset to
the extent of the premium received for writing the option. However, if the
security or currency appreciates to a price higher than the exercise price of
the call option, it can be expected that the option will be exercised and a Fund
will be obligated to sell the security or currency at less than its market
value.
Writing put options can serve as a limited long or anticipatory hedge because
increases in the value of the hedged investment would be offset to the extent of
the premium received for writing the option. However, if the security or
currency depreciates to a price lower than the exercise price of the put option,
it can be expected that the put option will be exercised and a Fund will be
obligated to purchase the security or currency at more than its market value.
The value of an option position will reflect, among other things, the current
market value of the underlying investment, the time remaining until expiration,
the relationship of the exercise price to the market price of the underlying
investment, the price volatility of the underlying investment and general market
and interest rate conditions. Options that expire unexercised have no value.
A Fund may effectively terminate its right or obligation under an option by
entering into a closing transaction. For example, the Fund may terminate its
obligation under a call or put option that it had written by purchasing an
identical call or put option, which is known as a closing purchase transaction.
Conversely, the Fund may terminate a position in a put or call option it had
purchased by writing an identical put or call option, which is known as a
closing sale transaction. Closing transactions permit a Fund to realize profits
or limit losses on an option position prior to its exercise or expiration.
RISKS OF OPTIONS ON SECURITIES. Options embody the possibility of large amounts
of exposure, which will result in a Fund's net asset value being more sensitive
to changes in the value of the related investment. A Fund may purchase or write
both exchange-traded and OTC options. Exchange-traded options in the United
States are issued by a clearing organization affiliated with the exchange on
which the option is listed that, in effect, guarantees completion of every
exchange-traded option transaction. In contrast, OTC options are contracts
between a Fund and its counterparty (usually a securities dealer or a bank) with
no clearing organization guarantee. Thus, when a Fund purchases an OTC option,
it relies on the counterparty from whom it purchased the option to make or take
delivery of the underlying investment upon exercise of the option. Failure by
the counterparty to do so would result in the loss of any premium paid by a Fund
as well as the loss of any expected benefit from the transaction.
The Funds' ability to establish and close out positions in options depends on
the existence of a liquid market. However, there can be no assurance that such a
market will exist at any particular time. Closing transactions can be made for
OTC options only by negotiating directly with the counterparty, or by a
transaction in the secondary market if any such market exists. There can be no
assurance that a Fund will in fact be able to close out an OTC option position
at a favorable price prior to expiration. In the event of insolvency of the
counterparty, a Fund might be unable to close out an OTC option position at any
time prior to the option's expiration. If a Fund is not able to enter into an
offsetting closing transaction on an option it has written, it will be required
to maintain the securities subject to the call or the liquid assets underlying
the put until a closing purchase transaction can be entered into or the option
<PAGE>
expires. However, there can be no assurance that such a market will exist at any
particular time.
If a Fund were unable to effect a closing transaction for an option it had
purchased, it would have to exercise the option to realize any profit. The
inability to enter into a closing purchase transaction for a covered call option
written by a Fund could cause material losses because the Fund would be unable
to sell the investment used as cover for the written option until the option
expires or is exercised.
OPTIONS ON INDEXES. Puts and calls on indexes are similar to puts and calls on
securities or futures contracts except that all settlements are in cash and
changes in value depend on changes in the index in question. When a Fund writes
a call on an index, it receives a premium and agrees that, prior to the
expiration date, upon exercise of the call, the purchaser will receive from the
Fund an amount of cash equal to the positive difference between the closing
price of the index and the exercise price of the call times a specified multiple
("multiplier"), which determines the total dollar value for each point of such
difference. When a Fund buys a call on an index, it pays a premium and has the
same rights as to such call as are indicated above. When a Fund buys a put on an
index, it pays a premium and has the right, prior to the expiration date, to
require the seller of the put to deliver to the Fund an amount of cash equal to
the positive difference between the exercise price of the put and the closing
price of the index times the multiplier. When a Fund writes a put on an index,
it receives a premium and the purchaser of the put has the right, prior to the
expiration date, to require the Fund to deliver to it an amount of cash equal to
the positive difference between the exercise price of the put and the closing
level of the index times the multiplier.
The risks of purchasing and selling options on indexes may be greater than
options on securities. Because index options are settled in cash, when a Fund
writes a call on an index it cannot fulfill its potential settlement obligations
by delivering the underlying securities. A Fund can offset some of the risk of
writing a call index option by holding a diversified portfolio of securities
similar to those on which the underlying index is based. However, a Fund cannot,
as a practical matter, acquire and hold a portfolio containing exactly the same
securities as underlie the index and, as a result, bears a risk that the value
of the securities held will vary from the value of the index.
Even if a Fund could assemble a portfolio that exactly reproduced the
composition of the underlying index, it still would not be fully covered from a
risk standpoint because of the "timing risk" inherent in writing index options.
When an index option is exercised, the amount of cash that the holder is
entitled to receive is determined by the difference between the exercise price
and the closing index level. As with other kinds of options, a Fund as the call
writer will not learn what it has been assigned until the next business day. The
time lag between exercise and notice of assignment poses no risk for the writer
of a covered call on a specific underlying security, such as common stock,
because in that case the writer's obligation is to deliver the underlying
security, not to pay its value as of a moment in the past. In contrast, the
writer of an index call will be required to pay cash in an amount based on the
difference between the closing index value on the exercise date and the exercise
price. By the time a Fund learns what it has been assigned, the index may have
declined. This "timing risk" is an inherent limitation on the ability of index
call writers to cover their risk exposure.
<PAGE>
If a Fund has purchased an index option and exercises it before the closing
index value for that day is available, it runs the risk that the level of the
underlying index may subsequently change. If such a change causes the exercised
option to fall out-of-the-money, the Fund nevertheless will be required to pay
the difference between the closing index value and the exercise price of the
option (times the applicable multiplier) to the assigned writer.
OTC OPTIONS. Unlike exchange-traded options, which are standardized with respect
to the underlying instrument, expiration date, contract size, and strike price,
the terms of OTC options (options not traded on exchanges) generally are
established through negotiation with the other party to the option contract.
While this type of arrangement allows a Fund great flexibility to tailor the
option to its needs, OTC options generally involve greater risk than
exchange-traded options, which are guaranteed by the clearing organization of
the exchange where they are traded.
Generally, OTC foreign currency options used by a Fund are European-style
options. This means that the option is only exercisable immediately prior to its
expiration. This is in contrast to American-style options, which are exercisable
at any time prior to the expiration date of the option.
FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS. When a Fund purchases or
sells a futures contract, it incurs an obligation respectively to take or make
delivery of a specified amount of the obligation underlying the contract at a
specified time and price. When a Fund writes an option on a futures contract, it
becomes obligated to assume a position in the futures contract at a specified
exercise price at any time during the term of the option. If a Fund writes a
call, on exercise it assumes a short futures position. If it writes a put, on
exercise it assumes a long futures position.
The purchase of futures or call options on futures can serve as a long or an
anticipatory hedge, and the sale of futures or the purchase of put options on
futures can serve as a short hedge. Writing call options on futures contracts
can serve as a limited short hedge, using a strategy similar to that used for
writing call options on securities or indexes. Similarly, writing put options on
futures contracts can serve as a limited long or anticipatory hedge.
In addition, futures strategies can be used to manage the "duration" (a measure
of anticipated sensitivity to changes in interest rates, which is sometimes
related to the weighted average maturity of a portfolio) and associated interest
rate risk of a Fund's fixed-income portfolio. If the adviser and/or sub-adviser
wishes to shorten the duration of a Fund's fixed-income portfolio (I.E., reduce
anticipated sensitivity), the Fund may sell an appropriate debt futures contract
or a call option thereon, or purchase a put option on that futures contract. If
the adviser and/or sub-adviser wishes to lengthen the duration of a Fund's
fixed-income portfolio (I.E., increase anticipated sensitivity), the Fund may
buy an appropriate debt futures contract or a call option thereon, or sell a put
option thereon.
At the inception of a futures contract, a Fund is required to deposit "initial
margin" in an amount generally equal to 10% or less of the contract value.
Initial margin must also be deposited when writing a call or put option on a
futures contract, in accordance with applicable exchange rules. Subsequent
"variation margin" payments are made to and from the futures broker daily as the
value of the futures or written option position varies, a process known as
"marking-to-market." Unlike margin in securities transactions, initial margin on
futures contracts and written options on futures contracts does not represent a
<PAGE>
borrowing on margin, but rather is in the nature of a performance bond or
good-faith deposit that is returned to the Fund at the termination of the
transaction if all contractual obligations have been satisfied. Under certain
circumstances, such as periods of high volatility, a Fund may be required to
increase the level of initial margin deposits. If the Fund has insufficient cash
to meet daily variation margin requirements, it might need to sell securities in
order to do so at a time when such sales are disadvantageous.
Purchasers and sellers of futures contracts and options on futures can enter
into offsetting closing transactions, similar to closing transactions on
options, by selling or purchasing, respectively, an instrument identical to the
instrument purchased or sold. However, there can be no assurance that a liquid
market will exist for a particular contract at a particular time. In such event,
it may not be possible to close a futures contract or options position.
Under certain circumstances, futures exchanges may establish daily limits on the
amount that the price of a futures contract or an option on a futures contract
can vary from the previous day's settlement price; once that limit is reached,
no trades may be made that day at a price beyond the limit. Daily price limits
do not limit potential losses because prices could move to the daily limit for
several consecutive days with little or no trading, thereby preventing
liquidation of unfavorable positions.
If a Fund were unable to liquidate a futures contract or an option on a futures
contract position due to the absence of a liquid market or the imposition of
price limits, it could incur substantial losses. The Fund would continue to be
subject to market risk with respect to the position. In addition, except in the
case of purchased options, the Fund would continue to be required to make daily
variation margin payments and might be required to continue to maintain the
position being hedged by the futures contract or option or to continue to
maintain cash or securities in a segregated account.
To the extent that a Fund enters into futures contracts, options on futures
contracts and options on foreign currencies traded on a CFTC-regulated exchange,
in each case that is not for BONA FIDE hedging purposes (as defined by the
CFTC), the aggregate initial margin and premiums required to establish these
positions (excluding the amount by which options are "in-the-money" at the time
of purchase) may not exceed 5% of the liquidation value of the Fund's portfolio,
after taking into account unrealized profits and unrealized losses on any
contracts the Fund has entered into. This policy does not limit to 5% the
percentage of the Fund's assets that are at risk in futures contracts, options
on futures contracts and currency options.
RISKS OF FUTURES CONTRACTS AND OPTIONS THEREON. The ordinary spreads at a given
time between prices in the cash and futures markets (including the options on
futures markets), due to differences in the natures of those markets, are
subject to the following factors. First, all participants in the futures market
are subject to margin deposit and maintenance requirements. Rather than meeting
additional margin deposit requirements, investors may close futures contracts
through offsetting transactions, which could distort the normal relationship
between the cash and futures markets. Second, the liquidity of the futures
market depends on participants entering into offsetting transactions rather than
making or taking delivery. To the extent participants decide to make or take
delivery, liquidity in the futures market could be reduced, thus producing
distortion. Due to the possibility of distortion, a hedge may not be successful.
<PAGE>
Although stock index futures contracts do not require physical delivery, under
extraordinary market conditions, liquidity of such futures contracts also could
be reduced. Additionally, the adviser and/or sub-adviser may be incorrect in its
expectations as to the extent of various interest rates, currency exchange rates
or stock market movements or the time span within which the movements take
place.
INDEX FUTURES. The risk of imperfect correlation between movements in the price
of index futures and movements in the price of the securities that are the
subject of a hedge increases as the composition of a Fund's portfolio diverges
from the index. The price of the index futures may move proportionately more
than or less than the price of the securities being hedged. If the price of the
index futures moves proportionately less than the price of the securities that
are the subject of the hedge, the hedge will not be fully effective. Assuming
the price of the securities being hedged has moved in an unfavorable direction,
as anticipated when the hedge was put into place, the Fund would be in a better
position than if it had not hedged at all, but not as good as if the price of
the index futures moved in full proportion to that of the hedged securities.
However, if the price of the securities being hedged has moved in a favorable
direction, this advantage will be partially offset by movement of the price of
the futures contract. If the price of the futures contract moves more than the
price of the securities, the Fund will experience either a loss or a gain on the
futures contract that will not be completely offset by movements in the price of
the securities that are the subject of the hedge.
Where index futures are purchased in an anticipatory hedge, it is possible that
the market may decline instead. If a Fund then decides not to invest in the
securities at that time because of concern as to possible further market decline
or for other reasons, it will realize a loss on the futures contract that is not
offset by a reduction in the price of the securities it had anticipated
purchasing.
FOREIGN CURRENCY HEDGING STRATEGIES--SPECIAL CONSIDERATIONS. A Fund may use
options and futures contracts on foreign currencies, as mentioned previously,
and forward currency contracts, as described below, to attempt to hedge against
movements in the values of the foreign currencies in which the Fund's securities
are denominated or, in certain circumstances, for investment (E.G., as a
substitute for investing in securities denominated in foreign currency).
Currency hedges can protect against price movements in a security that a Fund
owns or intends to acquire that are attributable to changes in the value of the
currency in which it is denominated.
A Fund might seek to hedge against changes in the value of a particular currency
when no Financial Instruments on that currency are available or such Financial
Instruments are more expensive than certain other Financial Instruments. In such
cases, a Fund may seek to hedge against price movements in that currency by
entering into transactions using Financial Instruments on another currency or a
basket of currencies, the value of which the adviser and/or sub-adviser believes
will have a high degree of positive correlation to the value of the currency
being hedged. The risk that movements in the price of the Financial Instrument
will not correlate perfectly with movements in the price of the currency subject
to the hedging transaction may be increased when this strategy is used.
The value of Financial Instruments on foreign currencies depends on the value of
the underlying currency relative to the U.S. dollar. Because foreign currency
transactions occurring in the interbank market might involve substantially
<PAGE>
larger amounts than those involved in the use of such Financial Instruments, a
Fund could be disadvantaged by having to deal in the odd-lot market (generally
consisting of transactions of less than $1 million) for the underlying foreign
currencies at prices that are less favorable than for round lots.
There is no systematic reporting of last sale information for foreign currencies
or any regulatory requirement that quotations available through dealers or other
market sources be firm or revised on a timely basis. Quotation information
generally is representative of very large transactions in the interbank market
and thus might not reflect odd-lot transactions where rates might be
less favorable. The interbank market in foreign currencies is a global,
round-the-clock market. To the extent the U.S. options or futures markets are
closed while the markets for the underlying currencies remain open, significant
price and rate movements might take place in the underlying markets that cannot
be reflected in the markets for the Financial Instruments until they reopen.
Settlement of hedging transactions involving foreign currencies might be
required to take place within the country issuing the underlying currency. Thus,
a Fund might be required to accept or make delivery of the underlying foreign
currency in accordance with any U.S. or foreign regulations regarding the
maintenance of foreign banking arrangements by U.S. residents and might be
required to pay any fees, taxes and charges associated with such delivery
assessed in the issuing country.
FORWARD CURRENCY CONTRACTS AND FOREIGN CURRENCY DEPOSITS. The Funds may enter
into forward currency contracts to purchase or sell foreign currencies for a
fixed amount of U.S. dollars or another foreign currency. A forward currency
contract involves an obligation to purchase or sell a specific currency at a
future date, which may be any fixed number of days (term) from the date of the
forward currency contract agreed upon by the parties, at a price set at the time
the forward currency contract is entered. Forward currency contracts are
negotiated directly between currency traders (usually large commercial banks)
and their customers.
Such transactions may serve as long or anticipatory hedges. For example, a Fund
may purchase a forward currency contract to lock in the U.S. dollar price of a
security denominated in a foreign currency that the Fund intends to acquire.
Forward currency contracts may also serve as short hedges. For example, a Fund
may sell a forward currency contract to lock in the U.S. dollar equivalent of
the proceeds from the anticipated sale of a security or a dividend or interest
payment denominated in a foreign currency.
The Funds may also use forward currency contracts to hedge against a decline in
the value of existing investments denominated in foreign currency. Such a hedge
would tend to offset both positive and negative currency fluctuations, but would
not offset changes in security values caused by other factors. A Fund could also
hedge the position by entering into a forward currency contract to sell another
currency expected to perform similarly to the currency in which the Fund's
existing investments are denominated. This type of hedge could offer advantages
in terms of cost, yield or efficiency, but may not hedge currency exposure as
effectively as a simple hedge against U.S. dollars. This type of hedge may
result in losses if the currency used to hedge does not perform similarly to the
currency in which the hedged securities are denominated.
<PAGE>
The Funds may also use forward currency contracts in one currency or a basket of
currencies to attempt to hedge against fluctuations in the value of securities
denominated in a different currency if the adviser anticipates that there will
be a positive correlation between the two currencies.
The cost to a Fund of engaging in forward currency contracts varies with factors
such as the currency involved, the length of the contract period and the market
conditions then prevailing. Because forward currency contracts are usually
entered into on a principal basis, no fees or commissions are involved. When a
Fund enters into a forward currency contract, it relies on the counterparty to
make or take delivery of the underlying currency at the maturity of the
contract. Failure by the counterparty to do so would result in the loss of some
or all of any expected benefit of the transaction.
As is the case with futures contracts, purchasers and sellers of forward
currency contracts can enter into offsetting closing transactions, similar to
closing transactions on futures contracts, by selling or purchasing,
respectively, an instrument identical to the instrument purchased or sold.
Secondary markets generally do not exist for forward currency contracts, with
the result that closing transactions generally can be made for forward currency
contracts only by negotiating directly with the counterparty. Thus, there can be
no assurance that a Fund will in fact be able to close out a forward currency
contract at a favorable price prior to maturity. In addition, in the event of
insolvency of the counterparty, the Fund might be unable to close out a forward
currency contract. In either event, the Fund would continue to be subject to
market risk with respect to the position, and would continue to be required to
maintain a position in securities denominated in the foreign currency or to
segregate cash or liquid assets.
The precise matching of forward currency contract amounts and the value of the
securities, dividends or interest payments involved generally will not be
possible because the value of such securities, dividends or interest payments,
measured in the foreign currency, will change after the forward currency
contract has been established. Thus, a Fund might need to purchase or sell
foreign currencies in the spot (cash) market to the extent such foreign
currencies are not covered by forward currency contracts. The projection of
short-term currency market movements is extremely difficult, and the successful
execution of a short-term hedging strategy is highly uncertain.
Forward currency contracts may substantially change a Fund's investment exposure
to changes in currency exchange rates and could result in losses to the Fund if
currencies do not perform as the adviser anticipates. There is no assurance that
the adviser's and/or sub-adviser's use of forward currency contracts will be
advantageous to a Fund or that it will hedge at an appropriate time.
The Funds may also purchase and sell foreign currency and invest in foreign
currency deposits. Currency conversion involves dealer spreads and other costs,
although commissions usually are not charged.
COMBINED POSITIONS. A Fund may purchase and write options or futures in
combination with each other, or in combination with futures or forward currency
contracts, to manage the risk and return characteristics of its overall
position. For example, a Fund may purchase a put option and write a call option
on the same underlying instrument, in order to construct a combined position
<PAGE>
whose risk and return characteristics are similar to selling a futures contract.
Another possible combined position would involve writing a call option at one
strike price and buying a call option at a lower price, in order to reduce the
risk of the written call option in the event of a substantial price increase.
Because combined options positions involve multiple trades, they result in
higher transaction costs.
TURNOVER. The Funds' options and futures activities may affect their turnover
rates and brokerage commission payments. The exercise of calls or puts written
by a Fund, and the sale or purchase of futures contracts, may cause it to sell
or purchase related investments, thus increasing its turnover rate. Once a Fund
has received an exercise notice on an option it has written, it cannot effect a
closing transaction in order to terminate its obligation under the option and
must deliver or receive the underlying securities at the exercise price. The
exercise of puts purchased by a Fund may also cause the sale of related
investments, increasing turnover. Although such exercise is within the Fund's
control, holding a protective put might cause it to sell the related investments
for reasons that would not exist in the absence of the put. A Fund will pay a
brokerage commission each time it buys or sells a put or call or purchases or
sells a futures contract. Such commissions may be higher than those that would
apply to direct purchases or sales.
SWAPS, CAPS, FLOORS AND COLLARS. The Funds are authorized to enter into swaps,
caps, floors and collars. Swaps involve the exchange by one party with another
party of their respective commitments to pay or receive cash flows, E.G., an
exchange of floating rate payments for fixed rate payments. The purchase of a
cap or a floor entitles the purchaser, to the extent that a specified index
exceeds in the case of a cap, or falls below in the case of a floor, a
predetermined value, to receive payments on a notional principal amount from the
party selling such instrument. A collar combines elements of buying a cap and
selling a floor.
ILLIQUID SECURITIES (All Funds, except S&P 500 Index Fund) -- Securities which
do not trade on stock exchanges or in the over the counter market, or have
restrictions on when and how they may be sold, are generally considered to be
"illiquid." An illiquid security is one that a Fund may have difficulty -- or
may even be legally precluded from -- selling at any particular time. A Fund may
invest in illiquid securities, including restricted securities and other
investments which are not readily marketable. A Fund will not purchase any such
security if the purchase would cause the Fund to invest more than 15% of its net
assets, measured at the time of purchase, in illiquid securities. Repurchase
agreements maturing in more than seven days are considered illiquid for purposes
of this restriction.
The principal risk of investing in illiquid securities is that a Fund may be
unable to dispose of them at the time desired or at a reasonable price. In
addition, in order to resell a restricted security, a Fund might have to bear
the expense and incur the delays associated with registering the security with
the SEC, and otherwise obtaining listing on a securities exchange or in the over
the counter market.
INVESTMENT COMPANY SECURITIES -- To manage their daily cash positions, the Funds
may invest in securities issued by other investment companies that invest in
short-term debt securities and seek to maintain a net asset value of $1.00 per
share ("money market funds"). The Funds also may invest in Standard & Poor's
Depository Receipts ("SPDRs") and shares of other investment companies. SPDRs
<PAGE>
are investment companies whose portfolios mirror the compositions of specific
S&P indices, such as the S&P 500 and the S&P 400. SPDRs are traded on the
American Stock Exchange. SPDR holders such as a Fund are paid a "Dividend
Equivalent Amount" that corresponds to the amount of cash dividends accruing to
the securities held by the SPDR Trust, net of certain fees and expenses. The
Investment Company Act of 1940, as amended (the "1940 Act"), limits investments
in securities of other investment companies, such as the SPDR Trust. These
limitations include, among others, that, subject to certain exceptions, no more
than 10% of a Fund's total assets may be invested in securities of other
investment companies and no more than 5% of its total assets may be invested in
the securities of any one investment company, and a Fund may not own more than
3% of the outstanding shares of any investment company. As a shareholder of
another investment company, a Fund would bear its pro rata portion of the other
investment company's expenses, including advisory fees, in addition to the
expenses the Fund bears directly in connection with its own operations.
REITS -- Real Estate Investment Trusts are investment trusts that invest
primarily in real estate and securities of businesses connected to the real
estate industry.
REPURCHASE AGREEMENTS -- A Fund may enter into repurchase agreements, or REPOs,
on debt securities that the Fund is allowed to hold in its portfolio. This is a
way to invest money for short periods. A REPO is an agreement under which the
Fund acquires a debt security and then resells it to the seller at an
agreed-upon price and date (normally, the next business day). The repurchase
price represents an interest rate effective for the short period the debt
security is held by the Fund, and is unrelated to the interest rate on the
underlying debt security. A repurchase agreement is often considered as a loan
collateralized by securities. The collateral securities acquired by the Fund
(including accrued interest earned thereon) must have a total value in excess of
the value of the repurchase agreement. The collateral securities are held by the
Fund's custodian bank until the repurchase agreement is completed.
The Funds may enter into repurchase agreements with commercial banks, registered
broker-dealers or registered government securities dealers that are creditworthy
under standards established by the Company's board of directors. The Company's
board of directors has established standards that INVESCO and the applicable
sub-adviser must use to review the creditworthiness of any bank, broker or
dealer that is party to a REPO. REPOs maturing in more than seven days are
considered illiquid securities. A Fund will not enter into repurchase agreements
maturing in more than seven days if as a result more than 15% of the Fund's net
assets would be invested in these repurchase agreements and other illiquid
securities.
As noted above, the Funds use REPOs as a means of investing cash for short
periods of time. Although REPOs are considered to be highly liquid and
comparatively low-risk, the use of REPOs does involve some risks. For example,
if the other party to the agreement defaults on its obligation to repurchase the
underlying security at a time when the value of the security has declined, the
Fund may incur a loss on the sale of the collateral security. If the other party
to the agreement becomes insolvent and subject to liquidation or reorganization
under the Bankruptcy Code or other laws, a court may determine that the
underlying security is collateral for a loan by the Fund not within the control
of the Fund and therefore the realization by the Fund on such collateral may
automatically be stayed. Finally, it is possible that the Fund may not be able
<PAGE>
to substantiate its interest in the underlying security and may be deemed an
unsecured creditor of the other party to the agreement.
RULE 144A SECURITIES (All Funds, except S&P 500 Index Fund) -- Securities that
can be resold to institutional investors pursuant to Rule 144A under the
Securities Act of 1933, as amended (the "1933 Act"). In recent years, a large
institutional market has developed for many Rule 144A Securities. Institutional
investors generally cannot sell these securities to the general public but
instead will often depend on an efficient institutional market in which Rule
144A Securities can readily be resold to other institutional investors, or on an
issuer's ability to honor a demand for repayment. Therefore, the fact that there
are contractual or legal restrictions on resale to the general public or certain
institutions does not necessarily mean that a Rule 144A Security is illiquid.
Institutional markets for Rule 144A Securities may provide both reliable market
values for Rule 144A Securities and enable a Fund to sell a Rule 144A investment
when appropriate. For this reason, the Company's board of directors has
concluded that if a sufficient institutional trading market exists for a given
Rule 144A security, it may be considered "liquid," and not subject to a Fund's
limitations on investment in restricted securities. The Company's board of
directors has given INVESCO the day-to-day authority to determine the liquidity
of Rule 144A Securities, according to guidelines approved by the board. The
principal risk of investing in Rule 144A Securities is that there may be an
insufficient number of qualified institutional buyers interested in purchasing a
Rule 144A Security held by a Fund, and the Fund might be unable to dispose of
such security promptly or at reasonable prices.
SECURITIES LENDING -- Each Fund may lend its portfolio securities. The advantage
of lending portfolio securities is that a Fund continues to have the benefits
(and risks) of ownership of the loaned securities, while at the same time
receiving interest from the borrower of the securities. The primary risk in
lending portfolio securities is that a borrower may fail to return a portfolio
security.
SOVEREIGN DEBT -- In certain emerging countries, the central government and its
agencies are the largest debtors to local and foreign banks and others.
Sovereign debt involves the risk that the government, as a result of political
considerations or cash flow difficulties, may fail to make scheduled payments of
interest or principal and may require holders to participate in rescheduling of
payments or even to make additional loans. If an emerging country government
defaults on its sovereign debt, there is likely to be no legal proceeding under
which the debt may be ordered repaid, in whole or in part. The ability or
willingness of a foreign sovereign debtor to make payments of principal and
interest in a timely manner may be influenced by, among other factors, its cash
flow, the magnitude of its foreign reserves, the availability of foreign
exchanges on the payment date, the debt service burden to the economy as a
whole, the debtor's then current relationship with the International Monetary
Fund and its then current political constraints. Some of the emerging countries
issuing such instruments have experienced high rates of inflation in recent
years and have extensive internal debt. Among other effects, high inflation and
internal debt service requirements may adversely affect the cost and
availability of future domestic sovereign borrowing to finance government
programs, and may have other adverse social, political and economic
consequences, including effects on the willingness of such countries to service
their sovereign debt. An emerging country government's willingness and ability
to make timely payments on its sovereign debt also are likely to be heavily
affected by the country's balance of trade and its access to trade and other
<PAGE>
international credits. If a country's exports are concentrated in a few
commodities, such country would be more significantly exposed to a decline in
the international prices of one or more of such commodities. A rise in
protectionism on the part of its trading partners, or unwillingness by such
partners to make payment for goods in hard currency, could also adversely affect
the country's ability to export its products and repay its debts. Sovereign
debtors may also be dependent on expected receipts from such agencies and others
abroad to reduce principal and interest arrearages on their debt. However,
failure by the sovereign debtor or other entity to implement economic reforms
negotiated with multilateral agencies or others, to achieve specified levels of
economic performance, or to make other debt payments when due, may cause third
parties to terminate their commitments to provide funds to the sovereign debtor,
which may further impair such debtor's willingness or ability to service its
debts.
The Funds may invest in debt securities issued under the "Brady Plan" in
connection with restructurings in emerging country debt markets or earlier
loans. These securities, often referred to as "Brady Bonds," are, in some cases,
denominated in U.S. dollars and collateralized as to principal by U.S. Treasury
zero coupon bonds having the same maturity. At least one year's interest
payments, on a rolling basis, are collateralized by cash or other investments.
Brady Bonds are actively traded on an over-the-counter basis in the secondary
market for emerging country debt securities. Brady Bonds are lower-rated bonds
and are highly volatile.
U.S. GOVERNMENT SECURITIES -- Each Fund may, from time to time, purchase debt
securities issued by the U.S. government. These securities include Treasury
bills, notes, and bonds. Treasury bills have a maturity of one year or less,
Treasury notes generally have a maturity of one to ten years, and Treasury bonds
generally have maturities of more than ten years.
U.S. government debt securities also include securities issued or guaranteed by
agencies or instrumentalities of the U.S. government. Some obligations of U.S.
government agencies, which are established under the authority of an act of
Congress, such as Government National Mortgage Association ("GNMA")
Participation Certificates, are supported by the full faith and credit of the
U.S. Treasury. GNMA Certificates are mortgage-backed securities representing
part ownership of a pool of mortgage loans. These loans -- issued by lenders
such as mortgage bankers, commercial banks and savings and loan associations --
are either insured by the Federal Housing Administration or guaranteed by the
Veterans Administration. A "pool" or group of such mortgages is assembled and,
after being approved by GNMA, is offered to investors through securities
dealers. Once approved by GNMA, the timely payment of interest and principal on
each mortgage is guaranteed by GNMA and backed by the full faith and credit of
the U.S. government. The market value of GNMA Certificates is not guaranteed.
GNMA Certificates are different from bonds because principal is paid back
monthly by the borrower over the term of the loan rather than returned in a lump
sum at maturity, as is the case with a bond. GNMA Certificates are called
"pass-through" securities because both interest and principal payments
(including prepayments) are passed through to the holder of the GNMA
Certificate.
Other United States government debt securities, such as securities of the
Federal Home Loan Banks, are supported by the right of the issuer to borrow from
the Treasury. Others, such as bonds issued by Fannie Mae, a federally chartered
private corporation, are supported only by the credit of the corporation. In the
case of securities not backed by the full faith and credit of the United States,
<PAGE>
a Fund must look principally to the agency issuing or guaranteeing the
obligation in the event the agency or instrumentality does not meet its
commitments. A Fund will invest in securities of such instrumentalities only
when INVESCO and the applicable sub-advisers are satisfied that the credit risk
with respect to any such instrumentality is comparatively minimal.
WHEN-ISSUED/DELAYED DELIVERY -- The Funds normally buy and sell securities on an
ordinary settlement basis. That means that the buy or sell order is sent, and a
Fund actually takes delivery or gives up physical possession of the security on
the "settlement date," which is three business days later. However, the Funds
also may purchase and sell securities on a when-issued or delayed delivery
basis.
When-issued or delayed delivery transactions occur when securities are purchased
or sold by a Fund and payment and delivery take place at an agreed-upon time in
the future. The Funds may engage in this practice in an effort to secure an
advantageous price and yield. However, the yield on a comparable security
available when delivery actually takes place may vary from the yield on the
security at the time the when-issued or delayed delivery transaction was entered
into. When a Fund engages in when-issued and delayed delivery transactions, it
relies on the seller or buyer to consummate the sale at the future date. If the
seller or buyer fails to act as promised, that failure may result in the Fund
missing the opportunity of obtaining a price or yield considered to be
advantageous. No payment or delivery is made by a Fund until it receives
delivery or payment from the other party to the transaction. However,
fluctuation in the value of the security from the time of commitment until
delivery could adversely affect a Fund.
INVESTMENT RESTRICTIONS
The Funds operate under certain investment restrictions. For purposes of the
following restrictions, all percentage limitations apply immediately after a
purchase or initial investment. Any subsequent change in a particular percentage
resulting from fluctuations in value does not require elimination of any
security from a Fund.
The following restrictions are fundamental and may not be changed without prior
approval of a majority of the outstanding voting securities of a Fund, as
defined in the 1940 Act. Each Fund may not:
1. purchase the securities of any issuer (other than securities issued
or guaranteed by the U.S. government or any of its agencies or
instrumentalities or municipal securities) if, as a result, more than 25%
of the Fund's total assets would be invested in the securities of
companies whose principal business activities are in the same industry;
2. with respect to 75% of the Fund's total assets, purchase the
securities of any issuer (other than securities issued or guaranteed by
the U.S. government or any of its agencies or instrumentalities, or
securities of other investment companies) if, as a result, (i) more than
5% of a Fund's total assets would be invested in the securities of that
issuer, or (ii) a Fund would hold more than 10% of the outstanding voting
securities of that issuer;
3. underwrite securities of other issuers, except insofar as it may be
<PAGE>
deemed to be an underwriter under the 1933 Act in connection with the
disposition of the Fund's portfolio securities;
4. borrow money, except that the Fund may borrow money in an amount not
exceeding 33 1/3% of its total assets (including the amount borrowed) less
liabilities (other than borrowings);
5. issue senior securities, except as permitted under the 1940 Act;
6. lend any security or make any loan if, as a result, more than
33 1/3% of its total assets would be lent to other parties, but this
limitation does not apply to the purchase of debt securities or to
repurchase agreements;
7. purchase or sell physical commodities; however, this policy shall
not prevent the Fund from purchasing and selling foreign currency, futures
contracts, options, forward contracts, swaps, caps, floors, collars and
other financial instruments; or
8. purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent
the Fund from investing in securities or other instruments backed by real
estate or securities of companies engaged in the real estate business).
9. Each Fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company managed by INVESCO or an
affiliate or a successor thereof, with substantially the same fundamental
investment objective, policies and limitations as the Fund.
In addition, each Fund has the following non-fundamental policies, which may be
changed without shareholder approval:
A. The Fund may not sell securities short (unless it owns or has the
right to obtain securities equivalent in kind and amount to the securities
sold short) or purchase securities on margin, except that (i) this policy
does not prevent the Fund from entering into short positions in foreign
currency, futures contracts, options, forward contracts, swaps, caps,
floors, collars and other financial instruments, (ii) the Fund may obtain
such short-term credits as are necessary for the clearance of
transactions, and (iii) the Fund may make margin payments in connection
with futures contracts, options, forward contracts, swaps, caps, floors,
collars and other financial instruments.
B. The Fund may borrow money only from a bank or from an open-end
management investment company managed by INVESCO or an affiliate or a
successor thereof for temporary or emergency purposes (not for leveraging
or investing) or by engaging in reverse repurchase agreements with any
party (reverse repurchase agreements will be treated as borrowings for
purposes of fundamental limitation (4)).
C. The Fund does not currently intend to purchase any security if, as a
<PAGE>
result, more than 15% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
D. The Fund may invest in securities issued by other investment
companies to the extent that such investments are consistent with the
Fund's investment objective and policies and permissible under the 1940
Act.
E. With respect to fundamental limitation (1), domestic and foreign
banking will be considered to be different industries.
In addition, with respect to a Fund that may invest in municipal obligations,
the following non-fundamental policy applies, which may be changed without
shareholder approval:
Each state (including the District of Columbia and Puerto Rico), territory
and possession of the United States, each political subdivision, agency,
instrumentality and authority thereof, and each multi-state agency of
which a state is a member is a separate "issuer." When the assets and
revenues of an agency, authority, instrumentality or other political
subdivision are separate from the government creating the subdivision and
the security is backed only by assets and revenues of the subdivision,
such subdivision would be deemed to be the sole issuer. Similarly, in the
case of an Industrial Development Bond or Private Activity bond, if that
bond is backed only by the assets and revenues of the non-governmental
user, then that non-governmental user would be deemed to be the sole
issuer. However, if the creating government or another entity guarantees a
security, then to the extent that the value of all securities issued or
guaranteed by that government or entity and owned by a Fund exceeds 10% of
the Fund's total assets, the guarantee would be considered a separate
security and would be treated as issued by that government or entity. With
respect to a Fund that is not a money market fund, securities issued or
guaranteed by a bank or subject to financial guaranty insurance are not
subject to the limitations set forth in the preceding sentence.
Following is a chart outlining some of the limitations pursuant to
non-fundamental investment policies set by the board of directors. These
non-fundamental policies may be changed by the board of directors without
shareholder approval:
--------------------------------------------------------------------------------
BLUE CHIP INVESCO
INVESTMENT GROWTH DYNAMICS ENDEAVOR GROWTH & INCOME
--------------------------------------------------------------------------------
EQUITY SECURITIES Unlimited Unlimited Unlimited Unlimited
--------------------------------------------------------------------------------
LOWER RATED Not Allowed Up to 25%
CORPORATE DEBT
SECURITIES
--------------------------------------------------------------------------------
<PAGE>
--------------------------------------------------------------------------------
BLUE CHIP INVESCO
INVESTMENT GROWTH DYNAMICS ENDEAVOR GROWTH & INCOME
--------------------------------------------------------------------------------
FOREIGN Up to 25% Up to 25% Up to 25% Up to 25%
SECURITIES
(Percentages
exclude ADRs and
securities of
Canadian
issuers.)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
INVESTMENT SMALL COMPANY GROWTH S&P 500 INDEX VALUE EQUITY
--------------------------------------------------------------------------------
EQUITY SECURITIES Normally, at Normally, Normally, at
least 65% in those listed least 65%
companies with in the S&P 500
market capi Index
talizations of
$2 billion or
less
--------------------------------------------------------------------------------
LOWER RATED Up to 5%
CORPORATE DEBT
SECURITIES
--------------------------------------------------------------------------------
FOREIGN SECURITIES Up to 25% Only securities Up to 25%
(Percentages that are
exclude ADRS and listed in the
securities of S&P 500 Index
Canadian issuers.)
--------------------------------------------------------------------------------
MANAGEMENT OF THE FUNDS
THE INVESTMENT ADVISER
INVESCO, located at 7800 East Union Avenue, Denver, Colorado, is the Company's
investment adviser. INVESCO was founded in 1932 and serves as an investment
adviser to:
INVESCO Advantage Series Funds, Inc.
INVESCO Bond Funds, Inc.
INVESCO Combination Stock & Bond Funds, Inc.
INVESCO International Funds, Inc.
INVESCO Money Market Funds, Inc.
INVESCO Sector Funds, Inc.
INVESCO Stock Funds, Inc.
INVESCO Treasurer's Series Funds, Inc.
INVESCO Variable Investment Funds, Inc.
As of October 31, 2000, INVESCO managed ___ mutual funds having combined assets
of over $____ billion, on behalf of more than _________ shareholders.
INVESCO is an indirect wholly owned subsidiary of AMVESCAP PLC, a publicly
traded holding company. Through its subsidiaries, AMVESCAP PLC engages in the
business of investment management on an international basis. AMVESCAP PLC is one
<PAGE>
of the largest independent investment management businesses in the world, with
approximately $____ billion in assets under management as of September 30, 2000.
AMVESCAP PLC's North American subsidiaries include:
INVESCO Retirement and Benefit Services, Inc. ("IRBS"), Atlanta, Georgia,
develops and provides domestic and international defined contribution
retirement plan services to plan sponsors, institutional retirement plan
sponsors, institutional plan providers and foreign governments.
INVESCO Retirement Plan Services ("IRPS"), Atlanta, Georgia, a
division of IRBS, provides recordkeeping and investment selection
services to defined contribution plan sponsors of plans with between
$2 million and $200 million in assets. Additionally, IRPS provides
investment consulting services to institutions seeking to provide
retirement plan products and services.
Institutional Trust Company, doing business as INVESCO Trust
Company ("ITC"), Denver, Colorado, a division of IRBS, provides
retirement account custodian and/or trust services for individual
retirement accounts ("IRAs") and other retirement plan accounts.
This includes services such as recordkeeping, tax reporting and
compliance. ITC acts as trustee or custodian to these plans. ITC
accepts contributions and provides complete transfer agency
functions: correspondence, sub-accounting, telephone communications
and processing of distributions.
INVESCO, Inc., Atlanta, Georgia, manages individualized investment
portfolios of equity, fixed-income and real estate securities for
institutional clients, including mutual funds and collective investment
entities. INVESCO, Inc. includes the following Divisions:
INVESCO Capital Management Division, Atlanta, Georgia, manages
institutional investment portfolios, consisting primarily of
discretionary employee benefit plans for corporations and state and
local governments, and endowment funds.
INVESCO Management & Research Division, Boston, Massachusetts,
primarily manages pension and endowment accounts.
PRIMCO Capital Management Division, Louisville, Kentucky,
specializes in managing stable return investments, principally on
behalf of Section 401(k) retirement plans.
INVESCO Realty Advisors Division, Dallas, Texas, is
responsible for providing advisory services in the U.S. real estate
markets for AMVESCAP PLC's clients worldwide. Clients include
corporate pension plans and public pension funds as well as
endowment and foundation accounts.
INVESCO (NY) Division, New York, is an investment adviser for
separately managed accounts, such as corporate and municipal pension
<PAGE>
plans, Taft-Hartley Plans, insurance companies, charitable
institutions and private individuals. INVESCO NY further serves as
investment adviser to several closed-end investment companies, and
as sub-adviser with respect to certain commingled employee benefit
trusts.
A I M Advisors, Inc., Houston, Texas, provides investment advisory and
administrative services for retail and institutional mutual funds.
A I M Capital Management, Inc., Houston, Texas, provides investment
advisory services to individuals, corporations, pension plans and other
private investment advisory accounts and also serves as a sub-adviser to
certain retail and institutional mutual funds, one Canadian mutual fund
and one portfolio of an open-end registered investment company that is
offered to separate accounts of insurance companies.
A I M Distributors, Inc. and Fund Management Company, Houston, Texas, are
registered broker-dealers that act as the principal underwriters for
retail and institutional mutual funds.
The corporate headquarters of AMVESCAP PLC are located at 11 Devonshire Square,
London, EC2M4YR, England.
THE INVESTMENT ADVISORY AGREEMENT
INVESCO serves as investment adviser to the Funds under an investment advisory
agreement dated February 28, 1997 (the "Agreement") with the Company.
The Agreement requires that INVESCO manage the investment portfolio of each Fund
in a way that conforms with the Fund's investment policies. INVESCO may directly
manage a Fund itself, or may hire a sub-adviser, which may be an affiliate of
INVESCO, to do so. Specifically, INVESCO is responsible for:
o managing the investment and reinvestment of all the assets of the Funds, and
executing all purchases and sales of portfolio securities;
o maintaining a continuous investment program for the Funds, consistent
with (i) each Fund's investment policies as set forth in the Company's
Articles of Incorporation, Bylaws and Registration Statement, as from time
to time amended, under the 1940 Act, and in any prospectus and/or statement
of additional information of the Funds, as from time to time amended and in
use under the 1933 Act, and (ii) the Company's status as a regulated
investment company under the Internal Revenue Code of 1986, as amended;
o determining what securities are to be purchased or sold for the Funds,
unless otherwise directed by the directors of the Company, and executing
transactions accordingly;
<PAGE>
o providing the Funds the benefit of the investment analysis and research,
the reviews of current economic conditions and trends, and the
consideration of a long-range investment policy now or hereafter generally
available to the investment advisory customers of the adviser or any
sub-adviser;
o determining what portion of each Fund's assets should be invested in the
various types of securities authorized for purchase by the Fund; and
o making recommendations as to the manner in which voting rights, rights to
consent to Fund action and any other rights pertaining to a Fund's
portfolio securities shall be exercised.
INVESCO also performs all of the following services for the Funds:
o administrative;
o internal accounting (including computation of net asset value);
o clerical and statistical;
o secretarial;
o all other services necessary or incidental to the administration of the
affairs of the Funds;
o supplying the Company with officers, clerical staff and other employees;
o furnishing office space, facilities, equipment, and supplies; providing
personnel and facilities required to respond to inquiries related to
shareholder accounts;
o conducting periodic compliance reviews of the Funds' operations;
preparation and review of required documents, reports and filings by
INVESCO's in-house legal and accounting staff or in conjunction with
independent attorneys and accountants (including prospectuses, statements
of additional information, proxy statements, shareholder reports, tax
returns, reports to the SEC, and other corporate documents of the Funds);
o supplying basic telephone service and other utilities; and
o preparing and maintaining certain of the books and records required to be
prepared and maintained by the Funds under the 1940 Act.
Expenses not assumed by INVESCO are borne by the Funds. As full compensation for
its advisory services to the Company, INVESCO receives a monthly fee from each
Fund. The fee is calculated at the annual rate of:
Blue Chip Growth and Dynamics Funds
o 0.60% on the first $350 million of each Fund's average net assets;
<PAGE>
o 0.55% on the next $350 million of each Fund's average net assets;
o 0.50% of each Fund's average net assets from $700 million;
o 0.45% of each Fund's average net assets from $2 billion;
o 0.40% of each Fund's average net assets from $4 billion;
o 0.375% of each Fund's average net assets from $6 billion; and
o 0.35% of each Fund's average net assets from $8 billion.
INVESCO Endeavor and Growth & Income Funds
o 0.75% on the first $500 million of each Fund's average net assets;
o 0.65% on the next $500 million of each Fund's average net assets;
o 0.55% of each Fund's average net assets from $1 billion;
o 0.45% of each Fund's average net assets from $2 billion;
o 0.40% of each Fund's average net assets from $4 billion;
o 0.375% of each Fund's average net assets from $6 billion; and
o 0.35% of each Fund's average net assets from $8 billion.
Small Company Growth Fund
o 0.75% on the first $350 million of the Fund's average net assets;
o 0.65% on the next $350 million of the Fund's average net assets;
o 0.55% of the Fund's average net assets from $700 million;
o 0.45% of the Fund's average net assets from $2 billion;
o 0.40% of the Fund's average net assets from $4 billion;
o 0.375% of the Fund's average net assets from $6 billion; and
o 0.35% of the Fund's average net assets from $8 billion.
<PAGE>
S&P 500 Index Fund
o 0.25% of the Fund's average net assets.
Value Equity Fund
o 0.75% on the first $500 million of the Fund's average net assets;
o 0.65% on the next $500 million of the Fund's average net assets;
o 0.50% of the Fund's average net assets from $1 billion;
o 0.45% of the Fund's average net assets from $2 billion;
o 0.40% of the Fund's average net assets from $4 billion;
o 0.375% of the Fund's average net assets from $6 billion; and
o 0.35% of the Fund's average net assets from $8 billion.
During the periods outlined in the table below, the Funds paid INVESCO advisory
fees in the dollar amounts shown below. Since Blue Chip Growth, Dynamics,
INVESCO Endeavor, Growth & Income, S&P 500 Index and Value Equity Funds' Class K
shares were not offered until _____ ___, 2000, no advisory fees were paid with
respect to Class K shares for the periods shown below. If applicable, the
advisory fees were offset by credits in the amounts shown below, so INVESCO'S
fees were not in excess of the expense limitations shown below, which have been
voluntarily agreed to by the Company and INVESCO.
ADVISORY TOTAL EXPENSE TOTAL EXPENSE
INVESTOR CLASS FEE DOLLARS REIMBURSEMENTS LIMITATIONS
-------------- ----------- -------------- -------------
Blue Chip Growth Fund
July 31, 2000 $_________ $ 0 N/A
July 31, 1999(1) 5,712,698 0 N/A
August 31, 1998 4,561,574 0 N/A
August 31, 1997 3,922,981 0 N/A
Dynamics Fund
July 31, 2000 $_________ $_________ 1.20%
July 31, 1999(2) 2,927,803 0 1.20%(3)
April 30, 1999 7,750,919 0 1.21%
April 30, 1998 5,874,212 0 1.21%
<PAGE>
INVESCO Endeavor Fund
July 31, 2000 $_________ $_________ 1.50%
July 31, 1999(2) 173,488 0 1.50%
April 30, 1999 206,836 0 1.50%
Growth & Income Fund
July 31, 2000 $_________ $_________ 1.50%
July 31, 1999(2) 107,949 33,201 1.50%
April 30, 1999 209,172 53,659 1.50%
Small Company Growth Fund
July 31, 2000 $_________ $_________ 1.50%
July 31, 1999(4) 512,934 84,361 1.50%
May 31, 1999 1,973,393 201,069 1.50%
May 31, 1998 2,334,680 0 1.50%
S&P 500 Index Fund
July 31, 2000 $_________ $_________ 0.60%
July 31, 1999 99,317 155,166 0.60%(5)
July 31, 1998 10,030 44,823 0.55%
Value Equity Fund
July 31, 2000 $_________ $_________ 1.30%
July 31, 1999(1) 2,756,316 397,754 1.30%(6)
August 31, 1998 3,080,351 164,235 1.25%
August 31, 1997 2,250,039 0 N/A
INSTITUTIONAL CLASS
-------------------
Dynamics Fund
July 31, 2000(7) $_________ $_________ 0.95%
S&P 500 Index Fund
July 31, 2000 $_________ $_________ 0.35%
July 31, 1999 9,042 29,912 0.35%(8)
July 31, 1998 3,729 31,239 0.30%
CLASS C(9)
----------
Blue Chip Growth Fund
July 31, 2000 $_________ N/A N/A
Dynamics Fund
July 31, 2000 $_________ $_________ 1.95%
<PAGE>
INVESCO Endeavor Fund
July 31, 2000 $_________ $_________ 2.25%
Growth & Income Fund
July 31, 2000 $_________ $_________ 2.25%
Small Company Growth Fund
July 31, 2000 $_________ $_________ 2.25%
Value Equity Fund
July 31, 2000 $_________ $_________ 2.05%
(1) For the period September 1, 1998 through July 31, 1999.
(2) For the period May 1, 1999 through July 31, 1999.
(3) Effective May 13, 1999, the Total Expense Limitation was changed to 1.20%.
(4) For the period June 1, 1999 through July 31, 1999.
(5) Effective May 13, 1999, the Total Expense Limitation was changed to 0.60%.
(6) Effective May 13, 1999, the Total Expense Limitation was changed to 1.30%.
(7) Institutional class shares of the Fund were offered beginning December 31,
1999, but did not commence investment operations until May 23, 2000.
(8) Effective May 13, 1999, the Total Expense Limitation was changed to 0.35%.
(9) Class C shares of the Funds were not offered until February 15, 2000.
THE SUB-ADVISORY AGREEMENT
With respect to S&P 500 Index Fund, World Asset Management ("World") serves as
sub-adviser to the Fund pursuant to a sub-advisory agreement dated July 15, 1999
with INVESCO.
With respect to Value Equity Fund, INVESCO Capital Management ("ICM"), a
division of INVESCO, Inc., serves as sub-adviser to the Fund pursuant to a
sub-advisory agreement dated February 28, 1997 with INVESCO.
The Sub-Agreements provide that World and ICM, as applicable, subject to the
supervision of INVESCO, shall manage the investment portfolio of the respective
Funds in conformity with each such Fund's investment policies. These management
services include: (a) managing the investment and reinvestment of all the
assets, now or hereafter acquired, of each Fund, and executing all purchases and
sales of portfolio securities; (b) maintaining a continuous investment program
for the Funds, consistent with (i) each Fund's investment policies as set forth
in the Company's Articles of Incorporation, Bylaws and Registration Statement,
as from time to time amended, under the 1940 Act, as amended, and in any
prospectus and/or statement of additional information of the Company, as from
time to time amended and in use under the 1933 Act and (ii) the Company's status
as a regulated investment company under the Internal Revenue Code of 1986, as
amended; (c) determining what securities are to be purchased or sold for each
Fund, unless otherwise directed by the directors of the Company or INVESCO, and
executing transactions accordingly; (d) providing the Funds the benefit of all
<PAGE>
of the investment analysis and research, the reviews of current economic
conditions and trends, and the consideration of long-range investment policy now
or hereafter generally available to investment advisory customers of World or
ICM; (e) determining what portion of each applicable Fund's assets should be
invested in the various types of securities authorized for purchase by such
Fund; and (f) making recommendations as to the manner in which voting rights,
rights to consent to Company action and any other rights pertaining to the
portfolio securities of each applicable Fund shall be exercised.
The Sub-Agreements provide that, as compensation for their services, World and
ICM shall receive from INVESCO, at the end of each month, a fee based upon the
average daily value of the applicable Fund's net assets. The sub-advisory fees
are paid by INVESCO, NOT the Funds. The fees are calculated at the following
annual rates:
S&P 500 Index Fund
o 0.07% on the first $10 million of the Fund's average net assets;
o 0.05% on the next $40 million of the Fund's average net assets; and
o 0.03% of the Fund's average net assets from $50 million.
Value Equity Fund
o 0.30% on the first $500 million of the Fund's average net assets;
o 0.26% on the next $500 million of the Fund's average net assets;
o 0.20% of the Fund's average net assets from $1 billion;
o 0.18% of the Fund's average net assets from $2 billion;
o 0.16% of the Fund's average net assets from $4 billion;
o 0.15% of the Fund's average net assets from $6 billion; and
o 0.14% of the Fund's average net assets from $8 billion.
ADMINISTRATIVE SERVICES AGREEMENT
INVESCO, either directly or through affiliated companies, provides certain
administrative, sub-accounting, and recordkeeping services to the Funds pursuant
to an Administrative Services Agreement dated June 1, 2000 with the Company.
<PAGE>
The Administrative Services Agreement requires INVESCO to provide the following
services to the Funds:
o such sub-accounting and recordkeeping services and functions as are
reasonably necessary for the operation of the Funds; and
o such sub-accounting, recordkeeping, and administrative services and
functions, which may be provided by affiliates of INVESCO, as are
reasonably necessary for the operation of Fund shareholder accounts
maintained by certain retirement plans and employee benefit plans for the
benefit of participants in such plans.
As full compensation for services provided under the Administrative Services
Agreement, each Fund pays a monthly fee to INVESCO consisting of a base fee of
$10,000 per year, plus an additional incremental fee computed daily and paid
monthly at an annual rate of 0.015% of the average net assets of each Fund prior
to May 13, 1999, and 0.045% per year of the average net assets of each Fund
effective May 13, 1999.
TRANSFER AGENCY AGREEMENT
INVESCO also performs transfer agent, dividend disbursing agent and registrar
services for the Funds pursuant to a Transfer Agency Agreement dated June 1,
2000 with the Company.
The Transfer Agency Agreement provides that each Fund pays INVESCO an annual fee
of $22.50 ($20.00 prior to June 1, 2000) per shareholder account, or, where
applicable, per participant in an omnibus account. This fee is paid monthly at
the rate of 1/12 of the annual fee and is based upon the actual number of
shareholder accounts and omnibus account participants in each Fund at any time
during each month.
FEES PAID TO INVESCO
During the periods outlined in the table below, the Funds paid the following
fees to INVESCO (in some instances, prior to the absorption of certain Fund
expenses by INVESCO and the sub-adviser, where applicable). Since Blue Chip
Growth, Dynamics, INVESCO Endeavor, Growth & Income, S&P 500 Index and Value
Equity Funds' Class K shares were not offered until ______, 2000 no fees were
paid with respect to Class K shares for the periods shown below.
ADMINISTRATIVE TRANSFER
INVESTOR CLASS ADVISORY SERVICES AGENCY
-------------- -------- -------------- --------
Blue Chip Growth Fund
July 31, 2000 $_________ $_________ $_________
July 31, 1999(1) 5,712,698 248,879 1,500,795
August 31, 1998 4,561,574 131,098 1,160,513
August 31, 1997 3,922,981 112,386 1,066,438
<PAGE>
Dynamics Fund
July 31, 2000 $_________ $_________ $_________
July 31, 1999(2) 2,927,803 236,694 993,382
April 30, 1999 7,750,919 226,800 2,693,081
April 30, 1998 5,874,212 170,476 2,156,766
INVESCO Endeavor Fund
July 31, 2000 $_________ $_________ $_________
July 31, 1999(2) 173,488 12,209 57,863
April 30, 1999(3) 206,836 9,217 52,532
Growth & Income Fund
July 31, 2000 $_________ $_________ $_________
July 31, 1999(2) 107,949 8,442 47,918
April 30, 1999(4) 209,172 12,517 70,040
Small Company Growth Fund
July 31, 2000 $_________ $_________ $_________
July 31, 1999(5) 512,934 33,164 327,104
May 31, 1999 1,973,393 54,324 1,116,282
May 31, 1998 2,334,680 56,738 1,090,224
S&P 500 Index Fund
July 31, 2000 $_________ $_________ $_________
July 31, 1999 99,317 19,051 76,345
July 31, 1998 10,030 4,250 7,631
Value Equity Fund
July 31, 2000 $_________ $_________ $_________
July 31, 1999(1) 2,756,316 89,785 1,011,717
August 31, 1998 3,080,351 71,607 918,694
August 31, 1997 2,250,039 55,001 610,115
INSTITUTIONAL CLASS
-------------------
Dynamics Fund
July 31, 2000(6) $_________ $_________ $_________
S&P 500 Index Fund
July 31, 2000 $_________ $_________ $_________
July 31, 1999 9,042 1,793 2,447
July 31, 1998 3,729 2,624 266
<PAGE>
CLASS C(7)
----------
Blue Chip Growth Fund
July 31, 2000 $_________ $_________ $_________
Dynamics Fund
July 31, 2000 $_________ $_________ $_________
INVESCO Endeavor Fund
July 31, 2000 $_________ $_________ $_________
Growth & Income Fund
July 31, 2000 $_________ $_________ $_________
Small Company Growth Fund
July 31, 2000 $_________ $_________ $_________
Value Equity Fund
July 31, 2000 $_________ $_________ $_________
(1) For the period September 1, 1998 through July 31, 1999.
(2) For the period May 1, 1999 through July 31, 1999.
(3) For the period October 28, 1998 (commencement of operations) through
April 30, 1999.
(4) For the period July 1, 1998 (commencement of operations) through April 30,
1999.
(5) For the period June 1, 1999 through July 31, 1999.
(6 Institutional Class shares were offered beginning December 31, 1999, but did
not commence investment operations until May 23, 2000.
(7) The Class C shares of the Funds were not offered until February 15, 2000.
DIRECTORS AND OFFICERS OF THE COMPANY
The overall direction and supervision of the Company come from the board of
directors. The board of directors is responsible for making sure that the Funds'
general investment policies and programs are carried out and that the Funds are
properly administered.
The board of directors has an audit committee comprised of four of the directors
who are not affiliated with INVESCO (the "Independent Directors"). The committee
meets quarterly with the Company's independent accountants and officers to
review accounting principles used by the Company, the adequacy of internal
controls, the responsibilities and fees of the independent accountants, and
other matters.
<PAGE>
The Company has a management liaison committee which meets quarterly with
various management personnel of INVESCO in order to facilitate better
understanding of management and operations of the Company, and to review legal
and operational matters which have been assigned to the committee by the board
of directors, in furtherance of the board of directors' overall duty of
supervision.
The Company has a brokerage committee. The committee meets periodically to
review soft dollar and other brokerage transactions by the Funds, and to review
policies and procedures of INVESCO with respect to brokerage transactions. It
reports on these matters to the Company's board of directors.
The Company has a derivatives committee. The committee meets periodically to
review derivatives investments made by the Funds. It monitors derivative usage
by the Funds and the procedures utilized by INVESCO to ensure that the use of
such instruments follows the policies on such instruments adopted by the
Company's board of directors. It reports on these matters to the Company's board
of directors.
The Company has a legal committee, an insurance committee and a compensation
committee. These committees meet when necessary to review legal, insurance and
compensation matters of importance to the directors of the Company.
The Company has a nominating committee. The committee meets periodically to
review and nominate candidates for positions as independent directors to fill
vacancies on the board of directors.
The officers of the Company, all of whom are officers and employees of INVESCO,
are responsible for the day-to-day administration of the Company and the Funds.
The officers of the Company receive no direct compensation from the Company or
the Funds for their services as officers. INVESCO has the primary responsibility
for making investment decisions on behalf of the Funds. These investment
decisions are reviewed by the investment committee of INVESCO.
All of the officers and directors of the Company hold comparable positions with
the following funds, which, with the Company, are collectively referred to as
the "INVESCO Funds":
INVESCO Advantage Series Funds, Inc.
INVESCO Bond Funds, Inc.
INVESCO Combination Stock & Bond Funds, Inc.
INVESCO International Funds, Inc.
INVESCO Money Market Funds, Inc.
INVESCO Sector Funds, Inc.
INVESCO Stock Funds, Inc.
INVESCO Treasurer's Series Funds, Inc.
INVESCO Variable Investment Funds, Inc.
The table below provides information about each of the Company's directors and
officers. Their affiliations represent their principal occupations.
<PAGE>
Position(s) Held Principal Occupation(s)
Name, Address and Age With Company During Past Five Years
Mark H. Williamson President, Chief President, Chief
(2)(3)(10) Executive Officer Executive Officer and
7800 E. Union Avenue and Chairman of the Chairman of the Board
Denver, Colorado Board of INVESCO Funds
Age: 49 Group, Inc.; President
Chief Executive Officer
and Chairman of the Board
of INVESCO Distributors,
Inc.; President,
Chief Operating
Officer and Chairman
of the Board of
INVESCO Global Health
Sciences Fund;
formerly, Chairman and
Chief Executive
Officer of NationsBanc
Advisors, Inc.;
formerly, Chairman of
NationsBanc
Investments, Inc.
Fred A. Deering Vice Chairman of the Trustee of INVESCO Global
(1)(2)(7)(8) Board Health Sciences Fund;
Security Life Center formerly, Chairman of the
1290 Broadway Executive Committee and
Denver, Colorado Chairman of the Board
Age: 72 of Security Life of Denver
Insurance Company;
Director of ING American
Holdings Company and First
ING Life Insurance
Company of New York.
<PAGE>
Position(s) Held Principal Occupation(s)
Name, Address and Age With Company During Past Five Years
Victor L. Andrews, Ph.D. Director Professor Emeritus,
(4)(6)(10) Chairman Emeritus and
34 Seawatch Drive Chairman of the CFO
Savannah, Georgia Roundtable of the
Age: 70 Department of Finance of
Georgia State University;
President, Andrews
Financial Associates, Inc.
(consulting firm);
Director of The
Sheffield Funds, Inc.;
formerly, member of the
faculties of the Harvard
Business School and the
Sloan School of Management
of MIT.
Bob R. Baker Director Consultant (since
(2)(4)(5)(9) 2000); formerly,
37 Castle Pines Dr., N. Executive Officer
Castle Rock, Colorado (1989 to 2000) of AMC
Age: 64 Cancer Research Center,
Denver, Colorado; until
mid-December 1988, Vice
Chairman of the Board of
First Columbia Financial
Corporation, Englewood,
Colorado; formerly,
Chairman of the Board and
Chief Executive Officer of
First Columbia Financial
Corporation.
Charles W. Brady(3) Director Chief Executive
1315 Peachtree St., N.E. Officer and Chairman
Atlanta, Georgia of AMVESCAP PLC, London,
Age: 65 England and various
subsidiaries of AMVESCAP
PLC; Trustee of INVESCO
Global Health Sciences
Fund.
<PAGE>
Position(s) Held Principal Occupation(s)
Name, Address and Age With Company During Past Five Years
Lawrence H. Budner Director Trust Consultant; prior to
(1)(5)(10) June 30, 1987, Senior Vice
7608 Glen Albens Circle President and Senior Trust
Dallas, Texas Officer of InterFirst
Age: 70 Bank, Dallas, Texas.
James T. Bunch(4)(5)(9) Director Principal and Founder
3600 Republic Plaza of Green Manning &
370 Seventeenth Street Bunch Ltd., Denver,
Denver, Colorado Colorado, since August
Age: 57 1988; Director and
Secretary of Green
Manning & Bunch
Securities, Inc.,
Denver, Colorado since
September 1993; Vice
President and Director
of Western Golf
Association and Evans
Scholars Foundation;
formerly, General
Counsel and Director
of Boettcher & Co.,
Denver, Colorado;
formerly, Chairman and
Managing Partner of
Davis Graham & Stubbs,
Denver, Colorado.
<PAGE>
Position(s) Held Principal Occupation(s)
Name, Address and Age With Company During Past Five Years
Wendy L. Gramm, Ph.D. Director Self-employed (since
(4)(6)(9) 1993); Distinguished
3401 N. Fairfax Senior Fellow and
Arlington, VA Director, Regulatory
Age: 55 Studies Program,
Mercatus Center George
Mason, VA; formerly,
Chairman, Commodity
Futures Trading
Commission; Administrator
for Information and
Regulatory Affairs at the
Office of Management and
Budget. Also, Director of
Enron Corporation, IBP,
Inc., State Farm Insurance
Company, International
Republic Institute, and
the Texas Public Policy
Foundation; formerly,
Director of the Chicago
Mercantile Exchange (1994
to 1999), Kinetic
Concepts, Inc. (1996 to
1997), and the Independent
Women's Forum (1994
to 1999).
Richard W. Healey(3) Director Director and Senior
7800 E. Union Avenue Vice President of
Denver, Colorado INVESCO Funds Group,
Age: 46 Inc.; Director and
Senior Vice President of
INVESCO Distributors,
Inc.; formerly, Senior
Vice President of GT
Global-North America
(1996 to 1998) and The
Boston Company (1993
to 1996).
<PAGE>
Position(s) Held Principal Occupation(s)
Name, Address and Age With Company During Past Five Years
Gerald J. Lewis(1)(6)(7) Chairman of Lawsuit
701 "B" Street Director Resolution Services,
Suite 2100 San Diego, California
San Diego, California since 1987; Director
Age: 67 of General Chemical
Group, Inc., Hampdon,
New Hampshire, since
1996; formerly,
Associate Justice of
the California Court
of Appeals; Director
of Wheelabrator
Technologies, Inc.,
Fisher Scientific,
Inc., Henley
Manufacturing, Inc.,
and California Coastal
Properties, Inc.; Of
Counsel, Latham &
Watkins, San Diego,
California (1987 to
1997).
John W. McIntyre Director Retired. Formerly, Vice
(1)(2)(5)(7) Chairman of the Board of
7 Piedmont Center Directors of The Citizens
Suite 100 and Southern Corporation
Atlanta, Georgia and Chairman of the Board
Age 70 and Chief Executive
Officer of The Citizens
and Southern Georgia Corp.
and The Citizens and
Southern National Bank;
Trustee of INVESCO Global
Health Sciences Fund,
Gables Residential Trust,
Employee's Retirement
System of GA, Emory
University, and J.M. Tull
Charitable Foundation;
Director of Kaiser
Foundation Health Plans
of Georgia, Inc.
<PAGE>
Position(s) Held Principal Occupation(s)
Name, Address and Age With Company During Past Five Years
Larry Soll, Ph.D. Director Retired. Formerly,
(4)(6)(9)(10) Chairman of the Board
345 Poorman Road (1987 to 1994), Chief
Boulder, Colorado Executive Officer
Age: 58 (1982 to 1989 and 1993 to
1994) and President (1982
to 1989) of Synergen Inc.;
Director of Synergen since
incorporation in 1982;
Director of Isis
Pharmaceuticals, Inc.;
Trustee of INVESCO Global
Health Sciences Fund.
Glen A. Payne Secretary Senior Vice President,
7800 E. Union Avenue General Counsel and
Denver, Colorado Secretary of INVESCO
Age: 53 Funds Group, Inc.;
Senior Vice President,
Secretary and General
Counsel of INVESCO
Distributors, Inc.;
Secretary of INVESCO
Global Health Sciences
Fund; formerly, General
Counsel of INVESCO Trust
Trust Company (1989 to
1998) and employee of a
U.S. regulatory agency,
Washington, D.C. (1973
to 1989).
<PAGE>
Position(s) Held Principal Occupation(s)
Name, Address and Age With Company During Past Five Years
Ronald L. Grooms Chief Accounting Senior Vice President,
7800 E. Union Avenue Officer, Chief Treasurer and Director
Denver, Colorado Financial Officer and of INVESCO Funds Group
Age: 53 Treasurer Inc.; Senior Vice
President, Treasurer and
Director of INVESCO
Distributors, Inc.;
Treasurer and
Principal Financial
and Accounting Officer
of INVESCO Global
Health Sciences Fund;
formerly, Senior Vice
President and Treasurer
of INVESCO Trust Company
(1988 to 1998).
William J. Galvin, Jr. Assistant Secretary Senior Vice President
7800 E. Union Avenue and Assistant Secretary
Denver, Colorado of INVESCO Funds Group,
Age: 43 Inc.; Senior Vice
President and Assistant
Secretary of INVESCO
Distributors, Inc.;
formerly, Trust Officer
of INVESCO Trust Company
(1995 to 1998).
Pamela J. Piro Assistant Treasurer Vice President and
7800 E. Union Avenue Assistant Treasurer of
Denver, Colorado INVESCO Funds Group,
Age: 40 Inc.; Assistant Treasurer
of INVESCO Distributors,
Inc.; formerly Assistant
Vice President (1996 to
1997), Director -
Portfolio Accounting
(1994 to 1996),
Portfolio Accounting
Manager (1993 to 1994)
and Assistant
Accounting Manager
(1990 to 1993).
<PAGE>
Position(s) Held Principal Occupation(s)
Name, Address and Age With Company During Past Five Years
Alan I. Watson Assistant Secretary Vice President of INVESCO
7800 E. Union Avenue Funds Group, Inc.;
Denver, Colorado formerly, Trust Officer
Age: 58 of INVESCO Trust Company.
Judy P. Wiese Assistant Secretary Vice President and
7800 E. Union Avenue Assistant Secretary of
Denver, Colorado INVESCO Funds Group, Inc.;
Age: 52 Assistant Secretary of
INVESCO Distributors,
Inc.; formerly, Trust
Officer of INVESCO Trust
Company.
(1) Member of the audit committee of the Company.
(2) Member of the executive committee of the Company. On occasion, the executive
committee acts upon the current and ordinary business of the Company between
meetings of the board of directors. Except for certain powers which, under
applicable law, may only be exercised by the full board of directors, the
executive committee may exercise all powers and authority of the board of
directors in the management of the business of the Company. All decisions are
subsequently submitted for ratification by the board of directors.
(3) These directors are "interested persons" of the Company as defined in the
1940 Act.
(4) Member of the management liaison committee of the Company.
(5) Member of the brokerage committee of the Company.
(6) Member of the derivatives committee of the Company.
(7) Member of the legal committee of the Company.
(8) Member of the insurance committee of the Company.
(9) Member of the nominating committee of the Company.
(10) Member of the compensation committee of the Company.
The following table shows the compensation paid by the Company to its
Independent Directors for services rendered in their capacities as directors of
the Company; the benefits accrued as Company expenses with respect to the
<PAGE>
Defined Benefit Deferred Compensation Plan discussed below; and the estimated
annual benefits to be received by these directors upon retirement as a result of
their service to the Company, all for the period ended July 31, 2000.
In addition, the table sets forth the total compensation paid by all of the
INVESCO Funds and INVESCO Global Health Sciences Fund (collectively, the
"INVESCO Complex") to these directors or trustees for services rendered in their
capacities as directors or trustees during the year ended December 31, 1999. As
of December 31, 1999, there were 46 funds in the INVESCO Complex.
--------------------------------------------------------------------------------
Name of Aggregate Benefits Estimated Total Compensa-
Person Compensation Accrued As Annual tion From
and From Part of Benefits INVESCO Complex
Position Company(1) Expenses(2) Upon Paid To
Retirement(3) Directors(7)
--------------------------------------------------------------------------------
Fred A. Deering, $______ $______ $______ $107,050
Vice Chairman
of the Board
--------------------------------------------------------------------------------
Victor L. Andrews ______ ______ ______ 84,700
--------------------------------------------------------------------------------
Bob R. Baker ______ ______ ______ 82,850
--------------------------------------------------------------------------------
Lawrence H. Budner ______ ______ ______ 82,850
--------------------------------------------------------------------------------
James T. Bunch(4) ______ ______ ______ 0
--------------------------------------------------------------------------------
Daniel D. Chabris(5) ______ ______ ______ 34,000
--------------------------------------------------------------------------------
Wendy L. Gramm ______ ______ ______ 81,350
--------------------------------------------------------------------------------
Kenneth T. King(5) ______ ______ ______ 85,850
--------------------------------------------------------------------------------
Gerald J. Lewis(4) ______ ______ ______ 0
--------------------------------------------------------------------------------
John W. McIntyre ______ ______ ______ 108,700
--------------------------------------------------------------------------------
Larry Soll ______ ______ ______ 100,900
--------------------------------------------------------------------------------
Total ______ ______ ______ 768,250
--------------------------------------------------------------------------------
% of Net Assets ______%(6) ______%(6) 0.0024%(7)
--------------------------------------------------------------------------------
(1) The vice chairman of the board, the chairs of the Funds' committees who
are Independent Directors, and the members of the Funds' committees who are
Independent Directors each receive compensation for serving in such capacities
in addition to the compensation paid to all Independent Directors.
(2) Represents estimated benefits accrued with respect to the Defined Benefit
<PAGE>
Deferred Compensation Plan discussed below, and not compensation deferred at the
election of the directors.
(3) These amounts represent the Company's share of the estimated annual
benefits payable by the INVESCO Funds upon the directors' retirement, calculated
using the current method of allocating director compensation among the INVESCO
Funds. These estimated benefits assume retirement at age 72. With the exception
of Drs. Soll and Gramm and Messrs. Bunch and Lewis, each of these directors has
served as a director of one or more of the funds in the INVESCO Funds for the
minimum five-year period required to be eligible to participate in the Defined
Benefit Deferred Compensation Plan. Mr. McIntyre became eligible to participate
in the Defined Benefit Deferred Compensation Plan as of November 1, 1998, and
was not included in the calculation of retirement benefits until November 1,
1999.
(4) Messrs. Bunch and Lewis became directors of the Company on
January 1, 2000.
(5) Mr. Chabris retired as a director of the Company on September 30, 1998.
Mr. King retired as a director of the Company on December 31, 1999.
(6) Total as a percentage of the Company's net assets as of July 31, 2000.
(7) Total as a percentage of the net assets of the INVESCO Complex as of
December 31, 1999.
Messrs. Brady, Healey and Williamson, as "interested persons" of the Company and
the other INVESCO Funds, receive compensation as officers or employees of
INVESCO or its affiliated companies, and do not receive any director's fees or
other compensation from the Company or the other funds in the INVESCO Funds for
their service as directors.
The boards of directors of the mutual funds in the INVESCO Funds have adopted a
Defined Benefit Deferred Compensation Plan (the "Plan") for the Independent
Directors of the funds. Under this Plan, each director who is not an interested
person of the funds (as defined in Section 2(a)(19) of the 1940 Act) and who has
served for at least five years (a "Qualified Director") is entitled to receive,
if the Qualified Director retires upon reaching age 72 (or the retirement age of
73 or 74, if the retirement date is extended by the boards for one or two years,
but less than three years), payment of a basic benefit for one year (the "First
Year Retirement Benefit"). Commencing with any such director's second year of
retirement, commencing with the first year of retirement of any Qualified
Director whose retirement has been extended by the boards for three years, and
commencing with attainment of age 72 by a Qualified Director who voluntarily
retires prior to reaching age 72, a Qualified Director shall receive quarterly
payments at an annual rate equal to 50% of the First Year Retirement Benefit.
These payments will continue for the remainder of the Qualified Director's life
or ten years, whichever is longer (the "Reduced Benefit Payments"). If a
Qualified Director dies or becomes disabled after age 72 and before age 74 while
still a director of the funds, the First Year Retirement Benefit and Reduced
Benefit Payments will be made to him/her or to his/her beneficiary or estate. If
a Qualified Director becomes disabled or dies either prior to age 72 or during
his/her 74th year while still a director of the funds, the director will not be
entitled to receive the First Year Retirement Benefit; however, the Reduced
Benefit Payments will be made to him/her or to his/her beneficiary or estate.
<PAGE>
The Plan is administered by a committee of three directors who are also
participants in the Plan and one director who is not a Plan participant. The
cost of the Plan will be allocated among the INVESCO Funds in a manner
determined to be fair and equitable by the committee. The Company began making
payments under the Plan to Mr. Chabris as of October 1, 1998 and to Mr. King as
of January 1, 2000. The Company has no stock options or other pension or
retirement plans for management or other personnel and pays no salary or
compensation to any of its officers. A similar plan has been adopted by INVESCO
Global Health Sciences Fund's board of trustees. All trustees of INVESCO Global
Health Sciences Fund are also directors of the INVESCO Funds.
The Independent Directors have contributed to a deferred compensation plan,
pursuant to which they have deferred receipt of a portion of the compensation
which they would otherwise have been paid as directors of certain of the INVESCO
Funds. Certain of the deferred amounts have been invested in the shares of all
INVESCO Funds, except Funds offered by INVESCO Variable Investment Funds, Inc.,
in which the directors are legally precluded from investing. Each Independent
Director may, therefore, be deemed to have an indirect interest in shares of
each such INVESCO Fund, in addition to any INVESCO Fund shares the Independent
Director may own either directly or beneficially. Each of the Independent
Directors has agreed to invest a minimum of $100,000 of his or her own resources
in shares of the INVESCO Funds. Compensation contributed to a deferred
compensation plan may constitute all or a portion of this $100,000 commitment.
CONTROL PERSONS AND PRINCIPAL SHAREHOLDERS
As of October 31, 2000, the following persons owned more than 5% of the
outstanding shares of the Funds indicated below. This level of share ownership
is considered to be a "principal shareholder" relationship with a Fund under the
1940 Act. Shares that are owned "of record" are held in the name of the person
indicated. Shares that are owned "beneficially" are held in another name, but
the owner has the full economic benefit of ownership of those shares:
Blue Chip Growth Fund
--------------------------------------------------------------------------------
Name and Address Basis of Ownership Percentage Owned
(Record/Beneficial)
================================================================================
Charles Schwab & Co., Inc. Record ____%
Special Custody Account for
the Exclusive Benefit of
Customers
Attn: Mutual Funds
101 Montgomery St.
San Francisco, CA 94104-4122
--------------------------------------------------------------------------------
<PAGE>
Dynamics Fund
--------------------------------------------------------------------------------
Name and Address Basis of Ownership Percentage Owned
(Record/Beneficial)
================================================================================
Charles Schwab & Co., Inc. Record ____%
Special Custody Account for
the Exclusive Benefit of
Customers
Attn: Mutual Funds
101 Montgomery St.
San Francisco, CA 94104-4122
--------------------------------------------------------------------------------
Connecticut General Life Ins. Record ____%
c/o Liz Pezda M-110
P.O. Box 2975 H 19 B
Hartford, CT 06104-2975
--------------------------------------------------------------------------------
FIIOC Agent Record ____%
Employee Benefit Plans
100 Magellan Way KW1C
Covington, KY 41015-1987
--------------------------------------------------------------------------------
National Financial Services Record ____%
Corp.
The Exclusive Benefit
of Customers
One World Financial Center
200 Liberty St., 5th Floor
Attn: Kate - Recon
New York, NY 10281-5500
--------------------------------------------------------------------------------
INVESCO Endeavor Fund
--------------------------------------------------------------------------------
Name and Address Basis of Ownership Percentage Owned
(Record/Beneficial)
================================================================================
Charles Schwab & Co., Inc. Record ____%
Special Custody Account for
the Exclusive Benefit of
Customers
Attn: Mutual Funds
101 Montgomery St.
San Francisco, CA 94104-4122
--------------------------------------------------------------------------------
<PAGE>
--------------------------------------------------------------------------------
Name and Address Basis of Ownership Percentage Owned
(Record/Beneficial)
================================================================================
National Financial Services Record ____%
Corp.
The Exclusive Benefit
of Customers
One World Financial Center
200 Liberty St., 5th Floor
Attn: Kate - Recon
New York, NY 10281-5500
--------------------------------------------------------------------------------
Growth & Income Fund
--------------------------------------------------------------------------------
Name and Address Basis of Ownership Percentage Owned
(Record/Beneficial)
================================================================================
Charles Schwab & Co., Inc. Record ____%
Special Custody Account for
the Exclusive Benefit of
Customers
Attn: Mutual Funds
101 Montgomery St.
San Francisco, CA 94104-4122
--------------------------------------------------------------------------------
Nat'l Financial Services Corp. Record ____%
The Exclusive Benefit of Cust.
One World Financial Center
200 Liberty Street, 5th Floor
Attn: Kate Recon
New York, NY 10281-1003
--------------------------------------------------------------------------------
<PAGE>
Small Company Growth Fund
--------------------------------------------------------------------------------
Name and Address Basis of Ownership Percentage Owned
(Record/Beneficial)
================================================================================
Connecticut General Life Record ____%
Insurance
c/o Carmon G. Rivera
One Commercial Plaza
280 Trumball St. H19-B
Hartford, CT 06103
--------------------------------------------------------------------------------
Charles Schwab & Co., Inc. Record ____%
Special Custody Account for
the Exclusive Benefit of
Customers
Attn: Mutual Funds
101 Montgomery St.
San Francisco, CA 94104-4122
--------------------------------------------------------------------------------
FIIOC Agent Record ____%
Employee Benefit Plans
100 Magellan Way KW1C
Covington, KY 41015-1987
--------------------------------------------------------------------------------
State Street Bank Cust Record ____%
RR Donnelley Deferred Comp
Plan Aggressive Equity Fund
US Mutual Fund Services Div.
PO Box 1713
Boston, MA 02105-1713
--------------------------------------------------------------------------------
National Financial Services Corp. Record ____%
The Exclusive Benefit of Cust.
One World Financial Center
200 Liberty St. 5th Floor
Attn: Kate - Recon
New York, NY 10281-5500
--------------------------------------------------------------------------------
<PAGE>
S&P 500 Index Fund
--------------------------------------------------------------------------------
Name and Address Basis of Ownership Percentage Owned
(Record/Beneficial)
================================================================================
INVESCO Trust Company Record ____%
Right Choice Managed Care Inc.
Supp Exec Retirement Plan
1831 Chestnut Street
St. Louis, MO 63103-2231
--------------------------------------------------------------------------------
INVESCO Trust Company Record ____%
Right Choice Managed Care Inc.
Exec Def Retirement Plan
1831 Chestnut Street
St. Louis, MO 63103-2231
--------------------------------------------------------------------------------
INVESCO Trust Company Record ____%
Compass Group USA
Non-Qualified Plan IRPS
Attn: Kelly Allen
P.O. Box 1350
Winston-Salem, NC 27102-1350
--------------------------------------------------------------------------------
Charles Schwab & Co., Inc. Record ____%
Special Custody Account for
the Exclusive Benefit of
Customers
Attn: Mutual Funds
101 Montgomery St.
San Francisco, CA 94104-4122
--------------------------------------------------------------------------------
Value Equity Fund
--------------------------------------------------------------------------------
Name and Address Basis of Ownership Percentage Owned
(Record/Beneficial)
================================================================================
Charles Schwab & Co., Inc. Record ____%
Special Custody Account for
the Exclusive Benefit of
Customers
Attn: Mutual Funds
101 Montgomery St.
San Francisco, CA 94104-4122
--------------------------------------------------------------------------------
<PAGE>
--------------------------------------------------------------------------------
Name and Address Basis of Ownership Percentage Owned
(Record/Beneficial)
================================================================================
INVESCO Trust Company Record ____%
Morris Communications Corp.
Employee's Profit Sharing
Retirement Plan
725 Broad Street
Augusta, GA 30901-1336
--------------------------------------------------------------------------------
INVESCO Trust Company Record ____%
The Ritz Carlton
Hotel Company LLC
Special Reserve Plan DC
400 Colony Square Suite 2200
1201 Peachtree Street NE
Atlanta, GA 30361-3500
--------------------------------------------------------------------------------
INVESCO Trust Co. TR Record ____%
Carle Clinic Association
Profit Sharing Plan
602 West University Ave.
Urbana, IL 61801-2530
--------------------------------------------------------------------------------
Institutional Trust Co. TR Record ____%
Magellan Health Services
Retirement Savings Plan &
Trust 401K
6950 Columbia Gateway Dr.
Columbia, MD 21046-2706
--------------------------------------------------------------------------------
As of ____________, 2000, officers and directors of the Company, as a group,
beneficially owned less than __% of each of the Fund's outstanding shares.
DISTRIBUTOR
INVESCO Distributors, Inc. ("IDI"), a wholly owned subsidiary of INVESCO, is the
distributor of the Funds. IDI bears all expenses, including the cost of printing
and distributing prospectuses, incident to marketing of the Funds' shares,
except for such distribution expenses as are paid out of Fund assets under the
Company's Plans of Distribution (the "Plans"), which have been adopted by each
Fund pursuant to Rule 12b-1 under the 1940 Act.
INVESTOR CLASS. The Company has adopted a Plan and Agreement of Distribution -
Investor Class (the "Investor Class Plan") with respect to Investor Class
shares, which provides that the Investor Class shares of each Fund will make
monthly payments to IDI computed at an annual rate no greater than 0.25% of
average net assets attributable to Investor Class shares. These payments permit
<PAGE>
IDI, at its discretion, to engage in certain activities and provide services in
connection with the distribution of a Fund's Investor Class shares to investors.
Payments by a Fund under the Investor Class Plan, for any month, may be made to
compensate IDI for permissible activities engaged in and services provided.
CLASS C. The Company has adopted a Master Distribution Plan and Agreement -
Class C pursuant to Rule 12b-1 under the 1940 Act relating to the Class C shares
of the Funds (the "Class C Plan"). Under the Class C Plan, Class C shares of the
Funds pay compensation to IDI at an annual rate of 1.00% per annum of the
average daily net assets attributable to Class C shares for the purpose of
financing any activity which is primarily intended to result in the sale of
Class C shares. The Class C Plan is designed to compensate IDI for certain
promotional and other sales-related costs, and to implement a dealer incentive
program which provides for periodic payments to selected dealers who furnish
continuing personal shareholder services to their customers who purchase and own
Class C shares of a Fund. Payments can also be directed by IDI to selected
institutions that have entered into service agreements with respect to Class C
shares of each Fund and that provide continuing personal services to their
customers who own such Class C shares of a Fund.
Of the aggregate amount payable under the Class C Plan, payments to dealers and
other financial institutions that provide continuing personal shareholder
services to their customers who purchase and own Class C shares of a Fund, in
amounts of up to 0.25% of the average daily net assets of the Class C shares of
the Fund attributable to the customers of such dealers or financial institutions
are characterized as a service fee. Payment to dealers and other financial
institutions in excess of such amount and payments to IDI would be characterized
as an asset-based sales charge pursuant to the Class C Plan. The Class C Plan
also imposes a cap on the total amount of sales charges, including asset-based
sales charges, that may be paid by the Company with respect to the Class C
shares of a Fund.
IDI may pay sales commissions to dealers and institutions who sell Class C
shares of the Funds at the time of such sales. Payments with respect to Class C
shares will equal 1.00% of the purchase price of the Class C shares sold by the
dealer or institution, and will consist of a sales commission of 0.75% of the
purchase price of Class C shares sold plus an advance of the first year service
fee of 0.25% with respect to such shares. IDI will retain all payments received
by it relating to Class C shares for the first thirteen months after they are
purchased. The portion of the payments to IDI under the Class C Plan
attributable to Class C shares which constitutes an asset-based sales charge
(0.75%) is intended in part to permit IDI to recoup a portion of on-going sales
commissions to dealers plus financing costs, if any. After the first thirteen
months, IDI will make such payments quarterly to dealers and institutions based
on the average net asset value of Class C shares which are attributable to
shareholders for whom the dealers and institutions are designated as dealers of
record.
CLASS K. The Company has adopted a Plan and Agreement of Distribution - Class K
pursuant to Rule 12b-1 under the 1940 Act relating to Class K shares (the "Class
K Plan"). Under the Class K Plan, Class K shares of the Funds pay compensation
to IDI at an annual rate of 0.45% of average net assets attributable to Class K
shares for the purpose of financing any activity which is primarily intended to
result in the sale of Class K shares. The Class K Plan is designed to compensate
<PAGE>
IDI for certain promotional and other sales-related costs, and to implement a
dealer incentive program which provides for periodic payments to selected
dealers who furnish continuing personal shareholder services to their customers
who purchase and own Class K shares of a Fund. Payments can also be directed by
IDI to selected institutions that have entered into service agreements with
respect to Class K shares of each Fund and that provide continuing personal
services to their customers who own such Class K shares of a Fund.
Of the aggregate amount payable under the Class K Plan, payments to dealers and
other financial institutions that provide continuing personal shareholder
services to their customers who purchase and own Class K shares of a Fund, in
amounts of up to 0.20% of the average daily net assets of the Class K shares of
the Fund attributable to the customers of such dealers or financial
institutions, are characterized as a service fee.
IDI may pay investment dealers or other financial service firms for share
purchases (measured on an annual basis) of Class K shares of all Funds sold at
net asset value to an employee benefit plan as follows: 1.00% of the first $2
million of such purchases, plus 0.80% of the next $1 million of such purchases,
plus 0.50% of the next $17 million of such purchases, plus 0.25% of amounts in
excess of $20 million of such purchases.
ALL PLANS
Activities appropriate for financing under the Plans include, but are not
limited to, the following: printing of prospectuses and statements of additional
information and reports for other than existing shareholders; preparation and
distribution of advertising material and sales literature; expenses of
organizing and conducting sales seminars; and supplemental payments to dealers
and other institutions such as asset-based sales charges or as payments of
service fees under shareholder service arrangements.
A significant expenditure under the Plans is compensation paid to securities
companies and other financial institutions and organizations, which may include
INVESCO-affiliated companies, in order to obtain various distribution-related
and/or administrative services for the Funds. Each Fund is authorized by a Plan
to use its assets to finance the payments made to obtain those services.
Payments will be made by IDI to broker-dealers who sell shares of a Fund and may
be made to banks, savings and loan associations and other depository
institutions. Although the Glass-Steagall Act limits the ability of certain
banks to act as underwriters of mutual fund shares, INVESCO does not believe
that these limitations would affect the ability of such banks to enter into
arrangements with IDI, but can give no assurance in this regard. However, to the
extent it is determined otherwise in the future, arrangements with banks might
have to be modified or terminated, and, in that case, the size of the Funds
possibly could decrease to the extent that the banks would no longer invest
customer assets in the Funds. Neither the Company nor its investment adviser
will give any preference to banks or other depository institutions which enter
into such arrangements when selecting investments to be made by a Fund.
Financial institutions and any other person entitled to receive compensation for
selling Fund shares may receive different compensation for selling shares of one
particular class instead of another.
The Funds made payments to IDI under the Investor Class Plan during the fiscal
year ended July 31, 2000 in the amounts of $_____, $_____, $_____, $_____,
<PAGE>
$_____, $_____, $_____, and $_____ for Blue Chip Growth Fund - Investor Class,
Dynamics Fund - Investor Class, INVESCO Endeavor Fund - Investor Class, Growth &
Income Fund - Investor Class, Small Company Growth Fund - Investor Class, S&P
500 Index Fund - Investor Class and Value Equity Fund - Investor Class,
respectively. In addition, as of the fiscal year ended July 31, 2000, $_____,
$_____, $_____, $_____, $_____, $_____, $_____ and $_____ of additional
distribution accruals had been incurred by Blue Chip Growth Fund - Investor
Class, Dynamics Fund - Investor Class, INVESCO Endeavor Fund - Investor Class,
Growth & Income Fund - Investor Class, Small Company Growth Fund - Investor
Class, S&P 500 Index Fund - Investor Class and Value Equity Fund - Investor
Class, respectively, and will be paid during the fiscal year ended July 31,
2001.
The Funds made payments to IDI under the Class C Plan during the fiscal year
ended July 31, 2000 in the amount of $_____, $_____, $_____, $______, $_____,
$_____ and $_____ for Blue Chip Growth Fund - Class C, Dynamics Fund - Class C,
INVESCO Endeavor Fund - Class C, Growth & Income Fund - Class C, Small Company
Growth Fund - Class C, and Value Equity Fund - Class C, respectively. In
addition, as of the fiscal year ended July 31, 2000, $_____, $_____, $_____,
$______, $_____, $_____ and $_____ of additional distribution accruals had been
incurred by Blue Chip Growth Fund - Class C, Dynamics Fund - Class C, INVESCO
Endeavor Fund - Class C, Growth & Income Fund - Class C, Small Company Growth
Fund - Class C and Value Equity Fund - Class C, respectively, and will be paid
during the fiscal year ended July 31, 2001. Since Blue Chip Growth, Dynamics,
INVESCO Endeavor, Growth & Income, S&P 500 Index and Value Equity Funds' Class K
shares were not offered until __________ , 2000, those shares made no payments
to IDI under the Plans during the fiscal year ended July 31, 2000.
For the fiscal year ended July 31, 2000, allocation of 12b-1 amounts paid by the
Funds for the following categories of expenses were:
INVESTOR CLASS
--------------
BLUE CHIP GROWTH FUND
Advertising $_____
Sales literature, printing, and postage $_____
Direct Mail $_____
Public Relations/Promotion $_____
Compensation to securities dealers and other organizations $_____
Marketing personnel $_____
DYNAMICS FUND
Advertising $_____
Sales literature, printing, and postage $_____
Direct Mail $_____
Public Relations/Promotion $_____
Compensation to securities dealers and other organizations $_____
Marketing personnel $_____
<PAGE>
INVESCO ENDEAVOR FUND
Advertising $_____
Sales literature, printing, and postage $_____
Direct Mail $_____
Public Relations/Promotion $_____
Compensation to securities dealers and other organizations $_____
Marketing personnel $_____
GROWTH & INCOME FUND
Advertising $_____
Sales literature, printing, and postage $_____
Direct Mail $_____
Public Relations/Promotion $_____
Compensation to securities dealers and other organizations $_____
Marketing personnel $_____
SMALL COMPANY GROWTH FUND
Advertising $_____
Sales literature, printing, and postage $_____
Direct Mail $_____
Public Relations/Promotion $_____
Compensation to securities dealers and other organizations $_____
Marketing personnel $_____
S&P 500 INDEX FUND
Advertising $_____
Sales literature, printing, and postage $_____
Direct Mail $_____
Public Relations/Promotion $_____
Compensation to securities dealers and other organizations $_____
Marketing personnel $_____
VALUE EQUITY FUND
Advertising $_____
Sales literature, printing, and postage $_____
Direct Mail $_____
Public Relations/Promotion $_____
Compensation to securities dealers and other organizations $_____
Marketing personnel $_____
<PAGE>
CLASS C
-------
BLUE CHIP GROWTH FUND
Advertising $_____
Sales literature, printing, and postage $_____
Direct Mail $_____
Public Relations/Promotion $_____
Compensation to securities dealers and other organizations $_____
Marketing personnel $_____
DYNAMICS FUND
Advertising $_____
Sales literature, printing, and postage $_____
Direct Mail $_____
Public Relations/Promotion $_____
Compensation to securities dealers and other organizations $_____
Marketing personnel $_____
INVESCO ENDEAVOR FUND
Advertising $_____
Sales literature, printing, and postage $_____
Direct Mail $_____
Public Relations/Promotion $_____
Compensation to securities dealers and other organizations $_____
Marketing personnel $_____
GROWTH & INCOME FUND
Advertising $_____
Sales literature, printing, and postage $_____
Direct Mail $_____
Public Relations/Promotion $_____
Compensation to securities dealers and other organizations $_____
Marketing personnel $_____
SMALL COMPANY GROWTH FUND
Advertising $_____
Sales literature, printing, and postage $_____
Direct Mail $_____
Public Relations/Promotion $_____
Compensation to securities dealers and other organizations $_____
Marketing personnel $_____
<PAGE>
VALUE EQUITY FUND
Advertising $_____
Sales literature, printing, and postage $_____
Direct Mail $_____
Public Relations/Promotion $_____
Compensation to securities dealers and other organizations $_____
Marketing personnel $_____
The services which are provided by securities dealers and other organizations
may vary by dealer but include, among other things, processing new shareholder
account applications, preparing and transmitting to the Company's Transfer Agent
computer-processable tapes of all Fund transactions by customers, serving as the
primary source of information to customers in answering questions concerning the
Funds, and assisting in other customer transactions with the Funds.
The Plans provide that they shall continue in effect with respect to each Fund
as long as such continuance is approved at least annually by the vote of the
board of directors of the Company cast in person at a meeting called for the
purpose of voting on such continuance, including the vote of a majority of the
Independent Directors. A Plan can also be terminated at any time by a Fund,
without penalty, if a majority of the Independent Directors, or shareholders of
the relevant class of shares of the Fund, vote to terminate a Plan. The Company
may, in its absolute discretion, suspend, discontinue or limit the offering of
its shares at any time. In determining whether any such action should be taken,
the board of directors intends to consider all relevant factors including,
without limitation, the size of a Fund, the investment climate for a Fund,
general market conditions, and the volume of sales and redemptions of a Fund's
shares. The Plans may continue in effect and payments may be made under a Plan
following any temporary suspension or limitation of the offering of Fund shares;
however, the Company is not contractually obligated to continue a Plan for any
particular period of time. Suspension of the offering of a Fund's shares would
not, of course, affect a shareholder's ability to redeem his or her shares.
So long as the Plans are in effect, the selection and nomination of persons to
serve as Independent Directors of the Company shall be committed to the
Independent Directors then in office at the time of such selection or
nomination. The Plans may not be amended to increase the amount of a Fund's
payments under a Plan without approval of the shareholders of that Fund's
respective class of shares, and all material amendments to a Plan must be
approved by the board of directors of the Company, including a majority of the
Independent Directors. Under the agreement implementing the Plans, IDI or a
Fund, the latter by vote of a majority of the Independent Directors, or a
majority of the holders of the relevant class of a Fund's outstanding voting
securities, may terminate such agreement without penalty upon 30 days' written
notice to the other party. No further payments will be made by a Fund under a
Plan in the event of its termination.
To the extent that a Plan constitutes a plan of distribution adopted pursuant to
Rule 12b-1 under the 1940 Act, it shall remain in effect as such, so as to
authorize the use of Fund assets in the amounts and for the purposes set forth
therein, notwithstanding the occurrence of an assignment, as defined by the 1940
Act, and rules thereunder. To the extent it constitutes an agreement pursuant to
a plan, a Fund's obligation to make payments to IDI shall terminate
automatically, in the event of such "assignment." In this event, a Fund may
<PAGE>
continue to make payments pursuant to a Plan only upon the approval of new
arrangements regarding the use of the amounts authorized to be paid by a Fund
under a Plan. Such new arrangements must be approved by the directors, including
a majority of the Independent Directors, by a vote cast in person at a meeting
called for such purpose. These new arrangements might or might not be with IDI.
On a quarterly basis, the directors review information about the distribution
services that have been provided to each Fund and the 12b-1 fees paid for such
services. On an annual basis, the directors consider whether a Plan should be
continued and, if so, whether any amendment to the Plan, including changes in
the amount of 12b-1 fees paid by each class of a Fund, should be made.
The only Company directors and interested persons, as that term is defined in
Section 2(a)(19) of the 1940 Act, who have a direct or indirect financial
interest in the operation of the Plans are the officers and directors of the
Company who are also officers either of IDI or other companies affiliated with
IDI. The benefits which the Company believes will be reasonably likely to flow
to a Fund and its shareholders under the Plans include the following:
o Enhanced marketing efforts, if successful, should result in an increase
in net assets through the sale of additional shares and afford greater
resources with which to pursue the investment objectives of the Funds;
o The sale of additional shares reduces the likelihood that redemption of
shares will require the liquidation of securities of the Funds in amounts
and at times that are disadvantageous for investment purposes; and
o Increased Fund assets may result in reducing each investor's share of
certain expenses through economies of scale (e.g., exceeding established
breakpoints in an advisory fee schedule and allocating fixed expenses over
a larger asset base), thereby partially offsetting the costs of a Plan.
The positive effect which increased Fund assets will have on INVESCO's revenues
could allow INVESCO and its affiliated companies:
o To have greater resources to make the financial commitments necessary to
improve the quality and level of the Funds' shareholder services (in both
systems and personnel);
o To increase the number and type of mutual funds available to investors
from INVESCO and its affiliated companies (and support them in their
infancy), and thereby expand the investment choices available to all
shareholders; and
o To acquire and retain talented employees who desire to be associated with
a growing organization.
<PAGE>
OTHER SERVICE PROVIDERS
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP, 1670 Broadway, Suite 1000, Denver, Colorado, are the
independent accountants of the Company. The independent accountants are
responsible for auditing the financial statements of the Funds.
CUSTODIAN
State Street Bank and Trust Company, P.O. Box 351, Boston, Massachusetts, is the
custodian of the cash and investment securities of the Company. The custodian is
also responsible for, among other things, receipt and delivery of each Fund's
investment securities in accordance with procedures and conditions specified in
the custody agreement with the Company. The custodian is authorized to establish
separate accounts in foreign countries and to cause foreign securities owned by
the Funds to be held outside the United States in branches of U.S. banks and, to
the extent permitted by applicable regulations, in certain foreign banks and
securities depositories.
TRANSFER AGENT
INVESCO, 7800 E. Union Avenue, Denver, Colorado, is the Company's transfer
agent, registrar, and dividend disbursing agent. Services provided by INVESCO
include the issuance, cancellation and transfer of shares of the Funds, and the
maintenance of records regarding the ownership of such shares.
LEGAL COUNSEL
The firm of Kirkpatrick & Lockhart LLP, 1800 Massachusetts Avenue, N.W., 2nd
Floor, Washington, D.C., is legal counsel for the Company. The firm of Moye,
Giles, O'Keefe, Vermeire & Gorrell LLP, 1225 17th Street, Suite 2900, Denver,
Colorado, acts as special counsel to the Company.
BROKERAGE ALLOCATION AND OTHER PRACTICES
As the investment adviser to the Funds, INVESCO places orders for the purchase
and sale of securities with broker-dealers based upon an evaluation of the
financial responsibility of the broker-dealers and the ability of the
broker-dealers to effect transactions at the best available prices.
While INVESCO seeks reasonably competitive commission rates, the Funds do not
necessarily pay the lowest commission or spread available. INVESCO is permitted
to, and does, consider qualitative factors in addition to price in the selection
of brokers. Among other things, INVESCO considers the quality of executions
obtained on a Fund's portfolio transactions, viewed in terms of the size of
transactions, prevailing market conditions in the security purchased or sold,
and general economic and market conditions. INVESCO has found that a broker's
consistent ability to execute transactions is at least as important as the price
the broker charges for those services.
<PAGE>
In seeking to ensure that the commissions charged a Fund are consistent with
prevailing and reasonable commissions, INVESCO monitors brokerage industry
practices and commissions charged by broker-dealers on transactions effected for
other institutional investors like the Funds.
Consistent with the standard of seeking to obtain favorable execution on
portfolio transactions, INVESCO may select brokers that provide research
services to INVESCO and the Company, as well as other INVESCO mutual funds and
other accounts managed by INVESCO. Research services include statistical and
analytical reports relating to issuers, industries, securities and economic
factors and trends, which may be of assistance or value to INVESCO in making
informed investment decisions. Research services prepared and furnished by
brokers through which a Fund effects securities transactions may be used by
INVESCO in servicing all of its accounts and not all such services may be used
by INVESCO in connection with a particular Fund. Conversely, a Fund receives
benefits of research acquired through the brokerage transactions of other
clients of INVESCO.
In order to obtain reliable trade execution and research services, INVESCO may
utilize brokers that charge higher commissions than other brokers would charge
for the same transaction. This practice is known as "paying up." However, even
when paying up, INVESCO is obligated to obtain favorable execution of a Fund's
transactions.
Portfolio transactions also may be effected through broker-dealers that
recommend the Funds to their clients, or that act as agent in the purchase of a
Fund's shares for their clients. When a number of broker-dealers can provide
comparable best price and execution on a particular transaction, INVESCO may
consider the sale of a Fund's shares by a broker-dealer in selecting among
qualified broker-dealers.
Certain of the INVESCO Funds utilize fund brokerage commissions to pay custody
fees for each respective fund. This program requires that the participating
funds receive favorable execution.
The aggregate dollar amount of underwriting discounts and brokerage commissions
paid by each Fund for the periods outlined in the table below were:
Blue Chip Growth Fund
Year Ended July 31, 2000 $_________
Period Ended July 31, 1999(1) 3,975,896
Year Ended August 31, 1998 2,574,626
Year Ended August 31, 1997 5,300,030
Dynamics Fund
Year Ended July 31, 2000 $_________
Period Ended July 31, 1999(2) 3,309,214
Year Ended April 30, 1999 7,689,483
Year Ended April 30, 1998 7,542,687
<PAGE>
INVESCO Endeavor Fund
Year Ended July 31, 2000 $_________
Period Ended July 31, 1999(2) 1,463,690
Period Ended April 30, 1999(3) 466,439
Growth & Income Fund
Year Ended July 31, 2000 $_________
Period Ended July 31, 1999(2) 165,787
Period Ended April 30, 1999(4) 438,309
Small Company Growth Fund
Year Ended July 31, 2000 $_________
Period Ended July 31, 1999(5) 1,414,200
Year Ended May 31, 1998 3,319,634
Year Ended May 31, 1997 4,167,020
S&P 500 Index Fund
Year Ended July 31, 2000 $_________
Year Ended July 31, 1999 18,707
Year Ended July 31, 1998 0
Value Equity Fund
Year Ended July 31, 2000 $_________
Period Ended July 31, 1999(1) 272,645
Year Ended August 31, 1998 194,473
Year Ended August 31, 1997 470,619
(1) From September 1, 1998 to July 31, 1999
(2) From May 1, 1999 to July 31, 1999
(3) From October 28, 1998 (commencement of operations) to April 30, 1999
(4) From July 1, 1998 (commencement of operations) to April 30, 1999
(5) From June 1, 1999 to July 31, 1999
For the fiscal year ended July 31, 2000, brokers providing research services
received $________ in commissions on portfolio transactions effected for the
Funds. The aggregate dollar amount of such portfolio transactions was
$__________. Commissions totaling $_________ were allocated to certain brokers
in recognition of their sales of shares of the Funds on portfolio transactions
of the Funds effected during the fiscal year ended July 31, 2000.
<PAGE>
At July 31, 2000, each Fund held debt and equity securities of its regular
brokers or dealers, or their parents, as follows:
--------------------------------------------------------------------------------
Value of Securities
Fund Broker or Dealer at July 31, 2000
================================================================================
Blue Chip Growth $__________
--------------------------------------------------------------------------------
Dynamics $__________
--------------------------------------------------------------------------------
INVESCO Endeavor $__________
--------------------------------------------------------------------------------
Growth & Income $__________
--------------------------------------------------------------------------------
Small Company Growth $__________
--------------------------------------------------------------------------------
S&P 500 Index $__________
--------------------------------------------------------------------------------
Value Equity $__________
--------------------------------------------------------------------------------
Neither INVESCO nor any affiliate of INVESCO receives any brokerage commissions
on portfolio transactions effected on behalf of the Funds, and there is no
affiliation between INVESCO or any person affiliated with INVESCO or the Funds
and any broker-dealer that executes transactions for the Funds.
CAPITAL STOCK
The Company is authorized to issue up to four billion shares of common stock
with a par value of $0.01 per share. As of ________, 2000, the following shares
of each Fund were outstanding:
Blue Chip Growth Fund - Investor Class _________
Blue Chip Growth Fund - Class C _________
Blue Chip Growth Fund - Class K _________
Dynamics Fund - Investor Class _________
Dynamics Fund - Institutional Class _________
Dynamics Fund - Class C _________
Dynamics Fund - Class K _________
INVESCO Endeavor Fund - Investor Class _________
INVESCO Endeavor Fund - Class C _________
INVESCO Endeavor Fund - Class K _________
Growth & Income Fund - Investor Class _________
Growth & Income Fund - Class C _________
Growth & Income Fund - Class K _________
<PAGE>
Small Company Growth Fund - Investor Class _________
Small Company Growth Fund - Class C _________
S&P 500 Index Fund - Investor Class _________
S&P 500 Index Fund - Institutional Class _________
S&P 500 Index Fund - Class K _________
Value Equity Fund - Investor Class _________
Value Equity Fund - Class C _________
Value Equity Fund - Class K _________
A share of each class of a Fund represents an identical interest in that Fund's
investment portfolio and has the same rights, privileges and preferences.
However, each class may differ with respect to sales charges, if any,
distribution and/or service fees, if any, other expenses allocable exclusively
to each class, voting rights on matters exclusively affecting that class, and
its exchange privilege, if any. The different sales charges and other expenses
applicable to the different classes of shares of the Funds will affect the
performance of those classes. Each share of a Fund is entitled to participate
equally in dividends for that class, other distributions and the proceeds of any
liquidation of a class of that Fund. However, due to the differing expenses of
the classes, dividends and liquidation proceeds on Institutional Class, Investor
Class and Class C shares will differ. All shares of a Fund will be voted
together, except that only the shareholders of a particular class of a Fund may
vote on matters exclusively affecting that class, such as the terms of a Rule
12b-1 Plan as it relates to the class. All shares issued and outstanding are,
and all shares offered hereby when issued will be, fully paid and non
assessable. The board of directors has the authority to designate additional
classes of common stock without seeking the approval of shareholders and may
classify and reclassify any authorized but unissued shares.
Shares have no preemptive rights and are freely transferable on the books of
each Fund.
All shares of the Company have equal voting rights based on one vote for each
share owned. The Company is not generally required and does not expect to hold
regular annual meetings of shareholders. However, when requested to do so in
writing by the holders of 10% or more of the outstanding shares of the Company
or as may be required by applicable law or the Company's Articles of
Incorporation, the board of directors will call special meetings of
shareholders.
Directors may be removed by action of the holders of a majority of the
outstanding shares of the Company. The Funds will assist shareholders in
communicating with other shareholders as required by the 1940 Act.
Fund shares have noncumulative voting rights, which means that the holders of a
majority of the shares of the Company voting for the election of directors of
the Company can elect 100% of the directors if they choose to do so. If that
occurs, the holders of the remaining shares voting for the election of directors
will not be able to elect any person or persons to the board of directors.
Directors may be removed by action of the holders of a majority of the
outstanding shares of the Company.
TAX CONSEQUENCES OF OWNING SHARES OF A FUND
Each Fund intends to continue to conduct its business and satisfy the applicable
diversification of assets, distribution and source of income requirements to
qualify as a regulated investment company under Subchapter M of the Internal
<PAGE>
Revenue Code of 1986, as amended. Each Fund qualified as a regulated investment
company and intends to continue to qualify during its current fiscal year. It is
the policy of each Fund to distribute all investment company taxable income and
net capital gains. As a result of this policy and the Funds' qualification as
regulated investment companies, it is anticipated that none of the Funds will
pay federal income or excise taxes and that all of the Funds will be accorded
conduit or "pass through" treatment for federal income tax purposes. Therefore,
any taxes that a Fund would ordinarily owe are paid by its shareholders on a
pro-rata basis. If a Fund does not distribute all of its net investment income
or net capital gains, it will be subject to income and excise taxes on the
amount that is not distributed. If a Fund does not qualify as a regulated
investment company, it will be subject to income tax on its net investment
income and net capital gains at the corporate tax rates.
Dividends paid by a Fund from net investment income as well as distributions of
net realized short-term capital gains and net realized gains from certain
foreign currency transactions are taxable for federal income tax purposes as
ordinary income to shareholders. After the end of each calendar year, the Funds
send shareholders information regarding the amount and character of dividends
paid in the year, including the dividends eligible for the dividends-received
deduction for corporations. Dividends eligible for the dividends-received
deduction will be limited to the aggregate amount of qualifying dividends that a
Fund derives from its portfolio investments.
A Fund realizes a capital gain or loss when it sells a portfolio security for
more or less than it paid for that security. Capital gains and losses are
divided into short-term and long-term, depending on how long the Fund held the
security which gave rise to the gain or loss. If the security was held one year
or less the gain or loss is considered short-term, while holding a security for
more than one year will generate a long-term gain or loss. A capital gain
distribution consists of long-term capital gains which are taxed at the capital
gains rate. Short-term capital gains are included with income from dividends and
interest as ordinary income and are paid to shareholders as dividends, as
discussed above. If total long-term gains on sales exceed total short-term
losses, including any losses carried forward from previous years, a Fund will
have a net capital gain. Distributions by a Fund of net capital gains are, for
federal income tax purposes, taxable to the shareholder as a long-term capital
gain regardless of how long a shareholder has held shares of the particular
Fund. Such distributions are not eligible for the dividends-received deduction.
After the end of each calendar year, the Funds send information to shareholders
regarding the amount and character of distributions paid during the year.
All dividends and other distributions are taxable income to the shareholder,
regardless of whether such dividends and distributions are reinvested in
additional shares or paid in cash. If the net asset value of a Fund's shares
should be reduced below a shareholder's cost as a result of a distribution, such
distribution would be taxable to the shareholder although a portion would be a
return of invested capital. The net asset value of shares of a Fund reflects
accrued net investment income and undistributed realized capital and foreign
currency gains; therefore, when a distribution is declared, the net asset value
is reduced by the amount of the distribution. If shares of a Fund are purchased
shortly before a distribution, the full price for the shares will be paid and
some portion of the price may then be returned to the shareholder as a taxable
dividend or capital gain. However, the net asset value per share will be reduced
by the amount of the distribution, which would reduce any gain (or increase any
loss) for tax purposes on any subsequent redemption of shares.
<PAGE>
If it invests in foreign securities, a Fund may be subject to the withholding of
foreign taxes on dividends or interest it receives on foreign securities.
Foreign taxes withheld will be treated as an expense of the Fund unless the Fund
meets the qualifications and makes the election to enable it to pass these taxes
through to shareholders for use by them as a foreign tax credit or deduction.
Tax conventions between certain countries and the United States may reduce or
eliminate such taxes.
A Fund may invest in the stock of "passive foreign investment companies"
("PFICs"). A PFIC is a foreign corporation that, in general, meets either of the
following tests: (1) at least 75% of its gross income is passive or (2) an
average value of at least 50% of its assets produce, or are held for the
production of, passive income. Each Fund intends to "mark-to-market" its stock
in any PFIC. In this context, "marking-to-market" means including in ordinary
income for each taxable year the excess, if any, of the fair market value of the
PFIC stock over the Fund's adjusted basis in the PFIC stock as of the end of the
year. In certain circumstances, a Fund will also be allowed to deduct from
ordinary income the excess, if any, of its adjusted basis in PFIC stock over the
fair market value of the PFIC stock as of the end of the year. The deduction
will only be allowed to the extent of any PFIC mark-to-market gains recognized
as ordinary income in prior years. A Fund's adjusted tax basis in each PFIC
stock for which it makes this election will be adjusted to reflect the amount of
income included or deduction taken under the election.
Gains or losses (1) from the disposition of foreign currencies, (2) from the
disposition of debt securities denominated in foreign currencies that are
attributable to fluctuations in the value of the foreign currency between the
date of acquisition of each security and the date of disposition, and (3) that
are attributable to fluctuations in exchange rates that occur between the time a
Fund accrues interest, dividends or other receivables or accrues expenses or
other liabilities denominated in a foreign currency and the time the Fund
actually collects the receivables or pays the liabilities, generally will be
treated as ordinary income or loss. These gains or losses may increase or
decrease the amount of a Fund's investment company taxable income to be
distributed to its shareholders.
INVESCO may provide Fund shareholders with information concerning the average
cost basis of their shares in order to help them prepare their tax returns. This
information is intended as a convenience to shareholders and will not be
reported to the Internal Revenue Service (the "IRS"). The IRS permits the use of
several methods to determine the cost basis of mutual fund shares. The cost
basis information provided by INVESCO will be computed using the single-category
average cost method, although neither INVESCO nor the Funds recommend any
particular method of determining cost basis. Other methods may result in
different tax consequences. If you have reported gains or losses for a Fund in
past years, you must continue to use the method previously used, unless you
apply to the IRS for permission to change methods.
If you sell Fund shares at a loss after holding them for six months or less,
your loss will be treated as long-term (instead of short-term) capital loss to
the extent of any capital gain distributions that you may have received on those
shares.
Each Fund will be subject to a nondeductible 4% excise tax to the extent it
fails to distribute by the end of any calendar year substantially all of its
ordinary income for that year and its net capital gains for the one-year period
<PAGE>
ending on October 31 of that year, plus certain other amounts.
You should consult your own tax adviser regarding specific questions as to
federal, state and local taxes. Dividends and capital gain distributions will
generally be subject to applicable state and local taxes. Qualification as a
regulated investment company under the Internal Revenue Code of 1986, as
amended, for income tax purposes does not entail government supervision of
management or investment policies.
PERFORMANCE
To keep shareholders and potential investors informed, INVESCO will occasionally
advertise the Funds' total return for one-, five-, and ten-year periods (or
since inception).
Cumulative total return shows the actual rate of return on an investment for the
period cited; average annual total return represents the average annual
percentage change in the value of an investment. Both cumulative and average
annual total returns tend to "smooth out" fluctuations in a Fund's investment
results, because they do not show the interim variations in performance over the
periods cited. More information about the Funds' recent and historical
performance is contained in the Company's Annual Report to Shareholders. You can
get a free copy by calling or writing to INVESCO using the telephone number or
address on the back cover of the Funds' Prospectuses.
When we quote mutual fund rankings published by Lipper Inc., we may compare a
Fund to others in its appropriate Lipper category, as well as the broad-based
Lipper general fund groupings. These rankings allow you to compare a Fund to its
peers. Other independent financial media also produce performance- or
service-related comparisons, which you may see in our promotional materials.
Performance figures are based on historical earnings and are not intended to
suggest future performance.
Average annual total return performance for the one-, five-, and ten-year
periods (or since inception) ended July 31, 2000 was:
10 YEAR OR
INVESTOR CLASS 1 YEAR 5 YEAR SINCE INCEPTION
-------------- ------ ------ ---------------
Blue Chip Growth Fund _____% _____% ______%
Dynamics Fund _____% _____% ______%
INVESCO Endeavor Fund _____% N/A ______%(1)
Growth & Income Fund _____% N/A ______%(2)
Small Company Growth Fund _____% _____% ______%(3)
S&P 500 Index Fund _____% N/A ______%(4)
Value Equity Fund _____% _____% ______%
<PAGE>
INSTITUTIONAL CLASS
-------------------
Dynamics Fund N/A N/A ______%(5)
S&P 500 Index Fund _____% N/A ______%(4)
CLASS C(6)
----------
Blue Chip Growth Fund N/A N/A ______%
Dynamics Fund N/A N/A ______%
INVESCO Endeavor Fund N/A N/A ______%
Growth & Income Fund N/A N/A ______%
Small Company Growth Fund N/A N/A ______%
Value Equity Fund N/A N/A ______%
(1) Since inception October 28, 1998
(2) Since inception July 1, 1998
(3) Since inception December 27, 1991
(4) Since inception December 23, 1997
(5) Since inception May 23, 2000
(6) Since inception February 15, 2000
Average annual total return performance is not provided for Blue Chip Growth,
Dynamics, INVESCO Endeavor, Growth & Income, S&P 500 Index and Value Equity
Funds' Class K shares since they were not offered until __________, 2000.
Average annual total return performance for each of the periods indicated was
computed by finding the average annual compounded rates of return that would
equate the initial amount invested to the ending redeemable value, according to
the following formula:
P[(1 + T)exponential n] = ERV
where: P = a hypothetical initial payment of $10,000
T = average annual total return
n = number of years
ERV = ending redeemable value of initial payment
The average annual total return performance figures shown above were determined
by solving the above formula for "T" for each time period indicated.
In conjunction with performance reports, comparative data between a Fund's
performance for a given period and other types of investment vehicles, including
certificates of deposit, may be provided to prospective investors and
shareholders.
In conjunction with performance reports and/or analyses of shareholder services
for a Fund, comparative data between that 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, S&P,
Lipper 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
<PAGE>
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 made by
independent sources may be used in advertisements, sales literature or
shareholder reports, including reprints of, or selections from, editorials or
articles about the Fund. These sources utilize information compiled (i)
internally; (ii) by Lipper Inc.; or (iii) by other recognized analytical
services. The Lipper Inc. mutual fund rankings and comparisons which may be used
by the Funds in performance reports will be drawn from the following mutual fund
groupings, in addition to the broad-based Lipper general fund groupings:
LIPPER MUTUAL
FUND FUND CATEGORY
---- -------------
Blue Chip Growth Fund Large-Cap Growth Funds
Dynamics Fund Multi-Cap Growth Funds
INVESCO Endeavor Fund Multi-Cap Growth Funds
Growth & Income Fund Large-Cap Core Funds
Small Company Growth Fund Small-Cap Growth Funds
S&P 500 Index Fund S&P 500 Funds
Value Equity Fund Multi-Cap Growth Funds
Sources for Fund performance information and articles about the Funds include,
but are not limited to, the following:
AMERICAN ASSOCIATION OF INDIVIDUAL INVESTORS' JOURNAL
BANXQUOTE
BARRON'S
BUSINESS WEEK
CDA INVESTMENT TECHNOLOGIES
CNBC
CNN
CONSUMER DIGEST
FINANCIAL TIMES
FINANCIAL WORLD
FORBES
FORTUNE
IBBOTSON ASSOCIATES, INC.
INSTITUTIONAL INVESTOR
INVESTMENT COMPANY DATA, INC.
INVESTOR'S BUSINESS DAILY
KIPLINGER'S PERSONAL FINANCE
LIPPER INC.'S MUTUAL FUND PERFORMANCE ANALYSIS
MONEY
MORNINGSTAR
MUTUAL FUND FORECASTER
<PAGE>
NO-LOAD ANALYST
NO-LOAD FUND X
PERSONAL INVESTOR
SMART MONEY
THE NEW YORK TIMES
THE NO-LOAD FUND INVESTOR
U.S. NEWS AND WORLD REPORT
UNITED MUTUAL FUND SELECTOR
USA TODAY
THE WALL STREET JOURNAL
WIESENBERGER INVESTMENT COMPANIES SERVICES
WORKING WOMAN
WORTH
CODE OF ETHICS
INVESCO permits investment and other personnel to purchase and sell securities
for their own accounts, subject to a compliance policy governing personal
investing. This policy requires INVESCO's personnel to conduct their personal
investment activities in a manner that INVESCO believes is not detrimental to
the Funds or INVESCO's other advisory clients. The Code of Ethics is on file
with, and may be obtained from, the Commission.
FINANCIAL STATEMENTS
The financial statements for the Funds for the fiscal year ended July 31, 2000
are incorporated herein by reference from INVESCO Stock Funds, Inc.'s Annual
Report to Shareholders dated July 31, 2000.
<PAGE>
APPENDIX A
BOND RATINGS
The following is a description of Moody's and S&P's bond ratings:
MOODY'S CORPORATE BOND RATINGS
Aaa - Bonds rated Aaa are judged to be of the best quality. They carry the
smallest degree of investment risk and are generally referred to as
"gilt-edged." Interest payments are protected by a large or by an exceptionally
stable margin, and principal is secure. While the various protective elements
are likely to change, such changes as can be visualized are most unlikely to
impair the fundamentally strong position of such issues.
Aa - Bonds rated Aa are judged to be of high quality by all standards. Together
with the Aaa group, they comprise what are generally known as high grade bonds.
They are rated lower than the best bonds because margins of protection may not
be as large as in Aaa securities or fluctuation of protective elements may be of
greater amplitude or there may be other elements present which make the long
term risk appear somewhat larger than in Aaa securities.
A - Bonds rated A possess many favorable investment attributes, and are to be
considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present which
suggest a susceptibility to impairment sometime in the future.
Baa - Bonds rated Baa are considered as medium grade obligations, i.e., they are
neither highly protected nor poorly secured. Interest payments and principal
security appear adequate for the present but certain protective elements may be
lacking or may be characteristically unreliable over any great length of time.
Such bonds lack outstanding investment characteristics and in fact have
speculative characteristics as well.
Ba - Bonds rated Ba are judged to have speculative elements. Their future cannot
be considered as well assured. Often the protection of interest and principal
payments may be very moderate and thereby not well safeguarded during both good
and bad times over the future. Uncertainty of position characterizes bonds in
this class.
B - Bonds rated B generally lack characteristics of the desirable investment.
Assurance of interest and principal payments or maintenance of other terms of
the contract over any longer period of time may be small.
Caa - Bonds rated Caa are of poor standing. Such issues may be in default or
there may be present elements of danger with respect to principal or interest.
<PAGE>
S&P CORPORATE BOND RATINGS
AAA - This is the highest rating assigned by Standard & Poor's to a debt
obligation and indicates an extremely strong capacity to pay principal and
interest.
AA - Bonds rated AA also qualify as high-quality debt obligations. Capacity to
pay principal and interest is very strong, and in the majority of instances they
differ from AAA issues only in small degree.
A - Bonds rated A have a strong capacity to pay principal and interest, although
they are somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than bonds in higher rated categories.
BBB - Bonds rated BBB are regarded as having an adequate capability to pay
principal and interest. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay principal and interest for bonds in
this category than for bonds in higher rated categories.
BB - Bonds rated BB have less near-term vulnerability to default than other
speculative issues. However, they face major ongoing uncertainties or exposure
to adverse business, financial, or economic conditions which could lead to
inadequate capacity to meet timely interest and principal payments.
B - Bonds rated B have a greater vulnerability to default but currently have the
capacity to meet interest payments and principal repayments. Adverse business,
financial, or economic conditions will likely impair capacity or willingness to
pay interest and repay principal.
CCC - Bonds rated CCC have a currently identifiable vulnerability to default and
are dependent upon favorable business, financial, and economic conditions to
meet timely payment of interest and repayment of principal. In the event of
adverse business, financial, or economic conditions, they are not likely to have
the capacity to pay interest and repay principal.
<PAGE>
PART C. OTHER INFORMATION
ITEM 23. EXHIBITS
(a) Articles of Incorporation filed April 2, 1993.(2)
(1) Articles of Amendment and Restatement of Articles of
Incorporation filed December 2, 1999.(8)
(2) Articles of Amendment to Articles of Amendment and
Restatement of Articles of Incorpration filed
May 5, 2000.(9)
(3) Articles of Amendment to Articles of Amendment and
Restatement of Articles of Incorporation filed
May 17, 2000.(10)
(b) Bylaws, as amended July 21, 1993.(2)
(c) Provisions of instruments defining the rights of holders of
registrant's securities are contained in Articles II, IV, VI and
VII of the Articles of Incorporation and Articles I, II, V, VI,
VII, VIII, IX and X of the Bylaws of the Registrant.
(d) (1) Investment Advisory Agreement between Registrant and
INVESCO Funds Group, Inc. dated February 28, 1997.(3)
(a) Amendment dated June 30, 1998 to Advisory
Agreement.(4)
(b) Amendment dated September 18, 1998 to Advisory
Agreement.(6)
(c) Amendment dated May 13, 1999 to Advisory
Agreement.(7)
(d) Amendment dated July 15, 1999 to Advisory
Agreement.(8)
(2) Sub-Advisory Agreement between INVESCO Funds Group,
Inc. and World Asset Management with respect to INVESCO S&P
500 Index Fund.(9)
(3) Form of Sub-Advisory Agreement between INVESCO Funds
Group, Inc. and INVESCO Capital Management, Inc. with
respect to INVESCO Value Equity Fund.(8)
(e) Underwriting Agreement between Registrant and INVESCO
Distribtors, Inc. dated June 1, 2000.
(f) Defined Benefit Deferred Compensation Plan for Non-
Interested Directors as amended June 1, 2000.
(g) Custody Agreement between Registrant and State Street Bank
and Trust Company dated July 1, 1993.(1)
(1) Amendment to Custody Agreement dated
October 25, 1995.(3)
(2) Data Access Services Addendum.(4)
<PAGE>
(3) Additional Fund Letter dated April 15, 1998.(4)
(4) Additional Fund Letter dated August 27, 1998.(6)
(5) Additional Fund Letter dated July 14, 1999.(8)
(6) Amended Fee Schedule effective January 1, 2000.(8)
(h) (1) Transfer Agency Agreement between Registrant and INVESCO
Funds Group, Inc. dated June 1, 2000.
(2) Administrative Services Agreement between Registrant and
INVESCO Funds Group, Inc. dated June 1, 2000.
(i) (1) Opinion and consent of counsel as to the legality of the
securities being registered, indicating whether they will,
when sold, be legally issued, fully paid and non-assessable
dated January 16, 1968.(4)
(2) Opinion and consent of counsel with respect to INVESCO
Blue Chip Growth Fund, INVESCO Small Company Growth Fund,
INVESCO S&P 500 Index Fund and INVESCO Value Equity Fund as
to the legality of the securities being registered dated
July 14, 1999.(5)
(j) Consent of Independent Accountants.
(k) Not applicable.
(l) Not applicable.
(m) (1) Master Plan and Agreement of Distribution adopted
pursuant to Rule 12b-1 under the Investment Company Act of
1940 dated June 1, 2000 with respect to the Funds' Investor
Class shares.
(2) Master Distribution Plan and Agreement adopted
pursuant to Rule 12b-1 under the Investment Company Act of
1940 dated June 1, 2000 with respect to the Funds' Class C
shares.
(n) Not Applicable.
(o) (1) Plan pursuant to Rule 18f-3 under the Investment Company
Act of 1940 with respect to INVESCO S&P 500 Index Fund
adopted February 3, 1999.(7)
(2) Plan pursuant to Rule 18f-3 under the Investment Company
Act of 1940 with respect to INVESCO Blue Chip Growth Fund
adopted November 9, 1999.(8)
(3) Plan pursuant to Rule 18f-3 under the Investment Company
Act of 1940 with respect to INVESCO Dynamics Fund adopted
November 9, 1999.(8)
<PAGE>
(4) Plan pursuant to Rule 18f-3 under the Investment Company
Act of 1940 with respect to INVESCO Endeavor Fund adopted
November 9, 1999.(8)
(5) Plan pursuant to Rule 18f-3 under the Investment Company
Act of 1940 with respect to INVESCO Growth & Income Fund
adopted November 9, 1999.(8)
(6) Plan pursuant to Rule 18f-3 under the Investment Company
Act of 1940 with respect to INVESCO Small Company Growth
Fund adopted November 9, 1999.(8)
(7) Plan pursuant to Rule 18f-3 under the Investment Company
Act of 1940 with respect to INVESCO Value Equity Fund
adopted November 9, 1999.(8)
(p) Code of Ethics pursuant to Rule 17j-1.
(1) Previously filed with Post-Effective Amendment No. 44 to the Registration
Statement on June 22, 1993, and incorporated by reference herein.
(2) Previously filed with Post-Effective Amendment No. 45 to the Registration
Statement on August 27, 1996, and incorporated by reference herein.
(3) Previously filed with Post-Effective Amendment No. 46 to the Registration
Statement on June 30, 1997, and incorporated by reference herein.
(4) Previously filed with Post-Effective Amendment No. 47 to the Registration
Statement on April 16, 1998, and incorporated by reference herein.
(5) Previously filed with Post-Effective Amendment No. 50 to the Registration
Statement on July 14, 1999, and incorporated by reference herein.
(6) Previously filed with Post-Effective Amendment No. 51 to the Registration
Statement on July 15, 1999 and incorporated by reference herein.
(7) Previously filed with Post-Effective Amendment No. 52 to the Registration
Statement on August 31, 1999 and incorporated by reference herein.
(8) Previously filed with Post-Effective Amendment No. 54 to the Registration
Statement on January 31, 2000 and incorporated by reference herein.
(9) Previously filed with Post-Effective Amendment No. 56 to the Registration
Statement on May 5, 2000 and incorporated by reference herein.
(10) Previously filed with Post-Effective Amendment No. 57 to the Registration
Statement on May 19, 2000 and incorporated by reference herein.
<PAGE>
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH INVESCO STOCK
FUNDS, INC. (THE "COMPANY")
No person is presently controlled by or under common control with the Company.
ITEM 25. INDEMNIFICATION
Indemnification provisions for officers, directors and employees of the Company
are set forth in Article X of the Amended Bylaws and Article Seven (3) of the
Articles of Restatement of the Articles of Incorporation, and are hereby
incorporated by reference. See Item 24(b)(1) and (2) above. Under these
Articles, directors and officers will be indemnified to the fullest extent
permitted to directors by the Maryland General Corporation Law, subject only to
such limitations as may be required by the Investment Company Act of 1940, as
amended, and the rules thereunder. Under the Investment Company Act of 1940,
directors and officers of the Company cannot be protected against liability to a
Fund or its shareholders to which they would be subject because of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties of
their office. The Company also maintains liability insurance policies covering
its directors and officers.
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
See "Fund Management" in the Funds' Prospectuses and "Management of the Funds"
in the Statement of Additional Information for information regarding the
business of the investment adviser, INVESCO.
Following are the names and principal occupations of each director and officer
of the investment adviser, INVESCO. Certain of these persons hold positions with
IDI, a subsidiary of INVESCO.
--------------------------------------------------------------------------------
Position with Principal Occupation and
Name Adviser Company Affiliation
--------------------------------------------------------------------------------
Mark H. Williamson Chairman and Chairman of the Board, President
Officer & Chief Executive Officer
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
Raymond R. Cunningham Officer Senior Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
William J. Galvin, Jr. Officer Senior Vice President &
Assistant Secretary
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
Ronald L. Grooms Officer & Senior Vice President
Director & Treasurer
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
Richard W. Healey Officer & Senior Vice President
Director INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
<PAGE>
--------------------------------------------------------------------------------
William R. Keithler Officer Senior Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
Trent E. May Officer Senior Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
Charles P. Mayer Officer & Senior Vice President
Director INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
Timothy J. Miller Officer & Senior Vice President
Director & Chief Investment Officer
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
Donovan J. (Jerry) Paul Officer Senior Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
Glen A. Payne Officer Senior Vice President, Secretary
& General Counsel
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
John R. Schroer, II Officer Senior Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
Marie E. Aro Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
Jeffrey R. Botwinick Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
Michael K. Brugman Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
Ingeborg S. Cosby Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
<PAGE>
--------------------------------------------------------------------------------
Stacie Cowell Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
Delta L. Donohue Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
Harvey I. Fladeland Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
Linda J. Gieger Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
Mark D. Greenberg Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
Brian B. Hayward Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
Richard R. Hinderlie Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
Stuart Holland Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
Thomas M. Hurley Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
Patricia F. Johnston Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
Campbell C. Judge Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
<PAGE>
--------------------------------------------------------------------------------
Thomas A. Kolbe Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
Peter M. Lovell Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
James F. Lummanick Officer Vice President & Assistant
General Counsel
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
Thomas A. Mantone, Jr. Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
George A. Matyas Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
Corey M. McClintock Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
Douglas J. McEldowney Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
Frederick R. (Fritz) Meyer Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
Stephen A. Moran Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
Jeffrey G. Morris Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
Laura M. Parsons Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
<PAGE>
--------------------------------------------------------------------------------
Jon B. Pauley Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
Thomas E. Pellowe Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
Dean C. Phillips Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
Pamela J. Piro Officer Vice President & Assistant
Treasurer
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
Sean F. Reardon Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
Anthony R. Rogers Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
Gary L. Rulh Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
Thomas R. Samuelson Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
James B. Sandidge Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
Thomas H. Scanlan Officer Vice President
INVESCO Funds Group, Inc.
12028 Edgepark Court
Potomac, MD 20854
--------------------------------------------------------------------------------
Harvey T. Schwartz Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
<PAGE>
--------------------------------------------------------------------------------
John S. Segner Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
Reagan A. Shopp Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
Terri B. Smith Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
Tane T. Tyler Officer Vice President & Assistant
General Counsel
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
Thomas R. Wald Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
Alan I. Watson Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
Judy P. Wiese Officer Vice President & Assistant
Secretary
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
Vaughn A. Greenlees Officer Assistant Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
Matthew A. Kunze Officer Assistant Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
Christopher T. Lawson Officer Assistant Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
Michael D. Legoski Officer Assistant Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
<PAGE>
--------------------------------------------------------------------------------
William S. Mechling Officer Assistant Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
Donald R. Paddack Officer Assistant Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
Craig J. St. Thomas Officer Assistant Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
Kent T. Schmeckpeper Officer Assistant Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
Charles V. Sellers Officer Assistant Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
Jeraldine E. Kraus Officer Assistant Secretary
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
--------------------------------------------------------------------------------
ITEM 27. (a) PRINCIPAL UNDERWRITERS
INVESCO Advantage Series Funds, Inc.
INVESCO Bond Funds, Inc.
INVESCO Combination Stock & Bond Funds, Inc.
INVESCO International Funds, Inc.
INVESCO Money Market Funds, Inc.
INVESCO Sector Funds, Inc.
INVESCO Stock Funds, Inc.
INVESCO Treasurer's Series Funds, Inc.
INVESCO Variable Investment Funds, Inc.
<PAGE>
(b)
POSITIONS AND POSITIONS AND
NAME AND PRINCIPAL OFFICES WITH OFFICES WITH
BUSINESS ADDRESS UNDERWRITER THE COMPANY
------------------ ------------ -------------
Raymond R. Cunningham Senior Vice
7800 E. Union Avenue President
Denver, CO 80237
William J. Galvin, Jr. Senior Vice Assistant Secretary
7800 E. Union Avenue President &
Denver, CO 80237 Asst. Secretary
Ronald L. Grooms Senior Vice Treasurer &
7800 E. Union Avenue President, Chief Financial and
Denver, CO 80237 Treasurer, & Accounting Officer
Director
Richard W. Healey Senior Vice
7800 E. Union Avenue President &
Denver, CO 80237 Director
Charles P. Mayer Director
7800 E. Union Avenue
Denver, CO 80237
Timothy J. Miller Director
7800 E. Union Avenue
Denver, CO 80237
Glen A. Payne Senior Vice Secretary
7800 E. Union Avenue President,
Denver, CO 80237 Secretary &
General Counsel
Pamela J. Piro Assistant Treasurer Assistant Treasurer
7800 E. Union Avenue
Denver, CO 80237
Judy P. Wiese Assistant Secretary Assistant Secretary
7800 E. Union Avenue
Denver, CO 80237
Mark H. Williamson Chairman of the Board, Chairman of the Board,
7800 E. Union Avenue President, & Chief President & Chief Executive
Denver, CO 80237 Executive Officer Officer
(c) Not applicable.
<PAGE>
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS
Mark H. Williamson
7800 E. Union Avenue
Denver, CO 80237
ITEM 29. MANAGEMENT SERVICES
Not applicable.
ITEM 30. UNDERTAKINGS
Not applicable
<PAGE>
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Company certifies that it has duly caused this
post-effective amendment to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Denver, County of Denver, and State of
Colorado, on the 29th day of September, 2000.
Attest: INVESCO Stock Funds, Inc.
/s/ Glen A. Payne /s/ Mark H. Williamson
------------------------------- --------------------------------
Glen A. Payne, Secretary Mark H. Williamson, President
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed below by the following persons in the capacities and
on the date indicated.
/s/ Mark H. Williamson /s/ Lawrence H. Budner*
------------------------------- --------------------------------
Mark H. Williamson, President & Lawrence H. Budner, Director
Director (Chief Executive Officer)
/s/ Ronald L. Grooms /s/ John W. McIntyre*
------------------------------- --------------------------------
Ronald L. Grooms, Treasurer John W. McIntyre, Director
Chief Financial and Accounting Officer)
/s/ Richard W. Healey*
--------------------------------
/s/ Victor L. Andrews* Richard W. Healey, Director
-------------------------------
Victor L. Andrews, Director /s/ Fred A. Deering*
--------------------------------
/s/ Bob R. Baker* Fred A. Deering, Director
-------------------------------
Bob R. Baker, Director /s/ Larry Soll*
--------------------------------
/s/ Charles W. Brady* Larry Soll, Director
-------------------------------
Charles W. Brady, Director /s/ Wendy L. Gramm*
--------------------------------
/s/ James T. Bunch* Wendy L. Gramm, Director
-------------------------------
James T. Bunch, Director /s/ Gerald J. Lewis*
--------------------------------
Gerald J. Lewis, Director
By By /s/ Glen A.Payne
----------------------------- ------------------------------
Edward F. O'Keefe Glen A. Payne
Attorney in Fact Attorney in Fact
*Original Powers of Attorney authorizing Edward F. O'Keefe and Glen A. Payne,
and each of them, to execute this post-effective amendment to the Registration
Statement of the Registrant on behalf of the above-named directors and officers
of the Registrant have been filed with the Securities and Exchange Commission on
June 15, 1993, June 22, 1994, June 22, 1995, June 30, 1997, August 28, 1998,
March 8, 2000 and May 5, 2000, respectively.
<PAGE>
Exhibit Index
PAGE IN
EXHIBIT NUMBER REGISTRATION STATEMENT
-------------- ----------------------
e 227
f 239
h(1) 246
h(2) 263
j 271
m(1) 272
m(2) 278
p 290
