File No. 2-15382
As filed on August 29, 1995
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
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Pre-Effective Amendment No. ________
Post-Effective Amendment No. 55 X
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REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
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Amendment No. 19 X
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INVESCO INDUSTRIAL INCOME FUND, INC.
(formerly, Financial Industrial Income Fund, 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:
Ronald M. Feiman, Esq.
Gordon Altman Butowsky
Weitzen Shalov & Wein
114 W. 47th St.
New York, New York 10036
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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)
60 days after filing pursuant to paragraph(a)(1)
X on October 31, 1995, 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.
Registrant has previously elected to register an indefinite number of shares of
its common stock pursuant to Rule 24f-2 under the Investment Company Act.
Registrant's Rule 24f-2 Notice for the fiscal year ended June 30, 1995, was
filed on or about August 22, 1995.
Page 1 of 76
Exhibit index is located at page 65
<PAGE>
INVESCO INDUSTRIAL INCOME FUND, INC.
--------------------------------------
CROSS-REFERENCE SHEET
Form N-1A
Item Caption
Part A Prospectus
1....................... Cover Page
2....................... Annual Fund Expenses; Essential
Information
3....................... Financial Highlights; Fund Price
and Performance
4....................... Investment Objective and
Strategy; Investment Policies and
Risks; The Fund and Its
Management
5....................... The Fund and Its Management
5a...................... Not Applicable
6....................... Fund Services; Taxes, Dividends,
and Capital Gain Distributions;
Additional Information
7....................... How to Buy Shares; Fund Price and
Performance; Fund Services; The
Fund and Its Management
8....................... Fund Services; How to Sell Shares
9....................... Not Applicable
Part B Statement of Additional
Information
10....................... Cover Page
11....................... Table of Contents
12....................... The Fund and Its Management
13....................... Investment Practices; Investment
Policies and Restrictions
14....................... The Fund and Its Management
15....................... The Fund and Its Management;
Additional Information
16....................... The Fund and Its Management;
Additional Information
<PAGE>
17....................... Investment Practices; Investment
Policies and Restrictions
18....................... Additional Information
19....................... How Shares Can Be Purchased; How
Shares Are Valued; Services
Provided by the Fund;
Tax-Deferred Retirement Plans;
How to Redeem Shares
20....................... Dividends, Capital Gain
Distributions, and Taxes
21....................... How Shares Can Be Purchased
22....................... Performance Data
23....................... Additional Information
Part C Other Information
Information required to be included in Part C is set forth under the
appropriate Item, so numbered, in Part C to this Registration Statement.
<PAGE>
PROSPECTUS
October 31, 1995
INVESCO INDUSTRIAL INCOME FUND, INC.
INVESCO Industrial Income Fund, Inc. (the "Fund") is actively managed to seek
the best possible current income, while following sound investment practices,
without sacrificing the potential for investment principal growth. The Fund
invests its assets in securities offering the potential for relatively high
yield and stable return. Over a period of years, these investments also may
provide capital appreciation, the Fund's secondary objective. Most of the Fund's
holdings are in U.S. common stocks and corporate bonds, but the Fund has the
flexibility to invest in other types of securities.
This prospectus provides you with the basic information you should know
before investing in the Fund. You should read it and keep it for future
reference. A Statement of Additional Information containing further information
about the Fund, dated October 31, 1995, has been filed with the Securities and
Exchange Commission, and is incorporated by reference into this prospectus. To
obtain a free copy, write to INVESCO Funds Group, Inc., P.O. Box 173706, Denver,
Colorado 80217- 3706; or call 1-800-525-8085.
TABLE OF CONTENTS
ESSENTIAL INFORMATION....................................................... 5
ANNUAL FUND EXPENSES........................................................ 6
FINANCIAL HIGHLIGHTS........................................................ 8
INVESTMENT OBJECTIVE AND STRATEGY........................................... 10
INVESTMENT POLICIES AND RISKS............................................... 10
THE FUND AND ITS MANAGEMENT.................................. .............. 14
FUND PRICE AND PERFORMANCE.................................................. 17
HOW TO BUY SHARES........................................................... 17
FUND SERVICES............................................................... 21
HOW TO SELL SHARES.......................................................... 22
TAXES, DIVIDENDS, AND CAPITAL GAIN DISTRIBUTIONS............................ 25
ADDITIONAL INFORMATION...................................................... 26
<PAGE>
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE. SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, ANY BANK OR OTHER FINANCIAL INSTITUTION. THE SHARES
OF THE FUND ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY.
ESSENTIAL INFORMATION
Investment Goal And Strategy. INVESCO Industrial Income Fund,
Inc. is a diversified mutual fund that seeks the best possible current
income, while following sound investment practices, with the added
potential for capital appreciation. Employing a moderate investment
philosophy, it invests primarily in dividend-paying common stocks of
U.S. companies traded on national securities exchanges or over-the-
counter. The Fund also may invest in fixed-income securities, such as
corporate bonds. There is no guarantee that the Fund will meet its
objective. See "Investment Objective And Strategy."
Designed For: Investors primarily seeking current income, but who do not
wish to sacrifice the potential for capital growth over the long term. While not
a complete investment program, the Fund may be a valuable element of your
investment portfolio. You also may wish to consider the Fund as part of a
Uniform Gift/Trust To Minors Account or systematic investing strategy. The Fund
may be a suitable investment for many types of retirement programs, including
the IRA, SEP-IRA, SARSEP, 401(k), Profit Sharing, Money Purchase Pension, and
403(b) plans.
Time Horizon. Stock and bond prices fluctuate on a daily basis, and the
Fund's price per share therefore varies daily. Potential shareholders should
consider this a longer-term investment.
Risks. The Fund generally uses a moderate investment strategy, but may
hold securities rated below investment grade and foreign debt securities, and
may experience relatively rapid portfolio turnover. The Fund's investments in
debt securities are subject to credit risk and market risk, both of which are
increased by investing in lower rated securities. The returns on foreign
investments may be influenced by the risks of investing overseas. Rapid
portfolio turnover may result in higher brokerage commissions and the
acceleration of taxable capital gains. These policies make the Fund unsuitable
for that portion of your savings dedicated to preservation of capital over the
short-term. See "Investment Objective and Strategy" and "Investment Policies and
Risks."
<PAGE>
Organization and Management. The Fund is owned by its shareholders. It
employs INVESCO Funds Group, Inc. ("IFG") (founded in 1932) to serve as
investment adviser, administrator, distributor, and transfer agent; and INVESCO
Trust Company ("INVESCO Trust") (founded in 1969) as sub-adviser.
The Fund's investments are selected by two experienced INVESCO portfolio
managers: INVESCO senior vice presidents Charles Mayer, who has 25 years of
investment experience, and Donovan J. (Jerry) Paul, with 19 years of experience.
A Chartered Financial Analyst, Mr. Mayer earned his MBA from St. John's
University and a BA from St. Peter's College. Mr. Paul holds an MBA from the
University of Northern Iowa and a BBA from the University of Iowa; he is both a
Chartered Financial Analyst and Certified Public Accountant. See "The Fund And
Its Management."
IFG and INVESCO Trust are part of a global firm that managed approximately
$74 billion as of June 30, 1995. The parent company, INVESCO PLC, is based in
London, with money managers located in Europe, North America, and the Far East.
This Fund offers all of the following services at no charge:
-----------------------------------------------------------
Telephone purchases
Telephone exchanges
Telephone redemptions
Automatic reinvestment of distributions
Regular investment plans (EasiVest (the Fund's automatic
monthly investment program), Direct Payroll Purchase, and
Automatic Monthly Exchange)
Periodic withdrawal plans
See "How To Buy Shares" and "How To Sell Shares."
Minimum Initial Investment: $1,000, which is waived for regular investment
plans, including EasiVest and Direct Payroll Purchase, and certain retirement
plans.
Minimum Subsequent Investment: $50 (Minimums are lower for certain
retirement plans.)
ANNUAL FUND EXPENSES
The Fund is no-load; there are no fees to purchase, exchange or redeem
shares. The Fund, however, is authorized to pay a Rule 12b-1 distribution fee of
one quarter of one percent each year. (See "How To Buy Shares -- Distribution
Expenses.")
Like any company, the Fund has operating expenses -- such as portfolio
management, accounting, shareholder servicing, maintenance of shareholder
accounts, and other expenses. These expenses are paid from the Fund's assets.
Lower expenses therefore benefit investors by increasing the Fund's total
return.
<PAGE>
We calculate annual operating expenses as a percentage of the Fund's
average annual net assets. To share economies of scale and to keep expenses
competitive, the Fund's Manager has voluntarily reduced the management fees on
the Fund's daily net assets over $2 billion.
Annual Fund Operating Expenses
(as a percentage of average net assets)
Management Fee (after expense limitation)1 0.45%
12b-1 Fees 0.25%
Other Expenses 0.24%
Total Fund Operating Expenses (after expense limitation)1 0.94%
1Under a voluntary expense limitation agreed to by IFG, the management fee paid
by the Fund has been reduced to an annual rate of 0.45% on daily net assets over
$2 billion, and to an annual rate of 0.40% on daily net assets over $4 billion.
In the absence of the voluntary expense limitation, the Fund's "Management Fee"
and "Total Fund Operating Expenses" would have been 0.48% and 0.97%,
respectively, based on the Fund's actual expenses for the fiscal year ended June
30, 1995.
Example
A shareholder would pay the following expenses on a $1,000 investment for
the periods shown, assuming a hypothetical 5% annual return and redemption at
the end of each time period. (Of course, actual operating expenses are paid from
the Fund's assets, and are deducted from the amount of income available for
distribution to shareholders; they are not charged directly to shareholder
accounts.)
1 Year 3 Years 5 Years 10 Years
$10 $30 $52 $116
The purpose of this table is to assist you in understanding the various
costs and expenses that you will bear directly or indirectly. The example should
not be considered a representation of past or future performance, and actual
annual returns and expenses may be greater or less than those shown. For more
information on the Fund's expenses, see "The Fund and Its Management" and "How
to Buy Shares -- Distribution Expenses."
Since the Fund pays a distribution fee, investors who own Fund shares for
a long period of time may pay more than the economic equivalent of the maximum
front-end sales charge permitted for mutual funds by the National Association of
Securities Dealers, Inc.
<PAGE>
FINANCIAL HIGHLIGHTS
(For a Fund Share Outstanding Throughout each Period)
The following information has been audited by Price Waterhouse LLP,
independent accountants. This information should be read in conjunction with the
audited financial statements and the independent accountant's report appearing
in the Fund's 1995 Annual Report to Shareholders, which is incorporated by
reference into the Statement of Additional Information. Both are available
without charge by contacting IFG at the address or telephone number on the cover
of this prospectus. The Annual Report also contains more information about the
Fund's performance.
INVESCO Industrial Income Fund, Inc
Financial Highlights
(For a Fund Share Outstanding throughout Each Period)
<TABLE>
<CAPTION>
Year Ended June 30
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-------- -------- --------- -------- ------- ------ ------- ------- ------- -------
1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
PER SHARE DATA
Net Asset Value --
Beginning of Period $11.32 $11.53 $10.67 $9.74 $9.39 $8.88 $7.98 $8.85 $9.10 $8.42
-------- -------- --------- -------- ------- ------- ------- ------- ------- -------
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income 0.42 0.36 0.31 0.28 0.36 0.38 0.42 0.35 0.34 0.44
Net Gains or (Losses)
on Securities
(Both Realized
and Unrealized) 1.14 0.02 1.33 1.38 0.81 1.43 1.01 (0.51) 0.83 2.61
Total from Investment
Operations 1.56 0.38 1.64 1.66 1.17 1.81 1.43 (0.16) 1.17 3.05
-------- -------- --------- -------- ------- ------- ------- ------- ------- -------
LESS DISTRIBUTIONS
Dividends from Net
Investment Income 0.42 0.36 0.32 0.29 0.34 0.40 0.39 0.36 0.36 0.48
-------- -------- --------- -------- ------- ------- ------- ------- ------- -------
In Excess of Net
Investment Income 0.00 0.11 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
-------- -------- --------- -------- ------- ------- ------- ------- ------- -------
Distributions
from Capital Gains 0.54 0.12 0.46 0.44 0.48 0.90 0.14 0.35 1.06 1.89
-------- -------- --------- -------- ------- ------- ------- ------- ------- -------
Total Distributions 0.96 0.59 0.78 0.73 0.82 1.30 0.53 0.71 1.42 2.37
-------- -------- --------- -------- ------- ------- ------- ------- ------- -------
Net Asset Value --
End of Period $11.92 $11.32 $11.53 $10.67 $ 9.74 $ 9.39 $ 8.88 $ 7.98 $ 8.85 $ 9.10
======== ======== ========= ======== ======= ======= ======= ======= ======= =======
TOTAL RETURN 14.79% 3.24% 15.66% 17.04% 13.06% 21.08% 18.45% (1.21%) 14.29% 37.24%
-------- -------- --------- -------- ------- ------- ------- ------- ------- -------
RATIOS
Net Assets --
End of Period
($000 Omitted) $4,009,609$3,913,322$3,412,527 $2,092,955$881,226$572,373 $399,538$380,978$451,332$341,839
-------- -------- --------- -------- ------- ------- ------- ------- ------- -------
Ratio of Expenses to
Average Net Assets# 0.94% 0.92% 0.96% 0.98% 0.94% 0.76% 0.78% 0.78% 0.74% 0.71%
Ratio of Net Investment
Income to Average Net
Assets# 3.61% 3.11% 2.94% 2.75% 3.92% 4.14% 5.08% 4.29% 3.96% 4.85%
Portfolio Turnover Rate 54% 56% 121% 119% 104% 132% 124% 148% 195% 160%
<FN>
# Various expenses of the Fund were voluntarily absorbed by IFG for the years
ended June 30, 1995, 1994 and 1993. If such expenses had not been voluntarily
absorbed, ratio of expenses to average net assets would have been 0.97%, 0.95%
and 0.98%, respectively, and ratio of net investment income to average net
assets would have been 3.58%, 3.08% and 2.92%, respectively.
</FN>
</TABLE>
<PAGE>
INVESTMENT OBJECTIVE AND STRATEGY
The Fund seeks the best possible current income while following sound
investment practices. This investment objective is fundamental and cannot be
changed without the approval of the Fund's shareholders. Capital growth
potential is an additional, but secondary, consideration in the selection of
portfolio securities. Our strategy is moderate, so we generally focus on
securities providing a relatively high yield and stable return and which, over a
period of years, also may provide capital appreciation. The Fund normally
invests between 60% and 75% of its assets in dividend-paying common stocks. The
remaining assets are invested in other income-producing securities, mostly
corporate bonds. There is no limit on the amount of debt securities in which the
Fund may invest. The Fund also has the flexibility to invest in preferred stocks
and convertible bonds. There is no assurance that the Fund's investment
objective will be met.
The Fund's investments in common stocks are limited to dividend- paying
stocks that are readily marketable in the United States. These securities
include American Depository Receipts ("ADRs"), which represent shares of a
foreign corporation held by a U.S. bank that entitle the holder to all dividends
and capital gains. ADRs are denominated in U.S. dollars and trade in the U.S.
securities markets.
The Fund is actively traded. Economic conditions and market circumstances
vary from day to day; securities may be bought and sold relatively frequently as
their suitability for the Fund's portfolio changes. The Fund's portfolio
turnover rate, generally exceeding 100%, may be higher than some other mutual
funds with the same investment objective; this policy also may result in greater
brokerage commissions and acceleration of capital gains which are taxable when
distributed to shareholders. The Statement of Additional Information includes an
expanded discussion of the Fund's portfolio turnover rate, its brokerage
practices and certain federal income tax matters.
When we believe market or economic conditions are unfavorable, the Fund
may act defensively -- that is, temporarily invest up to 100% of its assets in
high quality corporate bonds, notes or U.S. government obligations, or money
market instruments such as commercial paper or repurchase agreements, seeking to
protect its assets until conditions stabilize.
INVESTMENT POLICIES AND RISKS
Investors generally should expect to see their price per share vary with
movements in the stock market, changes in economic conditions and other factors.
The Fund invests in many different companies in a variety of industries; this
diversification reduces the Fund's overall exposure to investment and market
risks, but cannot eliminate these risks.
<PAGE>
Debt Securities. When we assess an issuer's ability to meet its interest
rate obligations and repay its debt when due, we are referring to "credit risk."
Debt obligations are rated based on their credit risk by independent services
such as Standard & Poor's Ratings Group (S&P) or Moody's Investors Service, Inc.
(Moody's). "Market risk" refers to sensitivity to changes in interest rates: For
instance, when interest rates go up, the market value of a bond issued
previously generally declines; on the other hand, when interest rates decrease,
bonds generally see their prices increase.
The lower a bond's quality, the more credit risk and market risk it is
subject to; this is also true of most unrated debt securities. Therefore, the
Fund does not invest in obligations it believes to be highly speculative.
Corporate bonds rated AAA, AA, A or BBB by S&P or Aaa, Aa, A or Baa by Moody's
enjoy strong to adequate capacity to pay principal and interest. No more than
15% of assets may be invested in issues rated below investment grade quality
(commonly called "junk bonds," and rated BB or below by S&P or Ba or below by
Moody's); these include issues which are of poorer quality and may have some
speculative characteristics, according to the ratings services. Never, under any
circumstances, does the Fund invest in bonds rated below CCC or Caa by S&P and
Moody's, respectively. Bonds rated CCC or Caa may be in default or there may be
present elements of danger with respect to payment of principal or interest.
While Fund Management continuously monitors all of the debt securities in the
Fund's portfolio for the issuer's ability to make required principal and
interest payments and other quality factors, it may retain a bond whose rating
is changed to one below the minimum rating required for purchase of the
security. For more information on debt securities and the foregoing corporate
bond rating categories, see the Statement of Additional Information.
For the fiscal year ended June 30, 1995, the following percentages of the
Fund's total assets were invested in corporate bonds rated investment grade (BBB
by S&P or Baa by Moody's and above) at the time they were purchased: AAA--0.14%;
AA--0.68%; A--2.15%; and BBB--1.76%, and the following percentages were invested
in corporate bonds rated below investment grade at the time of purchase:
BB--3.62%; B--5.81%; CCC--0.38%; and D--0.02%. Finally, 0.31% of total assets
were invested in unrated corporate bonds.
<PAGE>
All of these percentages were determined on a dollar-weighted basis,
calculated by averaging the Fund's month-end portfolio holdings during the
fiscal year. Keep in mind that the Fund's holdings are actively traded, and bond
ratings are occasionally adjusted by ratings services, so these figures do not
represent the Fund's actual holdings or quality ratings as of June 30, 1995.
The Fund's investments in debt securities may include investments in zero
coupon bonds, step-up bonds and asset-backed securities. Zero coupon bonds
("zeros") make no periodic interest payments. Instead, they are sold at a
discount from their face value. The buyer of the zero receives the rate of
return by the gradual appreciation in the price of the security, which is
redeemed at face value at maturity. 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. Being extremely responsive to
changes in interest rates, the market prices of zeros and step-up bonds may be
more volatile than other bonds. The Fund may be required to distribute income
recognized on these bonds, even though no cash interest payments may be
received, which could reduce the amount of cash available for investment by the
Fund. Asset-backed securities generally represent interests in pools of consumer
loans and most often are structured as pass-through securities. Interest and
principal payments ultimately depend on payment of the underlying loans by
individuals, although the securities may be supported, at least in part, by
letters of credit or other credit enhancements. The underlying loans are subject
to prepayments that may shorten the securities' weighted average life and may
lower their returns.
Foreign Securities. The Fund's investments in debt obligations may include
securities issued by foreign governments and foreign corporations. Up to 25% of
the Fund's total assets, measured at the time of purchase, may be invested
directly in foreign debt securities, provided that all such securities are
denominated and pay interest in U.S. dollars (such as Eurobonds and Yankee
bonds). Securities of Canadian issuers are not subject to this 25% limitation.
Investments in foreign debt securities involve certain risks.
For U.S. investors, the returns on foreign debt securities are influenced
not only by the returns on the foreign investments themselves, but also by
currency fluctuations. That is, when the U.S. dollar generally rises against
foreign currencies, returns on foreign securities for a U.S. investor may
decrease. By contrast, in a period when the U.S. dollar generally declines,
those returns may increase. The Fund attempts to minimize these risks by
limiting its investments in foreign debt securities to those which are
denominated and pay interest in U.S. dollars.
Other aspects of international investing to consider include:
-less publicly available information than is generally available
about U.S. issuers;
-differences in accounting, auditing and financial reporting
standards;
-generally higher commission rates on foreign portfolio
transactions and longer settlement periods;
<PAGE>
-smaller trading volumes and generally lower liquidity of foreign stock
markets, which may cause greater price volatility; and
-investments in certain countries may be subject to foreign withholding
taxes, which may reduce dividend income or capital gains payable to
shareholders.
There is also the possibility of expropriation or confiscatory taxation;
adverse changes in investment or exchange control regulations; political
instability; potential restrictions on the flow of international capital; and
the possibility of the Fund experiencing difficulties in pursuing legal remedies
and collecting judgments.
ADRs are subject to some of the same risks as direct investments in
foreign securities, including the risk that material information about the
issuer may not be disclosed in the United States and the risk that currency
fluctuations may adversely affect the value of the ADR.
Rule 144A Securities. The Fund may not purchase securities that are not
readily marketable. However, the Fund may purchase certain securities that are
not registered for sale to the general public, but that can be resold to
institutional investors ("Rule 144A Securities") if a liquid trading market
exists. The Fund's board of directors has delegated to Fund Management the
authority to determine the liquidity of Rule 144A Securities pursuant to
guidelines approved by the board. In the event that a Rule 144A Security held by
the Fund is subsequently determined to be illiquid, the security will be sold as
soon as that can be done in an orderly fashion consistent with the best
interests of the Fund's shareholders. For more information concerning Rule 144A
Securities, see "Investment Policies and Restrictions" in the Statement of
Additional Information.
Securities Lending. The Fund may seek to earn additional income by lending
securities to qualified brokers, dealers, banks, or other financial
institutions, on a fully collateralized basis. For further information on this
policy, see "Investment Policies and Restrictions" in the Statement of
Additional Information.
Repurchase Agreements. The Fund may invest money, for as short a time as
overnight, using repurchase agreements ("repos"). With a repo, the Fund buys a
debt instrument, agreeing simultaneously to sell it back to the prior owner at
an agreed-upon price. The Fund could incur costs or delays in seeking to sell
the instrument, if the prior owner defaults on its repurchase obligation. To
reduce that risk, securities which are the subject of the repurchase agreement
will be maintained with the Fund's custodian in an amount at least equal to the
repurchase price under the agreement (including accrued interest). These
agreements are entered into only with member banks of the Federal Reserve
System, registered broker-dealers, and registered U.S. government securities
dealers that are deemed creditworthy under standards established by the Fund's
board of directors.
For a further discussion of risks associated with an investment in the
Fund, see "Investment Policies and Restrictions" and "Investment Practices" in
the Statement of Additional Information.
Investment Restrictions. Certain restrictions, which are set forth in the
Statement of Additional Information, may not be altered without the approval of
the Fund's shareholders. For example, the Fund limits to 5% the portion of its
total assets which may be invested in a single company, and to 25% the portion
that may be invested in any one industry.
<PAGE>
THE FUND AND ITS MANAGEMENT
The Fund is a no-load mutual fund, registered with the Securities and
Exchange Commission as a diversified, open-end management investment company. It
was incorporated on March 20, 1959, under the laws of Maryland, and first
publicly offered shares on February 1, 1960.
The Fund's board of directors has responsibility for overall supervision
of the Fund, and reviews the services provided by the adviser and sub-adviser.
Under an agreement with the Fund, INVESCO Funds Group, Inc. ("IFG"), 7800 E.
Union Avenue, Denver, Colorado 80237, serves as the Fund's investment manager;
it is primarily responsible for providing the Fund with various administrative
services. IFG's wholly-owned subsidiary, INVESCO Trust Company ("INVESCO
Trust"), is the Fund's sub-adviser and is primarily responsible for managing the
Fund's investments. Together, IFG and INVESCO Trust constitute "Fund
Management."
The following managers share responsibility for the day-to-day management
of the Fund's holdings:
Charles P. Mayer has served as co-portfolio manager for the Fund since
1993, focusing on equity investments. He is also co-portfolio manager of
INVESCO-VIF Industrial Income Portfolio. Mr. Mayer began his investment career
in 1969 and is now a senior vice president of INVESCO Trust; from 1993 to 1994,
he was a vice president of INVESCO Trust. From 1984 to 1993, he was a portfolio
manager with Westinghouse Pension. B.A., St. Peter's College; M.B.A., St. John's
University; Chartered Financial Analyst.
Donovan J. (Jerry) Paul has served as co-portfolio manager for the Fund
since 1994, focusing on fixed-income investments. He also is the portfolio
manager of INVESCO High Yield Fund, INVESCO Select Income Fund, and INVESCO
VIF-High Yield Portfolio, as well as co-portfolio manager of INVESCO
VIF-Industrial Income Portfolio and INVESCO Balanced Fund. A senior vice
president of INVESCO Trust since 1994, he entered the investment management
industry in 1976. Mr. Paul's recent career includes these highlights: From 1989
to 1992, he served as senior vice president and director of fixed-income
research, and from 1987 to 1992, as portfolio manager, with Stein, Roe & Farnham
Inc. From 1993 to 1994, he was president of Quixote Investment Management, Inc.
B.B.A., University of Iowa; M.B.A., University of Northern Iowa; Chartered
Financial Analyst; Certified Public Accountant.
Fund management 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 Fund Management's personnel to conduct
their personal investment activities in a manner that Fund Management believes
is not detrimental to the Fund or Fund Management's other advisory clients. See
the Statement of Additional Information for more detailed information.
<PAGE>
The Fund pays IFG a monthly management fee which is based upon a
percentage of the Fund's average net assets determined daily; in turn, IFG pays
INVESCO Trust a subadvisory fee out of its management fee. The management fee is
computed at the annual rate of 0.60% on the first $350 million of the Fund's
average net assets; 0.55% on the next $350 million of the Fund's average net
assets; and 0.50% on the Fund's average net assets over $700 million. Since
October 15, 1992, IFG has been voluntarily waiving that portion of its fee which
exceeds 0.45% of the average net assets of the Fund in excess of $2 billion. In
addition, since October 21, 1993, IFG has been voluntarily waiving that portion
of its fee which exceeds 0.40% of the average net assets of the Fund in excess
of $4 billion. For the fiscal year ended June 30, 1995, investment advisory fees
paid by the Fund amounted to 0.45% of the Fund's average net assets. In the
absence of such voluntary expense limitation, the investment advisory fees paid
by the Fund for the fiscal year ended June 30, 1995, would have been 0.48% of
the Fund's average net assets. Out of this fee, IFG paid an amount equal to
0.20% of the Fund's average net assets to INVESCO Trust as a sub-advisory fee
(0.19% after INVESCO Trust's voluntary waiver of a portion of its fee). No fee
is paid by the Fund to INVESCO Trust.
Under a Transfer Agency Agreement, IFG acts as registrar, transfer agent,
and dividend disbursing agent for the Fund. The Fund pays an annual fee of
$14.00 per shareholder account or omnibus account participant for these
services. Registered broker-dealers, third party administrators of tax-qualified
retirement plans and other entities, including affiliates of IFG, may provide
equivalent services to the Fund. In these cases, IFG may pay, out of the fee it
receives from the Fund, an annual sub-transfer agency or record-keeping fee to
the third party.
In addition, under an Administrative Services Agreement, IFG handles
additional administrative, record-keeping, and internal sub- accounting services
for the Fund. For the fiscal year ended June 30, 1995, the Fund paid IFG a fee
for these services equal to 0.015% of the Fund's average net assets.
The Fund's expenses, which are accrued daily, are deducted from total
income before dividends are paid. Total expenses of the Fund for the fiscal year
ended June 30, 1995, including investment management fees (but excluding
brokerage commissions, which are a cost of acquiring securities), amounted to
0.94% of the Fund's average net assets. However, in the absence of the voluntary
expense limitation discussed above, the total expenses of the Fund for the year
ended June 30, 1995, would have been 0.97% of the Fund's average net assets.
Fund Management places orders for the purchase and sale of portfolio
securities with brokers and dealers based upon Fund Management's evaluation of
their financial responsibility coupled with their ability to effect transactions
at the best available prices. As discussed under "How to Buy Shares --
Distribution Expenses," the Fund may market its shares through intermediary
brokers or dealers that have entered into Dealer Agreements with IFG, as the
Fund's Distributor. The Fund may place orders for portfolio transactions with
qualified broker/dealers which recommend the Fund, or sell shares of the Fund,
to clients, or act as agent in the purchase of Fund shares for clients, if Fund
Management believes that the quality of the execution of the transaction and
level of commission are comparable to those available from other qualified
brokerage firms. For further information, see "Investment Practices -- Placement
of Portfolio Brokerage" in the Statement of Additional Information.
<PAGE>
The parent company for IFG and INVESCO Trust is INVESCO PLC, a publicly
traded holding company whose subsidiaries provide investment services around the
world. IFG was established in 1932 and, as of June 30, 1995, managed 14 mutual
funds, consisting of 38 separate portfolios, with combined assets of
approximately $10.2 billion on behalf of over 790,000 shareholders. INVESCO
Trust (founded in 1969) served as adviser or sub-adviser to 41 investment
portfolios as of June 30, 1995, including 27 portfolios in the INVESCO group.
These 27 portfolios had aggregate assets of approximately $9.5 billion as of
June 30, 1995. In addition, INVESCO Trust provides investment management
services to private clients, including employee benefit plans that may be
invested in a collective trust sponsored by INVESCO Trust.
FUND PRICE AND PERFORMANCE
Determining Price. The value of your investment in the Fund will vary
daily. The price per share is also known as the Net Asset Value (NAV). IFG
prices the Fund every day that the New York Stock Exchange is open, as of the
close of regular trading (normally, 4:00 p.m., New York time). NAV is calculated
by adding together the current market value of all of the Fund's assets,
including accrued interest and dividends; then subtracting liabilities,
including accrued expenses; and finally dividing that dollar amount by the total
number of shares outstanding.
Performance Data. To keep shareholders and potential investors informed,
we will occasionally advertise the Fund's total return and yield. Total return
figures show the rate of return on a $1,000 investment in the Fund, assuming
reinvestment of all dividends and capital gain distributions for one-, five-,
and ten-year periods. Cumulative total return shows the actual rate of return on
an investment; average annual total return represents the average annual
percentage change of an investment. Both cumulative and average annual total
returns tend to "smooth out" fluctuations in the Fund's investment results, not
showing the interim variations in performance over the periods cited. The yield
of the Fund refers to the income generated by an investment in the Fund over a
30-day or one month period, and is computed by dividing the net investment
income per share earned during the period by the net asset value per share at
the end of the period, then adjusting the result to provide for semi-annual
compounding. More information about the Fund's recent and historical performance
is contained in the Fund's Annual Report to shareholders. You can get a free
copy by calling or writing to IFG using the phone number or address on the cover
of this prospectus.
When we quote mutual fund rankings published by Lipper Analytical Services,
Inc., we may compare the fund to others in its category of Equity Income Funds,
as well as the broad-based Lipper general fund groupings. These rankings allow
you to compare the Fund to its peers. Other independent financial media also
produce performance- or service- related comparisons, which you may see in our
promotional materials. For more information see "Fund Performance" in the
Statement of Additional Information. Performance figures are based on historical
investment results and are not intended to suggest future performance.
<PAGE>
HOW TO BUY SHARES
The following chart shows several convenient ways to invest in the Fund.
Your new Fund shares will be priced at the NAV next determined after your order
in proper form is received. There is no charge to invest, exchange, or redeem
shares when you make transactions directly through IFG. However, if you invest
in the Fund through a securities broker, you may be charged a commission or
transaction fee. For all new accounts, please send a completed application form.
Please specify which Fund you wish to purchase.
Fund Management reserves the right to reduce or waive the minimum
investment requirements in its sole discretion, where it determines this action
is in the best interests of the Fund. Further, Fund Management reserves the
right in its sole discretion to reject any order for the purchase of Fund shares
(including purchases by exchange) when, in its judgment, such rejection is in
the Fund's best interests.
================================================================================
Method Investment Minimum Please Remember
- --------------------------------------------------------------------------------
By Check $1,000 for regular If your check does
Mail to: account; not clear, you will
INVESCO Funds $250 for an be responsible for
Group, Inc. Individual any related loss
P.O. Box 173706 Retirement Account; the Fund or IFG
Denver, CO 80217- $50 minimum for incurs. If you are
3706. each subsequent already a
Or you may send investment. shareholder in the
your check by INVESCO funds, the
overnight courier Fund may seek
to: 7800 E. Union reimbursement from
Ave., your existing
Denver, CO 80237. account(s) for any
loss incurred.
- --------------------------------------------------------------------------------
By Telephone or $1,000. Payment must be
Wire received within 3
Call 1-800-525-8085 business days, or
to request your the transaction may
purchase. Then send be cancelled. If a
your check by telephone purchase
overnight courier is cancelled due to
to our street nonpayment, you
address: will be responsible
7800 E. Union Ave., for any related
Denver, CO 80237. loss the Fund or
Or you may transmit IFG incurs. If you
your payment by are already a
bank wire (call IFG shareholder in the
for instructions). INVESCO funds, the
Fund may seek
reimbursement from your
existing account(s) for
any loss incurred.
<PAGE>
- ------------------------------------------------------------------------------
With EasiVest or $50 per month for Like all regular
Direct Payroll EasiVest; $50 per investment plans,
Purchase pay period for neither EasiVest
You may enroll on Direct Payroll nor Direct Payroll
the fund Purchase. You may Purchase ensures a
application, or start or stop your profit or protects
call us for the regular investment against loss in a
correct form and plan at any time, falling market.
more details. with two weeks' Because you'll
Investing the same notice to IFG. invest continually,
amount on a monthly regardless of
basis allows you to varying price
buy more shares levels, consider
when prices are low your financial
and fewer shares ability to keep
when prices are buying through low
high. This "dollar- price levels. And
cost averaging" may remember that you
help offset market will lose money if
fluctuations. Over you redeem your
a period of time, shares when the
your average cost market value of all
per share may be your shares is less
less than the than their cost.
actual average
price per share.
- --------------------------------------------------------------------------------
By PAL $1,000. Be sure to write
Your "Personal down the
Account Line" is confirmation number
available for provided by PAL.
subsequent Payment must be
purchases and received within 3
exchanges 24-hours business days, or
a day. Simply call the transaction may
1-800-424-8085. be cancelled. If a
telephone purchase is
cancelled due to
nonpayment, you will be
responsible for any
related loss the Fund or
IFG incurs. If you are
already a shareholder in
the INVESCO funds, the
Fund may seek
reimbursement from your
existing account(s) for
any loss incurred.
<PAGE>
- --------------------------------------------------------------------------------
By Exchange $1,000 to open a See "Exchange
Between this and new account; $50 Privilege" below.
another of the for written requests
INVESCO funds. Call to purchase additional
1-800-525-8085 for shares for an existing
prospectuses of other account. (The exchange
INVESCO funds. You may minimum is $250 for
also establish an purchases requested by
Automatic Monthly telephone.
Exchange service
between two INVESCO
funds; call IFG for
further details and the
correct form.
- --------------------------------------------------------------------------------
Exchange Privilege. You may exchange your shares in this Fund for
those in another INVESCO fund, on the basis of their respective net
asset values at the time of the exchange. Before making any exchange, be
sure to review the prospectuses of the funds involved and consider their
differences.
Please note these policies regarding exchanges of fund shares:
1) The fund accounts must be identically registered.
2) You may make four exchanges out of each fund during each
calendar year.
3) An exchange is the redemption of shares from one fund 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, your account is tax-
deferred).
4) The Fund reserves the right to reject any exchange request, or
to modify or terminate exchange privileges, in the best
interests of the Fund and its shareholders. Notice of all
such modifications or termination will be given at least 60
days prior to the effective date of the change in privilege,
except for unusual instances (such as when redemptions of the
exchanged shares are suspended under Section 22(e) of the
Investment Company Act of 1940, or when sales of the fund into
which you are exchanging are temporarily stopped).
<PAGE>
Distribution Expenses. The Fund is authorized under a Plan and Agreement
of Distribution pursuant to Rule 12b-1 under the Investment Company Act of 1940
(the "Plan") to use its assets to finance certain activities relating to the
distribution of shares. These expenditures may include compensation (including
incentive compensation and/or continuing compensation based on the amount of
customer assets maintained in the Fund) to securities dealers and other
financial institutions and organizations, which may include IFG-affiliated
companies, to obtain various distribution-related and/or administrative services
for the Fund. Such services may include, among other things, processing new
shareholder account applications, preparing and transmitting to the Fund's
transfer agent computer-processable tapes of all transactions by customers, and
serving as the primary source of information to customers in answering questions
concerning the Fund and their transactions.
In addition, other reimbursable expenditures include advertising,
preparation and distribution of sales literature, printing and distribution of
prospectuses to prospective investors, public relations efforts, marketing
programs and such other services and promotional activities agreed upon from
time to time by the Fund and its board of directors. These services and
activities may be conducted by the staff of IFG or its affiliates or by third
parties.
IFG is not entitled to reimbursement for overhead expenses under the Plan,
but may be reimbursed for all or a portion of the compensation paid for salaries
and other employee benefits for IFG personnel whose primary responsibilities
involve marketing shares of the INVESCO funds, including the Fund. Also, any
payments made by the Fund may not be used to finance the distribution of shares
of any other mutual fund advised by IFG. Payments made by the Fund under the
Plan for compensation of marketing personnel, as noted above, are based on an
allocation formula designed to ensure that all such payments are appropriate.
Under the Plan, the Fund's reimbursement to IFG is limited to an amount
computed at a maximum rate of 0.25 of 1% of the Fund's annual average net
assets. Payments by the Fund under the Plan, for any month, may only be made to
reimburse expenditures incurred during the rolling 12-month period in which that
month falls. Therefore, any reimbursable expenses incurred by IFG in excess of
the limitation described above are not reimbursable and will be borne by IFG. In
addition, IFG may from time to time make additional payments from its revenues
to securities dealers and other financial institutions that provide
distribution- related and/or administrative services for the Fund. No further
payments will be made by the Fund under the Plan in the event of its
termination.
<PAGE>
FUND SERVICES
Shareholder Accounts. IFG will maintain a share account that reflects your
current holdings. Share certificates will be issued only upon specific request.
You will have greater flexibility to conduct transactions if you do not request
certificates.
Transaction Confirmations. You will receive detailed confirmations of
individual purchases, exchanges, and redemptions. If you choose certain
recurring transaction plans (for instance, EasiVest), your transactions will be
confirmed on your quarterly Investment Summary.
Investment Summaries. Each calendar quarter, shareholders receive a
written statement which consolidates and summarizes account activity and value
at the beginning and end of the period for each of their INVESCO funds.
Reinvestment of Distributions. Dividends and capital gain distributions
are automatically invested in additional fund shares at the NAV on the
ex-dividend date, unless you choose to have dividends and/or capital gain
distributions automatically reinvested in another INVESCO fund or paid by check
(minimum of $10.00).
Telephone Transactions. All shareholders may exchange and redeem Fund
shares by telephone, unless they expressly decline these privileges. By signing
the new account Application, a Telephone Transaction Authorization Form, or
otherwise using these privileges, the investor has agreed that, if the Fund has
followed reasonable procedures, such as recording telephone instructions and
sending written transaction confirmations, it will not be liable for following
telephoned instructions that it believes to be genuine. As a result of this
policy, the investor may bear the risk of any loss due to unauthorized or
fraudulent instructions.
Retirement Plans And IRAs. Fund shares may be purchased for Individual
Retirement Accounts (IRAs) and many types of tax-deferred retirement plans. IFG
can supply you with information and forms to establish or transfer your existing
plan or account.
HOW TO SELL SHARES
The following chart shows several convenient ways to redeem your Fund
shares. Shares of the Fund may be redeemed at any time at their current NAV next
determined after a request in proper form is received at the Fund's office. The
NAV at the time of the redemption may be more or less than the price you paid to
purchase your shares, depending primarily upon the Fund's investment
performance.
Please be specific from which fund you wish to redeem shares. Shareholders
have a separate account for each fund in which they invest.
<PAGE>
================================================================================
Method Minimum Redemption Please Remember
================================================================================
By Telephone $250 (or, if less, This option is not
Call us toll-free full liquidation of available for
at 1-800-525-8085. the account) for a shares held in
redemption check; Individual
$1,000 for a wire Retirement Accounts
to bank of record. (IRAs).
The maximum amount
which may be
redeemed by
telephone is
generally $25,000.
These telephone
redemption
privileges may be
modified or
terminated in the
future at the
discretion of IFG.
- --------------------------------------------------------------------------------
In Writing Any amount. The If the shares to be
Mail your request redemption request redeemed are
to INVESCO Funds must be signed by represented by
Group, Inc., P.O. all registered stock certificates,
Box 173706 shareholders(s). the certificates
Denver, CO 80217- Payment will be must be sent to
3706. You may also mailed to your IFG.
send your request address of record,
by overnight or to a pre-
courier to 7800 E. designated bank.
Union Ave., Denver,
CO 80237.
- --------------------------------------------------------------------------------
By Exchange $1,000 to open a See "Exchange
Between this and new account; $50 Privilege," above.
another of the for written
INVESCO funds. Call requests to
1-800-525-8085 for purchase additional
prospectuses of shares for an
other INVESCO existing account.
funds. You may also (The exchange
establish an minimum is $250 for
automatic monthly exchanges requested
exchange service by telephone.)
between two INVESCO
funds; call IFG for
further details and
the correct form.
<PAGE>
- -------------------------------------------------------------------------------
Periodic Withdrawal $100 per payment, You must have at
Plan on a monthly or least $10,000 total
You may call us to quarterly basis. invested with the
request the The redemption INVESCO funds, with
appropriate form check may be made at least $5,000 of
and more payable to any that total invested
information at 1- party you in the fund from
800-525-8085. designate. which withdrawals
will be made.
- --------------------------------------------------------------------------------
Payment To Third Any amount. All registered
Party owners of the
Mail your request account must sign
to INVESCO Funds the request, with a
Group, Inc., P.O. signature guarantee
Box 173706 from an eligible
Denver, CO 80217- guarantor financial
3706. institution, such
as a commercial
bank or recognized
national or
regional securities
firm.
================================================================================
While the Fund will attempt 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 phone.
Payments of redemption proceeds will be mailed within seven days following
receipt of the redemption request in proper form. However, payment may be
postponed under unusual circumstances -- for instance, if normal trading is not
taking place on the New York Stock Exchange, or during an emergency as defined
by the Securities and Exchange Commission. If your shares were purchased by a
check which has not yet cleared, payment will be made promptly upon clearance of
the purchase check (which may take up to 15 days).
If you participate in Easivest, the Fund's automatic monthly investment
program, and redeem all of the shares in your account, we will terminate any
further Easivest purchases unless you instruct us otherwise.
Because of the high relative costs of handling small accounts, should the
value of any shareholder's account fall below $250 as a result of shareholder
action, the Fund reserves the right to involuntarily redeem all shares in such
account, in which case the account would be liquidated and the proceeds
forwarded to the shareholder. Prior to any such redemption, a shareholder will
be notified and given 60 days to increase the value of the account to $250 or
more.
<PAGE>
TAXES, DIVIDENDS, AND CAPITAL GAIN DISTRIBUTIONS
Taxes. The Fund intends to distribute to shareholders substantially all of
its net investment income, net capital gains and net gains from foreign currency
transactions, if any, in order to continue to qualify for tax treatment as a
regulated investment company. Thus, the Fund does not expect to pay any federal
income or excise taxes.
Unless shareholders are exempt from income taxes, they must include all
dividends and capital gain distributions in taxable income for federal, state,
and local income tax purposes. Dividends and other distributions are taxable
whether they are received in cash or automatically distributed in shares of the
Fund or another fund in the INVESCO group.
The Fund may be subject to 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 to
enable it to pass these taxes through to shareholders for use by them as a
foreign tax credit or deduction.
Shareholders may be subject to backup withholding of 31% on dividends,
capital gain distributions and redemption proceeds. Unless you are subject to
backup withholding for other reasons, you can avoid backup withholding on your
Fund account by ensuring that we have a correct, certified tax identification
number.
Dividends and Capital Gain Distributions. The Fund earns ordinary or net
investment income, in the form of dividends and interest on its investments. The
Fund's policy is to distribute substantially all of this income, less Fund
expenses, to shareholders on a quarterly basis, at the discretion of the Fund's
board of directors.
In addition, the Fund realizes capital gains and losses when it sells
securities for more or less than it paid. 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 December.
Dividends and capital gain distributions are paid to shareholders who hold
shares on the record date of distribution regardless of how long the shares have
been held. The Fund's share price will then drop by the amount of the
distribution on the day the distribution is made. If a shareholder purchases
shares immediately prior to the distribution, the shareholder will, in effect,
have "bought" the distribution by paying the full purchase price, a portion of
which is then returned in the form of a taxable distribution.
At the end of each year, information regarding the tax status of dividends
and capital gain distributions is provided to shareholders. Net realized capital
gains are divided into short-term and long-term gains depending upon how long
the Fund held the security which gave rise to the gains. The capital gains
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 income and are paid to shareholders as dividends.
<PAGE>
Shareholders also may realize capital gains or losses when they sell their
Fund shares at more or less than the price originally paid.
We encourage you to consult a tax adviser with respect to these matters.
For further information see "Dividends, Capital Gain Distributions and Taxes" in
the Statement of Additional Information.
ADDITIONAL INFORMATION
Voting Rights. All shares of the Fund have equal voting rights based on
one vote for each share owned. The Fund is not generally required and does not
expect to hold regular annual meetings of shareholders. However, when requested
to do so in writing by the holders of 10% or more of the outstanding shares of
the Fund or as may be required by applicable law or the Fund's Articles of
Incorporation, the 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 Fund. The Fund will assist shareholders in
communicating with other shareholders as required by the Investment Company Act
of 1940.
<PAGE>
INVESCO INDUSTRIAL INCOME FUND, INC.
A no-load mutual fund seeking current
income, with capital growth as an
additional factor.
PROSPECTUS
October 31, 1995
To receive general information and prospectuses on any of the INVESCO funds or
retirement plans, or to obtain current account or price information, call
toll-free:
1-800-525-8085
To reach PAL, your 24-hour Personal Account Line (PAL) call:
1-800-424-8085
Or write to:
INVESCO Funds Group, Inc., Distributor
7800 E. Union Avenue
Post Office Box 173706
Denver, Colorado 80217-3706
If you're in Denver, please visit one of our convenient Investor Centers:
Cherry Creek
155-B Fillmore Street
Denver Tech Center
7800 East Union Avenue, Lobby Level
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
October 31, 1995
INVESCO INDUSTRIAL INCOME FUND, INC.
A no-load mutual fund seeking current income with capital
growth as an additional factor
Address: Mailing Address:
7800 E. Union Avenue Post Office Box 173706
Denver, Colorado 80237 Denver, Colorado 80217-3706
Telephone:
In continental U.S., 1-800-525-8085
- -------------------------------------------------------------------------------
INVESCO INDUSTRIAL INCOME FUND, INC.'s ("the Fund") investment objective
is to seek the best possible current income while following sound investment
practices. The Fund will pursue this objective by investing its assets in
securities which will provide a relatively high yield and stable return and
which, over a period of years, may also provide capital appreciation. Capital
growth potential is a secondary factor in the selection of portfolio securities
of the Fund.
A Prospectus for the Fund dated October 31, 1995, which provides the basic
information you should know before investing in the Fund, may be obtained
without charge from INVESCO Funds Group, Inc., Post Office Box 173706, Denver,
Colorado 80217-3706. This Statement of Additional Information is not a
Prospectus, but contains information in addition to and more detailed than that
set forth in the Prospectus. It is intended to provide additional information
regarding the activities and operations of the Fund, and should be read in
conjunction with the Prospectus.
Investment Adviser and Distributor: INVESCO FUNDS GROUP, INC.
- -----------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS Page
INVESTMENT POLICIES AND RESTRICTIONS 30
THE FUND AND ITS MANAGEMENT 34
HOW SHARES CAN BE PURCHASED 46
HOW SHARES ARE VALUED 50
FUND PERFORMANCE 51
SERVICES PROVIDED BY THE FUND 53
TAX-DEFERRED RETIREMENT PLANS 54
HOW TO REDEEM SHARES 54
DIVIDENDS, CAPITAL GAIN DISTRIBUTIONS AND TAXES 55
INVESTMENT PRACTICES 57
ADDITIONAL INFORMATION 59
<PAGE>
INVESTMENT POLICIES AND RESTRICTIONS
In pursuing its investment objective, the Fund endeavors to select and
purchase securities providing reasonably secure dividend or interest income.
Sometimes warrants are acquired when offered with income-producing securities,
but the warrants are disposed of as soon as that can be done in an orderly
fashion consistent with the best interests of the Fund's shareholders. Acquiring
warrants involves a risk that the Fund will lose the premium it pays to acquire
warrants if the Fund does not exercise a warrant before it expires. The major
portion of the investment portfolio normally consists of common stocks,
convertible bonds and debentures, and preferred stocks; however, there may also
be substantial holdings of straight debt securities, including non-investment
grade and unrated debt securities.
Debt Securities. As discussed in the section of the Fund's Prospectus
entitled "Investment Policies and Risks," the straight debt securities in which
the Fund invests are generally subject to two kinds of risk, credit risk and
market risk. The ratings given a straight debt security by Moody's and Standard
& Poor's ("S&P") provide a generally useful guide as to such credit risk. The
lower the rating given a debt security by such rating service, the greater the
credit risk such rating service perceives to exist with respect to such
security. Increasing the amount of Fund assets invested in unrated or lower
grade (Ba or less by Moody's, BB or less by S&P) straight debt securities, while
intended to increase the yield produced by the Fund's straight debt securities,
will also increase the credit risk to which those straight debt securities are
subject.
Lower rated straight debt securities and non-rated securities of
comparable quality tend to be subject to wider fluctuations in yields and market
values than higher rated straight debt securities and may have speculative
characteristics. Although the Fund may invest in straight debt securities
assigned lower grade ratings by S&P or Moody's, the Fund's investments have
generally been limited to straight debt securities rated B or higher by either
S&P or Moody's. Straight debt securities rated lower than B by either S&P or
Moody's may be highly speculative. The Fund's investment adviser intends to
limit such Fund investments to straight debt securities which are not believed
by the adviser to be highly speculative and which are rated at least CCC or Caa,
respectively, by S&P or Moody's. In addition, a significant economic downturn or
major increase in interest rates may well result in issuers of lower rated
straight debt securities experiencing increased financial stress which would
adversely affect their ability to service their principal and interest
obligations, to meet projected business goals, and to obtain additional
financing. While the Fund's investment adviser attempts to limit purchases of
lower rated straight debt securities to securities having an established retail
secondary market, the market for such securities may not be as liquid as the
<PAGE>
market for higher rated straight debt securities. Bonds rated Caa by Moody's may
be in default or there may be present elements of danger with respect to
principal or interest. Lower rated bonds by Standard & Poor's (categories BB, B,
CCC) include those which 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 will likely have some quality
and protective characteristics, these are outweighed by large uncertainties or
major risk exposures to adverse conditions. For a specific description of each
corporate bond rating category, please refer to Appendix A.
Repurchase Agreements. As discussed in the Prospectus, the Fund may enter
into repurchase agreements with respect to debt instruments eligible for
investment by the Fund, with member banks of the Federal Reserve System,
registered broker-dealers, and registered government securities dealers, which
are deemed creditworthy under standards established by the Fund's board of
directors. A repurchase agreement may be considered a loan collateralized by
securities. The resale price reflects an agreed upon interest rate effective for
the period the instrument is held by the Fund and is unrelated to the interest
rate on the underlying instrument. In these transactions, the securities
acquired by the Fund (including accrued interest earned thereon) must have a
total value in excess of the value of the repurchase agreement, and are held as
collateral by the Fund's Custodian Bank until the repurchase agreement is
completed.
Restricted/144A Securities. In recent years, a large institutional market
has developed for certain securities that are not registered under the
Securities Act of 1933 (the "1933 Act"). Institutional investors will not
generally seek to sell these instruments to the general public, but instead will
often depend on an efficient institutional market in which such unregistered
securities can be readily resold 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 is not dispositive of
the liquidity of such investments.
Rule 144A under the 1933 Act establishes a "safe harbor" from the
registration requirements of the 1933 Act for resales of certain securities to
qualified institutional buyers. Institutional markets for restricted securities
that might develop as a result of Rule 144A could provide both readily
ascertainable values for restricted securities and the ability to liquidate an
investment in order to satisfy share redemption orders. An insufficient number
of qualified institutional buyers interested in purchasing Rule 144A-eligible
securities held by the Fund, however, could affect adversely the marketability
of such portfolio securities and the Fund might be unable to dispose of such
securities promptly or at reasonable prices.
<PAGE>
Loans of Portfolio Securities. The Fund also may lend its portfolio
securities to qualified brokers, dealers, banks, or other financial
institutions. This practice permits the Fund to earn income, which, in turn, can
be invested in additional securities to pursue the Fund's investment objective.
Loans of securities by the Fund will be collateralized by cash, letters of
credit, or securities issued or guaranteed by the U.S. government or its
agencies equal to at least 100% of the current market value of the loaned
securities, determined on a daily basis. Lending securities involves certain
risks, the most significant of which is the risk that a borrower may fail to
return a portfolio security. The Fund monitors the creditworthiness of borrowers
in order to minimize such risks. The Fund will not lend any security if, as a
result of such loan, the aggregate value of securities then on loan would exceed
33-1/3% of the Fund's net assets (taken at market value). While voting rights
may pass with the loaned securities, if a material event (e.g., proposed merger,
sale of assets, or liquidation) is to occur affecting an investment on loan, the
loan must be called and the securities voted. Loans of securities made by the
Fund will comply with all other applicable regulatory requirements, including
the rules of the New York Stock Exchange and the requirements of the Investment
Company Act of 1940, as amended (the "1940 Act"), and the rules of the
Securities and Exchange Commission (the "SEC") thereunder.
Investment Restrictions. As described in the section of the Fund's
Prospectus entitled "Investment Objective and Policies," the Fund has adopted
certain fundamental investment restrictions. Under these restrictions, the Fund
may not:
(1) issue preference shares or create any funded debt;
(2) sell short or buy on margin;
(3) borrow money except from banks in excess of 5% of the value of its
total net assets, and when borrowing, it is a temporary measure for
emergency purposes;
(4) buy or sell real estate, commodities, commodity contracts (however,
the Fund may purchase securities of companies investing in real
estate);
(5) invest in securities of any other investment company except for a
purchase or acquisition in accordance with a plan of reorganization,
merger or consolidation;
(6) invest in any company for the purpose of exercising control
or management;
<PAGE>
(7) buy other than readily marketable securities;
(8) purchase securities if the purchase would cause the Fund,
at the time, to have more than 5% of its total assets
invested in the securities of any one company or to own
more than 10% of the voting securities of any one company
(except obligations issued or guaranteed by the U.S. Government);
(9) engage in the underwriting of any securities;
(10) make loans to any person, except through the purchase of debt
securities in accordance with the Fund's investment policies, or the
lending of portfolio securities to broker-dealers or other
institutional investors, or the entering into repurchase agreements
with member banks of the Federal Reserve System, registered
broker-dealers and registered government securities dealers. The
aggregate value of all portfolio securities loaned may not exceed
33-1/3% of the Fund's total net assets (taken at current value). No
more than 10% of the Fund's total net assets may be invested in
repurchase agreements maturing in more than seven days;
(11) purchase securities of any company in which any officer or director
of the Fund or its investment adviser owns more than 1/2 of 1% of
the outstanding securities, or in which all of the officers and
directors of the Fund and its investment supervisor, as a group, own
more than 5% of such securities; or
(12) invest more than 25% of the value of the Fund's assets in one
particular industry.
The Fund has no written policy regarding the writing of put and call
options but has not engaged in such practices and does not anticipate doing so.
The first three restrictions set forth above are contained in the Fund's
charter and may not be changed without prior approval by the holders of
two-thirds of the outstanding shares of the Fund. The Fund's other investment
restrictions may be changed upon approval by the holders of a majority, as
defined in the 1940 Act, of the outstanding shares of the Fund.
<PAGE>
With respect to investment restriction (7) above, since the board of
directors has delegated to the Fund's investment adviser the authority to
determine that a liquid market exists for securities eligible for resale
pursuant to Rule 144A under the Securities Act of 1933, or any successor to such
rule, such securities are not subject to restriction (7) above. Under guidelines
established by the board of directors, the adviser will consider the following
factors, among others, in making this determination: (1) the unregistered nature
of a Rule 144A security, (2) the frequency of trades and quotes for the
security; (3) the number of dealers willing to purchase or sell the security and
the number of other potential purchasers; (4) dealer undertakings to make a
market in the security; and (5) the nature of the security and the nature of
marketplace trades (e.g., the time needed to dispose of the security, the method
of soliciting offers and the mechanics of transfer).
In applying restriction (12) above, the Fund uses an industry
classification system based on the O'Neil Database published by William O'Neil &
Co., Inc.
In addition to the foregoing investment restrictions, the Fund has given
undertakings to the State of Texas that the Fund may not invest in any oil, gas,
or mineral leases; and may not invest in real estate limited partnership
interests.
Under the 1940 Act, Fund directors and officers cannot be protected
against liability to the Fund or its shareholders to which they would be subject
because of willful misfeasance, bad faith, gross negligence or reckless
disregard of duties of their office.
THE FUND AND ITS MANAGEMENT
The Fund. The Fund was incorporated under the laws of Maryland
on March 20, 1959.
The Investment Adviser. INVESCO Funds Group, Inc., a Delaware corporation
("INVESCO"), is employed as the Fund's investment adviser. INVESCO was
established in 1932 and also serves as an investment adviser to INVESCO
Diversified Funds, Inc., INVESCO Dynamics Fund, Inc., INVESCO Emerging
Opportunity Funds, Inc., INVESCO Growth Fund, Inc., INVESCO Income Funds, Inc.,
INVESCO International Funds, Inc., INVESCO Money Market Funds, Inc., INVESCO
Multiple Asset Funds, Inc., INVESCO Specialty Funds, Inc., INVESCO Strategic
Portfolios, Inc., INVESCO Tax-Free Income Funds, Inc., INVESCO Value Trust, and
INVESCO Variable Investment Funds, Inc.
The Sub-Adviser. INVESCO Trust Company ("INVESCO Trust") serves as the
sub-adviser to the Fund, pursuant to an agreement between INVESCO and INVESCO
Trust. INVESCO Trust, a trust company founded in 1969, is a wholly-owned
subsidiary of INVESCO.
<PAGE>
INVESCO is an indirect, wholly-owned subsidiary of INVESCO PLC, a
publicly-traded holding company organized in 1935. Through subsidiaries located
in London, Denver, Atlanta, Boston, Louisville, Dallas, Tokyo, Hong Kong, and
the Channel Islands, INVESCO PLC provides investment services around the world.
INVESCO was acquired by INVESCO PLC in 1982 and, as of June 30, 1995, managed 14
mutual funds, consisting of 38 separate portfolios, on behalf of over 790,000
shareholders. INVESCO PLC's other North American subsidiaries include the
following:
--INVESCO Asset Management Limited of the United Kingdom manages pension
funds, investment trusts, unit trusts, and various investment portfolios on
behalf of private clients, charities, corporations, and foreign financial
institutions.
--INVESCO Capital Management, Inc. of Atlanta, Georgia manages
institutional investment portfolios, consisting primarily of discretionary
employee benefit plans for corporations and state and local governments, and
endowment funds. INVESCO Capital Management, Inc. is the sole shareholder of
INVESCO Services, Inc., a registered broker/dealer whose primary business is the
distribution of shares of two registered investment companies.
--INVESCO Management & Research, Inc. (formerly Gardner and Preston Moss,
Inc.) of Boston, Massachusetts, primarily manages pension and endowment
accounts.
--PRIMCO Capital Management, Inc. of Louisville, Kentucky, specializes in
managing stable return investments, principally on behalf of Section 401(k)
retirement plans.
--INVESCO Realty Advisors, Inc. of Dallas, Texas is responsible for
providing advisory services in the U.S. real estate markets for INVESCO PLC's
clients worldwide. Clients include corporate plans, public pension funds, and
endowment and foundation accounts.
The corporate headquarters of INVESCO PLC are located at 11 Devonshire
Square, London, EC2M 4YR, England.
As indicated in the Prospectus, INVESCO and INVESCO Trust permit
investment and other personnel to purchase and sell securities for their own
accounts in accordance with a compliance policy governing personal investing by
directors, officers and employees of INVESCO, INVESCO Trust and their North
American affiliates. The policy requires officers, inside directors, investment
and other personnel of INVESCO, INVESCO Trust and their North American
affiliates to pre-clear all transactions in securities not otherwise exempt
under the policy. Requests for trading authority will be denied when, among
other reasons, the proposed personal transaction would be contrary to the
provisions of the policy or would be deemed to adversely affect any transaction
then known to be under consideration for or to have been effected on behalf of
any client account, including the Fund.
In addition to the pre-clearance requirement described above, the policy
subjects officers, inside directors, investment and other personnel of INVESCO,
INVESCO Trust and their North American affiliates to various trading
restrictions and reporting obligations. All reportable transactions are reviewed
for compliance with the policy.
The provisions of this policy are administered by and subject to exceptions
authorized by INVESCO or INVESCO Trust.
<PAGE>
Investment Advisory Agreement. INVESCO serves as investment adviser
pursuant to an investment advisory agreement (the "Agreement") with the Fund
which was approved on April 24, 1991, by vote cast in person by a majority of
the directors of the Fund, including a majority of the directors who are not
"interested persons" of the Fund or INVESCO at a meeting called for such
purpose. The Agreement was approved by Fund shareholders on September 30, 1991,
for an initial term expiring April 30, 1993, and has been continued by action of
the board of directors until April, 30, 1996. Thereafter, the Agreement may be
continued from year to year as long as such continuance is specifically approved
at least annually by the board of directors of the Fund, or by a vote of the
holders of a majority, as defined in the 1940 Act, of the outstanding shares of
the Fund. Any such continuance also must be approved by a majority of the Fund's
directors who are not parties to the Agreement or interested persons (as defined
in the 1940 Act) of any such party, cast in person at a meeting called for the
purpose of voting on such continuance. The Agreement may be terminated at any
time without penalty by either party upon sixty (60) days' written notice and
terminates automatically in the event of an assignment to the extent required by
the 1940 Act and the Rules thereunder.
The Agreement provides that INVESCO shall manage the investment portfolio
of the Fund in conformity with the Fund's investment policies (either directly
or by delegation to a sub-adviser which may be a company affiliated with
INVESCO). Further, INVESCO shall perform all administrative, internal accounting
(including computation of net asset value), clerical, statistical, secretarial
and all other services necessary or incidental to the administration of the
affairs of the Fund excluding, however, those services that are the subject of
separate agreement between the Fund and INVESCO or any affiliate thereof,
including the distribution and sale of Fund shares and provision of transfer
agency, dividend disbursing agency, and registrar services, and services
furnished under an Administrative Services Agreement with INVESCO discussed
below. Services provided under the Agreement include, but are not limited to:
supplying the Fund with officers, clerical staff and other employees, if any,
who are necessary in connection with the Fund's operations; furnishing office
space, facilities, equipment, and supplies; providing personnel and facilities
required to respond to inquiries related to shareholder accounts; conducting
periodic compliance reviews of the Fund's operations; preparation and review of
required documents, reports and filings by the Adviser's in-house legal and
accounting staff (including the prospectus, statement of additional information,
proxy statements, shareholder reports, tax returns, reports to the SEC, and
other corporate documents of the Fund), except insofar as the assistance of
independent accountants or attorneys is necessary or desirable; supplying basic
telephone service and other utilities; and preparing and maintaining certain of
the books and records required to be prepared and maintained by the Fund under
the Investment Company Act of 1940. Expenses not assumed by INVESCO are borne by
the Fund.
<PAGE>
As full compensation for its advisory services to the Fund, INVESCO
receives a monthly fee. The fee is computed at the annual rate of: 0.60% on the
first $350 million of the Fund's average net assets; 0.55% on the next $350
million of the Fund's average net assets; and 0.50% of the Fund's average net
assets in excess of $700 million. Effective October 15, 1992, INVESCO has
voluntarily agreed to waive that portion of its fee which exceeds 0.45% of the
average net assets of the Fund in excess of $2 billion. In addition, effective
October 21, 1993, INVESCO has voluntarily agreed to waive that portion of its
fee which exceeds 0.40% of the average net assets of the Fund in excess of $4
billion. For the fiscal years ended June 30, 1995, 1994, and 1993, the Fund paid
INVESCO (prior to the voluntary absorption of certain Fund expenses by INVESCO)
advisory fees of $19,946,443, $19,598,151, and $14,324,368, respectively.
Certain states in which the shares of the Fund are qualified for sale
currently impose limitations on the expenses of the Fund. At the date of this
Statement of Additional Information, the most restrictive state-imposed annual
expense limitation requires that INVESCO absorb any amount necessary to prevent
the Fund's aggregate ordinary operating expenses (excluding interest, taxes,
brokerage fees and commissions, and extraordinary charges such as litigation
costs) from exceeding in any fiscal year 2.5% on the Fund's first $30,000,000 of
average net assets, 2.0% on the next $70,000,000 of average net assets and 1.5%
on the remaining average net assets. No payment of the investment advisory fee
will be made to INVESCO which would result in Fund expenses exceeding on a
cumulative annualized basis this state limitation. During the past year, INVESCO
did not absorb any amounts under this provision.
Sub-Advisory Agreement. INVESCO Trust serves as sub-adviser to the Fund
pursuant to a sub-advisory agreement (the "Sub-Agreement") with INVESCO which
was approved on April 24, 1991, by a vote cast in person by a majority of the
directors of the Fund, including a majority of the directors who are not
"interested persons" of the Fund, INVESCO, or INVESCO Trust at a meeting called
for such purpose. The Sub-Agreement was approved on September 30, 1991, by Fund
shareholders for an initial term expiring April 30, 1993, and has been continued
by action of the board of directors until April 30, 1996. Thereafter, the
Sub-Agreement may be continued from year to year as long as each such
continuance is specifically approved by the board of directors of the Fund, or
by a vote of the holders of a majority, as defined in the Investment Company Act
of 1940, of the outstanding shares of the Fund. Each such continuance also must
be approved by a majority of the directors who are not parties to the
Sub-Agreement or interested persons, as defined in the 1940 Act of any such
party, cast in person at a meeting called for the purpose of voting on such
continuance. The Sub-Agreement may be terminated at any time without penalty by
either party or the Fund upon sixty (60) days' written notice, and terminates
automatically in the event of an assignment to the extent required by the 1940
Act and the rules thereunder.
The Sub-Agreement provides that INVESCO Trust, subject to the supervision
of INVESCO, shall manage the investment portfolio of the Fund in conformity with
the Fund's investment policies. These management services would include: (a)
managing the investment and reinvestment of all the assets, now or hereafter
acquired, of the Fund, and executing all purchases and sales of portfolio
securities; (b) maintaining a continuous investment program for the Fund,
consistent with (i) the Fund's investment policies as set forth in the Fund'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 Fund,
<PAGE>
as from time to time amended and in use under the 1933 Act and (ii) the
Fund'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 the Fund, unless otherwise directed by the directors of the Fund or INVESCO,
and executing transactions accordingly; (d) providing the Fund the benefit of
all 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 the
Sub-Adviser; (e) determining what portion of the Fund should be invested in the
various types of securities authorized for purchase by the Fund; and (f) making
recommendations as to the manner in which voting rights, rights to consent to
Fund action and any other rights pertaining to the Fund's portfolio securities
shall be exercised.
The Sub-Agreement provides that as compensation for its services, INVESCO
Trust shall receive from INVESCO, at the end of each month, a fee based upon the
average net assets of the Fund at the following annual rates: 0.25% on the
Fund's average net assets up to $200 million, and 0.20% on the Fund's average
net assets in excess of $200 million. Effective October 15, 1992, INVESCO Trust
has voluntarily agreed to waive that portion of its sub-advisory fee which
exceeds 0.18% of the average net assets of the Fund in excess of $2 billion. In
addition, effective October 21, 1993, INVESCO Trust has voluntarily agreed to
waive that portion of its sub-advisory fee which exceeds 0.16% of the average
net assets of the Fund in excess of $4 billion. The Sub-Advisory fee is paid by
INVESCO, NOT the Fund.
Administrative Services Agreement. INVESCO, either directly or through
affiliated companies, also provides certain administrative, sub-accounting, and
recordkeeping services to the Fund pursuant to an Administrative Services
Agreement dated April 30, 1991 (the "Administrative Agreement"). The
Administrative Agreement was approved on April 24, 1991, by a vote cast in
person by all of the directors of the Fund, including all of the directors who
are not "interested persons" of the Fund or INVESCO at a meeting called for such
purpose. The Administrative Agreement was for an initial term of one year
expiring April 30, 1992, and has been continued by action of the board of
directors until April 30, 1996. The Administrative Agreement may be continued
from year to year as long as each such continuance is specifically approved by
the board of directors of the Fund, including a majority of the directors who
are not parties to the Administrative Agreement or interested persons (as
defined in the Investment Company Act of 1940) of any such party, cast in person
at a meeting called for the purpose of voting on such continuance. The
Administrative Agreement may be terminated at any time without penalty by
INVESCO on sixty (60) days' written notice, or by the Fund upon thirty (30)
days' written notice, and terminates automatically in the event of an assignment
unless the Fund's board of directors approves such assignment.
The Administrative Agreement provides that INVESCO shall provide the
following services to the Fund: (A) such sub-accounting and recordkeeping
services and functions as are reasonably necessary for the operation of the
Fund; and (B) 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.
<PAGE>
As full compensation for services provided under the Administrative
Agreement, the Fund pays a fee to INVESCO consisting of a base fee of $10,000
per year, plus an additional incremental fee computed daily and paid monthly at
an annual rate of 0.015% per year of the average net assets of the Fund.
During the fiscal years ended June 30, 1995, 1994, and 1993, the Fund paid
INVESCO administrative services fees in the amount of $592,643, $582,063, and
$424,003, respectively.
Transfer Agency Agreement. INVESCO also performs transfer agent, dividend
disbursing agent, and registrar services for the Fund pursuant to a Transfer
Agency Agreement which was approved by the board of directors of the Fund,
including a majority of the Fund's directors who are not parties to the Transfer
Agency Agreement or "interested persons" of any such party, in April 1992, for a
term of one year. The Transfer Agency Agreement has been continued by action of
the board of directors until April 30, 1996, and thereafter may be continued
from year to year as long as such continuance is specifically approved at least
annually by the board of directors of the Fund, or by a vote of the holders of a
majority of the outstanding shares of the Fund. Any such continuance also must
be approved by a majority of the Fund's directors who are not parties to the
Transfer Agency Agreement or interested persons (as defined by the 1940 Act) of
any such party, cast in person at a meeting called for the purpose of voting on
such continuance. The Transfer Agency Agreement may be terminated at any time
without penalty by either party upon sixty (60) days' written notice and
terminates automatically in the event of assignment.
The Transfer Agency Agreement provides that the Fund shall pay to INVESCO
a fee of $14.00 per shareholder account and omnibus account participant per
year. This fee is paid monthly at 1/12 of the annual fee and is based upon the
actual number of shareholder accounts or omnibus account participants in
existence at any time during each month. For the fiscal years ended June 30,
1995, 1994, and 1993, the Fund paid INVESCO transfer agency fees of $5,386,968,
$4,168,479, and $3,650,070, respectively.
Officers and Directors of the Fund. The overall direction and supervision
of the Fund is the responsibility of the board of directors, which has the
primary duty of seeing that the Fund's general investment policies and programs
of the Fund are carried out and that the Fund's portfolio is properly
administered. The officers of the Fund, all of whom are officers and employees
of and paid by INVESCO, are responsible for the day-to-day administration of the
Fund. The investment adviser for the Fund has the primary responsibility for
making investment decisions on behalf of the Fund. These investment decisions
are reviewed by the investment committee of INVESCO.
All of the officers and directors of the Fund hold comparable positions
with INVESCO Diversified Funds, Inc., INVESCO Dynamics Fund, Inc., INVESCO
Emerging Opportunity Funds, Inc., INVESCO Growth Fund, Inc., INVESCO Income
Shares, Inc., INVESCO International Funds, Inc., INVESCO Money Market Funds,
Inc., INVESCO Multiple Asset Funds, Inc., INVESCO Specialty Funds, Inc., INVESCO
Strategic Portfolios, Inc., INVESCO Tax-Free Income Funds, Inc., and INVESCO
Variable Investment Funds, Inc. In addition, all of the directors of the Fund
are also trustees of INVESCO Value Trust. In addition, all of the directors of
<PAGE>
the Fund, with the exception of Messrs. Hesser and Sim, also are trustees of
INVESCO Treasurer's Series Trust and directors of The EBI Funds, Inc. All of the
officers of the Fund also hold comparable positions with INVESCO Value Trust.
Set forth below is information with respect to each of the Fund's officers and
directors. Unless otherwise indicated, the address of the directors and officers
is Post Office Box 173706, Denver, Colorado 80217-3706. Their affiliations
represent their principal occupations during the past five years.
CHARLES W. BRADY,*+ Chairman of the Board. Chief Executive Officer and
Director of INVESCO PLC, London, England, and of various subsidiaries thereof;
Chairman of the Board of The EBI Funds, Inc., INVESCO Treasurer's Series Trust,
and The Global Health Sciences Fund. Address: 1315 Peachtree Street, NE,
Atlanta, Georgia. Born: May 11, 1935.
FRED A. DEERING,+# Vice Chairman of the Board. Vice Chairman of The EBI
Funds, Inc. and INVESCO Treasurer's Series Trust. Trustee of The Global Health
Sciences Fund. Chairman of the Executive Committee and, formerly, Chairman of
the Board of Security Life of Denver Insurance Company, Denver, Colorado;
Chairman of the Board of Midwestern United Life Insurance Company, Inc., Denver,
Colorado; Director of NN Financial, Toronto, Ontario, Canada; Director and
Chairman of the Executive Committee of ING America Life, Life Insurance Co. of
Georgia and Southland Life Insurance Company. Address: Security Life Center,
1290 Broadway, Denver, Colorado. Born: January 12, 1928.
DAN J. HESSER,+* President and Director. Chairman of the Board, President,
and Chief Executive Officer of INVESCO Funds Group, Inc., and Director of
INVESCO Trust Company. Trustee of The Global Health Sciences Fund. Born:
December 27, 1939.
VICTOR L. ANDREWS,** Director. Mills Bee Lane Professor of Banking and
Finance and Chairman of the Department of Finance at Georgia State University,
Atlanta, Georgia, since 1968; since October 1984, Director of the Center for the
Study of Regulated Industry at Georgia State University; formerly, member of the
faculties of the Harvard Business School and the Sloan School of Management of
MIT. Dr. Andrews is also a Director of The Southeastern Thrift and Bank Fund,
Inc. and The Sheffield Funds, Inc. Address: Department of Finance, Georgia State
University, University Plaza, Atlanta, Georgia. Born: June 23, 1930.
BOB R. BAKER,+** Director. President and Chief Executive Officer of AMC
Cancer Research Center, Denver, Colorado, since January 1989; until mid-December
1988, Vice Chairman of the Board of First Columbia Financial Corporation (a
financial institution), Englewood, Colorado. Formerly, Chairman of the Board and
Chief Executive Officer of First Columbia Financial Corporation. Address: 1775
Sherman Street, #1000, Denver, Colorado. Born: August 7, 1936.
FRANK M. BISHOP*, Director. President and Chief Operating Officer of
INVESCO Inc. since February, 1993; Director of INVESCO Funds Group, Inc.;
Director (since February 1993), Vice President (since December 1991), and
Portfolio Manager (since February 1987), of INVESCO Capital Management, Inc.
(and predecessor firms) of Atlanta, Georgia. Address: 1315 Peachtree Street,
N.E., Atlanta, Georgia. Born: December 7, 1943.
<PAGE>
LAWRENCE H. BUDNER,# Director. Trust Consultant; prior to June 30, 1987,
Senior Vice President and Senior Trust Officer of InterFirst Bank, Dallas,
Texas. Address: 7608 Glen Albens, Dallas, Texas. Born: July 25, 1930.
DANIEL D. CHABRIS,+# Director. Financial Consultant; Assistant Treasurer of
Colt Industries Inc., New York, New York, from 1966 to 1988. Address: 15
Sterling Road, Armonk, New York. Born: August 1, 1923.
A. D. FRAZIER, JR.,** Director. Chief Operating Officer of the Atlanta
Committee for the Olympic Games. From 1982 to 1991, Mr. Frazier was employed in
various capacities by First Chicago Bank, most recently as Executive Vice
President of the North American Banking Group. Trustee of The Global Health
Sciences Fund. Address: 250 Williams Street, Suite 6000, Atlanta, Georgia 30301.
Born: June 29, 1944.
KENNETH T. KING,** Director. Formerly, Chairman of the Board of The Capitol
Life Insurance Company, Providence Washington Insurance Company, and Director of
numerous subsidiaries thereof in the U.S. Formerly, Chairman of the Board of The
Providence Capitol Companies in the United Kingdom and Guernsey. Chairman of the
Board of the Symbion Corporation (a high technology company) until 1987.
Address: 4080 North Circulo Manzanillo, Tucson, Arizona. Born: November 16,
1925.
JOHN W. MCINTYRE,# Director. Retired. Formerly, Vice Chairman of the Board
of Directors of the Citizens and Southern Corporation and Chairman of the Board
and Chief Executive Officer of the Citizens and Southern Georgia Corporation and
Citizens and Southern National Bank. Director of Golden Poultry Co., Inc.
Trustee of The Global Health Sciences Fund and Gables Residential Trust.
Address: Seven Piedmont Center, Suite 100, Atlanta, Georgia 30305. Born:
September 14, 1930.
R. DALTON SIM*, Director. Chairman of the Board (since March 1993) and
President (since January 1991), of INVESCO Trust Company; Director since June
1987 and, formerly, Executive Vice President and Chief Investment Officer (June
1987 to January 1991) of INVESCO Funds Group, Inc.; President (since 1994) and
Trustee (since 1991) of The Global Health Sciences Fund. Born: July 18, 1939.
GLEN A. PAYNE, Secretary. Senior Vice President, General Counsel and
Secretary of INVESCO Funds Group, Inc. and INVESCO Trust Company; formerly,
employee of a U.S. regulatory agency, Washington, D.C., (June 1973 through May
1989). Born: September 25, 1947.
RONALD L. GROOMS, Treasurer. Senior Vice President and Treasurer of INVESCO
Funds Group, Inc. and INVESCO Trust Company. Born: October 1, 1946.
WILLIAM J. GALVIN, JR., Assistant Secretary. Senior Vice President of
INVESCO Funds Group, Inc. and Trust Officer of INVESCO Trust Company; Vice
President of 440 Financial Group from June 1990 to August 1992; Assistant Vice
President of Putnam Companies from November 1986 to June 1990. Born: August 21,
1956.
ALAN I. WATSON, Assistant Secretary. Vice President of INVESCO Funds Group,
Inc. and Trust Officer of INVESCO Trust Company. Born: September 14, 1941.
<PAGE>
JUDY P. WIESE, Assistant Treasurer. Vice President of INVESCO Funds Group,
Inc. and Trust Officer of INVESCO Trust Company. Born: February 3, 1948.
#Member of the audit committee of the Fund.
+Member of the executive committee of the Fund. On occasion, the executive
committee acts upon the current and ordinary business of the Fund 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 Fund. All decisions are
subsequently submitted for ratification by the board of directors.
*These directors are "interested persons" of the Fund as defined in the
Investment Company Act of 1940.
**Member of the management liaison committee of the Fund.
As of August 1, 1995, officers and directors of the Fund, as a group,
beneficially owned less than 1% of the Fund's outstanding shares.
Director Compensation
The following table sets forth, for the fiscal year ended June 30, 1995:
the compensation paid by the Fund to its eight independent directors for
services rendered in their capacities as directors of the Fund; the benefits
accrued as Fund expenses with respect to the 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
Fund. In addition, the table sets forth the total compensation paid by all of
the mutual funds distributed by INVESCO Funds Group, Inc. (including the Fund),
The EBI Funds, Inc., INVESCO Treasurer's Series Trust and The Global Health
Sciences Fund (collectively, the "INVESCO Complex") to these directors for
services rendered in their capacities as directors or trustees during the year
ended December 31, 1994. As of December 31, 1994, there were 45 funds in the
INVESCO Complex.
Total
Compensa-
Benefits Estimated tion From
Aggregate Accrued As Annual INVESCO
Compensa- Part of Benefits Complex
tion From Fund Upon Paid To
Fund1 Expenses2 Retirement3 Directors1
Fred A.Deering, $16,719 $13,616 $ 7,187 $89,350
Vice Chairman of the Board
Victor L. Andrews 12,344 12,866 8,320 68,000
Bob R. Baker 15,186 11,489 11,150 75,350
Lawrence H. Budner 12,344 12,866 8,320 68,000
<PAGE>
Daniel D. Chabris 14,396 14,683 5,913 73,350
A. D. Frazier, Jr.4 2,573 0 0 32,500
Kenneth T. King 13,889 14,139 6,519 71,000
John W. McIntyre4 2,573 0 0 33,000
Total $90,024 $79,659 $47,409 $510,550
% of Net Assets 0.0022%5 0.0020%5 0.0052%6
1The vice chairman of the board, the chairmen of the audit, management
liaison and compensation committees, and the members of the executive and
valuation committees each receive compensation for serving in such capacities in
addition to the compensation paid to all independent directors.
2Represents benefits accrued with respect to the Defined Benefit Deferred
Compensation Plan discussed below, and not compensation deferred at the election
of the directors.
3These figures represent the Fund's share of the estimated annual benefits
payable by the INVESCO Complex (excluding the Global Health Sciences Fund which
does not participate in any retirement plan) upon the directors' retirement,
calculated using the current method of allocating director compensation among
the funds in the INVESCO Complex. These estimated benefits assume retirement at
age 72 and that the basic retainer payable to the directors will be adjusted
periodically for inflation, for increases in the number of funds in the INVESCO
Complex, and for other reasons during the period in which retirement benefits
are accrued on behalf of the respective directors. This results in lower
estimated benefits for directors who are closer to retirement and higher
estimated benefits for directors who are further from retirement. With the
exception of Messrs. Frazier and McIntyre, each of these directors has served as
a director/trustee of one or more of the funds in the INVESCO Complex for the
minimum five-year period required to be eligible to participate in the Defined
Benefit Deferred Compensation Plan.
4Messrs. Frazier and McIntyre began serving as directors of the
Fund on April 19, 1995.
5Totals as a percentage of the Fund's net assets as of June
30, 1995.
6Total as a percentage of the net assets of the INVESCO Complex
as of December 31, 1994.
Messrs. Bishop, Brady, Hesser, and Sim, as "interested persons" of the
Fund and other funds in the INVESCO Complex, 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 Fund or other funds in the
INVESCO Complex for their services as directors.
<PAGE>
The boards of directors/trustees of the mutual funds managed by INVESCO,
The EBI Funds, Inc. and INVESCO Treasurer's Series Trust have adopted a Defined
Benefit Deferred Compensation Plan for the non- interested directors and
trustees of the funds. Under this plan, each director or trustee who is not an
interested person of the funds (as defined in the 1940 Act) and who has served
for at least five years (a "qualified director") is entitled to receive, upon
retiring from the boards at the retirement age of 72 (or the retirement age of
73 to 74, if the retirement date is extended by the boards for one or two years,
but less than three years) continuation of payment for one year (the "first year
retirement benefit") of the annual basic retainer payable by the funds to the
qualified director at the time of his retirement (the "basic retainer").
Commencing with any such director's second year of retirement, and commencing
with the first year of retirement of a director whose retirement has been
extended by the board for three years, a qualified director shall receive
quarterly payments at an annual rate equal to 25% of the basic retainer. These
payments will continue for the remainder of the qualified director's life or ten
years, whichever is longer (the "reduced retainer 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 the reduced
retainer payments will be made to him or to his 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
retainer payments will be made to his beneficiary or estate. 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, EBI and Treasurer's Series funds in a manner
determined to be fair and equitable by the committee. The Fund is not making any
payments to directors under the plan as of the date of this Statement of
Additional Information. The Fund 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.
The Fund has an audit committee comprised of four of the directors who are
not interested persons of the Fund. The committee meets periodically with the
Fund's independent accountants and officers to review accounting principles used
by the Fund, the adequacy of internal controls, the responsibilities and fees of
the independent accountants, and other matters.
The Fund also has a management liaison committee which meets quarterly
with various management personnel of INVESCO in order (a) to facilitate better
understanding of management and operations of the Fund, and (b) 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.
HOW SHARES CAN BE PURCHASED
The Fund's shares are sold on a continuous basis at the net asset value per
share next calculated after receipt of a purchase order in good form. The net
asset value per share is computed once each day that the New York Stock Exchange
is open as of the close of regular trading on that Exchange, but may also be
computed at other times. See "How Shares Are Valued." INVESCO acts as the Fund's
Distributor under a distribution agreement with the Fund under which it receives
no compensation and bears all expenses, including the cost of printing and
distributing prospectuses, incident to marketing of the Fund's shares, except
for such distribution expenses which are paid out of Fund assets under the
Fund's Plan of Distribution which has been adopted by the Fund pursuant to Rule
12b-1 under the 1940 Act.
<PAGE>
Distribution Plan. As discussed under "How to Buy Shares-- Distribution
Expenses" in the Prospectus, the Fund has adopted a Plan and Agreement of
Distribution (the "Plan") pursuant to Rule 12b-1 under the 1940 Act, which was
implemented on November 1, 1990. The Plan provides that the Fund may make
monthly payments to INVESCO of amounts computed at an annual rate no greater
than 0.25% of the Fund's average net assets during any 12-month period to
reimburse INVESCO for expenses incurred in connection with the distribution of
the Fund's shares to investors. For the fiscal year ended June 30, 1995, the
Fund made payments to INVESCO under the Plan in the amount of $11,766,872. In
addition, as of June 30, 1995, $509,713 of additional distribution expenses had
been incurred for the Fund, subject to payment upon approval of the Fund's
directors. As noted in the section of the Fund's Prospectus entitled "How to Buy
Shares--Distribution Expenses," one type of reimbursable expenditure is the
payment of compensation 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 Fund. The Fund is authorized by the Plan to use its assets to finance
the payments made to obtain those services. Payments will be made by INVESCO 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, the Fund does not believe that these limitations would affect the
ability of such banks to enter into arrangements with INVESCO, 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 Fund possibly could decrease to the extent
that the banks would no longer invest customer assets in the Fund. Neither the
Fund 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 the Fund.
For the fiscal year ended June 30, 1995, allocation of 12b-1 amounts paid
by the Fund for the following categories of expenses were:
advertising--$3,746,412; sales literature, printing, and postage--$1,365,290;
direct mail--$2,212,918; public relations/promotion--$546,727; compensation to
securities dealers and other organizations--$2,202,590; marketing
personnel--$1,692,935.
The nature and scope of services which are provided by securities dealers
and other organizations may vary by dealer but include, among other things,
processing new stockholder account applications, preparing and transmitting to
the Fund'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 Fund, and assisting in other customer
transactions with the Fund.
The Plan was approved on April 17, 1990, at a meeting called for such
purpose by a majority of the directors of the Fund, including a majority of the
directors who neither are "interested persons" of the Fund nor have any
financial interest in the operation of the Plan ("12b-1 directors"), and was
also approved by holders of a majority of the outstanding shares of the Fund on
June 29, 1990. Continuation of the Plan for another year was approved by the
board of directors of the Fund, including a majority of the 12b-1 directors, on
April 19, 1995.
<PAGE>
The Plan provides that it shall continue in effect with respect to the
Fund for so long as such continuance is approved at least annually by the vote
of the board of directors of the Fund cast in person at a meeting called for the
purpose of voting on such continuance. The Plan can also be terminated at any
time with respect to the Fund, without penalty, if a majority of the 12b-1
directors, or shareholders of the Fund, vote to terminate the Plan. The Fund
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 the Fund, the investment climate for the Fund,
general market conditions, and the volume of sales and redemptions of Fund
shares. The Plan may continue in effect and payments may be made under the Plan
following any such temporary suspension or limitation of the offering of Fund
shares; however, the Fund is not contractually obligated to continue the Plan
for any particular period of time. Suspension of the offering of Fund shares
would not, of course, affect a shareholder's ability to redeem his shares. So
long as the Plan is in effect, the selection and nomination of persons to serve
as independent directors of the Fund shall be committed to the independent
directors then in office at the time of such selection or nomination. The Plan
may not be amended to increase materially the amount of the Fund's payments
thereunder without approval of the shareholders of the Fund, and all material
amendments to the Plan must be approved by the board of directors of the Fund,
including a majority of the 12b-1 directors. Under the agreement implementing
the Plan, INVESCO or the Fund, the latter by vote of a majority of the 12b-1
directors, or of the holders of a majority of the Fund's outstanding voting
securities, may terminate such agreement without penalty upon thirty days'
written notice to the other party. No further payments will be made by the Fund
under the Plan in the event of its termination.
To the extent that the 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, the Fund's obligation to make payments to INVESCO shall
terminate automatically, in the event of such "assignment," in which event the
Fund may continue to make payments pursuant to the Plan to INVESCO or another
organization only upon the approval of new arrangements, which may or may not be
with INVESCO, regarding the use of the amounts authorized to be paid by it under
the Plan, by the directors, including a majority of the 12b-1 directors, by a
vote cast in person at a meeting called for such purpose.
Information regarding the services rendered under the Plan and the amounts
paid therefor by the Fund are provided to, and reviewed by, the directors on a
quarterly basis. In the quarterly review, the directors shall determine whether,
and to what extent, INVESCO will be reimbursed for expenditures which it has
made that are reimbursable under the Fund's Rule 12b-1 Plan. On an annual basis,
the directors shall consider the continued appropriateness of the Plan and the
level of compensation provided therein.
<PAGE>
The only directors or interested persons, as that term is defined in
Section 2(a)(19) of the 1940 Act, of the Fund who have a direct or indirect
financial interest in the operation of the Plan are the officers and directors
of the Fund listed herein under the section entitled "The Fund and Its
Management-Officers and Directors of the Fund" who are also officers either of
INVESCO or companies affiliated with INVESCO. The benefits which the Fund
believes will be reasonably likely to flow to it and its shareholders under the
Plan include the following:
(1) 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 Fund;
(2) The sale of additional shares reduces the likelihood that redemption
of shares will require the liquidation of Fund securities in amounts
and at times that are disadvantageous for investment purposes;
(3) The positive effect which increased Fund assets will have on its
revenues could allow INVESCO:
(a) To have greater resources to make the financial commitments
necessary to improve the quality and level of Fund and
shareholder services (in both systems and personnel),
(b) To increase the number and type of mutual funds available to
investors from INVESCO (and support them in their infancy),
and thereby expand the investment choices available to all
shareholders, and
(c) To acquire and retain talented employees who desire to be
associated with a growing organization; and
(4) Increased Fund assets may result in reducing each investor's share
of certain expenses through economies of scale (e.g. exceeding
established breakpoints in the advisory fee schedule and allocating
fixed expenses over a larger asset base), thereby partially
offsetting the costs of the Plan.
<PAGE>
HOW SHARES ARE VALUED
As described in the section of the Fund's Prospectus entitled "Fund Price
and Performance" the net asset value of shares of the Fund is computed once each
day that the New York Stock Exchange is open as of the close of regular trading
on that Exchange (generally 4:00 p.m., New York time) and applies to purchase
and redemption orders received prior to that time. Net asset value per share is
also computed on any other day on which there is a sufficient degree of trading
in the securities held by the Fund that the current net asset value per share
might be materially affected by changes in the value of the securities held, but
only if on such day the Fund receives a request to purchase or redeem shares.
Net asset value per share is not calculated on days the New York Stock Exchange
is closed, such as federal holidays, including New Year's Day, Presidents' Day,
Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving, and
Christmas.
The net asset value per share of the Fund is calculated by dividing the
value of all securities held by the Fund and its other assets (including
dividends and interest accrued but not collected), less the Fund's liabilities
(including accrued expenses), by the number of outstanding shares of the Fund.
Securities traded on national securities exchanges, the NASDAQ National Market
System, the NASDAQ Small Cap market and foreign markets are valued at their last
sale prices on the exchanges or markets where such securities are primarily
traded. Securities traded in the over-the-counter markets for which last sale
prices are not available, and listed securities for which no sales were reported
on a particular date, are valued at their highest closing bid prices (or, for
debt securities, yield equivalents thereof) obtained from one or more dealers
making markets for such securities. If market quotations are not readily
available, securities or other assets will be valued at their fair value as
determined in good faith by the Fund's board of directors or pursuant to
procedures adopted by the board of directors. The above procedures may include
the use of valuations furnished by a pricing service which employs a matrix to
determine valuations for normal institutional-size trading units of debt
securities. Prior to a pricing service, the Fund's board of directors reviews
the methods used by such service to assure itself that securities will be valued
at their fair values. The Fund's board of directors also periodically monitors
the methods used by such pricing services. Debt securities with remaining
maturities of 60 days or less at the time of purchase normally are valued at
amortized cost.
The values of securities held by the Fund and other assets used in
computing net asset value generally are determined as of the time regular
trading in such securities or assets is completed each day. Since regular
trading in most foreign securities markets is completed simultaneously with, or
prior to, the close of the New York Stock Exchange, closing prices for foreign
securities usually are available for purposes of computing the Fund's net asset
value. However, in the event that the closing price of a foreign security is not
available in time to calculate a Fund's net asset value on a particular day, the
Fund's board of directors has authorized the use of the market price for the
security obtained from an approved pricing service at an established time during
the day which may be prior to the close of regular trading in the security.
FUND PERFORMANCE
As discussed in the section of the Fund's Prospectus entitled "Fund Price
and Performance," the Fund advertises its yield and total return performance. In
calculating yield quotations for the Fund, interest earned is determined by
computing yield to maturity (or yield to call, if applicable) of each obligation
held by the Fund, based upon the market value of each obligation (including
actual accrued interest) at the close of business on the last business day of
each month, or, with respect to an obligation purchased during the month, the
purchase price plus accrued interest. The resultant yield to maturity is divided
by 360 and multiplied by the market value of the obligation (including actual
accrued interest), and the result is multiplied by the number of days in the
subsequent month that the obligation is in the Fund (assuming that each month
has 30 days). Dividends received held by the Fund are recognized, for purposes
of yield calculations, on a daily accrual basis. The Fund's yield for the 30
days ended June 30, 1995, was 3.13%.
Average annual total return performance for the one-, five- and ten-year
periods ended June 30, 1995, was 14.79%, 12.65% and 14.96%, respectively.
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)n = ERV
where: P = initial payment of $1000
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.
In conjunction with performance reports, comparative data between the
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
service for the Fund, comparative data between the Fund's performance for a
given period and recognized indices of investment results for the same period,
and/or assessments of the quality of shareholder service, may be provided to
shareholders. Such indices include indices provided by Dow Jones & Company,
Standard & Poor's, Lipper Analytical Services, Inc., Lehman Brothers, National
Association of Securities Dealers Automated Quotations, Frank Russell Company,
Value Line Investment Survey, the American Stock Exchange, Morgan Stanley
Capital International, Wilshire Associates, the Financial Times Stock Exchange,
the New York Stock Exchange, the Nikkei Stock Average and Deutcher Aktienindex,
all of which are unmanaged market indicators. In addition, rankings, ratings,
and comparisons of investment performance and/or assessments of the quality of
shareholder service 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 Analytical Services, Inc.; or (iii) by
other recognized analytical services. The Lipper Analytical Services, Inc.
mutual fund rankings and comparisons which may be used by the Fund in
performance reports will be drawn from the "Equity Income Funds" mutual fund
grouping, in addition to the broad-based Lipper general fund groupings. Sources
for Fund performance information and articles about the Fund 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 Analytical Services, Inc.'s Mutual Fund Performance
Analysis
Money
Morningstar
Mutual Fund Forecaster
No-Load Analyst
No-Load Fund X
Performance Analysis
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
Wall Street Journal
Wiesenberger Investment Companies Services
Working Woman
Worth
<PAGE>
SERVICES PROVIDED BY THE FUND
Periodic Withdrawal Plan. As described in the section of the Fund's
Prospectus entitled "How to Sell Shares," the Fund offers a Periodic Withdrawal
Plan. All dividends and distributions on shares owned by shareholders
participating in this Plan are reinvested in additional shares. Since withdrawal
payments represent the proceeds from sales of shares, the amount of
shareholders' investments in the Fund will be reduced to the extent that
withdrawal payments exceed dividends and other distributions paid and
reinvested. Any gain or loss on such redemptions must be reported for tax
purposes. In each case, shares will be redeemed at the close of business on or
about the 20th day of each month preceding payment, and payments will be mailed
within five business days thereafter.
The Periodic Withdrawal Plan involves the use of principal and is not a
guaranteed annuity. Payments under such Plan do not represent income or a return
on investment.
A Periodic Withdrawal Plan may be terminated at any time by sending a
written request to INVESCO. Upon termination, all future dividends and capital
gain distributions will be reinvested in additional shares unless a shareholder
requests otherwise.
Exchange Privilege. As discussed in the section of the Prospectus entitled
"How to Buy Shares--Exchange Privilege," the Fund offers shareholders the
privilege of exchanging shares of the Fund for shares of certain other mutual
funds advised by INVESCO. Exchange requests may be made either by telephone or
by written request to INVESCO Funds Group, Inc. using the telephone number or
address on the cover of this Statement of Additional Information. Exchanges made
by telephone must be in an amount of at least $250, if the exchange is being
made into an existing account of one of the INVESCO funds. All exchanges that
establish a new account must meet the fund's applicable minimum initial
investment requirements. Written exchange requests into an existing account have
no minimum requirements other than the fund's applicable minimum subsequent
investment requirements. Any gain or loss realized on an exchange is recognized
for federal income tax purposes. This privilege is not an option or right to
purchase securities, but is a revocable privilege permitted under the present
policies of each of the funds and is not available in any state or other
jurisdiction where the shares of the mutual fund into which transfer is to be
made are not qualified for sale, or when the net asset value of the shares
presented for exchange is less than the minimum dollar purchase required by the
appropriate prospectus.
TAX-DEFERRED RETIREMENT PLANS
As described in the section of the Prospectus entitled "Fund Services,"
shares of the Fund may be purchased as the investment medium for various
tax-deferred retirement plans. Persons who request information regarding these
plans from INVESCO will be provided with prototype documents and other
supporting information regarding the type of plan requested. Each of these plans
involves a long-term commitment of assets and is subject to possible regulatory
penalties for excess contributions, premature distributions or for insufficient
distributions after age 70-1/2. The legal and tax implications may vary
according to the circumstances of the individual investor. Therefore, the
investor is urged to consult with an attorney or tax adviser prior to the
establishment of such a plan.
HOW TO REDEEM SHARES
Normally, payments for shares redeemed will be mailed within seven (7)
days following receipt of the required documents as described in the section of
the Prospectus entitled "How to Sell Shares." The right of redemption may be
suspended and payment postponed when: (a) the New York Stock Exchange is closed
for other than customary weekends and holidays; (b) trading on that exchange is
restricted; (c) an emergency exists as a result of which disposal by the Fund of
securities owned by it is not reasonably practicable or it is not reasonably
practicable for the Fund fairly to determine the value of its net assets; or (d)
the SEC by order so permits.
<PAGE>
It is possible that in the future conditions may exist which would, in the
opinion of the Fund's investment adviser, make it undesirable for the Fund to
pay for redeemed shares in cash. In such cases, the investment adviser may
authorize payment to be made in portfolio securities or other property of the
Fund. However, the Fund is obligated under the 1940 Act to redeem for cash all
shares of the Fund presented for redemption by any one shareholder having a
value up to $250,000 (or 1% of the Fund's net assets if that is less) in any
90-day period. Securities delivered in payment of redemptions are selected
entirely by the investment adviser based on what is in the best interests of the
Fund and its shareholders, and are valued at the value assigned to them in
computing the Fund's net asset value per share. Shareholders receiving such
securities are likely to incur brokerage costs on their subsequent sales of the
securities.
DIVIDENDS, CAPITAL GAIN DISTRIBUTIONS AND TAXES
The Fund intends to continue to conduct its business and satisfy the
applicable diversification of assets and source of income requirements to
qualify as a regulated investment company under Subchapter M of the Internal
Revenue Code of 1986, as amended. The Fund so qualified in the fiscal year ended
June 30, 1995 and intends to continue to qualify during its current fiscal year.
As a result, it is anticipated that the Fund will pay no federal income or
excise taxes and will be accorded conduit or "pass through" treatment for
federal income tax purposes.
Dividends paid by the Fund from net investment income as well as
distributions of net realized short-term capital gains are, for federal income
tax purposes, taxable as ordinary income to shareholders. After the end of each
calendar year, the Fund sends shareholders information regarding the amount and
character of dividends paid in the year, including the dividends eligible for
the dividends-received deduction for corporations. Such amounts will be limited
to the aggregate amount of qualifying dividends which the Fund derives from its
portfolio investments.
Distributions by the Fund of net capital gains (the excess of long-term
capital gain over net short-term capital loss) are, for federal income tax
purposes, taxable to the shareholder as long-term capital gains regardless of
how long a shareholder has held shares of the Fund. Such distributions are
identified as such and are not eligible for the dividends-received deduction.
All dividends and other distributions are regarded as taxable to the
investor, whether or not such dividends and distributions are reinvested in
additional shares. If the net asset value of Fund 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, in effect, a return of
invested capital. The net asset value of shares of the Fund reflects accrued net
investment income and undistributed realized capital gains; therefore, when a
distribution is made, the net asset value is reduced by the amount of the
distribution. If shares 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>
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 Fund
recommends any particular method of determining cost basis. Other methods may
result in different tax consequences. If a shareholder has reported gains or
losses for a Fund in past years, the shareholder must continue to use the method
previously used, unless the shareholder applies to the IRS for permission to
change methods.
If the Fund's shares are sold at a loss after being held for six months or
less, the loss will be treated as long-term, instead of short-term, capital loss
to the extent of any capital gain distributions received on those shares.
The 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 capital gain net income for the one-year
period ending on October 31 of that year, plus certain other amounts.
Dividends and interest received by the Fund may be subject to income,
withholding or other taxes imposed by foreign countries and U.S. possessions
that would reduce the yield on its securities. Tax conventions between certain
countries and the United States may reduce or eliminate these foreign taxes,
however, and many foreign countries do not impose taxes on capital gains in
respect of investments by foreign investors. If more than 50% of the value of
the Fund's total assets at the close of any taxable year consists of securities
of foreign corporations, the Fund will be eligible to, and may, file an election
with the Internal Revenue Service that will enable its shareholders, in effect,
to receive the benefit of the foreign tax credit with respect to any foreign and
U.S. possessions income taxes paid by it. The Fund will report to its
shareholders shortly after each taxable year their respective shares of the
Fund's income from sources within, and taxes paid to, foreign countries and U.S.
possessions if it makes this election.
The 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 of at least 50% of its assets produce, or are held for the production
of, passive income. Under certain circumstances, the Fund will be subject to
federal income tax on a portion of any "excess distribution" received on the
stock of a PFIC or of any gain on disposition of the stock (collectively "PFIC
income"), plus interest thereon, even if the Fund distributes the PFIC income as
a taxable dividend to its shareholders. The balance of the PFIC income will be
included in the Fund's investment company taxable income and, accordingly, will
not be taxable to it to the extent that income is distributed to its
shareholders.
<PAGE>
Shareholders should consult their own tax advisers 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.
INVESTMENT PRACTICES
Portfolio Turnover. There are no fixed limitations regarding the Fund's
portfolio turnover. Since the Fund started business, the rate of portfolio
turnover has fluctuated under constantly changing economic conditions and market
circumstances. Portfolio turnover rates for the fiscal years ended June 30,
1995, 1994, and 1993 were 54%, 56%, and 121%, respectively. Securities initially
satisfying the basic policies and objectives of the Fund may be disposed of when
they are no longer suitable. Brokerage costs to the Fund are commensurate with
the rate of portfolio activity. In computing the portfolio turnover rate, all
investments with maturities or expiration dates at the time of acquisition of
one year or less were excluded. Subject to this exclusion, the turnover rate is
calculated by dividing (A) the lesser of purchases or sales of portfolio
securities for the fiscal year by (B) the monthly average of the value of
portfolio securities owned by the Fund during the fiscal year.
Placement of Portfolio Brokerage. Either INVESCO, as the Fund's investment
adviser, or INVESCO Trust, as the Fund's sub-adviser, places orders for the
purchase and sale of securities with brokers and dealers based upon INVESCO's or
INVESCO Trust's evaluation of their financial responsibility subject to their
ability to effect transactions at the best available prices. INVESCO or INVESCO
Trust evaluates the overall reasonableness of brokerage commissions paid by
reviewing the quality of executions obtained on the 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. In seeking to ensure that the commissions charged the Fund are
consistent with prevailing and reasonable commissions or discounts, INVESCO or
INVESCO Trust also endeavor to monitor brokerage industry practices with regard
to the commissions or discounts charged by brokers and dealers on transactions
effected for other comparable institutional investors. While INVESCO or INVESCO
Trust seek reasonably competitive rates, the Fund does not necessarily pay the
lowest commission, spread, or discount available.
Consistent with the standard of seeking to obtain the best execution on
portfolio transactions, INVESCO or INVESCO Trust may select brokers that provide
research services to effect such transactions. Research services consist of
statistical and analytical reports relating to issuers, industries, securities
and economic factors and trends, which may be of assistance or value to INVESCO
or INVESCO Trust in making informed investment decisions. Research services
prepared and furnished by brokers through which the Fund effects securities
transactions may be used by INVESCO or INVESCO Trust in servicing all of its
accounts and not all such services may be used by INVESCO or INVESCO Trust in
connection with the Fund.
In recognition of the value of the above-described brokerage and research
services provided by certain brokers, INVESCO or INVESCO Trust, consistent with
the standard of seeking to obtain the best execution on portfolio transactions,
may place orders with such brokers for the execution of Fund transactions on
which the commissions or discounts are in excess of those which other brokers
might have charged for effecting the same transactions.
<PAGE>
Portfolio transactions may be effected through qualified broker/dealers
who recommend the Fund to their clients, or who act as agent in the purchase of
the Fund's shares for their clients. When a number of brokers and dealers can
provide comparable best price and execution on a particular transaction, the
Fund's adviser may consider the sale of Fund shares by a broker or dealer in
selecting among qualified broker/dealers.
The aggregate dollar amounts of brokerage commissions paid by the Fund for
the fiscal years ended June 30, 1995, 1994, and 1993 were $5,098,664,
$8,141,611, and $11,846,833, respectively. For the fiscal year ended June 30,
1995, brokers providing research services received $2,409,277 in commissions on
portfolio transactions effected for the Fund. The aggregate dollar amount of
such portfolio transactions was $1,520,823,950. As a result of selling shares of
the Fund, brokers received $233,539 in commissions on portfolio transactions
effected for the Fund during the fiscal year ended June 30, 1995. The higher
brokerage commissions in fiscal 1993 were the result of higher portfolio
turnover during that year.
At June 30, 1995, the Fund held securities of its regular brokers or
dealers, or their parents, as follows:
Value of Securities
Broker or Dealer at 6/30/95
American Express Credit Corporation 18,512,000
Ford Motor Credit Company 34,947,715
Merrill Lynch & Company, Incorporated 24,958,333
Sears Roebuck Acceptance Corporation 58,081,000
Associates Corporation of North America 11,264,720
Chevron Corporation 27,975,000
Ford Motor Company 23,800,000
General Electric Company 33,825,000
Sears, Roebuck and Company 47,900,000
Neither INVESCO nor INVESCO Trust receive any brokerage commissions on
portfolio transactions effected on behalf of the Fund, and there is no
affiliation between INVESCO, INVESCO Trust, or any person affiliated with
INVESCO, INVESCO Trust, or the Fund and any broker or dealer that executes
transactions for the Fund.
ADDITIONAL INFORMATION
Common Stock. The Fund has one billion authorized shares of common stock
with a par value of $1.00 per share. As of June 30, 1995, 336,433,951 of the
Fund's shares of common stock were outstanding. All shares are of one class with
equal rights as to voting, dividends and liquidation. All shares issued and
outstanding are, and all shares offered hereby, when issued, will be, fully paid
and nonassessable.
<PAGE>
Shares have no preemptive rights and are freely transferable on the books
of the Fund. Fund shares have noncumulative voting rights, which means that the
holders of a majority of the shares voting for the election of directors of the
Fund can elect 100% of the directors if they choose to do so, and, in such
event, 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. After
they have been elected by shareholders, the directors will continue to serve
until their successors are elected and have qualified or they are removed from
office, in either case by a shareholder vote, or until death, resignation, or
retirement. They may appoint their own successors, provided that always at least
a majority of the directors have been elected by the Fund's shareholders. It is
the intention of the Fund not to hold annual meetings of shareholders. The
directors may call annual or special meetings of shareholders for action by
shareholder vote as may be required by the Investment Company Act of 1940 or the
Fund's Articles of Incorporation, or at their discretion.
Principal Shareholders. As of August 1, 1995, the following entities held
more than 5% of the Fund's outstanding equity securities.
Amount and Nature Class and Percent
Name and Address of Ownership of Class
Charles Schwab & Co. Inc. 47,817,534.364 14.357
Reinvest Acct. Record
101 Montgomery St.
San Francisco, CA 94104
Independent Accountants. Price Waterhouse LLP, 950 Seventeenth Street,
Denver, Colorado, has been selected as the independent accountants of the Fund.
The independent accountants are responsible for auditing the financial
statements of the Fund.
Custodian. State Street Bank and Trust Company, P.O. Box 351, Boston,
Massachusetts, has been designated as custodian of the cash and investment
securities of the Fund. The bank is also responsible for, among other things,
receipt and delivery of the Fund's investment securities in accordance with
procedures and conditions specified in the custody agreement.
Transfer Agent. The Fund is provided with transfer agent services by
INVESCO Funds Group, Inc., 7800 E. Union Avenue, Denver, Colorado 80237,
pursuant to the Transfer Agency Agreement described in "The Fund and Its
Management." Such services include the issuance, cancellation and transfer of
shares of the Fund, and the maintenance of records regarding the ownership of
such shares.
Reports to Shareholders. The Fund's fiscal year ends on June 30. The Fund
distributes reports at least semiannually to its shareholders. Financial
statements regarding the Fund, audited by the independent accountants, are sent
to shareholders annually.
Legal Counsel. The firm of Kirkpatrick & Lockhart LLP, Washington, D.C.,
is legal counsel for the Fund. The firm of Moye, Giles, O'Keefe, Vermeire &
Gorrell, Denver, Colorado, acts as special counsel to the Fund.
Financial Statements. The Fund's audited financial statements and the
notes thereto for the fiscal year ended June 30, 1995 and the report of Price
Waterhouse LLP with respect to such financial statements, are incorporated
herein by reference from the Fund's Annual Report to Shareholders for the fiscal
year ended June 30, 1995.
<PAGE>
Prospectus. The Fund will furnish, without charge, a copy of the
Prospectus upon request. Such requests should be made to the Fund at the mailing
address or telephone number set forth on the first page of this Statement of
Additional Information.
Registration Statement. This Statement of Additional Information and the
related Prospectus do not contain all of the information set forth in the
Registration Statement the Fund has filed with the Securities and Exchange
Commission. The complete Registration Statement may be obtained from the
Securities and Exchange Commission upon payment of the fee prescribed by the
rules and regulations of the Commission.
<PAGE>
APPENDIX A
BOND RATINGS
The following is a description of Standard & Poor's Corporation ("Standard
& Poor's") and Moody's Investors Service, Inc. ("Moody's") bond rating
categories:
Moody's Investors Service, Inc. 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>
Standard & Poor's Ratings Group 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 24. Financial Statements and Exhibits
(a) Financial Statements:
Page in
Prospectus
(1) Financial statements and schedules
included in Prospectus (Part A):
Financial Highlights for each of the 8
ten years in the period ended
June 30, 1995.
Page in
Statement of
Additional
Information
---------
(2) The following audited financial
statements of the Industrial
Income Fund and the notes thereto
for the fiscal year ended June 30,
1995, and the repor of Price Waterhouse
LLP with respect to such financial
statements, are incorporated in the
Statement of Additional Information by
reference from the Fund's Annual
Report to Shareholders for the fiscal
year ended June 30, 1995: Statement of
Investment Securities as of June 30,1995;
Statement of Assets and Liabilities as
of June 30, 1995; Statement of Operations
for the year ended June 30, 1995; Statement
of Changes in Net Assets for each of the two
years in the period ended June 30, 1995;
and Financial Highlights for each of the
five years ended June 30, 1995.
(3) Financial statements and schedules
included in Part C:
None: Schedules have been omitted as all
information has been presented in the
financial statements.
(b) Exhibits:
(1) Articles of Incorporation (Charter).1
Articles Supplementary to the Articles of
Incorporation dated July 20, 1992.2
Articles of Amendment of Articles of
Restatement of the Articles of
Incorporation of Financial Industrial
Income Fund, Inc. dated November 17,
1994.
(2) Bylaws--(amended) as of July 1993.9
(3) Not applicable.
(4) Specimen stock certificate.2
(5) (a) Investment Advisory Agreement.3
<PAGE>
(b) Sub-Advisory Agreement between the
Fund and INVESCO Trust Company dated
April 30, 1991.3
(6) General Distribution Agreement.4
(7) Defined Benefit Deferred Compensation
Plan for Non-Interested Directors and
Trustees.5
(8) Custody Agreement.6
(9) (a) Transfer Agency Agreement.3 Amended
Fee Schedule to Transfer Agency Agreement
dated April 22, 1993.2 Amended Fee
Schedule to Transfer Agency Agreement
dated April 1, 1994.
(b) Administrative Services Agreement
between the Fund and INVESCO Funds Group,
Inc., dated April 30, 1991.3
(10) 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 was filed with the
Securities and Exchange Commission on or
about August 22, 1995, pursuant to Rule
24f-2 and herein incorporated by
reference.
(11) Consent of Independent Accountants.
(12) Not applicable.
(13) Not applicable.
(14) Copies of model plans used in the
establishment of retirement plans as
follows: Non-standardized Profit Sharing
Plan; Non-standardized Money Purchase
Pension Plan; Standardized Profit Sharing
Plan Adoption Agreement; Standardized
Money Purchase Pension Plan; Non-
standardized 401(k) Plan Adoption
Agreement; Standardized 401(k) Paired
Profit Sharing Plan; Standardized
Simplified Profit Sharing Plan;
Standardized Simplified Money Purchase
Plan; Defined Contribution Master Plan &
Trust Agreement; and Financial 403(b)
Retirement Plan.7
(15) Plan and Agreement of Distribution dated
April 16, 1990, adopted pursuant to Rule
12b-1 under the Investment Company Act of
1940.1 Amendment of Plan and Agreement of
Distribution, dated July 19, 1995.
<PAGE>
(16) (a) Schedule for computation of
performance data.8
(b) Schedule for Computation of Yield.9
(17) Financial Data Schedule.
(18) Not Applicable.
1Previously filed with Post-Effective Amendment No.
48 to this Registration Statement on August 21,
1990 and incorporated by reference herein.
2Previously filed with Post-Effective Amendment No.
52 to this Registration Statement on June 22, 1993
and incorporated by reference herein.
3Previously filed with Post-Effective Amendment No.
49 to this Registration Statement on August 26,
1991 and incorporated by reference herein.
4Previously filed with Post-Effective Amendment No.
43 to this Registration Statement on September 1,
1985 and incorporated by reference herein.
5Previously filed with Post-Effective Amendment No.
53 to this Registration Statement on October 25,
1993 and incorporated by reference herein.
6Previously filed with Post-Effective Amendment No.
35 to this Registration Statement on November 1,
1980 and incorporated by reference herein.
7Previously fled with Registration Statement of
INVESCO International Funds, Inc. (File No. 33-
63498) on May 27, 1993 and incorporated by
reference herein.
8Previously filed with Post Effective Amendment No.
46 to this Registration Statement on September 1,
1988 and incorporated by reference herein.
9Previously filed with Post-Effective Amendment No.
54 to this Registration Statement on October 31,
1994 and incorporated by reference herein.
Item 25. Persons Controlled by or Under Common Control with
Registrant
No person is presently controlled by or under common
control with Registrant.
<PAGE>
Item 26. Number of Holders of Securities
Number of Record
Holders as of
Title of Class July 31, 1995
Common Stock 245,338
Item 27. Indemnification
Indemnification provisions for officers, directors and employees of
Registrant are set forth in Article XI of the amended bylaws. See Item 24(b)2
above. Under this Article, such persons will not be indemnified for any acts for
which the Investment Company Act of 1940 would not permit indemnification.
Item 28. Business and Other Connections of Investment Adviser
See "The Fund and Its Management" in the Prospectus and Statement of
Additional Information for information regarding the business of the investment
adviser. For information as to the business, profession, vocation or employment
of a substantial nature of each of the officers and directors of INVESCO Funds
Group, Inc., reference is made to Schedule Ds to the Form ADV filed under the
Investment Advisers Act of 1940 by INVESCO Funds Group, Inc., which schedules
are herein incorporated by reference.
Item 29. Principal Underwriters
(a) INVESCO Diversified Funds, Inc.
INVESCO Dynamics Fund, Inc.
INVESCO Emerging Opportunity Funds, Inc.
INVESCO Growth Fund, Inc.
INVESCO Income Funds, Inc.
INVESCO International Funds, Inc.
INVESCO Money Market Funds, Inc.
INVESCO Multiple Asset Funds, Inc.
INVESCO Specialty Funds, Inc.
INVESCO Strategic Portfolios, Inc.
INVESCO Tax-Free Income Funds, Inc.
INVESCO Value Trust
INVESCO Variable Investment Funds, Inc.
<PAGE>
(b)
Positions and Positions and
Name and Principal Offices with Offices with
Business Address Underwriter Registrant
David W. Altimont Regional Vice
7800 E. Union Avenue President
Denver, CO 80237
David D. Barrett Vice President
7800 E. Union Avenue
Denver, CO 80237
Frank M. Bishop Director Director
1315 Peachtree Street NE
Atlanta, GA 30309
Charles W. Brady Chairman of
1315 Peachtree St. NE the Board
Atlanta, GA 30309
Kenneth R. Christoffersen Vice President
7800 E. Union Avenue Asst. General Counsel
Denver, CO 80237
M. Anthony Cox Senior Vice
1315 Peachtree St., N.E. President
Atlanta, GA 30309
Steven T. Cox, Jr. Regional Vice
7800 E. Union Avenue President
Denver, CO 80237
Robert D. Cromwell Asst. Vice President
7800 E. Union Avenue
Denver, CO 80237
Philip J. Crosley Regional Vice
7800 E. Union Avenue President
Denver, CO 80237
Samuel T. DeKinder Director
1315 Peachtree Street NE
Atlanta, GA 30309
William J. Galvin, Jr. Sr. Vice President Assistant
7800 E. Union Avenue Secretary
Denver, CO 80237
Linda J. Gieger Vice President
7800 E. Union Avenue
Denver, CO 80237
Ronald L. Grooms Sr. Vice President Treasurer,
7800 E. Union Avenue & Treasurer Chief Fin'l
Denver, CO 80237 Officer, and
Chief Acctg.
Off.
Wylie G. Hairgrove Vice President
7800 E. Union Avenue
Denver, CO 80237
David S. Harris Regional Vice
1315 Peachtree Street NE President
Atlanta, GA 30309
Dan J. Hesser Chairman of the President
7800 E. Union Avenue Board, President, & Dir.
Denver, CO 80237 Chief Executive
Officer, & Director
Mark A. Jones Regional Vice
7800 E. Union Avenue President
Denver, CO 80237
<PAGE>
Jeraldine E. Kraus Assistant Secretary
7800 E. Union Avenue
Denver, CO 80237
Michael D. Legoski Assistant Vice
7800 E. Union Avenue President
Denver, CO 80237
Walter R. Lewis, Jr. Regional Vice
1315 Peachtree Street NE President
Atlanta, GA 30309
Dennis J. McCarthy Regional Vice
7800 E. Union Avenue President
Denver, CO 80237
David G. Mertens Regional Vice
1315 Peachtree Street NE President
Atlanta, GA 30309
Timothy J. Milligan Regional Vice
7800 E. Union Avenue President
Denver, CO 80237
Brian Minturn Executive
7800 E. Union Avenue Vice President
Denver, CO 80237
Robert J. O'Connor Director
1315 Peachtree Street NE
Atlanta, GA 30309
Laura M. Parsons Vice President
7800 E. Union Avenue
Denver, CO 80237
Glen A. Payne Sr. Vice President, Secretary
7800 E. Union Avenue Secretary &
Denver, CO 80237 General Counsel
M. Ellen Phillips Regional Vice
7800 E. Union Avenue President
Denver, CO 80237
R. Dalton Sim Director Director
7800 E. Union Avenue
Denver, CO 80237
James S. Skesavage Regional Vice
1315 Peachtree Street NE President
Atlanta, GA 30309
Terri Berg Smith Vice President
7800 E. Union Avenue
Denver, CO 80237
Katha Hall Stuart Regional Vice
1315 Peachtree Street NE President
Atlanta, GA 30309
Alan I. Watson Vice President Asst. Sec.
7800 E. Union Avenue
Denver, CO 80237
Judy P. Wiese Vice President Asst. Treas.
7800 E. Union Avenue
Denver, CO 80237
John F. Yeager, III Vice President Vice President
7800 E. Union Avenue
Denver, CO 80237
Allyson B. Zoellner Vice President
7800 E. Union Avenue
Denver, CO 80239
(c) Not applicable.
Item 30. Location of Accounts and Records
Dan J. Hesser
7800 E. Union Avenue
Denver, CO 80237
Item 31. Management Services
Not applicable.
Item 32. Undertakings
(a) The Registrant shall furnish each person to whom a prospectus is
delivered with a copy of the Registrant's latest annual report to
shareholders, upon request and without charge.
<PAGE>
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the registrant 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 24th day of August, 1995.
Attest: INVESCO Industrial Income Fund,
Inc.
/s/ Glen A. Payne /s/ Dan J. Hesser
- ------------------------ -------------------------
Glen A. Payne, Secretary Dan J. Hesser, President
Pursuant to the requirements of the Securities Act of 1933,
this post-effective amendment to Registrant's Registration
Statement has been signed by the following persons in the
capacities indicated on this 24th day of August, 1995.
/s/ Dan J. Hesser /s/ Lawrence H. Budner
- ------------------------ ----------------------------
Dan J. Hesser, President & Lawrence H. Budner, Director
Director (Chief Executive Officer)
/s/ Ronald L. Grooms /s/ Daniel D. Chabris
- ------------------------ -----------------------------
Ronald L. Grooms, Treasurer Daniel D. Chabris, Director
(Chief Financial and Accounting Officer)
/s/ Victor L. Andrews /s/ Fred A. Deering
- ------------------------ -----------------------------
Victor L. Andrews, Director Fred A. Deering, Director
/s/ Bob R. Baker /s/ A. D. Frazier, Jr.
- ------------------------ -----------------------------
Bob R. Baker, Director A. D. Frazier, Jr., Director
/s/ Frank M. Bishop /s/ Kenneth T. Kin
- ------------------------ ------------------------------
Frank M. Bishop, Director Kenneth T. King, Director
/s/ Charles W. Brady /s/ John W. McIntyre
- ------------------------ -------------------------------
Charles W. Brady, Director John W. McIntyre, Director
/s/ R. Dalton Sim
--------------------------------
R. Dalton Sim, Director
By* /s/ Glen A. Payne
--------------------------------- By* ---------------------------------
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
July 20, 1989, January 9, 1990, May 22, 1992, and October 25, 1993 and August
24, 1995.
<PAGE>
Exhibit Index
Page in
Exhibit Number Registration Statement
1 66
9(a) 68
11 69
15 70
17 72
EXHIBIT 1
ARTICLES OF AMENDMENT
OF
ARTICLES OF RESTATEMENT
OF THE
ARTICLES OF INCORPORATION
OF
FINANCIAL INDUSTRIAL INCOME FUND, INC.
Financial Industrial Income Fund, Inc., a corporation organized
and existing under the General Corporation Law of the State of
Maryland (the "Company"), hereby certifies that:
FIRST: Article First of the Articles of Restatement of the
Articles of Incorporation of the Company is hereby amended to
read as follows:
NAME AND TERM The name of the corporation is
"INVESCO INDUSTRIAL INCOME FUND, INC."
and it shall have perpetual existence.
SECOND: The foregoing amendment, in accordance with the
requirements of Section 2-408 of the General Corporation Law
of the State of Maryland, was approved by the Board of
Directors of the Company on October 19, 1994.
THIRD: The foregoing amendment was duly adopted in
accordance with the provisions of Section 2-605 of the General
Corporation Law of the State of Maryland.
The undersigned, President of the Company, who is executing on behalf of
the Company the foregoing Articles of Amendment, of which this paragraph
is made a part, hereby acknowledges, in the name and on behalf of the
Company, the foregoing Articles of Amendment to be the corporate act of
the Company and further verifies under oath that, to the best of his
knowledge, information and belief, the matters and facts set forth herein
are true in all material respects, under the penalties of perjury.
IN WITNESS WHEREOF, Financial Industrial Income Fund, Inc. has caused
these Articles of Amendment to be signed in its name and on its behalf by
its President and witnessed by its Secretary on the 17th day of November,
1994.
<PAGE>
These Articles of Amendment shall be effective upon acceptance by the
Maryland State Department of Assessments and Taxation.
FINANCIAL INDUSTRIAL INCOME FUND, INC.
BY:
/s/ Dan J. Hesser
---------------------
DAN J. HESSER
President
[SEAL]
WITNESSED:
/s/ Glen A. Payne
----------------------------
GLEN A. PAYNE, Secretary
CERTIFICATION
I, Ruth A. Christensen, a notary public in and for the County of Denver, City of
Denver, and State of Colorado, do hereby certify that Dan J. Hesser, personally
known to me to be the person whose name is subscribed to the foregoing Articles
of Amendment, appeared before me this date in person and acknowledged that he
signed, sealed and delivered said instrument as his free and voluntary act and
deed for the uses and purposes therein set forth.
Given my hand and official seal this 17th day of November, 1994.
/s/ Ruth A. Christensen
------------------------
Notary Public
7800 E. Union Avenue
Denver, Colorado 80237
[SEAL]
My commission expires March 16, 1998
EXHIBIT 9(a)
AMENDMENT NO. 3
to
FEE SCHEDULE
for
Services Pursuant to Transfer Agency Agreement, dated January 21, 1991,
between Financial Industrial Income Fund, Inc. (the "Fund") and INVESCO Funds
Group, Inc. as Transfer Agent (the "Agreement").
Account Maintenance Charges. Fees are based on an annual charge set forth
below per shareholder account or omnibus account participant for account
maintenance, as described in the Agreement. This charge, in the amount of $14.00
per shareholder account per year, or in the case of omnibus accounts that are
invested in the Fund $14.00 per participant in such accounts per year, is
billable monthly at the rate of one-twelfth (1/12) of the annual fee. A charge
is made for an account in the month that it opens or closes, as well as in each
month which the account remains open, regardless of the account balance.
Expenses. The Fund shall not be liable for reimbursement to the Transfer
Agent of expenses incurred by it in the performance of services pursuant to the
Agreement, provided, however, that nothing herein or in the Agreement shall be
construed as affecting in any manner any obligations assumed by the Fund with
respect to expense payment or reimbursement pursuant to a separate written
agreement between the Fund and the Transfer Agent or any affiliate thereof.
Effective this 1st day of April, 1994.
Financial Industrial Income Fund, Inc.
By: /s/ Dan J. Hesser
-------------------------
Dan J. Hesser, President
ATTEST:
/s/ Glen A. Payne
- -----------------------
Glen A. Payne, Secretary
INVESCO FUNDS GROUP, INC.
By: /s/ Ronald L. Grooms
------------------------
Ronald L. Grooms,
Senior Vice President
ATTEST:
/s/ Glen A. Payne
- ---------------------
Glen A. Payne, Secretary
EXHIBIT 11
Consent of Independent Accountants
We hereby consent to the use in the Statement of Additional Information
constituting part of this Post-Effective Amendment No. 55 to the registration
statement on Form N-1A (the "Registration Statement") of our report dated August
4, 1995, relating to the financial statements and financial highlights of
INVESCO Industrial Income Fund, Inc., which appears in such Statement of
Additional Information, and to the incorporation by reference of our report into
the Prospectus which constitutes part of this Registration Statement. We also
consent to the references to us under the heading "Financial Highlights" in the
Prospectus and under the headings "Independent Accountants" and "Financial
Statements" in the Statement of Additional Information.
PRICE WATERHOUSE LLP
Denver, Colorado
August 28, 1995
EXHIBIT 15
AMENDMENT OF PLAN AND AGREEMENT OF DISTRIBUTION
PURSUANT TO RULE 12B-1
This Amendment of Plan and Agreement of Distribution Pursuant to Rule
12b-1 (this "Amendment") is entered into as of the 19th day of July, 1995, by
and between INVESCO Industrial Income Fund, Inc., a Maryland corporation (the
"Company"), and INVESCO Funds Group, Inc., a Delaware corporation formerly known
as Financial Programs, Inc. ("Programs").
WHEREAS, the Company and Programs have entered into a Plan and Agreement
of Distribution Pursuant to Rule 12b-1, dated as of April 16, 1990 (the "Plan
and Agreement"); and
WHEREAS, the Plan and Agreement may be amended provided that all material
amendments to the Plan and Agreement are approved by the vote of the board of
directors of the Company, including a majority of the Disinterested Directors,
cast in person at a meeting called for the purpose of voting on such amendment
and, provided further, that the Plan may not be amended to increase the amount
to be spent by the Company thereunder without approval of a majority of the
outstanding voting securities of the Company; and
WHEREAS, the Company has determined to amend the Plan, and the Company and
Programs have mutually determined to amend the Agreement, in the manner set
forth in this Amendment, and such amendments were approved by the vote of the
board of directors of the Company, including a majority of the Disinterested
Directors, cast in person at a meeting held on July 19, 1995, called for the
purpose of voting on such amendments; and
WHEREAS, the Company has determined that the amendments to the Plan
contained in this Amendment will not increase the amount to be spent by the
Company under the Plan, and therefore do not require the approval of a majority
of the outstanding voting securities of the Company;
NOW, THEREFORE, the parties hereby agree as follows:
1. All capitalized terms used in this Amendment, unless otherwise defined,
shall have the meanings assigned to them in the Plan and Agreement.
2. The Company hereby adopts the amendments to the Plan set forth below,
and the Company and Programs hereby agree to the amendments to the Agreement set
forth below.
3. Section 2 of the Plan and Agreement is hereby amended to read as
follows:
<PAGE>
Subject to the supervision of the board of directors, the Company hereby
retains Programs to promote the distribution of the Company's shares by
providing services and engaging in activities beyond those specifically
required by the Distribution Agreement between the Company and Programs
and to provide related services. The activities and services to be
provided by Programs hereunder shall include one or more of the following:
(a) the payment of compensation (including trail commissions and incentive
compensation) to securities dealers, financial institutions and other
organizations, which may include Programs-affiliated companies, that
render distribution and administrative services in connection with the
distribution of the Company's shares; (b) the printing and distribution of
reports and prospectuses for the use of potential investors in the
Company; (c) the preparing and distributing of sales literature; (d) the
providing of advertising and engaging in other promotional activities,
including direct mail solicitation, and television, radio, newspaper and
other media advertisements; and (e) the providing of such other services
and activities as may from time to time be agreed upon by the Company.
Such reports and prospectuses, sales literature, advertising and
promotional activities and other services and activities may be prepared
and/or conducted either by Programs' own staff, the staff of
Programs-affiliated companies, or third parties.
4. Except to the extent modified by this Amendment, the Plan and
Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Amendment on the day and year first above written.
INVESCO Industrial Income Fund, Inc.
By: /s/ Dan J. Hesser
------------------------
Dan J. Hesser, President
ATTEST: /s/ Glen A. Payne
------------------------
Glen A. Payne, Secretary
INVESCO Funds Group, Inc.
By: /s/ Ronald L. Grooms
--------------------------
Ronald L. Grooms,
Senior Vice President
ATTEST: /s/ Glen A. Payne
----------------------
Glen A. Payne, Secretary
[ARTICLE] 6 EXHIBIT 17
[CIK] 0000035732
[NAME] INVESCO INDUSTRIAL INCOME FUND, INC.
<TABLE>
<S> <C>
[PERIOD-TYPE] 12-MOS
[FISCAL-YEAR-END] JUN-30-1995
[PERIOD-END] JUN-30-1995
[INVESTMENTS-AT-COST] 3551092075
[INVESTMENTS-AT-VALUE] 3975100316
[RECEIVABLES] 60574639
[ASSETS-OTHER] 275617
[OTHER-ITEMS-ASSETS] 1058163
[TOTAL-ASSETS] 4037008735
[PAYABLE-FOR-SECURITIES] 15369290
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 12030536
[TOTAL-LIABILITIES] 27399826
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 3567406370
[SHARES-COMMON-STOCK] 336433951
[SHARES-COMMON-PRIOR] 345817523
[ACCUMULATED-NII-CURRENT] 1916689
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 16277609
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 424008241
[NET-ASSETS] 4009608909
[DIVIDEND-INCOME] 79661232
[INTEREST-INCOME] 98013303
[OTHER-INCOME] (730240)
[EXPENSES-NET] 36655270
[NET-INVESTMENT-INCOME] 140289025
[REALIZED-GAINS-CURRENT] 52677597
[APPREC-INCREASE-CURRENT] 336508408
[NET-CHANGE-FROM-OPS] 389186005
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 140427579
[DISTRIBUTIONS-OF-GAINS] 180471498
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 67824580
[NUMBER-OF-SHARES-REDEEMED] 105096248
[SHARES-REINVESTED] 27888096
[NET-CHANGE-IN-ASSETS] 96287234
[ACCUMULATED-NII-PRIOR] 2055243
[ACCUMULATED-GAINS-PRIOR] 0
[OVERDISTRIB-NII-PRIOR] 144071510
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 19946443
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 37601676
[AVERAGE-NET-ASSETS] 3888879019
[PER-SHARE-NAV-BEGIN] 11.32
[PER-SHARE-NII] 0.53
[PER-SHARE-GAIN-APPREC] 0.11
[PER-SHARE-DIVIDEND] 0.42
[PER-SHARE-DISTRIBUTIONS] 0.54
[RETURNS-OF-CAPITAL] 0.00
[PER-SHARE-NAV-END] 11.92
[EXPENSE-RATIO] 1
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0
</TABLE>
