ANNUAL REPORT
October 31, 1996
INVESCO
STRATEGIC
PORTFOLIOS,
INC.
Energy
Environmental Services
Financial Services
Gold
Health Sciences
Leisure
Technology
Utilities
No-Load Portfolios Investing
In Targeted Industry Sectors
INVESCO Funds
<PAGE>
Market Overview November 1996
Overheating -- or headed into a recession? That's the question analysts
have posed all year about the U.S. economy.
During the third quarter of 1996, growth moderated to a "normal/dull" level
of 2.2%. Representing a significant slowdown from the second quarter's
relatively torrid pace of 4.7%, the current level of economic expansion should
be moderate enough to stave off inflation fears. The rate of increase in wages,
benefits, and prices for consumer and industrial goods has not accelerated over
the past 12 months; the Consumer Price Index will likely end 1996 up an
annualized rate of about 3.0% -- in line with the historical average.
The moderate inflation level represents a positive factor for the economy.
At the same time, though, the longevity of the current expansion -- over six
years -- remains a cause for concern; the post-World War II average is only four
and a half years. Negative growth hasn't been experienced since the first
quarter of 1993. If the growth rate again approaches 5%, many economists expect
the Federal Reserve Board to launch a preemptive strike against inflation, with
the concomitant danger of cutting the expansion short.
In mid-autumn, concern about the Fed and the national elections caused a
modest pullback in equity markets. Since then, with the status quo generally
maintained vis-a-vis the president and Congress, and the economy decelerating on
its own, the S&P 500 resumed its upward hike.
1997 is a post-presidential election year, when the stock market has
typically dropped and volatility may well continue. Currently, valuations for
many individual stocks appear high. Moderate action from the Fed over the winter
- -- an increase of .25% in short-term interest rates, for example -- might be
interpreted by investors in a positive light, with a subsequent calming
influence on price swings. Conversely, heavy-handed measures could be viewed as
likely to trigger a recession, with negative consequences for corporate earnings
estimates -- and stock prices.
INVESCO Strategic Portfolios
The line graphs on the following pages illustrate the value of a $10,000
investment in each of the INVESCO Strategic Portfolios, plus reinvested
dividends and capital gain distributions, for the ten-year period ended
10/31/96; or, in the case of Environmental Services Portfolio, from inception
through 10/31/96. Keep in mind that the S&P 500 is an unmanaged index of common
stocks considered representative of the broad market, while INVESCO's Strategic
Portfolios invest in targeted groups of industries. The charts and other total
return figures cited reflect the portfolios' operating expenses, but the indexes
do not have expenses, which would, of course, have lowered their performance.
Keep in mind that these funds are actively managed, and composition of
holdings will change over time.
<PAGE>
Energy Portfolio
Energy Portfolio
Average Annualized Total Return
as of 10/31/96(2)
1 year 49.33%
-----------------------------------------
5 years 6.51%
-----------------------------------------
10 years 7.95%
-----------------------------------------
The fund's competitive performance has improved significantly over the past 18
months. Lipper Analytical Services ranked INVESCO Energy Portfolio #9 of 38
natural resources funds for the one-year period ended 10/31/96, based on total
return unadjusted for commissions. For the 10-year period, the fund was ranked
#7 of 9 funds; for the five-year period, #15 of 17.(3)
For the ten-month period ended 10/31/96, Energy Portfolio achieved a total
return of 32.63%, compared to 16.63% for the S&P 500. (Of course, past
performance is not a guarantee of future results.)(1),(2)
In mid-November, the price per barrel of crude oil stood at $24.13, well
above the 12-month low. Nonetheless, most oil stocks have been trading at prices
more reflective of a lower per barrel cost. As a result, investment results for
the sector have been less than outstanding.
The fund has outperformed as a result of its long-term strategy, which
emphasizes companies with above-average production volume growth and participate
in attractive industry niches. Over the past year, this has led to a focus on
overweighting oil service stocks, as well as exploration and production.
Graph:
This line graph represents a comparison of the value of a $10,000
investment in INVESCO Energy Portfolio to the value of a $10,000
investment in the S&P 500 Index, assuming reinvestment of all dividends
and capital gain distributions, for the ten year period ended October 31,
1996.
Recently, we have taken profits in a number of these companies, and moved
towards greater diversification. To keep the fund less dependent upon commodity
price movement, holdings are shifting to energy companies with superior growth
prospects due to their ability to increase earnings through production growth,
cost-cutting, or product pricing strength. To that end, we have trimmed the
weighting in field services and international oil & gas companies, while adding
a position in Transocean Offshore.
Longer-term, supply and demand are working in favor of all of these
industries. The worldwide demand for energy is growing at an annual rate of
2.8%; production, however, has not kept up.
Energy Portfolio is managed by Thomas R. Samuelson. He joined INVESCO in
1995; previously, he worked for Swiss Bank Capital Markets and Duff & Phelps,
<PAGE>
Inc. Tom earned his MBA and BS from the University of Tulsa. He is a
Chartered Financial Analyst.
Environmental Services Portfolio
Environmental Services Portfolio
Average Annualized Total Return
as of 10/31/96(2)
1 year 25.58%
-----------------------------------------
5 years 2.98%
-----------------------------------------
10 years 4.58%
-----------------------------------------
Lipper Analytical Services ranked INVESCO Environmental Services Portfolio
#2 of 4 environmental funds for the one-year period ended 10/31/96, based on
total return unadjusted for commissions. For the five-year period, the fund was
ranked #3 of 3.(3)
For the ten-month period ended 10/31/96, Environmental Services Portfolio
achieved a total return of 14.70%, compared to 16.63% for the S&P 500. (Of
course, past performance is not a guarantee of future results.)(1),(2)
In the past six months, we have focused more on pollution control and
equipment systems. New holdings include Cuno Inc, Omega Environmental, and
Thermatrix Inc. We have also taken new positions in pollution control services,
such as American Disposal Systems, and Newpark Resources.
Graph:
This line graph represents a comparison of the value of a $10,000
investment in INVESCO Environmental Services Portfolio to the value of a
$10,000 investment in the S&P 500 Index, assuming reinvestment of all
dividends and capital gain distributions, for the ten year period ended
October 31, 1996.
Diversifying further, we have purchased utilities stocks including American
Water Works, United Water Resources, and Western Water. These firms are
well-positioned to benefit from the Clean Water Act.
We retain our preference for selected growth solid waste stocks. However,
our focus remains on companies not dependent upon legislative boons for
continued growth. Overall, environmental stocks have done well due to the
continuing moderate economic expansion, which supports growth in this sector.
During a recession, on the other hand, these stocks may underperform as firms
cut back optional environmental efforts as expendable. Due to the uncertain
economic outlook over the longer-term, we are searching for strong growth
prospects in defensible market positions.
Effective December 1996, Environmental Services Portfolio is managed by
INVESCO Vice President Gerard Hallaren. A Chartered Financial Analyst, Gerard
<PAGE>
earned a BA in Economics from the University of Massachusetts - Amherst. He
joined INVESCO in 1994.
Financial Services Portfolio
Lipper Analytical Services ranked INVESCO Financial Services Portfolio #4
of 17 financial services funds for the one-year period ended 10/31/96, based on
total return unadjusted for commissions. For the five-year period, the fund was
ranked #9 of 12 funds; and for the 10-year period, #4 of 10.(3)
For the ten-month period ended 10/31/96, the fund had a total return of
23.26%, compared to 16.63% for the S&P 500. (Of course, past performance is not
a guarantee of future results.)(1),(2)
Financial Services Portfolio
Average Annualized Total Return
as of 10/31/96(2)
1 year 31.48%
-----------------------------------------
5 years 19.40%
-----------------------------------------
10 years 18.32%
-----------------------------------------
As interest rates stabilized in 1996, the fund's performance has improved.
With fears of recession receding -- and any upward move in interest rates
increasingly unlikely in the near-term -- this sector has been among the market
leaders in recent months.
Banks in particular have performed well. We have closely examined our
holdings in this area, seeking companies with strong positions; in the past six
months, we closed several positions, while adding Bank of Boston, Signet
Banking, Wachovia Corp, and several others; our existing holdings such as Chase
Manhattan and Citicorp have appreciated strongly since their initial purchase.
Graph:
This line graph represents a comparison of the value of a $10,000
investment in INVESCO Financial Services Portfolio to the value of a
$10,000 investment in the S&P 500 Index, assuming reinvestment of all
dividends and capital gain distributions, for the ten year period ended
October 31, 1996.
After a period of underperformance, stocks of securities brokers advanced
strongly in 1996, benefiting the fund's performance. In recent months, we closed
positions in investment brokers, in favor of a heightened focus on
mortgage-related stocks, including savings & loans. New positions in these
industries include TCF Financial, Washington Mutual, Federal National Mortgage
Association, and Countrywide Credit Industries.
Insurance remains key to our overall strategy, as these companies (like
banks) move to consolidation and cost savings. For instance, Conseco has enjoyed
considerable success expanding its annuity business. New positions over the past
six months include Travelers Group, American Re, General Re, and ITT Hartford
Group.
<PAGE>
Financial Services Portfolio is managed by INVESCO Senior Vice President
Daniel B. Leonard. He joined INVESCO in 1975; his investment experience extends
back to 1960. He attended the New York University Graduate School of Business
and holds a BA from Washington & Lee University.
Gold Portfolio
Gold Portfolio
Average Annualized Total Return
as of 10/31/96(2)
1 year 53.55%
-----------------------------------------
5 years 13.45%
-----------------------------------------
10 years 5.04%
-----------------------------------------
Lipper Analytical Services ranked INVESCO Gold Portfolio #4 of 40
gold-oriented funds for the one-year period ended 10/31/96, based on total
return unadjusted for commissions. For the five-year period, the fund was ranked
#6 of 27 funds; for the 10-year period, #13 of 18.(3)
For the ten-month period ended 10/31/96, Gold Portfolio had a total return
of 45.99%, compared to 16.63% for the S&P 500. (Of course, past performance is
not a guarantee of future results.)(1),(2)
After more than a year generally on the upswing, fund performance over the
past two months was negative; this is partly due to the strong performance of
the stock market, where investors are focused in preference to hard assets. In
late November, the price of gold was hovering around $375 per troy ounce, a
12-month low. We should note that stocks of exploration companies (mining stocks
comprise over 80% of portfolio's assets) have done much better than bullion
prices; mining stocks comprise over 80% of fund holdings.
Graph:
This line graph represents a comparison of the value of a $10,000
investment in INVESCO Gold Portfolio to the value of a $10,000 investment
in the S&P 500 Index, assuming reinvestment of all dividends and capital
gain distributions, for the ten year period ended October 31, 1996.
The fund's performance over the past year was significantly aided by new
discoveries of mineral deposits. In addition, we have avoided the problematic
area of under-performing South African stocks; instead, fund holdings are
primarily in domestic and Canadian stocks, with minor weightings in other areas.
Gold Portfolio is managed by Senior Vice President Daniel B. Leonard. He
joined INVESCO in 1975; his investment experience extends back to 1960. He
attended the New York University Graduate School of Business and holds a BA from
Washington & Lee University.
<PAGE>
Health Sciences Portfolio
Health Sciences Portfolio
Average Annualized Total Return
as of 10/31/96(2)
1 year 17.99%
-----------------------------------------
5 years 8.30%
-----------------------------------------
10 years 20.13%
-----------------------------------------
Lipper Analytical Services ranked INVESCO Health Sciences Portfolio #1 of
7 health-biotechnology funds for the ten-year period ended 10/31/96, based on
total return unadjusted for commissions. For the one-year period, the fund was
ranked #12 of 19 funds; for the five-year period, #8 of 9.(3)
For the ten-month period ended 10/31/96, Health Sciences Portfolio had a
total return of 5.66% compared to 16.63% for the S&P 500. (Of course, past
performance is not a guarantee of future results.)(1),(2)
After a strong winter, the health care sector has been underperforming the
market. Investors have felt a renewed concern about the potential for Health
Care Reform II under the second Clinton Administration -- although these fears
are unlikely to be realized, given another Republican Congress. As a group,
health care stocks are up about 11% for the 12-months ended 10/31/96, compared
to the broad market advance of 24%. As the market digests the election results,
performance for these industries may improve.
In the past six months, the fund has cut way back on medical products. Our
most important focus remains on drugs, and during this period we took positions
in Warner-Lambert Co, Merck & Co, and Arris Pharmaceutical. Companies which are
introducing new products are particularly desirable, as these generally enjoy
stronger pricing power and margins.
Graph:
This line graph represents a comparison of the value of a $10,000
investment in INVESCO Health Sciences Portfolio to the value of a $10,000
investment in the S&P 500 Index, assuming reinvestment of all dividends
and capital gain distributions, for the ten year period ended October 31,
1996.
Biotechnology also enjoys strong potential, and here we purchased Vertex
Pharmaceuticals, INCYTE Pharmaceuticals, Cambridge Heart, and Gilead Sciences.
Hospital services is another area offering long-term possibilities. These
companies have improved their market penetration; consolidation and acquisition
have also improved their earnings growth potential.
Health Sciences Portfolio is co-managed by INVESCO Senior Vice President
John R. Schroer, a Chartered Financial Analyst. He started his investment career
in 1989, after earning an MBA and BA from the University of Wisconsin. Last
<PAGE>
summer, Carol A. Werther joined the team as co-manager. Carol was
previously a portfolio manager specializing in biotechnology stocks with
Rothschild Management Ltd. She earned her MBA from New York University and MS
from the University of Alabama, as well as a BS from Cornell University.
Leisure Portfolio
Lipper Analytical Services ranked INVESCO Leisure Portfolio #4 of 16
specialty/miscellaneous funds for the ten-year period ended 10/31/96, based on
total return unadjusted for commissions. For the one-year period, the fund was
ranked #19 of 28 funds; for the five-year period, #6 of 19.(3)
Leisure Portfolio
Average Annualized Total Return
as of 10/31/96(2)
1 year 10.66%
-----------------------------------------
5 years 16.29%
-----------------------------------------
10 years 16.30%
-----------------------------------------
After underperforming the broad market in 1995, leisure stocks staged a
turnaround in 1996, only to fall behind again as the year advanced. For the
ten-month period ended 10/31/96, the fund had a total return of 7.52%, compared
to 16.63% for the S&P 500. (Of course, past performance is not a guarantee of
future results.)(1),(2)
Graph:
This line graph represents a comparison of the value of a $10,000
investment in INVESCO Leisure Portfolio to the value of a $10,000
investment in the S&P 500 Index, assuming reinvestment of all dividends
and capital gain distributions, for the ten year period ended October 31,
1996.
After a strong second quarter, the U.S. economy has since slowed. While a
moderate expansion does not make vigorous growth likely across the board for
this sector, potential does exist for carefully selected companies and
industries. In 1996, we have sought fund holdings in core companies with strong
market positions which are both attractively priced and generate strong cash
flows. In particular, we are seeking areas with improving dynamics.
Fund performance this year has been aided by holdings in advertising and
publishing. As we anticipated upon increasing our weightings in these areas,
their earnings growth rates have been above-average. Many of these firms enjoy
stronger pricing power; additionally, restructuring has brought about improved
margins for companies such as Times Mirror.
As we noted in the semiannual report last April, we closed positions in
several gaming stocks. This industry has since underperformed.
<PAGE>
Leisure Portfolio is managed by Mark Greenberg. He started his investment
career in 1980 and is a Chartered Financial Analyst. Mark earned his BSBA in
Finance from Marquette University. Prior to joining INVESCO early this year, he
was with Scudder, Stevens & Clark in New York.
Technology Portfolio
Technology Portfolio
Average Annualized Total Return
as of 10/31/96(2)
1 year 19.98%
-----------------------------------------
5 years 21.72%
-----------------------------------------
10 years 20.53%
-----------------------------------------
Lipper Analytical Services ranked INVESCO Technology Portfolio #2 of 12
science & technology funds for the 10-year period ended 10/31/96, based on total
return unadjusted for commissions. For the one-year period, the fund was ranked
#3 of 36 funds; for the five-year period, #7 of 14.(3)
For the ten-month period ended 10/31/96, Technology Portfolio achieved a
total return of 17.51%, compared to 16.63% for the S&P 500. (Of course, past
performance is not a guarantee of future results.)(1),(2)
Technology stocks remain even more volatile than the S&P 500. Earnings
disappointments have caused especially strong reactions in jumpy investors.
Nonetheless, over the ten months ended 10/31/96, this sector has overtaken the
broad market.
Our strategy over the year has remained consistent. We are biased towards
companies that are established market leaders and achieve stable earnings
growth.
Certain companies are likely to benefit from continued expansion of the
Internet and intranet systems. Seeking reasonable valuations and strong
potential for earnings growth acceleration, we have taken positions in selected
telecommunications firms and data communications companies.
Graph:
This line graph represents a comparison of the value of a $10,000
investment in INVESCO Technology Portfolio to the value of a $10,000
investment in the S&P 500 Index, assuming reinvestment of all dividends
and capital gain distributions, for the ten year period ended October 31,
1996.
Computer services and software are additional areas of interest. Here we
are looking for both high growth rates and predictable earnings from companies
which ease Internet access and automate paper-heavy processes.
At the same time, we have shunned "trendier" investments in many
Internet-related firms, where price advances are given up as easily as they are
achieved. Semiconductors is another area which we profitably avoided.
<PAGE>
Our cash position remains relatively high. This is a somewhat defensive
measure in an erratic market, but we do anticipate making additional purchases
as we find selected stocks which warrant investment. Technology Portfolio is
co-managed by Senior Vice President Daniel B. Leonard and Vice President Gerard
Hallaren. Dan's experience in investment management extends back to 1960. He
joined INVESCO in 1975 and is now a senior vice president. He attended the New
York University Graduate School of Business and holds a BA from Washington & Lee
University. Gerard earned his BA from the University of Massachusetts at
Amherst.
Utilities Portfolio
Utilities Portfolio
Average Annualized Total Return
as of 10/31/96(2)
1 year 17.18%
-----------------------------------------
5 years 12.42%
-----------------------------------------
10 years 10.53%
-----------------------------------------
Lipper Analytical Services ranked INVESCO Utilities Portfolio #1 of 22
utilities funds for the five-year period ended 10/31/96, based on total return
unadjusted for commissions. For the one-year period, the fund was ranked #11 of
90 funds, and for the 10-year period, #3 of 8.(3)
For the ten-month period ended 10/31/96, Utilities Portfolio achieved a
total return of 10.37%, compared to 16.63% for the S&P 500. (Of course, past
performance is not a guarantee of future results.)(1),(2)
With the rest of the stock market, the fund experienced a difficult
summer. However, as interest rates stabilized, performance rebounded.
Currently, the portfolio is tilted towards companies in a variety of
industries which enjoy relatively good growth prospects in defensible market
positions. Holdings in natural gas stocks have aided performance, as
energy-related companies have performed well for most of 1996.
Graph:
This line graph represents a comparison of the value of a $10,000
investment in INVESCO Utilities Portfolio to the value of a $10,000
investment in the S&P 500 Index, assuming reinvestment of all dividends
and capital gain distributions, for the ten year period ended October 31,
1996.
The "Baby Bells" have advanced recently. They are building stronger
positions within the industry through increased diversification and
<PAGE>
consolidation, strengthening their longer-term earnings outlooks. Key
holdings in this area include Ameritech Corp, SBC Communications, and BellSouth
Corp. Long-distance companies such as AT&T, on the other hand, are under
increasing competitive pressure, as well as experiencing management problems
which are unlikely to be resolved in the near-term. Telecommunications has been
a problematic area. Fallout has been wide from the negative repercussions of the
Telecommunications Act. The regulatory environment is the critical factor for
these stocks, and we will treat this area cautiously. Utilities Portfolio is
managed by Jeffrey G. Morris. He is a Chartered Financial Analyst, and earned
his BSBA from Colorado State University. Jeff joined INVESCO in 1991.
(1)The S&P 500 is an unmanaged index considered representative of the
performance of the broad U.S. stock market.
(2)Total return assumes reinvestment of dividends and capital gain
distributions for the periods indicated. Past performance is not a guarantee of
future results. Investment return and principal value will fluctuate so that,
when redeemed, an investor's shares may be worth more or less than when
purchased.
(3)Past performance is not a guarantee of future results. Rankings provided
by Lipper Analytical Services, an independent fund analyst, are based upon total
return performance unadjusted for commissions. When available, rankings are
cited for one-, five-, and 10-year periods.
<PAGE>
INVESCO Strategic Portfolios, Inc.
Five Largest Common Stock Holdings
October 31, 1996
Description Value
- ------------------------------------------------------------------
ENERGY Portfolio
Reading & Bates $12,937,500
Transocean Offshore 12,898,565
Diamond Offshore Drilling 12,783,750
Fluor Corp 11,790,000
Exxon Corp 11,521,250
ENVIRONMENTAL SERVICES Portfolio
Philip Environmental $1,867,500
General Chemical Group 1,639,700
US Filter 1,635,300
United Waste Systems 1,581,250
Thermatrix Inc 1,430,000
FINANCIAL SERVICES Portfolio
Conseco Inc $29,425,000
BankAmerica Corp 27,450,000
Bank of Boston 22,400,000
Chase Manhattan 21,437,500
Bank of New York 19,875,000
GOLD Portfolio
Bre-X Minerals Ltd $23,275,000
Golden Star Resources Ltd 18,625,000
Franco-Nevada Mining 17,150,472
Getchell Gold 15,575,000
Greenstone Resources Ltd 13,887,500
HEALTH SCIENCES Portfolio
HBO & Co $43,280,380
Warner-Lambert Co 38,175,000
Waters Corp 36,425,000
American Home Products 34,606,250
Bristol-Myers Squibb 33,840,000
LEISURE Portfolio
Time Warner $10,057,500
Disney (Walt) Co 7,656,849
Lin Television 7,272,000
Harcourt General 7,164,000
McGraw-Hill Cos 7,031,250
<PAGE>
TECHNOLOGY Portfolio
Intel Corp $34,610,625
Microsoft Corp 29,508,750
Schlumberger Ltd 24,781,250
Dell Computer 24,412,500
Northern Telecom Ltd 22,793,750
UTILITIES Portfolio
Public Service of Colorado $5,254,000
BellSouth Corp 4,665,875
SBC Communications 4,619,375
IES Industries 4,612,500
US WEST Communications Group 4,474,238
Composition of holdings is subject to change.
<PAGE>
INVESCO Strategic Portfolios, Inc.
Statement of Investment Securities
October 31, 1996
Country Shares,
Code Units or
if Principal
Description Non US Amount Value
- --------------------------------------------------------------------------------
ENERGY Portfolio
COMMON STOCKS & OPTION
AGREEMENTS 87.24%
BUILDING & CONSTRUCTION RELATED 4.77%
Fluor Corp $180,000 $11,790,000
-------------
ENGINEERING 1.61%
Willbros Group* PM 425,000 3,984,375
-------------
Oil & Gas 79.39%
EXPLORATION & PRODUCTION 20.96%
Atwood Oceanics* 30,000 1,665,000
Barrett Resources* 30,000 1,151,250
Burlington Resources 30,000 1,511,250
Cabot Oil & Gas Class A 23,900 370,450
Flores & Rucks* 229,700 10,853,325
Forcenergy Inc* 41,913 1,147,368
Forcenergy Inc Option Agreement
(Exp 2000)*^ 9,342 82,934
Louisiana Land & Exploration 140,000 7,962,500
Nuevo Energy* 100,000 4,987,500
PanEnergy Corp 260,000 10,010,000
Rio Alto Exploration Ltd* CA 150,000 1,012,250
Union Pacific Resources Group 250,000 6,875,000
Union Texas Petroleum Holdings 40,000 855,000
United Meridian* 70,000 3,298,750
-------------
51,782,577
-------------
FIELD SERVICES 9.25%
Energy Ventures* 100,000 4,400,000
Global Industries Ltd 50,000 900,000
Halliburton Co 80,000 4,530,000
ICO Inc 60,000 371,250
McDermott International 30,000 532,500
Nabors Industries* 200,000 3,325,000
Schlumberger Ltd 80,000 7,930,000
Tidewater Inc 20,000 875,000
-------------
22,863,750
-------------
INTEGRATED 9.04%
Amerada Hess 110,000 6,091,250
Exxon Corp 130,000 11,521,250
<PAGE>
Texaco Inc 40,000 4,065,000
USX-Marathon Group 30,000 656,250
-------------
22,333,750
-------------
INTERNATIONAL 17.00%
Abacan Resource* CA 500,000 3,812,500
Alberta Energy Ltd CA 200,000 4,300,000
Anderson Exploration Ltd* CA 50,000 581,625
British Petroleum PLC ADR UK 58,000 7,460,250
Canadian 88 Energy* CA 200,000 850,067
Canadian Natural Resources Ltd* CA 330,000 8,194,198
Denbury Resources CA 83,000 1,084,187
Morrison Petroleums Ltd CA 50,000 361,651
Renaissance Energy Ltd* CA 215,000 6,813,584
Royal Dutch Petroleum
New York Shrs NL 30,000 4,961,250
Ultramar Corp 70,000 2,003,750
Yacimientos Petroliferos
Fiscales SA Sponsored ADR AR 70,000 1,592,500
-------------
42,015,562
-------------
OFFSHORE DRILLING 15.82%
Diamond Offshore Drilling* 210,000 12,783,750
Global Marine* 25,000 459,375
Reading & Bates* 450,000 12,937,500
Transocean Offshore 203,930 12,898,565
-------------
39,079,190
-------------
PRODUCTION/PIPELINE 4.78%
Aquila Gas Pipeline 50,000 725,000
Enron Corp 40,000 6,510,000
Tejas Gas 100,000 4,062,500
TransCanada PipeLines CA 30,000 506,250
-------------
11,803,750
-------------
REFINING & MARKETING 0.19%
MarkWest Hydrocarbon* 45,600 473,100
-------------
UTILITIES 1.65%
KN Energy 80,000 2,990,000
Questar Corp 30,000 1,080,000
-------------
4,070,000
-------------
WHOLESALE 0.70%
World Fuel Services 100,000 1,737,500
-------------
TOTAL OIL & GAS 196,159,179
-------------
TELECOMMUNICATIONS 0.64%
Newbridge Networks CA 50,000 1,581,250
<PAGE>
TRANSPORTATION 0.83%
Burlington Northern Santa Fe 25,000 2,059,375
-------------
TOTAL COMMON STOCKS
& OPTION AGREEMENTS
(Cost $198,472,497) 215,574,179
-------------
PREFERRED STOCKS 2.53%
Oil & Gas 2.53%
INTERNATIONAL 1.76%
LASMO PLC Sponsored ADR
Representing 10.000%, Series A
Cum Pfd UK 170,000 4,335,000
-------------
UTILITIES 0.77%
MCN Corp, Conv Pfd
(Each shr consists of
five-sixths interest in a shr of
8.750% Conv Pfd) 69,400 1,908,500
-------------
TOTAL PREFERRED STOCKS
(Cost $5,913,764) 6,243,500
-------------
SHORT-TERM INVESTMENTS -
REPURCHASE AGREEMENTS 10.23%
Repurchase Agreement with
State Street Bank & Trust Co
dated 10/31/1996 due 11/1/1996
at 5.430%, repurchased at
$25,283,813 (Collateralized by
US Treasury Bonds due 2/15/2015
at 11.250%, value $25,792,967)
(Cost $25,280,000) 25,280,000 25,280,000
TOTAL INVESTMENT
SECURITIES AT VALUE 100.00%
(Cost $229,666,261)
(Cost for Income Tax Purposes
$230,834,900) 247,097,679
=============
ENVIRONMENTAL SERVICES Portfolio
COMMON STOCKS 100.00%
AEROSPACE & DEFENSE 0.41%
SPACEHAB Inc* 19,000 109,250
-------------
BUILDING & CONSTRUCTION
RELATED 2.84%
Harsco Corp 11,600 740,950
-------------
BUSINESS & COMMERCIAL
SERVICES 1.42%
On Assignment* 12,000 369,000
-------------
<PAGE>
CHEMICALS 13.48%
Agrium Inc 51,700 691,487
General Chemical Group 86,300 1,639,700
Nalco Chemical 11,400 414,675
Potash Corp of Saskatchewan 4,000 283,500
SAES Getters SpA Sponsored ADR* 42,000 483,000
-------------
3,512,362
-------------
DIVERSIFIED COMPANIES 3.38%
Laidlaw Inc Class B 75,000 881,250
-------------
ENGINEERING 2.13%
Jacobs Engineering Group* 25,100 555,337
-------------
MANUFACTURING 2.22%
Millipore Corp 16,500 577,500
-------------
MEDICAL PRODUCTS 1.25%
Meridian Diagnostics 31,000 325,500
-------------
METALS & MINING 2.45%
Addington Resources* 19,000 532,000
Recycling Industries* 35,000 107,187
-------------
639,187
-------------
OIL & GAS RELATED 8.33%
Costilla Energy* 45,000 573,750
PanEnergy Corp 21,000 808,500
Sonat Inc 16,000 788,000
-------------
2,170,250
-------------
Pollution Control 45.35%
EQUIPMENT/SYSTEMS 18.35%
Cuno Inc* 52,000 832,000
Memtec Ltd Sponsored ADR* 25,200 859,950
Omega Environmental* 25,500 26,297
Thermatrix Inc* 143,000 1,430,000
US Filter* 47,400 1,635,300
-------------
4,783,547
-------------
RECYCLING 10.25%
IMCO Recycling 29,400 470,400
Philip Environmental* 180,000 1,867,500
TETRA Technologies* 16,000 334,000
-------------
2,671,900
-------------
SERVICES 16.75%
Allied Waste Industries* 48,000 435,000
American Disposal Services* 49,000 784,000
EnviroSource Inc* 30,000 91,875
<PAGE>
Newpark Resources 8,000 300,000
Republic Industries* 14,000 435,750
Superior Services* 18,000 310,500
United Waste Systems* 46,000 1,581,250
WMX Technologies 12,400 426,250
-------------
4,364,625
-------------
TOTAL POLLUTION CONTROL 11,820,072
-------------
SERVICES 4.32%
Culligan Water Technologies* 30,000 1,125,000
-------------
UTILITIES 10.17%
American Water Works 21,000 427,875
IES Industries 5,000 153,750
Idaho Power 13,300 413,963
United Water Resources 53,000 828,125
Western Water* 43,000 827,750
-------------
2,651,463
-------------
WHOLESALE 2.25%
World Fuel Services 33,700 585,538
-------------
TOTAL COMMON STOCKS
(Cost $22,706,619) 26,062,659
-------------
PREFERRED STOCKS 0.00%
POLLUTION CONTROL
- RECYCLING 0.00%
Cyclean Inc, Series D Pfd*^
(Cost $499,998) 146,691 1
-------------
TOTAL INVESTMENT
SECURITIES AT VALUE 100.00%
(Cost $23,206,617)
(Cost for Income Tax Purposes
$23,237,611) $ 26,062,660
=============
FINANCIAL SERVICES Portfolio
COMMON STOCKS 96.03%
BANKING 53.93%
ABN AMRO Holding NV 100,000 5,654,811
Banc One 300,000 12,712,500
Bank of Boston 350,000 22,400,000
Bank of New York 600,000 19,875,000
BankAmerica Corp 300,000 27,450,000
Bankers Trust New York 200,000 16,900,000
Chase Manhattan 250,000 21,437,500
Citicorp 200,000 19,800,000
Compass Bancshares 500,000 18,062,500
First Security 505,000 14,834,375
<PAGE>
National Westminster
Bank PLC ADR 50,000 3,406,250
PNC Bank 375,000 13,593,750
Regions Financial 280,000 14,000,000
Republic New York 250,000 19,062,500
Riggs National 300,000 5,137,500
Signet Banking 250,000 7,218,750
Southern National 400,000 13,850,000
State Street Boston 200,000 12,675,000
Union Planters 350,000 12,162,500
Wachovia Corp 250,000 13,437,500
-------------
293,670,436
-------------
COMPUTER RELATED 1.76%
Fiserv Inc* 250,000 9,593,750
-------------
FINANCE RELATED 13.78%
American Financial Group 400,000 14,350,000
Countrywide Credit Industries 600,000 17,100,000
Federal National Mortgage
Association 200,000 7,825,000
Green Tree Financial 300,000 11,887,500
Household International 100,000 8,850,000
SunAmerica Inc 400,000 15,000,000
-------------
75,012,500
-------------
INSURANCE 22.80%
American Re 200,000 12,875,000
Conseco Inc 550,000 29,425,000
Equitable of Iowa 240,000 10,050,000
Everest Re Holdings 300,000 7,650,000
General Re 100,000 14,725,000
ITT Hartford Group 175,000 11,025,000
Jefferson-Pilot Corp 300,000 17,062,500
PennCorp Financial Group 150,000 5,193,750
ReliaStar Financial 100,000 5,300,000
Travelers Group 200,000 10,850,000
-------------
124,156,250
-------------
SAVINGS & LOAN 3.76%
Federal Home Loan Mortgage 100,000 10,100,000
TCF Financial 50,000 1,937,500
Washington Mutual 200,000 8,450,000
-------------
20,487,500
-------------
TOTAL COMMON STOCKS
(Cost $433,751,237) 522,920,436
-------------
<PAGE>
SHORT-TERM INVESTMENTS -
COMMERCIAL PAPER 3.97%
FINANCE RELATED 3.97%
Associates Corp of North America
5.650%, 11/1/1996
(Cost $21,630,000) 21,630,000 21,630,000
TOTAL INVESTMENT
SECURITIES AT VALUE 100.00%
(Cost $455,381,237#) 544,550,436
=============
GOLD Portfolio
COMMON STOCKS 87.36%
AGRICULTURAL 1.31%
Nevsun Resources Ltd* CA 500,000 3,802,931
-------------
BANKING 1.54%
Bank fuer Internationalen
Zahlungsausgleich SZ 500 4,488,755
-------------
BUSINESS & COMMERCIAL
SERVICES 0.11%
Birch Mountain Minerals Ltd* CA 150,000 329,960
-------------
EXPLORATION & MINING 82.41%
Aber Resources Ltd* CA 250,000 3,875,000
Acacia Resources Ltd* AS 600,000 1,132,547
Agnico Eagle Mines Ltd CA 300,000 4,200,000
Argosy Mining* CA 1,100,000 1,328,788
Arizona Star Resource*~ CA 1,500,000 9,003,997
Armada Gold Class A* CA 450,000 523,462
Ashanti Goldfields Ltd
Sponsored ADR GH 600,000 9,825,000
Aurora Gold Ltd* AS 1,000,000 1,903,440
Band-Ore Resources* CA 70,000 574,168
Barrick Gold CA 342,228 8,940,707
Battle Mountain Gold 100,000 762,500
Bema Gold* CA 1,000,000 6,062,500
Bre-X Minerals Ltd* CA 1,400,000 23,275,000
Bro-X Minerals Ltd* CA 140,000 407,137
Cambior Inc CA 150,000 2,100,000
Canyon Resources* 1,154,229 2,957,712
Crown Resources*~ 960,000 5,640,000
Emperor Mines Ltd* AS 3,000,000 5,710,320
Euro-Nevada Mining Ltd CA 403,000 11,900,043
Francisco Gold*~ CA 300,000 2,393,609
Franco-Nevada Mining Ltd CA 400,000 17,150,472
Geomaque Explorations Ltd* CA 500,000 1,249,001
Getchell Gold* 350,000 15,575,000
Goldbelt Resources*~ CA 2,000,000 1,640,480
Golden Knight Resources* CA 200,000 1,150,000
Golden Star Resources Ltd*~ 1,000,000 18,625,000
Goldfields Ltd AS 333,333 682,065
Greenstone Resources Ltd* CA 1,100,000 13,887,500
Guyana Gold* CA 600,000 295,286
Guyanor Ressources SA
Class B* FR 689,000 6,678,990
High River Gold Mines Ltd* CA 499,300 1,507,873
<PAGE>
IAMGOLD* CA 23,800 127,778
Indochina Goldfields Ltd*^ CA 1,400,000 9,969,644
International Capri Resources*~ CA 600,000 536,884
International Taurus Resources*~ CA 600,000 894,807
KWG Resources* CA 243,100 1,549,762
Kinross Gold* CA 600,000 4,350,000
Lihir Gold Ltd Sponsored ADR* PP 100,000 3,525,000
Manhattan Minerals* CA 399,000 2,588,453
Metallica Resources* CA 46,200 138,600
Monarch Resources* CA 235,000 280,373
Newcrest Mining Ltd AS 787,850 2,724,319
Newmont Mining 100,000 4,625,000
Original Sixteen to One Mine* 91,100 341,625
Orvana Minerals* CA 500,000 2,516,645
Pangea Goldfields* CA 200,000 1,036,485
Peruvian Gold Ltd* CA 200,000 387,750
Plutonic Resources Ltd AS 200,000 951,720
Rea Gold* CA 322,700 564,725
Repadre Capital* CA 31,300 177,381
Rex Diamond Mining* CA 240,000 572,963
Royal Oak Mines* CA 1,500,000 5,625,000
Santa Fe Pacific Gold 200,000 2,375,000
Scorpion Minerals* CA 519,333 2,710,768
Solitario Resources* CA 204,000 206,879
Sonoma Resources*~ CA 62,800 63,218
South Pacific Resources* CA 150,000 559,254
Steppe Gold International*~ CA 900,000 771,771
TVI Pacific* CA 1,500,000 1,677,764
Texas Star Resources* 500,000 382,813
Trillion Resources Ltd*~ CA 574,000 2,097,278
Viceroy Resources* CA 900,010 4,395,789
-------------
239,683,045
-------------
METALS 1.99%
Freeport McMoRan Copper &
Gold Class A 200,000 5,800,000
-------------
TOTAL COMMON STOCKS
(Cost $222,436,683) 254,104,691
-------------
PREFERRED STOCKS 5.34%
EXPLORATION & MINING 5.34%
Coeur D'Alene Mines, 7.000%
Mandatory Adjustable
Redeemable Conv Security 275,000 4,571,875
Freeport McMoRan Copper &
Gold, 7.000%, Conv Pfd 300,000 9,000,000
Hecla Mining, $3.50, Series B
Cum Conv Pfd 42,100 1,957,650
-------------
TOTAL PREFERRED STOCKS
(Cost $15,088,401) 15,529,525
-------------
<PAGE>
FIXED INCOME SECURITIES 3.04%
EXPLORATION & MINING 3.04%
Agnico Eagle Mines
Conv Sr Notes
3.500%, 1/27/2004 CA 3,000,000 2,726,250
Ashanti Capital Ltd
Exchangeable Gtd Notes
5.500%, 3/15/2003 CJ 7,000,000 6,125,000
-------------
TOTAL FIXED INCOME SECURITIES
(Cost $9,830,889) 8,851,250
-------------
SHORT-TERM INVESTMENTS -
COMMERCIAL PAPER 4.26%
FINANCE RELATED 3.54%
Associates Corp of North America
5.650%, 11/1/1996 10,275,000 10,275,000
-------------
INVESTMENT BROKERS 0.72%
Merrill Lynch & Co
5.280%, 11/1/1996 2,100,000 2,100,000
-------------
TOTAL SHORT-TERM INVESTMENTS
(Cost $12,375,000) 12,375,000
-------------
TOTAL INVESTMENT
SECURITIES AT VALUE 100.00%
(Cost $259,730,973)
(Cost for Income Tax Purposes
$301,168,581) 290,860,466
=============
HEALTH SCIENCES Portfolio
COMMON STOCKS & WARRANTS 91.06%
BIOTECHNOLOGY 8.81%
Amgen Inc* 315,000 19,313,437
Cambridge Heart*~ 77,000 856,625
Cambridge Heart*^~ 600,000 5,340,000
Centocor Inc* 120,300 3,533,813
Creative BioMolecules*~ 1,130,000 9,746,250
Ecogen Technologies I*^~ 100 1,320,000
Gilead Sciences* 435,000 10,168,125
ImClone Systems* 650,000 5,606,250
INCYTE Pharmaceuticals* 355,000 14,377,500
MedClone Inc Warrants
(Exp 1999)*@^ 500,000 0
Metra Biosystems*^ 275,081 1,423,544
Unisyn Technologies*^~ 31,132 31,132
Vertex Pharmaceuticals* 277,900 9,240,175
Xenometrix Inc*^~ 145,641 1,146,923
-------------
82,103,774
-------------
COMPUTER RELATED 4.65%
HBO & Co 719,840 43,280,380
<PAGE>
ELECTRONICS 3.19%
Perkin-Elmer Corp 555,000 29,761,875
HEALTH CARE - EQUIPMENT &
SUPPLIES 2.30%
Allegiance Corp* 147,000 2,756,250
Cardiovascular Diagnostics* 38,000 171,000
Total Renal Care Holdings* 475,000 18,525,000
-------------
21,452,250
-------------
HEALTH CARE FACILITIES 1.05%
Salick Health Care* 245,000 9,800,000
HEALTH MAINTENANCE
ORGANIZATIONS 4.83%
Humana Inc* 800,000 14,600,000
Oxford Health Plans* 669,000 30,439,500
-------------
45,039,500
-------------
MANUFACTURING 3.91%
Waters Corp* 1,175,000 36,425,000
MEDICAL EQUIPMENT
& SUPPLIES 6.71%
Becton Dickinson & Co 731,000 31,798,500
Cardiometrics Inc* 322,500 1,330,313
Diametrics Medical* 409,554 1,587,022
Johnson & Johnson 500,000 24,625,000
KeraVision Inc* 206,185 3,195,867
-------------
62,536,702
-------------
MEDICAL INSTRUMENTS 6.58%
Boston Scientific* 261,500 14,219,062
Medtronic Inc 400,000 25,750,000
Sofamor/Danek Group* 775,000 21,312,500
-------------
61,281,562
-------------
MEDICAL PRODUCTS 6.24%
Cadus Pharmaceutical* 50,000 350,000
Clarus Medical Systems Warrants
(Exp 2000)*@^~ 2,224 0
Electroscope Inc*^~ 399,000 2,374,050
Emisphere Technologies*~ 500,000 7,625,000
IDEC Pharmaceuticals* 428,000 9,255,500
Landec Corp*~ 378,072 3,355,389
ResMed Inc*~ 445,000 7,453,750
Rochester Medical* 200,000 3,250,000
Sepracor Inc* 360,000 5,850,000
SEQUUS Pharmaceutical* 650,000 9,140,625
St Jude Medical* 240,000 9,480,000
-------------
58,134,314
-------------
<PAGE>
MEDICAL RELATED - DRUGS 32.50%
American Home Products 565,000 34,606,250
Arris Pharmaceutical*~ 611,000 7,561,125
Bristol-Myers Squibb 320,000 33,840,000
CIMA Labs*~ 466,666 3,499,995
Crown Laboratories*^~ 730,792 543,527
Dura Pharmaceuticals* 20,000 690,000
Dura Pharmaceuticals Series W
Warrants (Exp 1997)*^ 120,000 10,794,000
Lilly (Eli) & Co 400,000 28,200,000
Merck & Co 400,000 29,650,000
Pfizer Inc 380,000 31,445,000
Pharmos Corp*~ 713,005 935,819
Rhone-Poulenc Rorer 288,900 19,392,412
Sandoz AG Ltd Registered Shrs 24,700 28,669,801
Smithkline Beecham PLC ADR
Representing Ord A Shrs 417,000 26,114,625
Sparta Pharmaceuticals*^~ 500,000 646,875
Titan Pharmaceuticals*^~ 488,215 4,442,757
Vical Inc* 275,000 3,678,125
Warner-Lambert Co 600,000 38,175,000
-------------
302,885,311
-------------
MEDICAL SERVICES 10.29%
Advanced Health*^ 687,088 8,245,056
Medical Associates of America*^~ 502,935 1
Omnicare Inc 1,070,000 29,157,500
PAREXEL International* 316,300 15,498,700
PhyCor Inc* 540,000 16,740,000
Quintiles Transnational* 320,000 21,040,000
RoTech Medical* 324,000 5,184,000
-------------
95,865,257
-------------
TOTAL COMMON STOCKS
& WARRANTS
(Cost $653,496,336) 848,565,925
-------------
PREFERRED STOCKS 1.06%
BIOTECHNOLOGY 0.38%
Ingenex Inc, Series B Pfd*^~ 103,055 600,000
Janus Biomedical, Series A
Conv Pfd*^ 400,000 1,000,000
MedClone Inc, Series G
Conv Pfd*^ 581,396 1
Osiris Therapeutics, Series C
Conv Pfd*^ 382,353 1,300,000
Unisyn Technologies
Series A Conv Pfd*^~ 359,501 359,501
Series B Conv Pfd*^~ 250,500 250,500
-------------
3,510,002
-------------
<PAGE>
MEDICAL PRODUCTS 0.18%
Clarus Medical Systems
Series I Pfd*^~ 106,664 533,320
Series II Pfd*^~ 22,239 111,195
OrbTek Inc, Series A Conv Pfd*^ 476,190 999,999
-------------
1,644,514
-------------
MEDICAL SERVICES 0.50%
Multum Information Services
Series C Pfd*^~ 571,429 1,468,573
Physicians Online Series A Pfd*^ 361,350 3,219,628
-------------
4,688,201
-------------
TOTAL PREFERRED STOCKS
(Cost $9,584,798) 9,842,717
-------------
FIXED INCOME SECURITIES 0.00%
BIOTECHNOLOGY 0.00%
MedClone Inc, Promissory Notes, 10.000%
6/30/1996^** 36,840 1
12/31/1996^ 36,840 1
-------------
2
-------------
MEDICAL SERVICES 0.00%
Medical Associates of America
Conv Sr Notes
7.000%, 2/28/1999*^>~ 1,689,904 100
-------------
TOTAL FIXED INCOME SECURITIES
(Cost $1,763,584) 102
-------------
SHORT-TERM INVESTMENTS -
COMMERCIAL PAPER 7.88%
DIVERSIFIED COMPANIES 4.29%
General Electric
5.350%, 11/5/1996 39,951,000 39,951,000
-------------
FINANCE RELATED 3.59%
General Motors Acceptance
5.200%, 11/1/1996 33,511,000 33,511,000
TOTAL SHORT-TERM
INVESTMENTS
(Cost $73,462,000) 73,462,000
-------------
TOTAL INVESTMENT
SECURITIES AT VALUE 100.00%
(Cost $738,306,718)
(Cost for Income Tax Purposes
$739,593,758) 931,870,744
=============
<PAGE>
LEISURE Portfolio
COMMON STOCKS 90.48%
ADVERTISING 5.30%
Cordiant PLC* UK 2,250,000 3,737,178
Eagle River Interactive* 20,000 187,500
Katz Media Group* 99,500 833,312
Omnicom Group 120,000 5,970,000
WPP Group PLC UK 700,000 2,598,926
-------------
13,326,916
-------------
AUDIO/VIDEO RELATED 3.41%
Granada Group PLC UK 150,000 2,160,480
Harman International Industries 124,970 6,420,334
-------------
8,580,814
-------------
BROADCASTING 14.73%
Adelphia Communications Class A* 100,000 775,000
Belo (A H) Corp Series A 150,000 5,850,000
Central European Media
Enterprises Ltd Class A* BD 127,800 3,578,400
Evergreen Media Class A* 112,500 3,037,500
HTV Group PLC UK 100,000 616,349
Heritage Media Class A* 190,400 2,903,600
Lin Television* 192,000 7,272,000
Metro Networks* 29,500 597,375
Television Broadcasts Ltd HK 200,000 700,958
Television Broadcasts Ltd ADR HK 750,000 2,628,524
United Video Satellite Group
Class A* 210,000 3,727,500
ValueVision International Class A* 500,000 2,687,500
Yorkshire-Tyne Tees Television
Holdings PLC UK 129,000 2,662,556
-------------
37,037,262
-------------
BUSINESS & COMMERCIAL SERVICES 3.38%
CUC International* 183,668 4,499,854
Sotheby's Holdings Class A 235,000 3,995,000
-------------
8,494,854
-------------
CABLE TELEVISION 6.84%
Comcast Cable Partners Ltd Class A* UK 100,000 1,262,500
Comcast Corp Special Class A 145,000 2,138,750
Rogers Communications
Class B Representing
Non-Voting Shrs* CA 100,000 805,327
TCA Cable TV 100,000 2,675,000
Tele-Communications Inc -
Liberty Media Group Series A* 162,500 4,184,375
TCI Group Series A* 150,000 1,865,625
<PAGE>
Tele-Communication
International Series A* 285,700 4,285,500
-------------
17,217,077
-------------
COMPUTER SYSTEMS 1.38%
Bell & Howell* 130,000 3,477,500
-------------
EDUCATION & TRAINING 0.67%
Sylvan Learning Systems* 40,000 1,690,000
-------------
FOOD PRODUCTS & BEVERAGES 2.11%
Seagram Co Ltd CA 140,000 5,302,500
-------------
GAMING 7.24%
Bally Entertainment* 100,000 3,012,500
Circus Circus Enterprises* 120,000 4,140,000
Crown Ltd* AS 283,440 615,942
Grand Casinos* 95,000 1,413,125
Harrah's Entertainment* 92,600 1,551,050
MGM Grand* 100,000 3,875,000
Trump Hotels & Casino Resorts* 227,200 3,606,800
-------------
18,214,417
-------------
HOTELS 3.66%
HFS Inc* 23,600 1,728,700
Hilton Hotels 120,000 3,645,000
Interstate Hotels* 18,300 494,100
Studio Plus Hotels* 190,000 3,348,750
-------------
9,216,550
-------------
MEDICAL EQUIPMENT
& SUPPLIES 0.89%
Bausch & Lomb 66,000 2,227,500
-------------
MOTION PICTURES & TELEVISION 5.02%
Disney (Walt) Co 116,233 7,656,849
Gaylord Entertainment Class A 117,059 2,311,915
Viacom Inc
Class A* 13,040 425,430
Class B* 68,802 2,244,665
-------------
12,638,859
-------------
PRINTING & PUBLISHING 16.57%
Harcourt General 144,000 7,164,000
McClatchy Newspapers Class A 24,000 669,000
McGraw-Hill Cos 150,000 7,031,250
New York Times Class A 50,000 1,806,250
News Corp Ltd ADR AS 120,000 2,715,000
Pearson PLC UK 50,000 618,792
Scholastic Corp* 50,000 3,662,500
Scripps (E W) Co Class A 70,000 3,316,250
<PAGE>
Time Warner 270,000 10,057,500
Times Mirror Series A 100,000 4,625,000
-------------
41,665,542
-------------
RECREATION PRODUCTS
& SERVICES 8.72%
AMC Entertainment* 50,000 862,500
Amalgamated Holdings Ltd AS 658,908 3,997,737
Carnival Corp Class A 154,200 4,645,275
K2 Inc 195,000 4,485,000
Metromedia International Group* 100,000 987,500
Nintendo Co Ltd JA 20,000 1,266,048
Premier Parks* 17,500 555,625
Salomon SA FR 45,000 4,034,696
Sodak Gaming* 60,000 1,087,500
-------------
21,921,881
-------------
RETAIL 5.74%
IHOP Corp* 135,000 2,970,000
Landry's Seafood Restaurants* 90,000 1,845,000
Rite Aid 150,000 5,100,000
TAG Heuer International SA
Sponsored ADR* SZ 50,000 800,000
Wal-Mart Stores 140,000 3,727,500
-------------
14,442,500
-------------
TELECOMMUNICATIONS 0.93%
Rogers Cantel Mobile
Communications Class B* CA 100,000 2,337,500
-------------
TEXTILES & APPAREL
MANUFACTURERS 1.06%
Adidas AG Sponsored ADR^ GM 62,000 2,659,124
-------------
TOYS & HOBBIES 0.38%
Tyco Toys* 150,000 956,250
-------------
UTILITIES 2.45%
US WEST Communications Group 100,000 3,037,500
US WEST Media Group* 200,000 3,125,000
-------------
6,162,500
-------------
TOTAL COMMON STOCKS
(Cost $197,714,243) 227,569,546
-------------
PREFERRED STOCKS 2.75%
MOTION PICTURES & TELEVISION 0.29%
Village Roadshow Ltd, Pfd AS 250,000 723,704
-------------
<PAGE>
PRINTING & PUBLISHING 2.46%
News Corp Ltd Sponsored ADR
Representing Ltd Voting
Pfd Shrs AS 160,000 2,840,000
Times Mirror, Series B
Conv Pfd, $1.3740 125,000 3,359,375
-------------
6,199,375
-------------
TOTAL PREFERRED STOCKS
(Cost $6,972,337) 6,923,079
-------------
FIXED INCOME SECURITIES 0.83%
CABLE TELEVISION 0.83%
United International Holdings
Sr Secured Discount Notes
Zero Coupon, 11/15/1999
(Cost $2,053,600) 3,000,000 2,085,000
-------------
OTHER SECURITIES 0.92%
CABLE TELEVISION 0.92%
United International Holdings
Units* (Each unit consists of one
$1,000 face amount Sr Secured
Discount Note, Zero Coupon
1/15/1999 and 1 wrnt to purchase
4.535 shrs of cmn stock)
(Cost $2,235,765) 3,225 2,322,000
-------------
SHORT-TERM INVESTMENTS
COMMERCIAL PAPER 5.02%
FINANCE RELATED 5.02%
Associates Corp of North America
5.650%, 11/1/1996
(Cost $12,620,000) 12,620,000 12,620,000
-------------
TOTAL INVESTMENT
SECURITIES AT VALUE 100.00%
(Cost $221,595,945)
(Cost for Income Tax Purposes
$221,646,445) 251,519,625
=============
TECHNOLOGY Portfolio
COMMON STOCKS 81.38%
AEROSPACE & DEFENSE 0.16%
Nichols Research* 35,000 1,216,250
-------------
BIOTECHNOLOGY 0.64%
Vertex Pharmaceutical* 150,000 4,987,500
-------------
BROADCASTING 0.00%
Future Communications*~ 160,000 1
-------------
<PAGE>
BUSINESS & COMMERCIAL
SERVICES 2.77%
Computer Learning Centers* 50,000 1,337,500
Equifax Inc 400,000 11,900,000
TeleTech Holdings* 250,000 8,000,000
Thomas Group* 15,500 189,875
-------------
21,427,375
-------------
COMPUTER GRAPHICS 0.24%
Cadence Design Systems* 50,000 1,825,000
-------------
COMPUTER LOCAL NETWORKS 3.24%
Cisco Systems* 175,000 10,828,125
Vanstar Corp* 599,800 14,245,250
-------------
25,073,375
-------------
COMPUTER PERIPHERALS
& SUPPLIES 0.58%
Digi International* 100,000 1,475,000
Kentek Information Systems 175,000 853,125
Storage Technology* 50,000 2,131,250
-------------
4,459,375
-------------
COMPUTER SERVICES 10.02%
Ceridian Corp* 325,000 16,128,125
Claremont Technology Group* 121,000 3,690,500
Computer Sciences* 35,000 2,598,750
Electronic Data Systems 370,000 16,650,000
Fiserv Inc* 240,000 9,210,000
International Network Services* 2,050 73,288
National Data 427,750 17,591,219
Technology Solutions* 300,000 11,662,500
-------------
77,604,382
-------------
COMPUTER SOFTWARE 20.81%
Activision Inc* 100,000 1,262,500
Adobe Systems 100,000 3,462,500
Aware Inc* 25,000 306,250
BMC Software* 150,000 12,450,000
Baan Corp NV* 400,000 14,800,000
Cellular Technical Services* 800,000 12,900,000
Cognos Inc* 300,000 9,412,500
Computer Associates International 350,000 20,693,750
Document Sciences* 41,000 522,750
Electronic Arts* 75,000 2,812,500
Informix Corp* 75,000 1,664,062
Innovus Corp* 60,000 270,000
Keane Inc* 167,500 7,767,812
Microsoft Corp* 215,000 29,508,750
Netscape Communications* 250,000 11,062,500
Oracle Corp* 290,000 12,270,625
<PAGE>
Pure Atria* 100,000 2,725,000
State Of The Art* 465,000 5,638,125
Summit Design* 130,000 1,381,250
Sybase Inc* 25,000 440,625
VIASOFT Inc* 200,000 9,850,000
-------------
161,201,499
-------------
COMPUTER SYSTEMS 6.92%
Compaq Computer* 170,000 11,836,250
Dell Computer* 300,000 24,412,500
Exabyte Corp* 125,000 1,656,250
Ingram Micro Class A*~~ 123,400 2,221,200
Micron Electronics* 270,000 4,016,250
Sun Microsystems* 50,000 3,050,000
Wind River Systems* 150,000 6,375,000
-------------
53,567,450
-------------
EDUCATION & TRAINING 0.84%
National Education* 400,000 6,500,000
-------------
ELECTRONICS 8.55%
Analog Devices* 240,000 6,240,000
Computer Products* 75,000 1,481,250
Harris Corp Delaware 150,000 9,393,750
Intel Corp 315,000 34,610,625
Lattice Semiconductor* 20,000 685,000
Nokia Corp Sponsored ADR 290,000 13,448,750
Voice Control Systems* 60,000 382,500
-------------
66,241,875
-------------
FINANCE RELATED 2.06%
First Data 200,000 15,950,000
-------------
GAMING 1.36%
International Game Technology 500,000 10,562,500
-------------
MEDICAL PRODUCTS 0.84%
Jones Medical Industries 150,000 6,525,000
-------------
MEDICAL RELATED - DRUGS 1.58%
Medicis Pharmaceutical Class A* 200,000 10,050,000
Titan Pharmaceuticals*^ 244,108 2,221,383
-------------
12,271,383
-------------
OIL & GAS RELATED 5.50%
Global Marine* 200,000 3,675,000
Halliburton Co 250,000 14,156,250
Schlumberger Ltd 250,000 24,781,250
-------------
42,612,500
-------------
<PAGE>
RECREATION PRODUCTS & SERVICES 0.20%
Nintendo Co Ltd 25,000 1,582,560
-------------
RETAIL 2.52%
Intelligent Electronics 100,000 887,500
Toys "R" Us* 550,000 18,631,250
-------------
19,518,750
SCIENTIFIC TESTING 0.78%
GenRad Inc* 300,000 6,075,000
-------------
SECURITY - SAFETY EQUIPMENT
& SERVICES 1.60%
Lo-Jack Corp* 50,000 518,750
Pittway Corp Delaware Class A 242,700 11,831,625
-------------
12,350,375
-------------
SEMICONDUCTOR EQUIPMENT 1.65%
Applied Materials* 200,000 5,287,500
HADCO Corp* 200,000 6,075,000
TriQuint Semiconductor* 82,200 1,428,225
-------------
12,790,725
-------------
TELECOMMUNICATIONS 8.03%
ADC Telecommunications* 50,000 3,418,750
Ericsson (L M) Telephone ADR
Representing Class B Shrs 75,000 2,071,875
Global Village Communication* 25,000 190,625
Harmonic Lightwaves* 200,000 3,375,000
Newbridge Networks* 550,000 17,393,750
Northern Telecom Ltd 350,000 22,793,750
Octel Communications* 300,000 4,762,500
P-COM Inc* 75,000 1,650,000
Tadiran Telecommunications Ltd* 285,000 6,555,000
-------------
62,211,250
-------------
WHOLESALE 0.49%
Kent Electronics* 166,000 3,797,250
-------------
TOTAL COMMON STOCKS
(Cost $514,860,214) 630,351,375
-------------
PREFERRED STOCKS 0.16%
BIOTECHNOLOGY 0.04%
Ingenex Inc, Series B Pfd*^ 51,527 300,000
-------------
DIVERSIFIED COMPANIES 0.12%
Alpine Group, 9.000%
Cum Conv Sr Pfd^ 1,000 900,000
-------------
<PAGE>
TOTAL PREFERRED STOCKS
(Cost $1,300,000 ) 1,200,000
-------------
SHORT-TERM INVESTMENTS -
COMMERCIAL PAPER 18.46%
FINANCE RELATED 15.88%
American Express Credit
5.250%, 11/4/1996 17,457,000 17,457,000
Chevron Oil Finance
5.240%, 11/6/1996 37,554,000 37,554,000
Deere (John) Capital
5.200%, 11/4/1996 15,000,000 15,000,000
Ford Motor Credit
5.350%, 11/5/1996 24,230,000 24,230,000
General Motors Acceptance
5.200%, 11/1/1996 28,760,000 28,760,000
-------------
123,001,000
-------------
INSURANCE 2.58%
CIGNA Corp
5.220%, 11/1/1996 20,000,000 20,000,000
-------------
TOTAL SHORT-TERM INVESTMENTS
(Cost $143,001,000 ) 143,001,000
-------------
TOTAL INVESTMENT
SECURITIES AT VALUE 100.00%
(Cost $659,161,214)
(Cost for Income Tax Purposes
$660,108,080) 774,552,375
=============
UTILITIES Portfolio
COMMON STOCKS OPTION
AGREEMENTS 85.87%
BROADCASTING 1.13%
Scottish Television PLC 142,000 1,691,468
-------------
OIL & GAS RELATED 13.52%
Coastal Corp 47,000 2,021,000
Enron Corp 42,000 1,953,000
ENSERCH Corp 50,000 1,075,000
Forcenergy Inc* 41,913 1,147,368
Forcenergy Inc Option
Agreement (Exp 2000)*^ 9,342 82,934
NGC Corp 35,625 641,250
PanEnergy Corp 80,000 3,080,000
Sonat Inc 61,000 3,004,250
TransCanada Pipelines Ltd 90,000 1,518,750
Union Pacific Resources Group 100,000 2,750,000
Williams Cos 58,000 3,030,500
-------------
20,304,052
-------------
<PAGE>
TELECOMMUNICATIONS 9.30%
AT&T Corp 43,600 1,520,550
Clearnet Communications Class A* 48,300 712,425
Frontier Corp 125,000 3,625,000
MFS Communications* 20,000 1,002,500
McLeod Inc* 69,000 2,242,500
NEXTEL Communications Class A* 82,000 1,312,000
Portugal Telecom SA Sponsored ADR 21,800 564,075
Telefonica del Peru SA Sponsored ADR
Representing Class B Shrs 50,000 1,031,250
Viatel Inc* 141,700 1,700,400
Western Wireless Class A* 14,800 244,200
-------------
13,954,900
-------------
Utilites 61.92%
ELECTRIC 28.86%
Allegheny Power System 50,000 1,493,750
American Electric Power 68,000 2,822,000
Calpine Corp* 30,000 532,500
Central & South West Corp 50,000 1,325,000
CIPSCO Inc 40,000 1,455,000
Commonwealth Energy Systems SBI 61,700 1,480,800
FPL Group 68,000 3,128,000
IES Industries 150,000 4,612,500
Idaho Power 90,000 2,801,250
Interstate Power 33,900 1,029,712
KU Energy 25,000 740,625
NIPSCO Industries 71,000 2,689,125
Oklahoma Gas & Electric 47,000 1,838,875
PacifiCorp 137,600 2,906,800
Portland General 35,000 1,531,250
Public Service of Colorado 142,000 5,254,000
SCANA Corp 111,400 2,979,950
Southern Co 142,500 3,152,812
TNP Enterprises 60,200 1,557,675
-------------
43,331,624
-------------
GAS 4.74%
Chesapeake Utilities 54,400 911,200
Columbia Gas System 48,000 2,916,000
Equitable Resources 33,000 948,750
New Jersey Resources 35,000 966,875
ONEOK Inc 51,000 1,370,625
-------------
7,113,450
-------------
TELEPHONE 28.32%
ALLTEL Corp 114,000 3,477,000
Ameritech Corp 77,000 4,215,750
Bell Atlantic 72,000 4,338,000
BellSouth Corp 114,500 4,665,875
<PAGE>
Century Telephone Enterprises 84,000 2,698,500
Cincinnati Bell 20,500 1,012,187
GTE Corp 34,000 1,432,250
NYNEX Corp 97,000 4,316,500
SBC Communications 95,000 4,619,375
Southern New England
Telecommunications 115,500 4,302,375
Sprint Corp 75,500 2,963,375
US WEST Communications Group 147,300 4,474,238
-------------
42,515,425
-------------
TOTAL UTILITIES 92,960,499
-------------
TOTAL COMMON STOCKS
& OPTION AGREEMENTS
(Cost $121,905,821) 128,910,919
-------------
PREFERRED STOCKS 1.31%
UTILITIES - ELECTRIC 1.31%
Niagara Mohawk Power
9.500%, Series M Pfd
(Cost $1,668,502) 80,100 1,972,463
-------------
FIXED INCOME SECURITIES 3.32%
UTILITIES - TELEPHONE 3.32%
Bell Telephone of Pennsylvania
Deb, 7.500%, 5/1/2013 3,000,000 3,044,784
GTE South, Series B, Deb
7.250%, 8/1/2002 1,000,000 1,036,541
GTE Southwest, Series A, Deb
5.820%, 12/1/1999 915,000 904,999
-------------
TOTAL FIXED INCOME SECURITIES
(Cost $4,971,427) 4,986,324
-------------
SHORT-TERM INVESTMENTS -
REPURCHASE AGREEMENTS 9.50%
Repurchase Agreement with
State Street Bank & Trust Co
dated 10/31/1996 due 11/1/1996
at 5.430%, repurchased at
$14,262,151 (Collateralized by
US Treasury Bonds due 2/15/2015
at 11.250%, value $14,782,404)
(Cost $14,260,000) 14,260,000 14,260,000
-------------
TOTAL INVESTMENT
SECURITIES AT VALUE 100.00%
(Cost $142,805,750)
(Cost for Income Tax Purposes
$142,813,031) 150,129,706
=============
<PAGE>
* Security is non-income producing.
# Also represents cost for income tax purposes.
~ Security is an affiliated company (See Note 5).
@ Security has no market value at October 31, 1996.
* Security is a defaulted security with respect to cumulative interest payments
of $1,862 at October 31, 1996. The security has been devalued to $1.
>> Security is a defaulted security with respect to cumulative interest
payments of $156,293 at October 31, 1996. The security has been devalued to
$100.
~~ Security is a when-issued security.
<PAGE>
^ The following are restricted securities at October 31, 1996:
Value as
Acquisition Acquisition % of
Description Date(s) Cost Net Assets
- --------------------------------------------------------------------------------
Energy Portfolio
Forcenergy Inc
Option Agreement 6/14/94 $0 0.04%
==========
Environmental Services Portfolio
Cyclean Inc Series D Pfd 2/23/94 499,998 0.00%
==========
Gold Portfolio
Indochina Goldfields Ltd 6/12/96-
10/04/96 14,238,740 3.59%
==========
Health Sciences Portfolio
Advanced Health 8/31/93-
3/16/94 2,000,103 0.88%
Cambridge Heart 9/29/93 1,200,000 0.57
Clarus Medical Systems
Series I Pfd 12/23/92 2,000,000 0.06
Series II Pfd 5/3/95 111,196 0.01
Warrants 5/3/95 0 0.00
Crown Laboratories 8/24/93 1,096,199 0.06
Dura Pharmaceuticals
Series W Warrants 9/27/93 446,400 1.16
Ecogen Technologies I
11/18/92- 1/28/94 1,140,000 0.14%
Electroscope Inc 4/27/93- 5/3/96 1,039,500 0.25
Ingenex Inc, Series B Pfd 9/27/94 600,000 0.06
Janus Biomedical
Series A Conv Pfd 3/2/94 1,000,000 0.11
MedClone Inc Promissory
Notes 12/7/94-10.000% 6/29/95 73,680 0.00
Series G Conv Pfd 10/21/93 1,000,001 0.00
Warrants 10/21/93 0 0.00
Medical Associates of America
2/24/92- 8/31/92 502,935 0.00
Medical Associates of America,
Conv Sr Notes
7.000%, 2/28/1999 2/21/92-
3/1/94 1,689,904 0.00
Metra Biosystems 1/11/94 1,700,001 0.15
Multum Information Services,
Series C Pfd 12/28/93 1,000,001 0.16
OrbTek Inc, Series A Conv Pfd 5/13/94 999,999 0.11
Osiris Therapeutics
Series C Conv Pfd 5/26/94 1,300,000 0.14
Physicians Online
Series A Pfd 8/31/93 963,600 0.34
<PAGE>
Sparta Pharmaceuticals 11/12/93 1,000,000 0.07
Titan Pharmaceuticals 7/19/94 2,000,035 0.48
Unisyn Technologies 2/28/94 1,500,000 0.00
Unisyn Technologies
Series A Conv Pfd 12/27/94 359,501 0.04
Series B Conv Pfd 2/5/96 250,500 0.03
Xenometrix Inc 1/7/94 1,400,000 0.12
----------
4.94%
==========
Leisure Portfolio
Adidas AG Sponsored ADR 11/13/95 1,494,609 1.06%
==========
Technology Portfolio
Alpine Group .000%, Cum
Conv Sr Pfd 4/21/92 1,000,000 0.11%
Ingenex Inc Series B Pfd 9/27/94 300,000 0.04%
Titan Pharmaceuticals 7/19/93 1,000,035 0.28
----------
0.43%
==========
Utilities Portfolio
Forcenergy Inc Option
Agreement 6/14/94 0 0.05%
==========
<PAGE>
Summary of Investments by Country
% of
Country Investment
Country Code Securities Value
- --------------------------------------------------------------------------------
Energy Portfolio
Argentina AR 0.64% $1,592,500
Canada CA 11.78 29,097,562
Netherlands NL 2.01 4,961,250
Panama PM 1.61 3,984,375
United Kingdom UK 4.77 11,795,250
United States US 79.19 195,666,742
-------------------------
100.00% $247,097,679
=========================
Gold Portfolio
Australia AS 4.50% $13,104,411
Canada CA 55.74 162,124,135
Cayman Islands CJ 2.11 6,125,000
France FR 2.30 6,678,990
Ghana GH 3.38 9,825,000
Papua New Guinea PP 1.21 3,525,000
Switzerland SZ 1.54 4,488,755
United States US 29.22 84,989,175
-------------------------
100.00% $290,860,466
=========================
Leisure Portfolio
Australia AS 4.33% $ 10,892,383
Bermuda BD 1.42 3,578,400
Canada CA 3.36 8,445,327
France FR 1.61 4,034,696
Germany GM 1.06 2,659,124
Hong Kong HK 1.32 3,329,482
Japan JA 0.50 1,266,048
Switzerland SZ 0.32 800,000
United Kingdom UK 5.43 13,656,781
United States US 80.65 202,857,384
-------------------------
100.00% $251,519,625
=========================
See Notes to Financial Statements
<PAGE>
INVESCO Strategic Portfolios, Inc.
Statement of Assets and Liabilities
October 31, 1996
<TABLE>
<CAPTION>
Environmental Financial
Energy Services Services Gold
Portfolio Portfolio Portfolio Portfolio
------------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS
Investment Securities:
At Cost~ $229,666,261 $23,206,617 $455,381,237 $259,730,973
==================================================================
At Value~ 247,097,679 26,062,660 544,550,436 290,860,466
Cash 100,280 590,987 205,285 1,884,223
Receivables:
Investment Securities Sold 2,131,103 0 0 19,518
Fund Shares Sold 3,118,792 177,864 17,075,682 687,812
Dividends and Interest 76,729 17,518 697,708 287,162
Prepaid Expenses and Other Assets 39,653 20,944 47,180 80,811
------------------------------------------------------------------
TOTAL ASSETS 252,564,236 26,869,973 562,576,291 293,819,992
------------------------------------------------------------------
LIABILITIES
Payables:
Distributions to Shareholders 26,451 4,866 618,550 0
Investment Securities Purchased 11,931,677 0 17,877,720 8,943,931
Fund Shares Repurchased 4,428,625 68,302 1,355,508 6,954,282
Depreciation on Forward Foreign
Currency Contracts 1,491 0 0 39
Accrued Expenses and Other Payables 6,580 3,111 36,576 29,376
------------------------------------------------------------------
TOTAL LIABILITIES 16,394,824 76,279 19,888,354 15,927,628
------------------------------------------------------------------
Net Assets at Value 236,169,412 26,793,694 542,687,937 277,892,364
==================================================================
NET ASSETS
Paid-in Capital* 202,558,331 22,690,510 405,059,882 220,527,445
Accumulated Undistributed Net
Investment Income 1,036 11,295 2,782 34,512,656
<PAGE>
Accumulated Undistributed Net Realized
Gain (Loss) on Investment Securities
and Foreign Currency Transactions 16,178,627 1,235,846 48,456,074 (8,277,798)
Net Appreciation of Investment
Securities and Foreign Currency
Transactions 17,431,418 2,856,043 89,169,199 31,130,061
------------------------------------------------------------------
Net Assets at Value 236,169,412 26,793,694 542,687,937 277,892,364
==================================================================
Shares Outstanding 15,716,738 2,643,091 23,658,772 34,730,165
Net Asset Value, Offering and Redemption
Price per Share 15.03 10.14 22.94 8.00
==================================================================
</TABLE>
~ Investment securities at cost and value at October 31, 1996 include a
repurchase agreement of $25,280,000 for the Energy Portfolio.
* The Fund has one billion authorized shares of common stock, par value of
$0.01 per share. Of such shares, 100 million have been allocated to each
individual Portfolio.
See Notes to Financial Statements
<PAGE>
INVESCO Strategic Portfolios, Inc.
Statement of Assets and Liabilities (Continued)
October 31, 1996
<TABLE>
<CAPTION>
Health
Sciences Leisure Technology Utilities
Portfolio Portfolio Portfolio Portfolio
------------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS
Investment Securities:
At Cost~ $738,306,718 $221,595,945 $659,161,214 $142,805,750
==================================================================
At Value~ 931,870,744 251,519,625 774,552,375 150,129,706
Cash 0 72,878 53,580 0
Receivables:
Investment Securities Sold 10,621,479 1,009,221 20,060,548 406,286
Fund Shares Sold 1,345,651 102,537 14,272,858 3,015,527
Dividends and Interest 562,052 167,334 152,645 792,713
Prepaid Expenses and Other Assets 81,676 29,700 59,919 34,296
------------------------------------------------------------------
TOTAL ASSETS 944,481,602 252,901,295 809,151,925 154,378,528
------------------------------------------------------------------
LIABILITIES
Payables:
Custodian 758,118 0 0 108,231
Distributions to Shareholders 52,386 18,764 67,478 51,272
Investment Securities Purchased 7,077,744 334,650 17,397,102 0
Fund Shares Repurchased 2,727,133 229,192 2,053,270 1,126,035
Accrued Expenses and Other Payables 38,108 21,561 23,424 11,435
------------------------------------------------------------------
TOTAL LIABILITIES 10,653,489 604,167 19,541,274 1,296,973
------------------------------------------------------------------
Net Assets at Value 933,828,113 252,297,128 789,610,651 153,081,555
==================================================================
NET ASSETS
Paid-in Capital* 603,138,469 215,739,415 569,745,279 135,367,153
Accumulated Undistributed (Distributions
in Excess of) Net Investment Income (6,213) (1,403) (9,962) 117,252
Accumulated Undistributed Net Realized
<PAGE>
Gain on Investment Securities and
Foreign Currency Transactions 137,132,450 6,634,311 104,484,522 10,272,753
Net Appreciation of Investment Securities
and Foreign Currency Transactions 193,563,407 29,924,805 115,390,812 7,324,397
------------------------------------------------------------------
Net Assets at Value 933,828,113 252,297,128 789,610,651 153,081,555
==================================================================
Shares Outstanding 16,904,277 11,021,164 23,064,698 12,715,877
Net Asset Value, Offering and Redemption
Price per Share 55.24 22.89 34.23 12.04
==================================================================
</TABLE>
~ Investment securities at cost and value at October 31, 1996 include a
repurchase agreement of $14,260,000 for the Utilities Portfolio.
* The Fund has one billion authorized shares of common stock, par value of
$0.01 per share. Of such shares, 100 million have been allocated to each
individual Portfolio.
See Notes to Financial Statements
<PAGE>
INVESCO Strategic Portfolios, Inc.
Statement of Operations
Year Ended October 31, 1996
<TABLE>
<CAPTION>
Environmental Financial
Energy Services Services Gold
Portfolio Portfolio Portfolio Portfolio
----------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
INCOME
Dividends $1,276,586 $275,948 $14,863,923 $1,833,061
Interest 675,953 368,344 1,233,503 1,340,997
Foreign Taxes Withheld (42,312) (4,393) 0 (70,681)
----------------------------------------------------------------
TOTAL INCOME 1,910,227 639,899 16,097,426 3,103,377
----------------------------------------------------------------
EXPENSES
Investment Advisory Fees 813,779 237,561 3,306,980 2,136,116
Transfer Agent Fees 385,446 227,295 1,298,961 889,509
Administrative Fees 26,275 14,751 78,234 52,965
Custodian Fees and Expenses 39,116 12,078 79,128 130,796
Directors' Fees and Expenses 11,884 9,357 27,928 20,140
Professional Fees and Expenses 15,833 12,839 27,243 22,548
Registration Fees and Expenses 63,580 30,701 93,333 82,131
Reports to Shareholders 45,609 38,282 129,824 119,374
Other Expenses 5,977 2,505 21,094 29,172
----------------------------------------------------------------
TOTAL EXPENSES 1,407,499 585,369 5,062,725 3,482,751
Fees and Expenses Absorbed
by Investment Adviser 0 (76,382) 0 0
Fees and Expenses Paid Indirectly (77,953) (19,634) (256,835) (150,478)
----------------------------------------------------------------
NET EXPENSES 1,329,546 489,353 4,805,890 3,332,273
----------------------------------------------------------------
NET INVESTMENT INCOME (LOSS) 580,681 150,546 11,291,536 (228,896)
----------------------------------------------------------------
<PAGE>
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENT SECURITIES
Net Realized Gain on Investment Securities
and Foreign Currency Transactions 20,895,131 4,012,079 49,662,621 41,924,779
Change in Net Appreciation of Investment
Securities and Foreign Currency
Transactions 17,796,621 2,319,724 59,699,110 47,263,589
----------------------------------------------------------------
NET GAIN ON INVESTMENT SECURITIES 38,691,752 6,331,803 109,361,731 89,188,368
----------------------------------------------------------------
Net Increase in Net Assets
from Operations 39,272,433 6,482,349 120,653,267 88,959,472
================================================================
</TABLE>
See Notes to Financial Statements
<PAGE>
INVESCO Strategic Portfolios, Inc.
Statement of Operations (Continued)
Year Ended October 31, 1996
<TABLE>
<CAPTION>
Health
Sciences Leisure Technology Utilities
Portfolio Portfolio Portfolio Portfolio
------------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
INCOME
Dividends $6,753,710 $2,025,053 $2,242,580 $4,963,653
Interest 4,632,645 1,880,424 6,227,015 1,099,570
Foreign Taxes Withheld (173,699) (61,377) (13,750) (37,324)
------------------------------------------------------------------
TOTAL INCOME 11,212,656 3,844,100 8,455,845 6,025,899
------------------------------------------------------------------
EXPENSES
Investment Advisory Fees 7,016,028 2,026,976 4,677,778 1,032,013
Transfer Agent Fees 2,584,098 1,133,674 1,863,571 471,705
Administrative Fees 172,697 50,540 110,454 30,640
Custodian Fees and Expenses 220,973 82,650 125,122 39,895
Directors' Fees and Expenses 55,084 21,632 38,236 14,532
Professional Fees and Expenses 52,335 22,997 34,969 17,518
Registration Fees and Expenses 157,620 44,423 136,853 49,040
Reports to Shareholders 271,825 119,807 192,560 55,914
Other Expenses 42,829 13,820 29,416 8,888
------------------------------------------------------------------
TOTAL EXPENSES 10,573,489 3,516,519 7,208,959 1,720,145
Fees and Expenses Absorbed by
Investment Adviser 0 0 0 (104,595)
Fees and Expenses Paid Indirectly (583,248) (152,768) (384,963) (102,633)
------------------------------------------------------------------
NET EXPENSES 9,990,241 3,363,751 6,823,996 1,512,917
------------------------------------------------------------------
NET INVESTMENT INCOME 1,222,415 480,349 1,631,849 4,512,982
------------------------------------------------------------------
<PAGE>
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENT SECURITIES
Net Realized Gain on Investment Securities
and Foreign Currency Transactions 137,904,104 6,689,537 105,200,971 14,115,442
Change in Net Appreciation of
Investment Securities and Foreign
Currency Transactions 23,591,252 19,505,255 13,795,426 2,563,450
------------------------------------------------------------------
NET GAIN ON INVESTMENT SECURITIES 161,495,356 26,194,792 118,996,397 16,678,892
------------------------------------------------------------------
Net Increase in Net Assets
from Operations 162,717,771 26,675,141 120,628,246 21,191,874
==================================================================
</TABLE>
See Notes to Financial Statements
<PAGE>
INVESCO Strategic Portfolios, Inc.
Statement of Changes in Net Assets
Year Ended October 31
<TABLE>
<CAPTION
Energy Environmental Services Financial Services
Portfolio Portfolio Portfolio
-------------------------- -------------------------- ----------------------------
1996 1995 1996 1995 1996 1995
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS
Net Investment Income $580,681 $436,226 $150,546 $202,824 $11,291,536 $5,986,155
Net Realized Gain (Loss) on
Investment Securities and
Foreign Currency
Transactions 20,895,131 (651,948) 4,012,079 9,733,774 49,662,621 28,781,212
Change in Net Appreciation
(Depreciation) of Investment
Securities and Foreign
Currency Transactions 17,796,621 (2,001,837) 2,319,724 (1,928,995) 59,699,110 26,811,946
-------------------------- -------------------------- ----------------------------
NET INCREASE (DECREASE)
IN NET ASSETS FROM
OPERATIONS 39,272,433 (2,217,559) 6,482,349 8,007,603 120,653,267 61,579,313
-------------------------- -------------------------- ----------------------------
DISTRIBUTIONS TO
SHAREHOLDERS
Net Investment Income (580,681) (430,850) (149,211) (210,661) (11,291,536) (5,997,327)
In Excess of Net Investment
Income (3,529) 0 0 0 (1,199,518) 0
Net Realized Gain on
Investment Securities 0 0 0 0 (24,567,717) 0
-------------------------- -------------------------- ----------------------------
TOTAL DISTRIBUTIONS (584,210) (430,850) (149,211) (210,661) (37,058,771) (5,997,327)
-------------------------- -------------------------- ----------------------------
FUND SHARE TRANSACTIONS
Proceeds from Sales of Shares 658,993,329 254,345,190 122,232,471 104,904,724 717,132,503 520,541,107
Reinvestment of Distributions 557,255 415,572 161,433 205,670 35,465,349 5,760,531
-------------------------- -------------------------- ----------------------------
659,550,584 254,760,762 122,393,904 105,110,394 752,597,852 526,301,638
<PAGE>
Amounts Paid for Repurchases
of Shares (510,352,997) (277,595,492) (124,689,299) (119,427,501) (703,552,727) (438,005,806)
---------------------------- ---------------------------- ----------------------------
NET INCREASE (DECREASE)
IN NET ASSETS FROM FUND
SHARE TRANSACTIONS 149,197,587 (22,834,730) (2,295,395) (14,317,107) 49,045,125 88,295,832
---------------------------- ---------------------------- ----------------------------
Total Increase (Decrease)
in Net Assets 187,885,810 (25,483,139) 4,037,743 (6,520,165) 132,639,621 143,877,818
NET ASSETS
Beginning of Period 48,283,602 73,766,741 22,755,951 29,276,116 410,048,316 266,170,498
---------------------------- ---------------------------- ----------------------------
End of Period 236,169,412 48,283,602 26,793,694 22,755,951 542,687,937 410,048,316
============================ ============================ ============================
Accumulated Undistributed
Net Investment Income
Included in Net Assets
at End of Period 1,036 4,565 11,295 9,960 2,782 5,816
FUND SHARE TRANSACTIONS
Shares Sold 52,683,481 25,336,363 12,863,444 14,163,882 34,784,265 29,961,166
Shares Issued from Reinvestment
of Distributions 37,088 41,187 16,188 25,328 1,767,754 317,403
---------------------------- ---------------------------- ----------------------------
52,720,569 25,377,550 12,879,632 14,189,210 36,552,019 30,278,569
Shares Repurchased (41,791,100) (27,437,686) (13,037,396) (15,890,903) (34,528,936) (26,025,023)
---------------------------- ---------------------------- ----------------------------
Net Increase (Decrease)
in Fund Shares 10,929,469 (2,060,136) (157,764) (1,701,693) 2,023,083 4,253,546
============================ ============================ ============================
</TABLE>
See Notes to Financial Statements
<PAGE>
INVESCO Strategic Portfolios, Inc.
Statement of Changes in Net Assets (Continued)
Year Ended October 31
<TABLE>
<CAPTION>
Gold Health Sciences Leisure
Portfolio Portfolio Portfolio
---------------------------- --------------------------- ----------------------------
1996 1995 1996 1995 1996 1995
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS
Net Investment Income (Loss) $(228,896) $273,946 $1,222,415 $(451,769) $480,349 $860,862
Net Realized Gain (Loss) on
Investment Securities and
Foreign Currency
Transactions 41,924,779 (9,619,639) 137,904,104 85,687,476 6,689,537 33,968,704
Change in Net Appreciation
(Depreciation) of Investment
Securities and Foreign
Currency Transactions 47,263,589 (12,084,161) 23,591,252 135,563,223 19,505,255 (8,985,890)
---------------------------- ---------------------------- ----------------------------
NET INCREASE (DECREASE)
IN NET ASSETS FROM
OPERATIONS 88,959,472 (21,429,854) 162,717,771 220,798,930 26,675,141 25,843,676
---------------------------- ---------------------------- ----------------------------
DISTRIBUTIONS TO
SHAREHOLDERS
Net Investment Income 0 (262,208) (1,216,776) 0 (480,349) (860,862)
In Excess of Net
Investment Income 0 0 0 0 (4,051) (63,967)
Net Realized Gain on
Investment Securities 0 0 (73,235,099) 0 (6,689,537) (10,878,825)
In Excess of Net Realized
Gain on Investment
Securities 0 0 0 0 (27,147,496) 0
---------------------------- ---------------------------- ----------------------------
TOTAL DISTRIBUTIONS 0 (262,208) (74,451,875) 0 (34,321,433) (11,803,654)
---------------------------- ---------------------------- ----------------------------
<PAGE>
FUND SHARE TRANSACTIONS
Proceeds from Sales
of Shares 1,233,702,381 391,054,681 1,100,025,309 857,581,666 229,000,338 174,159,525
Reinvestment of
Distributions 0 253,356 71,749,211 0 33,235,182 11,479,280
---------------------------- ---------------------------- ----------------------------
1,233,702,381 391,308,037 1,171,774,520 857,581,666 262,235,520 185,638,805
Amounts Paid for Repurchases
of Shares (1,196,548,485) (489,000,464)(1,187,138,111) (691,380,383) (267,472,664) (217,147,233)
----------------------------- ----------------------------- ----------------------------
NET INCREASE (DECREASE)
IN NET ASSETS FROM FUND
SHARE TRANSACTIONS 37,153,896 (97,692,427) (15,363,591) 166,201,283 (5,237,144) (31,508,428)
----------------------------- ---------------------------- ----------------------------
Total Increase (Decrease)
in Net Assets 126,113,368 (119,384,489) 72,902,305 387,000,213 (12,883,436) (17,468,406)
NET ASSETS
Beginning of Period 151,778,996 271,163,485 860,925,808 473,925,595 265,180,564 282,648,970
----------------------------- ---------------------------- ----------------------------
End of Period 277,892,364 151,778,996 933,828,113 860,925,808 252,297,128 265,180,564
============================= ============================ ============================
Accumulated Undistributed
(Distributions in Excess
of) Net Investment Income
Included in Net Assets
at End of Period 34,512,656 7,616 (6,213) (11,852) (1,403) 2,648
FUND SHARE TRANSACTIONS
Shares Sold 159,903,190 78,351,361 20,091,872 20,481,654 9,926,200 7,569,986
Shares Issued from Reinvestment
of Distributions 0 48,628 1,369,450 0 1,556,657 536,677
----------------------------- ---------------------------- ----------------------------
159,903,190 78,399,989 21,461,322 20,481,654 11,482,857 8,106,663
Shares Repurchased (154,311,942) (97,024,464) (21,613,551) (16,931,693) (11,613,010) (9,443,709)
----------------------------- ---------------------------- ----------------------------
Net Increase (Decrease)
in Fund Shares 5,591,248 (18,624,475) (152,229) 3,549,961 (130,153) (1,337,046)
============================= ============================ ============================
</TABLE>
See Notes to Financial Statements
<PAGE>
INVESCO Strategic Portfolios, Inc.
Statement of Changes in Net Assets (Continued)
Year Ended October 31
<TABLE>
<CAPTION>
Technology Utilities
Portfolio Portfolio
----------------------------- ----------------------------
1996 1995 1996 1995
<S> <C> <C> <C> <C>
OPERATIONS
Net Investment Income (Loss) $1,631,849 $(285,996) $4,512,982 $5,678,806
Net Realized Gain (Loss) on
Investment Securities and
Foreign Currency Transactions 105,200,971 96,331,634 14,115,442 (971,514)
Change in Net Appreciation
of Investment Securities and
Foreign Currency Transactions 13,795,426 64,454,697 2,563,450 11,041,948
----------------------------- ----------------------------
NET INCREASE IN NET
ASSETS FROM OPERATIONS 120,628,246 160,500,335 21,191,874 15,749,240
----------------------------- ----------------------------
DISTRIBUTIONS TO SHAREHOLDERS
Net Investment Income (1,631,849) 0 (4,512,982) (5,546,736)
In Excess of Net Investment Income (3,266) 0 (13,166) 0
Net Realized Gain on
Investment Securities (96,107,659) (10,002,886) 0 0
----------------------------- ----------------------------
TOTAL DISTRIBUTIONS (97,742,774) (10,002,886) (4,526,148) (5,546,736)
----------------------------- ----------------------------
FUND SHARE TRANSACTIONS
Proceeds from Sales of Shares 1,273,121,550 952,121,237 275,156,466 165,131,684
Reinvestment of Distributions 94,751,957 9,719,957 4,318,319 5,277,145
----------------------------- ----------------------------
1,367,873,507 961,841,194 279,474,785 170,408,829
Amounts Paid for Repurchases of Shares (1,164,257,096) (876,489,871) (277,526,457) (185,722,491)
----------------------------- ----------------------------
<PAGE>
NET INCREASE (DECREASE)
IN NET ASSETS FROM FUND
SHARE TRANSACTIONS 203,616,411 85,351,323 1,948,328 (15,313,662)
----------------------------- ---------------------------
Total Increase (Decrease)
in Net Assets 226,501,883 235,848,772 18,614,054 (5,111,158)
NET ASSETS
Beginning of Period 563,108,768 327,259,996 134,467,501 139,578,659
----------------------------- ---------------------------
End of Period 789,610,651 563,108,768 153,081,555 134,467,501
============================= ===========================
Accumulated Undistributed
(Distributions in Excess of)
Net Investment Income
Included in Net Assets at
End of Period (9,962) (6,696) 117,252 130,418
FUND SHARE TRANSACTIONS
Shares Sold 39,668,920 33,572,713 23,673,545 16,608,991
Shares Issued from Reinvestment
of Distributions 3,238,131 404,324 371,817 530,647
----------------------------- ---------------------------
42,907,051 33,977,037 24,045,362 17,139,638
Shares Repurchased (36,244,761) (30,697,802) (24,000,218) (18,770,917)
----------------------------- ---------------------------
Net Increase (Decrease) in Fund Shares 6,662,290 3,279,235 45,144 (1,631,279)
============================= ===========================
</TABLE>
See Notes to Financial Statements
<PAGE>
INVESCO Strategic Portfolios, Inc.
Notes to Financial Statements
NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES. INVESCO Strategic
Portfolios, Inc. (the "Fund"), was incorporated in Maryland and presently
consists of eight separate Portfolios: Energy Portfolio, Environmental Services
Portfolio, Financial Services Portfolio, Gold Portfolio, Health Sciences
Portfolio, Leisure Portfolio, Technology Portfolio and Utilities Portfolio. The
investment objectives of the Portfolios are to seek capital appreciation through
investments in specific business sectors. Additionally, the Utilities Portfolio
seeks capital appreciation and income through investments in public utilities.
The Fund is registered under the Investment Company Act of 1940 (the "Act") as a
diversified, open-end management investment company.
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of income and expenses during the reporting period. Actual
results could differ from those estimates.
A. SECURITY VALUATION - Equity securities traded on national securities
exchanges or in the over-the-counter market are valued at the last sales
price in the market where such securities are primarily traded. If last
sales prices are not available, securities are valued at the highest
closing bid price obtained from one or more dealers making a market for
such securities or by a pricing service approved by the Fund's board of
directors.
Debt securities are valued at evaluated bid prices as determined by a
pricing service approved by the Fund's board of directors. If evaluated
bid prices are not available, debt securities are valued by averaging the
bid prices obtained from one or more dealers making a market for such
securities.
Foreign securities are valued at the closing price on the principal
stock exchange on which they are traded. In the event that closing prices
are not available for foreign securities, prices will be obtained from the
principal stock exchange at or prior to the close of the New York Stock
Exchange. Foreign currency exchange rates are determined daily prior to
the close of the New York Stock Exchange.
If market quotations or pricing service valuations are not readily
available, securities are valued at fair value as determined in good faith
by the Fund's board of directors. Restricted securities are valued in
accordance with procedures established by the Fund's board of directors.
Short-term securities are stated at amortized cost (which approximates
market value) if maturity is 60 days or less at the time of purchase, or
market value if maturity is greater than 60 days.
B. WHEN-ISSUED SECURITIES - When-issued securities held by the Fund are fully
collateralized by other securities. Such collateral is in the possession
of the Fund's custodian. The collateral is evaluated daily to ensure its
market value equals or exceeds the current market value of the when-issued
securities.
C. REPURCHASE AGREEMENTS - Repurchase agreements held by the Fund are fully
collateralized by U.S. Government securities and such collateral is in the
possession of the Fund's custodian. The collateral is evaluated daily to
<PAGE>
ensure its market value exceeds the current market value of the repurchase
agreements including accrued interest.
D. SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME - Security
transactions are accounted for on the trade date and dividend income is
recorded on the ex dividend date. Certain dividends from foreign
securities will be recorded as soon as the Fund is informed of the
dividend if such information is obtained subsequent to the ex dividend
date. Interest income, which may be comprised of stated coupon rate,
market discount and original issue discount, is recorded on the accrual
basis. Discounts on debt securities purchased are amortized over the life
of the respective security as adjustments to interest income. Cost is
determined on the specific identification basis.
The Fund may have elements of risk due to concentrated investments in
specific industries or foreign issuers located in a specific country. Such
concentrations may subject the Fund to additional risks resulting from
future political or economic conditions and/or possible impositions of
adverse foreign governmental laws or currency exchange restrictions. Net
realized and unrealized gain or loss from investments includes
fluctuations from currency exchange rates and fluctuations in market
value.
The Fund's use of short-term forward foreign currency contracts may
subject it to certain risks as a result of unanticipated movements in
foreign exchange rates. The Fund does not hold short-term forward foreign
currency contracts for trading purposes. The Fund may hold foreign
currency in anticipation of settling foreign security transactions and not
for investment purposes.
The Environmental Services Portfolio may have elements of risk due to
concentrated investments in the environmental services industry.
Investments in environmental services companies may be affected by
regulations imposed by various federal and state authorities, including
the Environmental Protection Agency and its affiliates. In addition, some
of these companies may have certain liability risks as a result of the
products or services they provide.
Restricted securities held by the Fund may not be sold except in exempt
transactions or in a public offering registered under the Securities Act
of 1933. The risk of investing in such securities is generally greater
than the risk of investing in the securities of widely held, publicly
traded companies. Lack of a secondary market and resale restrictions may
result in the inability of each Portfolio to sell a security at a fair
price and may substantially delay the sale of the security which each
Portfolio seeks to sell. In addition, these securities may exhibit greater
price volatility than securities for which secondary markets exist.
E. FEDERAL AND STATE TAXES - The Fund has complied and continues to comply
with the provisions of the Internal Revenue Code applicable to regulated
investment companies and, accordingly, has made or intends to make
sufficient distributions of net investment income and net realized capital
gains, if any, to relieve it from all federal and state income taxes and
federal excise taxes. At October 31, 1996, Gold Portfolio had $1,051,643
in net capital loss carryovers which expire in the year 2003.
Net capital loss carryovers utilized in 1996 by the Energy,
Environmental Services, Gold and Utilities Portfolios amounted to
$4,454,421, $2,731,233 $14,365,511 and $3,803,857, respectively. To the
extent future capital gains are offset by capital loss carryovers, such
gains will not be distributed to shareholders.
<PAGE>
Dividends paid by the Fund from net investment income and distributions
of net realized short-term capital gains are, for federal income tax
purposes, taxable as ordinary income to shareholders. Of the ordinary
income distributions declared for the year ended October 31, 1996, amounts
qualifying for the dividends received deduction available to the Fund's
corporate shareholders were as follows:
Qualifying
Portfolio Percentage
- --------------------------------------------------------------------------------
Energy Portfolio 100.00%
Environmental Services Portfolio 99.49%
Financial Services Portfolio 39.35%
Gold Portfolio 0.00%
Health Sciences Portfolio 2.90%
Leisure Portfolio 4.02%
Technology Portfolio 2.92%
Utilities Portfolio 99.95%
Investment income received from foreign sources may be subject to
foreign withholding taxes. Dividend and interest income is shown gross of
foreign withholding taxes in the accompanying financial statements.
F. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS - Dividends and distributions
to shareholders are recorded by the Fund on the ex dividend/distribution
date. The Fund distributes net realized capital gains, if any, to its
shareholders at least annually, if not offset by capital loss carryovers.
Income distributions and capital gain distributions are determined in
accordance with income tax regulations which may differ from generally
accepted accounting principles. These differences are primarily due to
differing treatments for foreign currency transactions, nontaxable
dividends, net operating losses and expired capital loss carryforwards.
For the year ended October 31, 1996, the effects of such differences
were as follows:
Accumulated
Accumulated Undistributed
Undistributed Net Realized
Net Gain on
Investment Investment Paid-in
Portfolio Income Securities Capital
- --------------------------------------------------------------------------------
Financial Services Portfolio $1,196,484 $(1,201,535) $5,051
Gold Portfolio 34,733,936 (34,896,231) 162,295
Net investment income, net realized gains and net assets were not affected.
G. FORWARD FOREIGN CURRENCY CONTRACTS - The Fund enters into short-term
forward foreign currency contracts in connection with planned purchases or
sales of securities as a hedge against fluctuations in foreign exchange
rates pending the settlement of transactions in foreign securities. A
forward foreign currency contract is an agreement between contracting
parties to exchange an amount of currency at some future time at an agreed
upon rate. These contracts are marked-to-market daily and the related
<PAGE>
appreciation or depreciation of the contracts is presented in the
Statement of Assets and Liabilities.
H. EXPENSES - Each of the Portfolios bears expenses incurred specifically on
its behalf and, in addition, each Portfolio bears a portion of general
expenses, based on the relative net assets of each Portfolio.
Under an agreement between each Portfolio and the Fund's Custodian,
agreed upon Custodian Fees and Expenses are reduced by credits granted by
the Custodian from any temporarily uninvested cash. Similarly, Other
Expenses, which include Pricing Expenses, and Transfer Agent Fees are
reduced by credits earned by each Portfolio from security brokerage
transactions under certain broker/service arrangements with third parties.
Such credits are included in Fees and Expenses Paid Indirectly in the
Statement of Operations.
For the year ended October 31, 1996, Fees and Expenses Paid Indirectly
consisted of the following:
Custodian Fees Transfer Other
Portfolio and Expenses Agent Fees Expenses
- --------------------------------------------------------------------------------
Energy Portfolio $20,394 $56,829 $730
Environmental Services Portfolio 6,753 12,428 453
Financial Services Portfolio 45,749 210,258 828
Gold Portfolio 0 150,103 375
Health Sciences Portfolio 143,411 438,157 1,680
Leisure Portfolio 37,408 114,965 395
Technology Portfolio 73,214 310,132 1,617
Utilities Portfolio 24,806 76,483 1,344
NOTE 2 - INVESTMENT ADVISORY AND OTHER AGREEMENTS. INVESCO Funds Group, Inc.
("IFG") serves as the Fund's investment adviser. As compensation for its
services to the Fund, IFG receives an investment advisory fee which is accrued
daily at the applicable rate and paid monthly. The fee for each Portfolio is
based on the annual rate of 0.75% on the first $350 million of average net
assets; reduced to 0.65% on the next $350 million of average net assets; and
0.55% on average net assets in excess of $700 million. Effective May 1, 1996,
IFG voluntarily agreed to waive a portion of its fee which exceeds 0.45% on
average net assets in excess of $2 billion, 0.40% on average net assets in
excess of $4 billion, and 0.35% on average net assets in excess of $10 billion.
In accordance with a Sub-Advisory Agreement between IFG and INVESCO Trust
Company ("ITC"), a wholly owned subsidiary of IFG, investment decisions of each
Portfolio are made by ITC. Fees for such sub-advisory services are paid by IFG.
In accordance with an Administrative Agreement, each Portfolio pays IFG an
annual fee of $10,000, plus an additional amount computed at an annual rate of
0.015% of average net assets to provide administrative, accounting and clerical
services. The fee is accrued daily and paid monthly.
IFG received a transfer agent fee at an annual rate of $14.00 per
shareholder account, or per participant in an omnibus account through April 30,
1996. IFG may pay such fee for participants in omnibus accounts to affiliates or
third parties. The fee is paid monthly at one-twelfth of the annual fee and is
based upon the actual number of accounts in existence during each month. As of
May 1, 1996, the transfer agent fee became $20.00 per shareholder account or,
where applicable, per participant in an omnibus account, per year, computed in a
manner similar to the previous fee.
<PAGE>
IFG has voluntarily agreed, in some instances, to absorb certain fees and
expenses incurred by Environmental Services and Utilities Portfolios.
NOTE 3 - PURCHASES AND SALES OF INVESTMENT SECURITIES. For the year ended
October 31, 1996, the aggregate cost of purchases and proceeds from sales of
investment securities (excluding all U.S. Government securities and short-term
securities) were as follows:
Portfolio Purchases Sales
- --------------------------------------------------------------------------------
Energy Portfolio $530,639,995 $390,966,081
Environmental Services Portfolio 37,856,101 34,744,013
Financial Services Portfolio 643,222,340 619,401,464
Gold Portfolio 462,447,234 421,546,582
Health Sciences Portfolio 898,879,983 889,044,961
Leisure Portfolio 134,680,041 144,126,732
Technology Portfolio 949,554,877 964,947,593
Utilities Portfolio 177,828,719 184,119,450
For the year ended October 31, 1996, the aggregate cost of purchases and
proceeds from sales of U.S. Government securities for the Utilities Portfolio
were $0 and $2,500,000, respectively. There were no purchases or sales of U.S.
Government securities in any other Portfolio.
NOTE 4 - APPRECIATION AND DEPRECIATION. At October 31, 1996, the gross
appreciation of securities in which there was an excess of value over tax cost,
the gross depreciation of securities in which there was an excess of tax cost
over value and the resulting net appreciation (depreciation) by Portfolio were
as follows:
Net
Gross Gross Appreciation
Portfolio Appreciation Depreciation (Depreciation)
- --------------------------------------------------------------------------------
Energy Portfolio $17,528,114 $1,265,335 $16,262,779
Environmental Services Portfolio 4,350,054 1,525,005 2,825,049
Financial Services Portfolio 90,309,697 1,140,498 89,169,199
Gold Portfolio 32,928,364 43,236,479 (10,308,115)
Health Sciences Portfolio 211,175,170 18,898,184 192,276,986
Leisure Portfolio 41,847,577 11,974,397 29,873,180
Technology Portfolio 129,546,268 15,101,973 114,444,295
Utilities Portfolio 10,561,140 3,244,465 7,316,675
NOTE 5 - TRANSACTIONS WITH AFFILIATES AND AFFILIATED COMPANIES. Certain of the
Fund's officers and directors are also officers and directors of IFG or ITC.
The Fund has adopted an unfunded deferred compensation plan covering all
independent directors of the Fund who will have served as an independent
director for at least five years at the time of retirement. Benefits under this
plan were based on an annual rate equal to 25% of the retainer fee at the time
of retirement. As of July 1, 1996, benefits are based on an annual rate of 40%
of the retainer fee at the time of retirement.
Pension expenses for the year ended October 31, 1996, included in
Directors' Fees and Expenses in the Statement of Operations, and unfunded
accrued pension costs and pension liability included in Prepaid Expenses and
Accrued Expenses, respectively, in the Statement of Assets and Liabilities were
as follows:
<PAGE>
Unfunded
Pension Accrued Pension
Portfolio Expenses Pension Costs Liability
- --------------------------------------------------------------------------------
Energy Portfolio $607 $1,949 $4,179
Environmental Services Portfolio 301 878 1,923
Financial Services Portfolio 4,163 6,628 17,342
Gold Portfolio 2,176 10,567 20,987
Health Sciences Portfolio 8,698 11,148 31,697
Leisure Portfolio 3,075 7,743 17,588
Technology Portfolio 6,206 5,359 18,260
Utilities Portfolio 1,468 3,802 8,575
An affiliated company represents ownership by the Portfolio of at least 5%
of the voting securities of the issuer during the period, as defined in the Act.
A summary of the transactions during the year ended October 31, 1996, in which
the issuer was an affiliate of the Portfolio, is as follows:
<PAGE>
<TABLE>
<CAPTION>
Purchases Sales Realized
------------------------ ---------------------- Gain (Loss) Value
Affiliate Shares Cost Shares Cost on Investments at 10/31/96
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Gold Portfolio
Arequipa Resources 754,000 $7,007,602 1,500,000 $3,199,057 $16,457,872 $0
Arizona Star Resource 1,000,000 10,122,403 100,000 112,874 64,224 9,003,997
Crown Resources _ _ _ _ _ 5,640,000
Francisco Gold _ _ 100,000 300,440 661,403 2,393,609
Goldbelt Resources 2,000,000 1,778,000 _ _ _ 1,640,480
Golden Star Resources Ltd _ _ 700,500 4,945,915 4,740,932 18,625,000
International Capri Resources 200,000 422,091 _ _ _ 536,884
International Taurus Resources _ _ _ _ _ 894,807
Loki Gold _ _ _ _ _ 0
MK Gold _ _ 1,350,000 8,327,495 (6,169,513) 0
Sonoma Resources 62,800 87,769 _ _ _ 63,218
Steppe Gold International 900,000 1,664,280 _ _ _ 771,771
Texas T Resources 400,000 903,520 400,000 903,520 (532,277) 0
Trillion Resouces Ltd _ _ 32,800 79,011 59,418 2,097,278
Health Sciences Portfolio
Arris Pharmaceutical 611,000 $ 7,943,000 _ _ _ $ 7,561,125
BioGen Inc 284,000 18,850,060 284,000 $ 18,850,060 $ (3,702,534) 0
Cambridge Heart 82,000 738,000 5,000 45,000 13,125 6,196,625
CIMA Labs _ _ _ _ _ 3,499,995
Clarus Medical Systems Warrants _ _ _ _ _ 0
Series I Pfd _ _ _ _ _ 533,320
Series II Pfd _ _ _ _ _ 111,195
Creative BioMolecules 500,000 3,500,000 70,000 244,506 448,732 9,746,250
Crown Laboratories _ _ 29,000 43,500 (4,651) 543,527
Ecogen Technologies I _ _ _ _ _ 1,320,000
Electroscope Inc 42,000 252,000 _ _ _ 2,374,050
Emisphere Technologies _ _ _ _ _ 7,625,000
Home Health of America 500,000 3,750,000 500,000 3,750,000 2,993,750 0
Ingenex Inc, Series B Pfd _ _ _ _ _ 600,000
Landec Corp _ _ _ _ _ 3,355,389
Medical Associates of America _ _ _ _ _ 1
<PAGE>
Medical Associates of America,
Conv Sr Notes _ _ _ _ _ 100
Multum Information Services,
Series C Pfd _ _ _ _ _ 1,468,573
Pharmos Corp _ _ _ _ _ 935,819
ResMed Inc _ _ _ _ _ 7,453,750
Sparta Pharmaceuticals _ _ _ _ _ 646,875
Titan Pharmaceuticals _ _ _ _ _ 4,442,757
Unisyn Technologies _ _ _ _ _
31,132
Unisyn Technologies Series A,
Conv Pfd _ _ _ _ _ 359,501
Series B, Conv Pfd 250,500 250,500 _ _ _ 250,500
Xenometrix Inc _ _ _ _ _ 1,146,923
Technology Portfolio
Future Communications _ _ _ _ _ 1
No dividend income was received from any affiliated companies.
</TABLE>
NOTE 6 - LINE OF CREDIT. The Fund has available a Redemption Line of Credit
Facility ("LOC"), from a consortium of national banks, to be used for temporary
or emergency purposes to fund redemptions of investor shares. The LOC permits
borrowings to a maximum of 10% of the Net Assets at Value of each respective
Portfolio. Each Portfolio agrees to pay annual fees and interest on the unpaid
principal balance based on prevailing market rates as defined in the agreement.
At October 31, 1996, there were no such borrowings.
<PAGE>
INVESCO Strategic Portfolios, Inc.
Financial Highlights
(For a Fund Share Outstanding Throughout Each Period)
<TABLE>
<CAPTION>
Year Ended October 31
--------------------------------------------------------------------
1996 1995 1994 1993 1992
Energy Portfolio
<S> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value - Beginning of Period $10.09 $10.77 $11.53 $9.14 $11.28
--------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.04 0.09 0.06 0.13 0.05
Net Gains or (Losses) on Securities
(Both Realized and Unrealized) 4.94 (0.68) (0.76) 2.36 (2.17)
--------------------------------------------------------------------
Total from Investment Operations 4.98 (0.59) (0.70) 2.49 (2.12)
--------------------------------------------------------------------
LESS DISTRIBUTIONS
Dividends from Net Investment Income+ 0.04 0.09 0.06 0.10 0.02
--------------------------------------------------------------------
Net Asset Value - End of Period $15.03 $10.09 $10.77 $11.53 $9.14
====================================================================
TOTAL RETURN 49.33% (5.45%) (6.04%) 27.18% (18.74%)
RATIOS
Net Assets - End of Period
($000 Omitted) 236,169 48,284 73,767 50,272 17,048
Ratio of Expenses to Average Net Assets 1.30%@ 1.53%@ 1.35% 1.18% 1.73%
Ratio of Net Investment Income
to Average Net Assets 0.54% 0.72% 0.65% 0.86% 0.32%
Portfolio Turnover Rate 392% 300% 123% 190% 370%
Average Commission Rate Paid^^ 0.0794 - - - -
</TABLE>
+ Distributions in excess of net investment income for the year ended October
31, 1996, aggregated less than $0.01 on a per share basis.
<PAGE>
@ Ratio is based on Total Expenses of the Portfolio, which is before any expense
offset arrangements.
^^ The average commission rate paid is the total brokerage commissions paid on
applicable purchases and sales of securities for the period divided by the total
number of related shares purchased or sold which is required to be disclosed for
fiscal years beginning September 1, 1995 and thereafter.
<PAGE>
INVESCO Strategic Portfolios, Inc.
Financial Highlights (Continued)
(For a Fund Share Outstanding Throughout Each Period)
<TABLE>
<CAPTION>
Year Ended October 31
---------------------------------------------------------------------
1996 1995 1994 << 1993<< 1992
Environmental Services Portfolio
<S> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value - Beginning of Period $8.12 $6.50 $6.80 $7.54 $8.97
---------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss) 0.06 0.08 0.06 (0.02) (0.04)
Net Gains or (Losses) on Securities
(Both Realized and Unrealized) 2.02 1.62 (0.30) (0.72) (1.39)
---------------------------------------------------------------------
Total from Investment Operations 2.08 1.70 (0.24) (0.74) (1.43)
---------------------------------------------------------------------
LESS DISTRIBUTIONS
Dividends from Net Investment Income 0.06 0.08 0.06 0.00 0.00
---------------------------------------------------------------------
Net Asset Value - End of Period 10.14 8.12 6.50 6.80 7.54
=====================================================================
TOTAL RETURN 25.58% 26.09% (3.51%) (9.85%) (15.90%)
RATIOS
Net Assets - End of Period
($000 Omitted) 26,794 22,756 29,276 40,589 17,685
Ratio of Expenses to Average Net Assets# 1.61%@ 1.57%@ 1.29% 1.62% 1.85%
Ratio of Net Investment Income (Loss)
to Average Net Assets# 0.47% 0.65% 0.61% (0.40%) (1.23%)
Portfolio Turnover Rate 142% 195% 211% 155% 113%
Average Commission Rate Paid^^ 0.1639 - - - -
<< The per share information was computed based on weighted average shares.
# Various expenses of the Portfolio were voluntarily absorbed by IFG for the
years ended October 31,
<PAGE>
1996, 1995 and 1994. If such expenses had not been voluntarily absorbed,
ratio of expenses to average net assets would have been 1.85%, 1.93% and
1.43%, respectively, and ratio of net investment income to average net assets
would have been 0.23%, 0.29% and 0.47%, respectively.
@ Ratio is based on Total Expenses of the Portfolio, less Expenses Absorbed by
Investment Adviser, which is before any expense offset arrangements.
^^ The average commission rate paid is the total brokerage commissions paid on
applicable purchases and sales of securities for the period divided by the
total number of related shares purchased or sold which is required to be
disclosed for fiscal years beginning September 1, 1995 and thereafter.
<PAGE>
INVESCO Strategic Portfolios, Inc.
Financial Highlights (Continued)
(For a Fund Share Outstanding Throughout Each Period)
</TABLE>
<TABLE>
<CAPTION>
Year Ended October 31
----------------------------------------------------------------------
1996 1995 1994 1993 1992
Financial Services Portfolio
<S> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value - Beginning of Period $18.95 $15.31 $20.28 $15.28 $14.67
----------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.50 0.29 0.29 0.24 0.20
Net Gains or (Losses) on Securities
(Both Realized and Unrealized) 5.18 3.64 (0.66) 5.00 1.52
----------------------------------------------------------------------
Total from Investment Operations 5.68 3.93 (0.37) 5.24 1.72
----------------------------------------------------------------------
LESS DISTRIBUTIONS
Dividends from Net Investment Income 0.50 0.29 0.29 0.24 0.20
In Excess of Net Investment Income 0.05 0.00 0.00 0.00 0.00
Distributions from Capital Gains 1.14 0.00 4.31 0.00 0.91
----------------------------------------------------------------------
Total Distributions 1.69 0.29 4.60 0.24 1.11
----------------------------------------------------------------------
Net Asset Value - End of Period 22.94 18.95 15.31 20.28 15.28
======================================================================
TOTAL RETURN 31.48% 25.80% (2.24%) 34.33% 11.74%
RATIOS
Net Assets - End of Period
($000 Omitted) 542,688 410,048 266,170 384,131 189,708
Ratio of Expenses to Average Net Assets 1.11%@ 1.26%@ 1.18% 1.03% 1.07%
Ratio of Net Investment Income
to Average Net Assets 2.48% 2.10% 1.66% 1.16% 1.28%
Portfolio Turnover Rate 141% 171% 88% 236% 208%
Average Commission Rate Paid^^ 0.0835 - - - -
</TABLE>
@ Ratio is based on Total Expenses of the Portfolio, which is before any expense
offset arrangements.
^^ The average commission rate paid is the total brokerage commissions paid on
applicable purchases and sales of securities for the period divided by the total
number of related shares purchased or sold which is required to be disclosed for
fiscal years beginning September 1, 1995 and thereafter.
<PAGE>
INVESCO Strategic Portfolios, Inc.
Financial Highlights (Continued)
(For a Fund Share Outstanding Throughout Each Period)
<TABLE>
<CAPTION>
Year Ended October 31
---------------------------------------------------------------------
1996 1995 1994 1993<< 1992
Gold Portfolio
<S> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value - Beginning of Period $5.21 $5.68 $6.23 $3.99 $4.26
---------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss) (0.01) 0.01 (0.02) (0.01) (0.01)
Net Gains or (Losses) on Securities
(Both Realized and Unrealized) 2.80 (0.47) (0.53) 2.25 (0.26)
---------------------------------------------------------------------
Total from Investment Operations 2.79 (0.46) (0.55) 2.24 (0.27)
---------------------------------------------------------------------
LESS DISTRIBUTIONS
Dividends from Net Investment Income 0.00 0.01 0.00 0.00 0.00
---------------------------------------------------------------------
Net Asset Value - End of Period 8.00 5.21 5.68 6.23 3.99
=====================================================================
TOTAL RETURN 53.55% (8.12%) (8.83%) 56.27% (6.51%)
RATIOS
Net Assets - End of Period
($000 Omitted) 277,892 151,779 271,163 292,940 46,212
Ratio of Expenses to Average Net Assets 1.22%@ 1.32%@ 1.07% 1.03% 1.41%
Ratio of Net Investment Income (Loss)
to Average Net Assets (0.08%) 0.13% (0.32%) (0.21%) (0.23%)
Portfolio Turnover Rate 155% 72% 97% 142% 101%
Average Commission Rate Paid^^ 0.0415 - - - -
</TABLE>
<< The per share information was computed based on weighted average shares.
@ Ratio is based on Total Expenses of the Portfolio, which is before any
expense offset arrangements.
^^ The average commission rate paid is the total brokerage commissions paid on
applicable purchases and sales of securities for the period divided by the
total number of related shares purchased or sold which is required to be
disclosed for fiscal years beginning September 1, 1995 and thereafter.
<PAGE>
INVESCO Strategic Portfolios, Inc.
Financial Highlights (Continued)
(For a Fund Share Outstanding Throughout Each Period)
<TABLE>
<CAPTION>
Year Ended October 31
---------------------------------------------------------------------
1996 1995 1994 1993 1992
Health Sciences Portfolio
<S> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value - Beginning of Period $50.47 $35.09 $33.49 $35.65 $40.60
---------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss) 0.07 (0.03) (0.24) (0.13) 0.11
Net Gains or (Losses) on Securities
(Both Realized and Unrealized) 8.78 15.41 1.84 (2.02) (4.52)
---------------------------------------------------------------------
Total from Investment Operations 8.85 15.38 1.60 (2.15) (4.41)
---------------------------------------------------------------------
LESS DISTRIBUTIONS
Dividends from Net Investment Income 0.07 0.00 0.00 0.01 0.10
Distributions from Capital Gains+ 4.01 0.00 0.00 0.00 0.44
---------------------------------------------------------------------
Total Distributions 4.08 0.00 0.00 0.01 0.54
---------------------------------------------------------------------
Net Asset Value - End of Period 55.24 50.47 35.09 33.49 35.65
=====================================================================
TOTAL RETURN 17.99% 43.83% 4.78% (6.01%) (10.86%)
RATIOS
Net Assets - End of Period
($000 Omitted) 933,828 860,926 473,926 560,294 756,791
Ratio of Expenses to Average Net Assets 0.98%@ 1.15%@ 1.19% 1.16% 1.00%
Ratio of Net Investment Income (Loss)
to Average Net Assets 0.11% (0.08%) (0.57%) (0.34%) 0.26%
Portfolio Turnover Rate 90% 107% 80% 87% 91%
Average Commission Rate Paid^^ 0.1204 - - - -
</TABLE>
+ For the year ended October 31, 1993, the Portfolio declared a Capital Gains
distribution which aggregated less than $0.01 on a per share basis.
@ Ratio is based on Total Expenses of the Portfolio, which is before any
expense offset arrangements.
^^ The average commission rate paid is the total brokerage commissions paid on
applicable purchases and sales of securities for the period divided by the
total number of related shares purchased or sold which is required to be
disclosed for fiscal years beginning September 1, 1995 and thereafter.
<PAGE>
INVESCO Strategic Portfolios, Inc.
Financial Highlights (Continued)
(For a Fund Share Outstanding Throughout Each Period)
<TABLE>
<CAPTION>
Year Ended October 31
---------------------------------------------------------------------
1996 1995 1994 1993<< 1992
Leisure Portfolio
<S> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value - Beginning of Period $23.78 $22.63 $25.47 $16.29 $14.85
---------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss) 0.04 0.08 (0.01) (0.02) (0.01)
Net Gains or (Losses) on Securities
(Both Realized and Unrealized) 2.25 2.06 (0.94) 9.20 2.44
---------------------------------------------------------------------
Total from Investment Operations 2.29 2.14 (0.95) 9.18 2.43
---------------------------------------------------------------------
LESS DISTRIBUTIONS
Dividends from Net Investment Income+ 0.04 0.08 0.00 0.00 0.00
Distributions from Capital Gains 2.25 0.91 1.89 0.00 0.99
In Excess of Capital Gains 0.89 0.00 0.00 0.00 0.00
---------------------------------------------------------------------
Total Distributions 3.18 0.99 1.89 0.00 0.99
---------------------------------------------------------------------
Net Asset Value - End of Period 22.89 23.78 22.63 25.47 16.29
=====================================================================
TOTAL RETURN 10.66% 9.98% (3.92%) 56.36% 16.34%
RATIOS
Net Assets End of Period
($000 Omitted) 252,297 265,181 282,649 351,685 40,140
Ratio of Expenses to Average Net Assets 1.30%@ 1.29%@ 1.17% 1.14% 1.51%
Ratio of Net Investment Income (Loss)
to Average Net Assets 0.18% 0.31% 0.00% (0.11%) (0.33%)
Portfolio Turnover Rate 56% 119% 116% 116% 148%
Average Commission Rate Paid^^ 0.1503 - - - -
</TABLE>
<< The per share information was computed based on weighted average shares.
+ Distributions in excess of net investment income for the years ended October
31, 1996 and 1995, aggregated less than $0.01 on a per share basis.
@ Ratio is based on Total Expenses of the Portfolio, which is before any
expense offset arrangements.
^^ The average commission rate paid is the total brokerage commissions paid on
applicable purchases and sales of securities for the period divided by the
total number of related shares purchased or sold which is required to be
disclosed for fiscal years beginning September 1, 1995 and thereafter.
<PAGE>
INVESCO Strategic Portfolios, Inc.
Financial Highlights (Continued)
(For a Fund Share Outstanding Throughout Each Period)
<TABLE>
<CAPTION>
Year Ended October 31
---------------------------------------------------------------------
1996 1995 1994 1993 1992<<
Technology Portfolio
<S> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value - Beginning of Period $34.33 $24.94 $26.99 $20.20 $18.10
---------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss) 0.07 (0.02) (0.02) (0.15) (0.09)
Net Gains on Securities
(Both Realized and Unrealized) 5.76 10.20 1.19 6.94 2.19
---------------------------------------------------------------------
Total from Investment Operations 5.83 10.18 1.17 6.79 2.10
---------------------------------------------------------------------
LESS DISTRIBUTIONS
Dividends from Net Investment Income+ 0.07 0.00 0.00 0.00 0.00
Distributions from Capital Gains 5.86 0.79 3.22 0.00 0.00
---------------------------------------------------------------------
Total Distributions 5.93 0.79 3.22 0.00 0.00
---------------------------------------------------------------------
Net Asset Value - End of Period 34.23 34.33 24.94 26.99 20.20
=====================================================================
TOTAL RETURN 19.98% 42.19% 5.04% 33.63% 11.57%
RATIOS
Net Assets - End of Period
($000 Omitted) 789,611 563,109 327,260 248,803 165,083
Ratio of Expenses to Average Net Assets 1.08%@ 1.12%@ 1.17% 1.13% 1.12%
Ratio of Net Investment Income (Loss)
to Average Net Assets 0.24% (0.06%) (0.55%) (0.69%) (0.45%)
Portfolio Turnover Rate 168% 191% 145% 184% 169%
Average Commission Rate Paid^^ 0.1557 - - - -
</TABLE>
<< The per share information was computed based on weighted average shares.
+ Distributions in excess of net investment income for the year ended October
31, 1996, aggregated less than $0.01 on a per share basis.
@ Ratio is based on Total Expenses of the Portfolio, which is before any
expense offset arrangements.
^^ The average commission rate paid is the total brokerage commissions paid on
applicable purchases and sales of securities for the period divided by the
total number of related shares purchased or sold which is required to be
disclosed for fiscal years beginning September 1, 1995 and thereafter.
<PAGE>
INVESCO Strategic Portfolios, Inc.
Financial Highlights (Continued)
(For a Fund Share Outstanding Throughout Each Period)
<TABLE>
<CAPTION>
Year Ended October 31
---------------------------------------------------------------------
1996 1995 1994 1993 1992
Utilities Portfolio
<S> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value - Beginning of Period $10.61 $9.76 $12.80 $10.10 $9.95
---------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.37 0.44 0.33 0.29 0.27
Net Gains or (Losses) on Securities
(Both Realized and Unrealized) 1.43 0.84 (1.12) 2.71 0.92
---------------------------------------------------------------------
Total from Investment Operations 1.80 1.28 (0.79) 3.00 1.19
---------------------------------------------------------------------
LESS DISTRIBUTIONS
Dividends from Net Investment Income+ 0.37 0.43 0.25 0.30 0.26
Distributions from Capital Gains 0.00 0.00 2.00 0.00 0.78
---------------------------------------------------------------------
Total Distributions 0.37 0.43 2.25 0.30 1.04
---------------------------------------------------------------------
Net Asset Value - End of Period 12.04 10.61 9.76 12.80 10.10
=====================================================================
TOTAL RETURN 17.18% 13.48% (7.22%) 29.88% 12.04%
RATIOS
Net Assets -End of Period
($000 Omitted) 153,082 134,468 139,579 181,738 107,561
Ratio of Expenses to Average Net Assets# 1.17%@ 1.18%@ 1.13% 1.06% 1.13%
Ratio of Net Investment Income to
Average Net Assets# 3.28% 4.47% 3.33% 2.66% 2.73%
Portfolio Turnover Rate 141% 185% 180% 202% 226%
Average Commission Rate Paid^^ 0.0895 - - - -
</TABLE>
+ Distributions in excess of net investment income for the year ended October
31, 1996, aggregated less than $0.01 on a per share basis.
# Various expenses of the Portfolio were voluntarily absorbed by IFG for the
years ended October 31, 1996, 1995 and 1994. If such expenses had not been
voluntarily absorbed, ratio of expenses to average net assets would have been
1.25%, 1.30% and 1.14%, respectively, and ratio of net investment income to
average net assets would have been 3.20%, 4.34% and 3.32%, respectively.
@ Ratio is based on Total Expenses of the Portfolio, less Expenses Absorbed by
Investment Adviser, which is before any expense offset arrangements.
<PAGE>
^^ The average commission rate paid is the total brokerage commissions paid on
applicable purchases and sales of securities for the period divided by the
total number of related shares purchased or sold which is required to be
disclosed for fiscal years beginning September 1, 1995 and thereafter.
Other Information
UNAUDITED
On October 22, 1996, a special meeting of the shareholders of the Energy,
Environmental Services and Gold Portfolios was held at which approval to modify
the fundamental investment policy with respect to the Portfolio's borrowing
limitation was ratified. The following is a report of the votes cast:
Portfolio For Against Abstain Total
- --------------------------------------------------------------------------------
Energy 4,058,334 282,154 230,935 4,571,423
Environmental Services 1,393,330 135,369 108,073 1,636,772
Gold 14,445,676 1,621,962 949,068 17,016,706
<PAGE>
Report of Independent Accountants
To the Board of Directors and Shareholders of
INVESCO Strategic Portfolios, Inc.
In our opinion, the accompanying statement of assets and liabilities, including
the statement of investment securities, and the related statements of operations
and of changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of each of the portfolios constituting
INVESCO Strategic Portfolios, Inc. (the "Fund") at October 31, 1996, the results
of each of their operations for the year then ended, the changes in each of
their net assets for each of the two years in the period then ended and the
financial highlights for each of the five years in the period then ended, in
conformity with generally accepted accounting principles. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Fund's management; our responsibility
is to express an opinion on these financial statements based on our audits. We
conducted our audits of these financial statements in accordance with generally
accepted auditing standards which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at October 31, 1996 by
correspondence with the custodian and brokers and the application of alternative
auditing procedures for unsettled security transactions, provide a reasonable
basis for the opinion expressed above.
PRICE WATERHOUSE LLP
Denver, Colorado
December 6, 1996
<PAGE>
Introducing INVESCO's netPAL for Account Information
INVESCO now offers secure access to your account information from your own
computer -- at your convenience.
- Account Balance
- Latest Transactions
- Latest Distributions
1. Go to the INVESCO Funds' web site at http://www.invesco.com.
2. Select netPAL on the navigation bar.
3. Click on INVESCO Account Information.
4. Key in your account number and password. (Your password is identical to
the four-digit personal identification number code you use for the PAL(R)
Personal Account Line, INVESCO's automated telephone information system.)
5. Click on "Submit." Your current account summary will then be displayed
automatically.
<PAGE>
Questions and Answers About INVESCO Internet Account Information
What is my password?
Your password is initially set as the last four digits of your Social Security
number. If you have not done so previously, we encourage you to change this code
to something you find easy to remember -- just call PAL(R) toll-free at
1-800-424-8085, and choose menu option #3. Changing the password on PAL(R)
automatically changes your netPAL password, too.
When can I get my account summary?
As an online user, you know that the Internet is one of the most convenient ways
to get information: The World Wide Web is open 24 hours a day, 365 days a year.
Whenever you request information from the INVESCO web site, your account summary
will be up-to-date as of the last 4 p.m. (Eastern Time) market close.
Do I need special software?
No. INVESCO's web site can be accessed through any standard Internet browser,
and works with both IBM-compatible computers and Macs. If you're online, you
should be able to access and print out a copy of your INVESCO account summary.
Can anyone access my account information?
Because the system is password-protected, you are the only person who can
retrieve information about your account via the Internet. Your privacy is
ensured.
Are INVESCO's computer systems secure?
INVESCO is taking advantage of the most advanced security measures available to
protect our data -- and your privacy. INVESCO's netPAL operates on a separate
system to prevent outsiders from tampering with our databases.
<PAGE>
FAMILY OF FUNDS
Newspaper
Fund Name Fund Code Ticker Symbol Abbreviation
- --------------------------------------------------------------------------------
International
International Growth 49 FSIGX IntlGr
Asian Growth 41 IVAGX AsianGr
European 56 FEURX Europ
European Small Company 37 IVECX EuroSmCo
Latin American Growth 34 IVSLX LatinAmGr
Pacific Basin 54 FPBSX PcBas
- --------------------------------------------------------------------------------
Sector
Energy 50 FSTEX Enrgy
Environmental Services 59 FSEVX Envirn
Financial Services 57 FSFSX FinSvc
Gold 51 FGLDX Gold
Health Sciences 52 FHLSX HlthSc
Leisure 53 FLISX Leisur
Technology 55 FTCHX Tech
Worldwide Capital Goods 38 ISWGX WldCap
Worldwide Communications 39 ISWCX WldCom
- --------------------------------------------------------------------------------
Capital Appreciation
Growth 10 FLRFX Grwth
Dynamics 20 FIDYX Dynm
Small Company 74 IDSCX DivSmCo
Emerging Growth 60 FIEGX Emgrth
- --------------------------------------------------------------------------------
Growth & Income
Industrial Income 15 FIIX IndInc
Value Equity 46 FSEQX ValEq
Multi-Asset Allocation 70 IMAAX MulAstAL
Balanced 71 IMABX Bal
Total Return 48 FSFLX TotRtn
- --------------------------------------------------------------------------------
<PAGE>
Bond
Short-Term Bond 33 INIBX ShTrBd
Intermediate Government Bond 47 FIGBX IntGov
U.S. Government Securities 32 FBDGX USGvt
Select Income 30 FBDSX SelInc
High Yield 31 FHYPX HiYld
- --------------------------------------------------------------------------------
Tax-Exempt
Tax-Free Intermediate Bond 36 * *
Tax-Free Long-Term Bond 35 FTIFX TxFre
- --------------------------------------------------------------------------------
Money Market
U.S. Government Money Fund 44 FUGXX N/A
Cash Reserves 25 FDSXX N/A
Tax-Free Money Fund 40 FFRXX N/A
* This fund does not meet size requirements to be assigned a ticker symbol in
newspaper listings.
For more information about any of the INVESCO Funds, including management fees
and expenses, please call us at 1-800-525-8085 for a prospectus. Read it
carefully before you invest or send money.
<PAGE>
INVESCO FUNDS
To receive general information and prospectuses
on any of INVESCO's funds or retirement plans,
or to obtain current account or price information,
call toll-free:
1-800-525-8085
To reach PAL(R), your 24-hour Personal Account
Line call: 1-800-424-8085
You can find us on the World Wide Web:
http://www.invesco.com
Or write to:
INVESCO Funds Group, Inc., (SM) Distribution
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
This information must be preceded or
accompanied by an effective prospectus.
