Semiannual Report
April 30, 1998
INVESCO
Strategic
Portfolios
Energy
Environmental Services
Financial Services
Gold
Health Sciences
Leisure
Technology
Utilities
No-load portfolios investing in
targeted industry sectors.
You should know
what INVESCO knows.(TM)
INVESCO FUNDS
<PAGE>
Market Overview May 1998
The market's strength continues to surprise even the most bullish pundits.
Since the economic recession in 1990, equity prices in the U.S. have advanced
with limited interruptions. From a historical perspective, this is the greatest
bull market of all time. Exemplifying the underlying strength of this market,
the Dow Jones Industrial Average(1) (an unmanaged index composed of 30 domestic
large-capitalization stocks) reached these historic milestones on the following
dates:
o 1000 on November 14, 1972
o 2000 on January 8, 1987
o 3000 on April 17, 1991
o 4000 on February 23, 1995
o 5000 on November 21, 1995
o 6000 on October 14, 1996
o 7000 on February 13, 1997
o 8000 on July 16, 1997
o 9000 on April 6, 1998
Notice that it took the Dow approximately 15 years to double from 1000 to
2000, eight years to double from 2000 to 4000, and a little over two years to
double from 4000 to 8000. The phenomenal bull market of the 1990s has created
more financial wealth than at any other time in history. Nonetheless, equity
markets do go up and down, and it is highly unusual for stocks to consistently
produce returns of 20% to 30% annually. Instead, history has shown that stock
indexes average between 10% to 12% over longer time periods, and investors may
need to adjust their expectations accordingly.
Equity markets produced astonishingly strong returns in the last six
months, although day-to-day volatility was sometimes extreme. Since the Asian
financial crisis led to a correction in the fall of 1997, many domestic indexes
have advanced by more than 20%. Although the crisis increased negative sentiment
about the future direction of the economy and the market, it has done little to
affect either so far. Domestic economic growth continues to exceed its
historical average of 2% to 3%, yet we see no signs of inflation on the horizon
- -- an oxymoron in economic textbooks. (Historically, strong economic growth
increases the demand for labor, which leads to increased wages and eventually
inflation.) In fact, both consumer and producer prices remain stable and in many
cases are declining.
Understandably, consumer confidence is at its highest level in more than 27
years. Real wages are increasing and intense global competition is decreasing
retail prices for many consumer goods. Plus, the chronic federal budget deficit,
which has plagued the government for the last 18 years, might become a surplus
in 1998 -- thus improving the chances for a tax cut for many Americans.
At present, the economy is in what some call a "sweet spot," as benign
inflation, strong economic growth, and low unemployment have increased
consumers' confidence and willingness to spend money. The key to maintaining
this environment will be continued gains in worker productivity and low interest
rates. A decrease in productivity may lead to a slowdown in corporate earnings,
which has been one of the underlying fundamentals of this bull market. In
addition, a significant increase in interest rates would slow the rate of growth
in the economy, and most likely reduce the price-to-earnings multiple that
investors are willing to pay for equity securities. Meanwhile, the technical
underpinnings needed to support a buoyant equity market, namely a strong and
healthy economy, remain intact.
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 10-year period ended 4/30/98;
or, in the case of Environmental Services Portfolio, from inception through
4/30/98. The charts and other total return figures cited reflect the funds'
operating expenses; but the index does not have expenses, which would, of
course, have lowered its performance.(1),(2)
<PAGE>
Energy Portfolio
Independent mutual fund analyst Lipper Analytical Services ranked INVESCO
Energy Portfolio #3 of 50 natural resources funds for the one-year period ended
4/30/98. For the five-year period, the fund was ranked #10 of 20 funds; for the
10-year period, #8 of 13.(3)
Although the portfolio is well-diversified throughout the energy sector, it
is still narrowly focused on one segment of the economy. Because of this
concentrated focus, there will be periods of time when the fund will under- or
over-perform the broad market. Unlike many natural resources funds, the fund is
not designed to invest in gold, forestry, or natural resources -- it is a true
energy fund.
For the six-month period ended 4/30/98, Energy Portfolio achieved a total
return of -7.82%, compared to 22.42% for the S&P 500. (Of course, past
performance is not a guarantee of future results.)(1),(2)
During the last six months, a short-term oversupply of oil, due to
decreased demand from Asian/Pacific Rim economies, caused the price of crude oil
to reach a nine-year low. Although the oversupply represented a minor proportion
of total demand (one million barrels of excess supply daily compared to 75
million barrels demanded daily), it did rattle investors' confidence and created
a short-term negative environment for energy stocks. This temporary imbalance in
supply/demand conditions is already starting to pass, and worldwide demand for
oil will increase by approximately 1.8% this year -- compared to 3% originally
forecast for 1998 before the Asian financial crisis.
Energy Portfolio
Average Annualized Total Return
as of 4/30/92 (2)
1 year 28.84%
-------------------------------
5 years 12.50%
-------------------------------
10 years 8.13%
-------------------------------
We have kept the fund broadly diversified across the three main energy
subsectors: major oils, energy services, and oil & gas exploration/production
companies. Reflecting a more important theme in the portfolio, we did increase
the fund's weighting towards natural gas companies in the Gulf of Mexico, while
reducing our exposure to oil companies during the last six months. Overall
demand for natural gas continues to grow about 3% yearly; however, the supply
from existing wells is declining -- forcing a greater emphasis on exploration
and production of new natural gas deposits. In addition, natural gas differs
from crude oil in that it is difficult to ship overseas. Instead, natural gas
has to be found relatively close to its end-use destination and sent via a
pipeline to that location. As the population continues to increase in North
America and environmentally clean fuels are favored by consumers, the demand for
natural gas will increase -- causing a greater emphasis on natural gas
exploration and production in North America, particularly in the Gulf of Mexico.
Our favorite company in this area remains Vastar Resources, a natural gas
exploration and development firm with deep water prospects in the Gulf. In
addition, consolidation is likely to occur in this industry, and the portfolio
is exposed to high quality companies that could benefit from this trend.
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 in each case reinvestment of all dividends and capital
gain distributions, for the ten year period ended 4/30/98.
<PAGE>
While reducing the fund's exposure to oil companies in the last six months,
the portfolio still has significant holdings in oil services and exploration and
production firms. These firms should experience strong relative performance when
the price of crude returns to its previous levels as excess supply is taken out
of the market.
Although short-term volatility may continue, the long-term prospects for
this sector appear quite attractive. Worldwide demand for energy continues to
increase, while the supply is diminishing. We are already seeing increased
capital spending by energy companies as they try to replenish their reserves,
which is a positive for this sector. After years of underperforming the broad
market, the energy sector may be in the infancy stages of a long-term growth
cycle.
Vice President John S. Segner assumed the responsibilities of portfolio
manager in February 1997. He received a BS from the University of Alabama and an
MBA from the University of Texas at Austin. Before joining INVESCO in 1997, John
served as Managing Director and Principal for The Mitchell Group, and was a
co-manager of an institutional energy portfolio worth over $250 million. Prior
to The Mitchell Group, he held responsibilities with Texaco Inc., Amerada Hess
Corporation, and First Tennessee National Corporation.
Environmental Services Portfolio For the six-month period ended 4/30/98,
Environmental Services Portfolio had a total return of 11.70%, compared to
22.42% for the S&P 500. (Of course, past performance is not a guarantee of
future results.)(1),(2)
Industry consolidation dominated the news for environmental stocks during
the last six months. In the spring of 1998, the largest waste management
company, Waste Management, agreed to merge with the third largest company, USA
Waste Services. This merger may signal a change in the waste industry, where
historically many companies have operated inefficiently. Also, merger activity
in the water industry increased valuations as US Filter merged with Culligan
Water Technologies. US Filter is the world's largest manufacturer of water and
wastewater treatment systems, specializing in water management and resource
recovery services for industrial, commercial and municipal customers. Culligan,
on the other hand, specializes in residential water treatment systems. The
merger of these two entities will create the dominant company in the water
industry.
Environmental Services Portfolio
Average Annualized Total Return
as of 4/30/92 (2)
1 year 38.22%
--------------------------------
5 years 15.87%
--------------------------------
Since inception (1/91) 7.74%
--------------------------------
During the last six months, we have made minor changes to the portfolio.
The fund continues to invest approximately 40% of its assets in sewage and waste
companies, 40% in water treatment, and 20% in higher growth companies that may
or may not have exposure to the environmental services sector. While industry
consolidation has improved valuations for selected environmental stocks, we
remain focused on companies with high internal growth rates and firms that have
the ability to internally finance their expansion. Looking forward, industry
consolidation should increase competition and force firms to focus on efficiency
and profitability. In addition, the deterioration of municipal water quality may
lead to greater consumer emphasis on water purity, potentially increasing
revenue for selected water companies. Furthermore, valuation levels of
environmental stocks look quite attractive compared to the broad market, and may
offer added diversification to the typical equity portfolio.
<PAGE>
Graph
This line graph represents a comparison of the value of a $10,000 investment
in INVESCO Enviromental Services Portfolio to the value of a $10,000
investment in the S&P 500 Index, assuming in each case reinvestment of all
dividends and capital gain distributions, for the period from inception
(1/91) through 4/30/98.
Environmental Services Portfolio is managed by INVESCO Vice President
Gerard Hallaren. A Chartered Financial Analyst, Gerard earned a BA in economics
from the University of Massachusetts -- Amherst.
Financial Services Portfolio
Overall, and for the three-, five- and 10-year periods ended 4/30/98, the
fund received the prestigious five star rating for risk-adjusted performance by
independent mutual fund analyst Morningstar.(4)
During the six-month period ended 4/30/98, Financial Services Portfolio
achieved a total return of 24.31%, compared to 22.42% for the S&P 500. (Of
course, past performance is not a guarantee of future results.)(1),(2)
The existing trend towards consolidation in the financial services sector
continued over the last six months. Merger and acquisition activity culminated
in the planned merger between Citicorp and Travelers Group. This merger was
highly unusual because it marked the first time that a major insurance company
ventured into the banking industry. Previously, most of the M&A activity was
focused on regional banks acquiring other regional banks or brokerage firms.
However, with this deal, the bar has been raised and it's apparent that all
financial services companies may participate in the consolidation wave sweeping
this sector -- including money center banks, brokerage firms, insurance
companies, and regional banks.
Within this environment of low interest rates and increased consolidation,
we have kept the fund broadly diversified to provide exposure to the entire
financial services sector. During the last six months, we have slightly
increased the fund's allocation to mid-capitalization brokerage firms and
insurance companies. Mid-cap brokerage firms are benefiting from the prolonged
rally in the financial markets and the increased use of intermediaries. In
addition, these firms are coveted because of their strong distribution channels,
and takeover speculation is increasing. One of our favorite stocks in this
industry remains market leader Paine Webber Group.
Financial Services Portfolio
Average Annualized Total Return
as of 4/30/98 (2)
1 year 51.40%
-------------------------------
5 years 25.06%
-------------------------------
10 years 25.75%
-------------------------------
We have also increased the fund's weighting in insurance companies. These
firms are becoming more aggressive in gathering assets. Through the selling of
fixed and variable annuities and other wealth-protection products, selected
companies are benefiting from the change in demographics and the growing
emphasis on retirement by baby boomers. We continue to favor insurance companies
that are well-positioned in both fixed and variable products, that are building
strong brand names, and that have effective distribution forces -- like
SunAmerica Inc. Although we made minor adjustments to the portfolio in the last
six months, a significant portion of the fund's assets remains in regional
banks, where merger and acquisition activity is occurring at a torrid pace. One
<PAGE>
of our favorite investments in this area continues to be the new BankAmerica
Corp., formed by the merger with NationsBank Corp. This new bank is
well-managed, with exposure to the faster-growing regions of the U.S.
(particularly the sunbelt) and should realize economies of scale from the merger
which could improve bottom-line results.
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 in each case reinvestment of all dividends
and capital gain distributions, for the ten year period ended 4/30/98.
Looking forward, although the sector has performed well over the last
decade, the technical underpinnings for strong future growth remain.
Consolidation should continue for many years, and a low interest rate
environment bodes well for these companies. The one area of concern for this
sector remains a significant increase in interest rates, which would negatively
affect performance.
Financial Services Portfolio is co-managed by INVESCO Senior Vice President
Daniel B. Leonard and Vice President Jeffrey G. Morris. Dan 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.
Jeff was named co-manager of the fund in March 1997. He joined INVESCO in
1991, served as a research analyst from 1994 to 1995, and became a vice
president in 1997. He earned a BS from Colorado State University and MS from
University of Colorado -- Denver. He is a Chartered Financial Analyst.
Gold Portfolio
For the six-month period ended 4/30/98, Gold Portfolio had a total return
of -15.97%, compared to 22.42% for the S&P 500. (Of course, past performance is
not a guarantee of future results.)(1),(2)
As a commodity-based fund, Gold Portfolio's performance is highly dependent
on the price of gold. During the last six months, the price of a gold futures
contract reached an 18-year low as continued selling of gold reserves by
European central banks and decreased demand by Asian consumers caused an
oversupply in the world's markets. In addition, some Asian/Pacific Rim
governments asked citizens to turn in their jewelry which could be sold to raise
hard currency -- putting more pressure on the price of gold.
Within this negative environment, we continue to use our growth-gold
philosophy of focusing on junior to mid-sized gold exploration concerns. Many of
these companies have suffered significant capital losses in the last year, but
remain fundamentally sound. When the price of gold recovers, these firms should
re-establish themselves as some of the best growth opportunities in the gold
industry.
Gold Portfolio
Average Annualized Total Return
as of 4/30/98 (2)
1 year -41.23%
-------------------------------
5 years -7.27%
-------------------------------
10 years -3.70%
-------------------------------
Earlier this year, we started to see signs of that recovery. The decision
of the European Union to back their new currency (the Euro) with gold reserves
provided a boost to the price of bullion. In addition, it appears that European
central banks have finished selling off their gold reserves, which should
improve the demand/supply relationship. This may signal that the price bottom
has been reached, and the metal may be entering a period of accelerating prices.
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>
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 in each case reinvestment of all dividends and capital
gain distributions, for the ten year period ended 4/30/98.
Health Sciences Portfolio
The fund received the prestigious five star rating for risk-adjusted
performance by independent mutual fund analyst Morningstar for the 10-year
period ended 4/30/98. For the five-year period the fund received four stars, and
three stars for the three-year period ended 4/30/98.(4)
Lipper Analytical Services ranked INVESCO Health Sciences Portfolio #2 of 7
health-biotechnology funds for the 10-year period ended 4/30/98, based on total
return unadjusted for commissions. For the five-year period, the fund was ranked
#6 of 15 funds; for the one-year period, #25 of 38.(3)
Health Sciences Portfolio
Average Annualized Total Return
as of 4/30/98 (2)
1 year 40.47%
-------------------------------
5 years 24.23%
-------------------------------
10 years 24.22%
-------------------------------
For the six-month period ended 4/30/98, Health Sciences Portfolio had a
total return of 19.83%, compared to 22.42% for the S&P 500. (Of course, past
performance is not a guarantee of future results.)(1),(2)
The dominant theme in the portfolio remains large-capitalization
pharmaceuticals, which produced significant gains for the fund in the last six
months. These companies are benefiting from an improved regulatory environment
and strong new product pipelines. The Food & Drug Administration (FDA) has
dramatically cut the approval time for new drugs. This has improved the
profitability of large-cap pharmaceuticals, since new drugs sales typically
drive their revenue and earnings growth. Not only are new drugs coming to the
market sooner, but a better-educated consumer is increasing the demand for these
new products.
Our favorite pharmaceutical company remains Pfizer Inc. Pfizer, besides
having a strong new product pipeline, recently gained FDA approval for its
treatment of erectile dysfunction -- commonly known as impotence. Pfizer's new
impotence pill, called Viagra, is easy to use with few side effects, and works
approximately 70% of the time. The potential for this drug is staggering, as it
is estimated that half of the men between the ages of 40 and 70 have experienced
some form of sexual dysfunction. At $7 to $10 per pill, it could easily be one
of the best-selling drugs of all time, perhaps producing average annual sales in
excess of $2 billion within a few years. In addition, Pfizer has begun testing
the drug on women which, if successful, could only enhance its market potential.
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 in each case reinvestment of all dividends and
capital gain distributions, for the ten year period ended 4/30/98.
<PAGE>
Medical devices and supplies have also produced strong returns for the
fund. Like the pharmaceutical industry, this area has high barriers to entry,
and profits are somewhat protected by patents. Two of our favorite investments
are Guidant Corp. and Medtronic Inc. Both of these market-leading firms
specialize in products for use in cardiac rhythm management, angioplasty
devices, coronary artery disease intervention, and other forms of cardiac
surgery. These companies continue to deliver strong revenue growth, in excess of
15% per year, and they appear poised for strong future performance.
Looking forward, the health care sector should be a major engine of growth
for world economies in years to come. We will continue to focus a substantial
portion of the fund's assets on market-leading pharmaceuticals, as these
companies are positioned to benefit from dominant market positions, an improved
regulatory environment, and strong new product pipelines. As long as interest
rates remain relatively stable, the technical underpinnings for the health care
sector should remain positive.
Health Sciences Portfolio is managed by INVESCO Senior Vice President John
R. Schroer, a Chartered Financial Analyst. John started his investment career in
1989, after earning an MBA and BA from the University of Wisconsin.
Leisure Portfolio
Lipper Analytical Services ranked INVESCO Leisure Portfolio #2 of 17
specialty/miscellaneous funds for the 10-year period ended 4/30/98, based on
total return unadjusted for commissions. For the one-year period, the fund was
ranked #14 of 45 funds; for the five-year period, #12 of 23.(3)
For the six-month period ended 4/30/98, the fund had a total return of
21.18%, compared to 22.42% for the S&P 500. (Of course, past performance is not
a guarantee of future results.)(1),(2)
Leisure Portfolio
Average Annualized Total Return
as of 4/30/98 (2)
1 year 45.53%
-------------------------------
5 years 17.46%
-------------------------------
10 years 19.86%
-------------------------------
Our decision last fall to avoid leisure companies that derive a significant
portion of their revenues from Asian economies helped relative performance over
the last six months. Instead, we skewed the portfolio towards companies that
would benefit from the continued strength of the U.S. and European economies.
Two industries that met this criterion, and produced strong returns for the fund
over the last six months, were the advertising and cruise ship industries.
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 in each case reinvestment of all dividends and capital
gain distributions, for the ten year period ended 4/30/98.
<PAGE>
Companies like Carnival Corp., Royal Caribbean Cruises Ltd., and Steiner
Leisure Ltd. experienced improving fundamentals and price appreciation.
Historically, cruise ships were for elderly people or retirees, and had limited
appeal to young families. However, as discretionary income increases, younger
families are spending more money on vacations, and increasingly use cruise ships
to fulfill their vacation needs. Since only 8% of the U.S. population has ever
taken a cruise, the potential for market penetration is enormous. Furthermore,
newer ships are more profitable than older ones, which should improve the
earnings for many companies as they replace their fleets.
Another industry we continue to favor, and that has produced strong returns
for the fund over the last six months, is the advertising industry. With the
increase in global competition, it is more important for firms to brand their
products with advertising. Whether you are in Germany or Canada, if consumers do
not recognize your brand name, there is only a small chance that they will
purchase your product -- making marketing and advertising crucial to expanding
sales. Our favorite companies within this area remain Omnicom Group and WPP
Group PLC, as both have dominant market positions and accelerating earnings.
Looking forward, strong economies in the U.S. and Europe bode well for many
leisure companies. However, we will continue to avoid those that have
significant ties to Asian economies until the crisis passes. Overall, the
fundamentals for this sector remain positive.
Leisure Portfolio is managed by Mark Greenberg. With over 16 years of
experience in the leisure sector, he is a Chartered Financial Analyst and
started his investment career in 1980. Mark earned his BSBA in Finance from
Marquette University. Prior to joining INVESCO he was with Scudder, Stevens &
Clark in New York.
Technology Portfolio
Technology Portfolio
Average Annualized Total Return
as of 4/30/98(2)
1 year 27.25%
-------------------------------
5 years 24.18%
-------------------------------
10 years 22.19%
-------------------------------
INVESCO Technology Portfolio was awarded the prestigious five-star rating
for risk-adjusted performance by Morningstar, for the 10-year period ended
4/30/98. The fund received a three-star rating for the five-year period, and two
stars for the three-year period.(4)
For the six-month period ended 4/30/98, the fund had a total return of
7.43%, compared to 22.42% for the S&P 500. (Of course, past performance is not a
guarantee of future results.)(1),(2)
We have remained fairly conservative with the fund's investments over the
last six months. The Asian financial crisis, which started in the summer of
1997, increased investment risk associated with this sector, as many technology
firms derive a significant portion of their revenue from the Asian/Pacific Rim
region. In response to this uncertain environment, we have focused holdings in
companies that can benefit from continued economic strength in the U.S. and
Europe, while avoiding firms that rely on revenue from Asia. This strategy
concentrates the portfolio on market-leading companies with defensible positions
in the software, services, computing and specialty technology fields, while
avoiding semi-conductor stocks.
<PAGE>
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 in each case reinvestment of all dividends and
capital gain distributions, for the ten year period ended 4/30/98.
During the last six months, fund performance was enhanced by large,
predictable-growth technology companies like International Business Machines
(IBM) and Cisco Systems. These firms have little exposure to the Asian/Pacific
Rim region, and are experiencing accelerating earnings. However, the fund's
relative performance was hurt by exposure to the oil industry. Declining oil
prices created negative sentiment towards these companies, but we remain
confident of their long-term prospects.
Looking forward, the Asian financial crisis will continue to cause extreme
volatility on a day-to-day basis for technology stocks. Paradoxically, this
crisis may improve the earnings of selected technology companies which
manufacture or buy their products in the Asian/Pacific Rim region, but sell
these products in the U.S. or Europe -- as their cost of production has
decreased. After the Asian crisis passes, we believe that the technology sector
will re-establish itself as the preeminent engine of growth for the world's
economies. This sector continues to produce better products at lower prices each
year, factors which enhance the availability of technology for everyone.
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, who joined INVESCO in
1994, earned his BA from the University of Massachusetts at Amherst and is a
Chartered Financial Analyst.
Utilities Portfolio
Utilities Portfolio
Average Annualized Total Return
as of 4/30/98 (2)
1 year 40.65%
-------------------------------
5 years 14.23%
-------------------------------
10 years 14.51%
-------------------------------
For the six-month period ended 4/30/98, the fund had a total return of
21.89%, compared to 22.42% for the S&P 500. (Of course, past performance is not
a guarantee of future results.)(1),(2)
We have made minor adjustments to the portfolio over the last six months,
increasing our weighting in telecommunications companies, decreasing the fund's
exposure to electric utilities, and maintaining our position in natural gas
companies. This modest re-allocation was in response to changes in valuations
for these industries. In the last few months of 1997, increased market
volatility as a result of the Asian financial crisis caused investors to focus
on defensive stocks. As a result, electric utilities experienced strong relative
performance and went from being undervalued to overvalued in a short period of
time. This created an opportunity to reduce the number of holdings of electric
utilities at a profit and investing the proceeds in stocks of telecommunications
companies, which currently represent better values.
<PAGE>
Although we believe long-term prospects are attractive for the electric
utilities industry, uncertainty regarding the regulatory environment near-term
has increased the need to be selective when investing in this industry. We have
skewed the fund's investments towards states that are the furthest along in
addressing key issues such as recovery of stranded costs, namely California, New
York, and Pennsylvania.
The telecommunications industry continued to produce strong returns for the
fund in the last six months. From a valuation standpoint, this industry offers
superior growth opportunities with less regulatory risk than with utilities. Our
investments in telecommunications are focused in RBOCs (Regional Bell Operating
Companies), several other local exchange service providers, and long distance
service companies. The RBOCs provided strong performance late in 1997 as
investors rewarded their defensive characteristics. One of our favorite RBOCs
remains SBC Communications. This company has an experienced, aggressive
management team, and their merger with Pacific Telesis Group will improve
operating efficiencies and bottom line results. Also, when SBC Communications is
allowed to compete in the long-distance market, it could provide a substantial
stream of revenue to the company.
Telecommunications service providers also produced strong returns for the
fund, as demand for the Internet and related services continued to experience
exponential growth. The fund's investments have been focused on
large-capitalization service providers such as WorldCom Inc. and GTE Corp. These
companies continue to post strong growth rates, and are benefiting from
speculation on potential merger and acquisition activity.
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 in each case reinvestment of all dividends and
capital gain distributions, for the ten year period ended 4/30/98.
Looking forward, the utilities sector is going through a dynamic period of
change. Positive structural changes are expected to make utilities more
efficient and profitable. Deregulation is in its infancy stage. As this process
continues, growth opportunities within this sector should improve, making it
attractive to long-term investors.
Brian B. Hayward assumed responsibilities of portfolio manager for INVESCO
Utilities Portfolio in June 1997. Previously, he was a senior equity analyst for
Mississippi Valley Advisors in St. Louis, Missouri and began his investment
career in 1985. Brian earned a BA in Mathematics and a MA in Economics from the
University of Missouri. He is a Chartered Financial Analyst.
(1)The S&P 500 is an unmanaged index considered representative of the
performance of the broad U.S. stock market, while the Dow Jones Industrial
Average represents large-capitalization stocks.
(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)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>
(4)Morningstar's proprietary rankings reflect historical risk-adjusted
performance and are subject to change every month. Ratings are calculated for
the fund's three-, five-, and 10-year average annual returns (based on available
track records) in excess of 90-day Treasury bill returns. The top 10% of funds
in an investment category receive 5 stars; the next 22.5%, 4 stars; the next
35%, 3 stars; the next 22.5%, 2 stars; and the last 10%, 1 star. As of 4/30/98,
Financial Services Portfolio received 5 stars among 2,477 funds in the domestic
equity fund category for the three-year period, 5 stars among 1,404 funds for
the five-year period, and 5 stars among 704 funds 10-year period. As of 4/30/98,
Health Sciences Portfolio received 5 stars among 704 funds in the domestic
equity fund category for the 10-year period, 4 stars among 1,404 funds for the
five-year period, and 3 stars among 2,477 funds three-year period. As of
4/30/98, Technology Portfolio received 5 stars among 704 funds in the domestic
equity fund category for the 10-year period, 3 stars among 1,404 funds for the
five-year period, and 2 stars among 2,477 funds three-year period.
<PAGE>
INVESCO Strategic Portfolios, Inc.
Five Largest Common Stock Holdings
April 30, 1998
UNAUDITED
Description Value
- ---------------------------------------------------------------------
ENERGY Portfolio
Vastar Resources $9,997,638
Global Industries Ltd 8,115,319
EEX Corp 8,115,219
Camco International 7,995,675
El Paso Natural Gas 7,985,887
ENVIRONMENTAL SERVICES Portfolio
Republic Industries $1,613,125
USA Waste Services 1,471,875
Laidlaw Inc 1,393,750
United Rentals 1,377,500
Allied Waste Industries 1,182,500
FINANCIAL SERVICES Portfolio
American International Group $61,505,469
BankAmerica Corp 43,775,000
State Street 36,822,500
AEGON NV Ord American
Registered Shrs Representing
Dutch Bearer Shrs 36,509,532
Compass Bancshares 36,375,000
GOLD Portfolio
Franco-Nevada Mining Ltd $14,681,386
Euro-Nevada Mining 13,501,631
Lihir Gold Ltd Sponsored ADR
Representing 20 Ord Shrs 12,381,250
Stillwater Mining 7,931,250
Western Deep Levels Ltd ADR
Representing Ord Shrs 7,875,000
HEALTH SCIENCES Portfolio
Merck & Co $78,927,500
Bristol-Myers Squibb 71,995,000
Warner-Lambert Co 70,566,938
Schering-Plough Corp 59,452,750
American Home Products 57,514,000
LEISURE Portfolio
Tele-Communications Inc -
Liberty Media Group Class A $12,134,180
Omnicom Group 10,422,500
WPP Group PLC 9,676,491
Heineken NV 9,184,081
Time Warner 7,850,000
TECHNOLOGY Portfolio
International Business Machines $49,536,562
International Game Technology 41,718,750
Lexmark International Group Class A 34,725,000
Ceridian Corp 30,543,750
CBT Group PLC Sponsored ADR
Representing 1/2 Ord Shr 30,525,000
UTILITIES Portfolio
SBC Communications $6,008,438
WorldCom Inc 5,873,655
Ameritech Corp 5,618,250
BellSouth Corp 5,192,769
Sprint Corp 5,191,750
Composition of holdings is subject to change.
<PAGE>
<TABLE>
<CAPTION>
INVESCO Strategic Portfolios, Inc.
Statement of Investment Securities
April 30, 1998
UNAUDITED
Shares,
Country Units or
Code if Principal
Description Non US Amount Value
- ---------------------------------------------------------------------------------------------
ENERGY Portfolio
COMMON STOCKS 95.75%
ENGINEERING & CONSTRUCTION 1.91%
<S> <C> <C>
J Ray McDermott SA* 83,000 $ 3,683,125
------------
Oil & Gas 87.11%
DOMESTIC INTEGRATED 6.14%
Murphy Oil 109,100 5,611,831
Phillips Petroleum 125,600 6,225,050
------------
11,836,881
------------
DRILLING & EQUIPMENT 31.21%
BJ Services* 132,500 4,968,750
Baker Hughes 89,500 3,624,750
Camco International 117,800 7,995,675
Dresser Industries 121,200 6,408,450
Global Industries Ltd* 357,700 8,115,319
IRI International* 378,100 5,080,719
Marine Drilling* 300,000 7,293,750
Nabors Industries* 204,500 5,150,844
Noble Drilling* 142,500 4,604,531
Weatherford Enterra* 138,000 6,908,625
------------
60,151,413
------------
EXPLORATION & PRODUCTION 34.32%
Apache Corp 169,700 6,003,137
Black Sea Energy Ltd* 3,298,550 2,421,364
Burlington Resources 132,600 6,232,200
Canadian Occidental Petroleum 281,900 5,761,331
Chieftain International* 227,800 5,097,025
Clayton Williams Energy* 135,000 1,552,500
EEX Corp* 837,700 8,115,219
Newfield Exploration* 205,000 4,971,250
Oryx Energy* 185,000 4,833,125
Petsec Energy Ltd Sponsored
ADR Representing 5 Ord Shrs* 324,500 6,672,531
Tom Brown* 217,000 4,475,625
Vastar Resources 210,200 9,997,638
------------
66,132,945
------------
<PAGE>
INTERNATIONAL INTEGRATED 15.44%
British Petroleum PLC Sponsored
ADR Representing 6 Ord Shrs 62,700 5,925,150
Chevron Corp 90,000 7,441,875
Exxon Corp 84,000 6,126,750
Texaco Inc 81,900 5,036,850
YPF SA Sponsored ADR
Representing Class D Shr 150,000 $ 5,231,250
------------
29,761,875
------------
TOTAL OIL & GAS 167,883,114
------------
OIL WELL EQUIPMENT & SERVICES 2.59%
Schlumberger Ltd 60,300 4,997,363
------------
UTILITIES GAS 4.14%
El Paso Natural Gas 216,200 7,985,887
------------
TOTAL COMMON STOCKS
(Cost $173,236,484) 184,549,489
------------
PREFERRED STOCKS 3.49%
OIL & GAS --
EXPLORATION & PRODUCTION 3.49%
Enron Corp, 6.25%, Redeemable
Exchangeable Pfd
(Cost $6,802,656) 313,000 6,729,500
------------
SHORT-TERM INVESTMENTS --
REPURCHASE AGREEMENTS 0.76%
Repurchase Agreement with
State Street Bank & Trust Co
dated 4/30/1998 due 5/1/1998
at 5.470%, repurchased at
$1,459,222 (Collaterized by
US Treasury Bonds due
8/15/2017 at 8.875%
value $1,501,458)
(Cost $1,459,000) $1,459,000 1,459,000
------------
TOTAL INVESTMENT
SECURITIES AT VALUE 100.00%
(Cost $181,498,140)
(Cost for Income Tax Purposes
$181,643,981) $192,737,989
============
ENVIRONMENTAL SERVICES Portfolio
COMMON STOCKS 100.00%
CHEMICALS 2.82%
OM Group 13,000 $576,063
COMPUTER RELATED 0.71%
Symantec Corp* 5,000 145,000
------------
ELECTRIC UTILITIES 3.38%
United Water Resources 40,000 692,500
------------
<PAGE>
ELECTRONICS 1.53%
SanDisk Corp* 15,000 313,125
------------
ELECTRONICS --
SEMICONDUCTOR 1.12%
Xilinx Inc* 5,000 228,750
------------
FINANCIAL 2.27%
Cadiz Land* 40,000 465,000
------------
MANUFACTURING 3.01%
Recovery Engineering* 20,000 $ 615,000
------------
METALS MINING 1.47%
Recycling Industries* 40,000 300,000
------------
OIL & GAS RELATED 4.70%
Newpark Resources* 40,000 962,500
------------
Pollution Control 69.18%
EQUIPMENT/SYSTEMS 10.81%
GTS Duratek* 25,000 293,750
ITEQ Inc* 68,500 873,375
US Filter* 32,000 1,044,000
------------
2,211,125
------------
RECYCLING 3.16%
IMCO Recycling 10,000 185,000
KTI Inc* 25,000 462,500
------------
647,500
------------
SERVICES 55.21%
Allied Waste Industries* 43,000 1,182,500
American Disposal Services* 25,000 1,002,344
Casella Waste Systems Class A* 10,000 311,250
Culligan Water Technologies* 15,000 870,937
Eastern Environmental Services* 20,000 522,500
Laidlaw Environmental Services* 256,000 1,008,000
Laidlaw Inc 100,000 1,393,750
NSC Corp 4,962 11,475
Republic Industries* 58,000 1,613,125
Safety-Kleen Corp 8,000 234,000
USA Waste Services* 30,000 1,471,875
Waste Industries* 13,000 265,688
Waste Management 30,000 1,005,000
Waste Management International
PLC Sponsored ADR
Representing 2 Ord Shrs* 50,000 403,125
------------
11,295,569
------------
TOTAL POLLUTION CONTROL 14,154,194
------------
<PAGE>
SERVICES 9.81%
American Water Works 21,000 628,687
United Rentals* 40,000 1,377,500
------------
2,006,187
------------
TOTAL COMMON STOCKS
(Cost $16,685,037) 20,458,319
------------
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 $17,185,035)
(Cost for Income Tax Purposes
$17,204,719) $20,458,320
============
FINANCIAL SERVICES Portfolio
COMMON STOCKS 95.27%
BANKS 40.18%
BB&T Corp 170,000 $11,432,500
Bank of New York 600,000 35,437,500
BankAmerica Corp 515,000 43,775,000
BankBoston Corp 140,000 15,111,250
Bankers Trust New York 140,000 18,077,500
Citicorp 209,000 31,454,500
City National 280,000 10,412,500
Compass Bancshares 750,000 36,375,000
First Chicago NBD 212,500 19,735,938
First Tennessee National 700,000 24,106,250
First Union 140,000 8,452,500
Fleet Financial Group 200,000 17,275,000
Imperial Bancorp* 590,175 17,299,505
Julius Baer Holding AG
Series B Shrs 2,000 5,520,221
Mellon Bank 333,000 23,976,000
Mercantile Bankshares 250,000 9,593,750
National Commerce Bancorp 45,000 2,013,750
National Westminster Bank PLC 800,000 16,011,072
NationsBank Corp 104,000 7,878,000
Nordbanken Holding AB 2,754,000 20,284,500
Norwest Corp 767,500 30,460,156
Providian Financial 400,000 24,075,000
Republic New York 250,000 33,437,500
Royal Bank of Canada 270,500 16,179,281
SouthTrust Corp 547,500 23,371,406
State Street 515,000 36,822,500
Toronto-Dominion Bank 263,900 12,056,931
Union Planters 400,000 24,600,000
US Bancorp 229,000 29,083,000
Wachovia Corp 227,000 19,280,813
Wells Fargo & Co 60,000 22,110,000
------------
645,698,823
------------
<PAGE>
CONSUMER FINANCE 4.87%
American Express 267,900 27,325,800
Beneficial Corp 244,900 31,928,838
FIRSTPLUS Financial Group* 392,000 19,012,000
------------
78,266,638
------------
FINANCIAL 8.44%
Associates First Capital Class A 335,700 25,093,575
Fannie Mae 605,000 $ 36,224,375
Freddie Mac 620,000 28,713,750
Heller Financial* 167,000 4,509,000
MBNA Corp 660,000 22,357,500
Northern Trust 257,000 18,761,000
------------
135,659,200
------------
INSURANCE 26.88%
AXA-UAP* 139,000 16,307,388
ACE Ltd* 275,000 10,415,625
AEGON NV Ord American
Registered Shrs Representing
Dutch Bearer Shrs 274,766 36,509,532
Allstate Corp 270,000 25,987,500
American General 355,149 23,661,802
American International Group 467,500 61,505,469
Chubb Corp 360,000 28,417,500
Everest Reinsurance Holdings 630,000 25,987,500
Frontier Insurance Group 82,000 2,173,000
Hartford Life Class A 305,700 15,113,044
ING Groep NV 373,700 24,284,326
ING Groep NV Sponsored
ADR Representing Ord Shrs 140,683 9,460,932
Lincoln National 365,000 32,416,562
SCOR SA 132,000 8,133,521
SunAmerica Inc 700,700 34,991,206
Torchmark Corp 220,000 9,803,750
Transamerica Corp 165,000 19,057,500
Travelers Group 481,000 29,431,188
UNUM Corp 340,000 18,275,000
------------
431,932,345
------------
INSURANCE BROKERS 1.63%
Regions Financial 600,000 26,175,000
------------
INVESTMENT BANK/
BROKER FIRM 6.64%
Bear Stearns 296,400 16,913,325
Lehman Brothers Holdings 220,000 15,633,750
Merrill Lynch & Co 90,000 7,897,500
Morgan Stanley Dean Witter & Co 383,000 30,209,125
Paine Webber Group 372,700 16,701,619
Price (T Rowe) Associates 116,000 8,758,000
Waddell & Reed Financial Class A 424,400 10,503,900
------------
106,617,219
------------
RAILROADS 1.26%
Kansas City Southern Industries 450,000 20,334,375
------------
<PAGE>
SAVINGS & LOAN 5.37%
Ahmanson (H F) & Co 380,000 28,975,000
Charter One Financial 286,450 19,389,084
Golden West Financial 132,700 13,974,969
Washington Mutual 341,000 23,891,312
------------
86,230,365
------------
TOTAL COMMON STOCKS
(Cost $1,122,436,235) $1,530,913,965
------------
SHORT-TERM INVESTMENTS 4.73%
Commercial Paper 1.95%
MACHINERY 1.95%
Deere & Co
5.510%, 5/4/1998
(Cost $31,301,000) $ 31,301,000 31,301,000
------------
Repurchase Agreements 2.78%
Repurchase Agreement with
State Street Bank & Trust Co
dated 4/30/1998 due 5/1/1998
at 5.470%, repurchased at
$44,637,781 (Collateralized by
US Treasury Bonds due
11/15/2015 at 9.875%
value $45,809,346)
(Cost $44,631,000) $ 44,631,000 44,631,000
-------------
TOTAL SHORT-TERM INVESTMENTS
(Cost $75,932,000) 75,932,000
-------------
TOTAL INVESTMENT
SECURITIES AT VALUE 100.00%
(Cost $1,198,368,235)
(Cost for Income Tax Purposes
$1,198,562,540) $1,606,845,965
=============
GOLD Portfolio
COMMON STOCKS 100.00%
CONSUMER -- JEWELRY,
NOVELTIES & GIFTS 0.85%
De Beers Consolidated Mines
Deferred ADR Representing
Ord Shrs SF 50,000 $ 1,287,500
------------
GOLD & PRECIOUS
METALS MINING 99.15%
Aber Resources Ltd* CA 300,000 3,412,500
Apex Silver Mines Ltd* CJ 500,000 5,843,750
Claude Resources* CA 346,700 727,148
Coeur D'Alene Mines* 500,000 5,843,750
Crown Resources*~ 960,000 4,200,000
Emperor Mines Ltd* AS 3,000,000 1,290,919
Euro-Nevada Mining CA 750,000 13,501,631
Francisco Gold* CA 261,200 2,830,431
Franco-Nevada Mining Ltd CA 600,000 14,681,386
Freeport McMoRan Copper
& Gold Class A 406,247 7,236,275
Geomaque Explorations Ltd* CA 1,500,000 2,726,543
<PAGE>
Getchell Gold* 300,000 7,387,500
Gitennes Exploration* CA 800,000 1,482,121
Glenmore Highlands* CA 500,000 $ 611,724
Golden Knight Resources* CA 450,000 506,250
Golden Star Resources* 1,000,000 3,625,000
Guyanor Ressources SA
Class B*~ FR 1,000,000 1,503,094
Hecla Mining* 500,000 3,187,500
IAMGOLD* CA 800,000 2,936,277
Indochina Goldfields Ltd*^^ CA 1,000,000 1,363,272
Lihir Gold Ltd Sponsored ADR
Representing 20 Ord Shrs* AS 350,000 12,381,250
Manhattan Minerals* CA 400,000 1,118,582
Meridian Gold* CA 1,200,000 4,725,000
Metallica Resources* CA 500,000 750,000
Minefinders Corp Ltd* CA 100,000 137,725
Monarch Resources* CA 235,000 31,215
Nevsun Resources Ltd* CA 800,000 1,661,094
Newcrest Mining Ltd* AS 150,000 273,831
Newmont Mining 100,000 3,218,750
Original Sixteen to One Mine* CA 91,100 159,425
Orvana Minerals* CA 500,000 664,158
Pacific Rim Mining*~ CA 924,900 905,254
Pangea Goldfields* CA 300,000 388,008
Placer Dome CA 500,000 7,375,000
Queenstake Resources Ltd* CA 500,000 160,796
Repadre Capital* CA 500,000 1,957,518
Rio Narcea Gold Mines Ltd* CA 556,900 1,849,348
SEMAFO Inc* CA 100,000 125,141
Solitario Resources* CA 204,000 427,858
SouthernEra Resources Ltd* CA 500,000 3,233,400
Star Resources*~ CA 3,370,000 612,563
Stillwater Mining* 300,000 7,931,250
Sutton Resources Ltd*~ CA 777,900 6,125,963
Trillion Resources Ltd* CA 509,900 534,717
Western Deep Levels Ltd ADR
Representing Ord Shrs SF 280,000 7,875,000
------------
149,519,917
------------
TOTAL INVESTMENT
SECURITIES AT VALUE 100.00%
(Cost $191,142,677)
(Cost for Income Tax Purposes
$193,523,517) $150,807,417
============
HEALTH SCIENCES Portfolio
COMMON STOCKS
& WARRANTS 94.27%
BIOTECHNOLOGY 5.85%
Algos Pharmaceutical* 3,000 $98,625
Creative BioMolecules* 199,500 1,483,781
Ecogen Technologies I*^~ 100 1
Emisphere Technologies*~ 395,000 $ 6,591,562
Genentech Inc* 325,000 22,506,250
MedClone Trust*@^ 144,405 0
<PAGE>
MedImmune Inc* 445,000 23,473,750
PathoGenesis Corp* 95,600 3,788,150
Sepracor Inc* 88,000 4,070,000
Titan Pharmaceuticals* 488,215 2,166,454
Unisyn Technologies*^~ 31,132 10,896
Xenometrix Inc*^ 145,641 110,596
------------
64,300,065
------------
HEALTH CARE DRUGS --
PHARMACEUTICALS 62.35%
Abbott Laboratories 364,000 26,617,500
ALZA Corp 423,000 20,277,563
American Home Products 617,600 57,514,000
Bristol-Myers Squibb 680,000 71,995,000
Forest Laboratories* 450,000 16,284,375
Glaxo Wellcome PLC
Sponsored ADR Representing
2 Ord Shrs 735,000 41,573,438
ICN Pharmaceuticals 784,500 38,636,625
Johnson & Johnson 475,000 33,903,125
Lilly (Eli) & Co 470,300 32,715,244
Merck & Co 655,000 78,927,500
Monsanto Co 275,000 14,540,625
Novartis AG Registered Shrs++ 9,330 15,426,218
Pfizer Inc 457,500 52,069,219
Schering-Plough Corp 742,000 59,452,750
Shire Pharmaceuticals Group PLC* 639,500 4,672,596
SmithKline Beecham PLC
Sponsored ADR Representing
5 Ord Shrs 845,700 50,372,006
Warner-Lambert Co 373,000 70,566,938
------------
685,544,722
------------
HEALTH CARE -- SERVICES 8.99%
ABR Information Services* 200,000 5,787,500
Cognizant Corp 381,900 19,643,981
Columbia/HCA Healthcare 668,100 22,005,544
HBO & Co 333,000 19,917,562
McKesson Corp 445,000 31,455,937
------------
98,810,524
------------
MEDICAL EQUIPMENT &
DEVICES 17.08%
Beckman Coulter 296,100 16,489,069
Becton Dickinson 224,400 15,623,850
Cambridge Heart* 381,112 3,620,564
Clarus Medical Systems
Warrants (Exp 2000)*@^ 2,224 0
Guidant Corp 804,000 53,767,500
IDEXX Laboratories* 354,200 7,836,675
Medtronic Inc 560,400 29,491,050
ResMed Inc*~ 445,000 $ 17,605,313
Sofamor/Danek Group* 494,000 43,348,500
------------
187,782,521
------------
<PAGE>
TOTAL COMMON STOCKS
& WARRANTS
(Cost $729,682,202) 1,036,437,832
------------
PREFERRED STOCKS 0.65%
BIOTECHNOLOGY 0.21%
Ingenex Inc, Series B, Pfd*^ 103,055 600,000
MedClone Trust, Series G
Conv Pfd*^ 581,396 75,581
Osiris Therapeutics, Series C
Conv Pfd*^ 382,353 1,300,000
Unisyn Technologies,
Series A, Conv Pfd*^~ 359,501 125,825
Series B, Pfd*^ ~ 250,500 87,675
Series C, Pfd*^ ~ 349,376 122,282
------------
2,311,363
------------
HEALTH CARE -- SERVICES 0.29%
Physicians Online, Series A, Pfd*^~ 361,350 3,219,629
------------
MEDICAL EQUIPMENT
& DEVICES 0.15%
Clarus Medical Systems
Series I, Pfd*^ 106,664 533,320
Series II, Pfd*^ 22,239 111,196
Janus Biomedical, Series A
Conv Pfd*^~ 400,000 1,000,000
OrbTek Inc, Series A, Conv Pfd*^~ 476,190 1
------------
1,644,517
------------
TOTAL PREFERRED STOCKS
(Cost $9,021,517) 7,175,509
------------
OTHER SECURITIES 1.03%
BIOTECHNOLOGY 1.03%
Axogen Ltd, Units* (Each unit
consists of one cmn shr
of Axogen and one wrnt to purchase
ELAN representing one ADR)
(Cost $3,555,000) 197,500 11,356,250
------------
SHORT-TERM INVESTMENTS --
REPURCHASE AGREEMENTS 4.05%
Repurchase Agreement with
State Street Bank & Trust Co
dated 4/30/1998 due 5/1/1998
at 5.470%, repurchased at
$44,588,774 (Collateralized
by US Treasury Bonds due
11/15/2015 at 9.875%
value $ 45,758,170)
(Cost $44,582,000) $ 44,582,000 44,582,000
------------
TOTAL INVESTMENT
SECURITIES AT VALUE 100.00%
(Cost $786,840,719)
(Cost for Income Tax Purposes
$789,201,415) $1,099,551,591
=============
<PAGE>
LEISURE Portfolio
COMMON STOCKS
& WARRANTS 91.12%
AIRLINES 0.20%
Virgin Express Holdings PLC
Sponsored ADR Representing
1/3 Ord Shr* BE 21,600 $ 486,000
------------
BROADCASTING 5.79%
CBS Corp 98,000 3,491,250
Central European Media
Enterprises Ltd Class A* BD 82,800 2,313,225
Chancellor Media* 105,400 4,999,912
Sinclair Broadcast Group* 40,000 2,075,000
Television Broadcasts Ltd
Sponsored ADR Representing
2 Ord Shrs HK 194,500 994,323
------------
13,873,710
------------
CABLE 18.83%
Cablevision Systems Class A* 10,000 614,375
Comcast Cable Partners Ltd
Class A* UK 110,000 1,409,375
Comcast Corp Special Class A 161,578 5,786,512
Flextech PLC* UK 890,000 7,365,996
Tele-Communications Inc -
International Class A* 315,700 6,018,031
Liberty Media Group Class A* 365,625 12,134,180
TCI Group Series A* 154,086 4,969,273
United International Holdings
Warrants (Exp 1999)* 3,225 48,375
United Video Satellite Group
Class A* 155,000 6,771,563
------------
45,117,680
------------
COMMUNICATIONS -- EQUIPMENT
& MANUFACTURING 1.41%
Pittway Corp Class A 45,300 3,386,175
------------
COMPUTER RELATED 1.58%
Bell & Howell* 112,900 3,118,863
Powerhouse Technologies* 68,000 671,500
------------
3,790,363
------------
CONSUMER -- JEWELRY,
NOVELTIES & GIFTS 2.81%
De Beers Consolidated Mines
Deferred ADR Representing
Ord Shrs SF 230,000 5,922,500
TAG Heuer International SA
Sponsored ADR Representing
1/10 Shr* SZ 75,000 $ 815,625
------------
6,738,125
------------
<PAGE>
CONTAINERS 0.09%
EarthShell Corp* 15,000 219,375
------------
ENTERTAINMENT 9.01%
Cineplex Odeon* CA 1,286,000 2,330,875
Disney (Walt) Co 28,133 3,497,284
Granada Group PLC UK 115,229 1,984,428
Metromedia International Group* 100,000 1,662,500
Time Warner 100,000 7,850,000
Viacom Inc
Class A* 45,040 1,670,516
Class B* 28,802 2,601,060
------------
21,596,663
------------
FOODS 3.83%
Heineken NV NL 39,600 9,184,081
------------
GAMING 2.10%
GTECH Holdings* 57,906 965,938
Grand Casinos* 55,000 2,077,378
MGM Grand* 45,000 1,518,750
Mirage Resorts* 21,000 463,312
------------
5,025,378
------------
HOUSEHOLD FURNITURE
& APPLIANCES 0.50%
Harman International Industries 27,770 1,194,110
------------
LEISURE TIME 9.24%
AMF Bowling* 70,000 2,025,625
Amalgamated Holdings Ltd AS 337,008 1,186,500
Bally Total Fitness Holdings* 78,800 2,423,100
Carnival Corp Class A 79,200 5,509,350
Cedar Fair LP 144,000 3,816,000
K2 Inc 79,000 1,792,313
Premier Parks* 7,500 417,187
Royal Caribbean Cruises Ltd 44,000 3,008,500
Steiner Leisure Ltd* 48,300 1,524,469
Vail Resorts* 15,000 438,750
------------
22,141,794
------------
LODGING -- HOTELS 3.00%
Extended Stay America* 34,400 449,350
Hilton Hotels 195,200 6,234,200
Suburban Lodges of America* 27,000 499,500
------------
7,183,050
------------
PUBLISHING 12.44%
Belo (A H) Corp Class A 110,000 5,823,125
Central Newspapers Class A 10,000 732,500
Harcourt General 66,000 3,444,375
Houghton Mifflin 56,100 1,826,756
McClatchy Newspapers Class A 122,500 3,667,344
McGraw-Hill Cos 56,700 4,390,706
News Corp Ltd Sponsored ADR
Representing 4 Ord Shrs AS 60,000 $ 1,638,750
<PAGE>
Pearson PLC UK 50,000 783,332
Petersen Cos Class A* 28,300 735,800
Scholastic Corp* 20,000 745,000
Scripps (E W) Co Class A 70,000 3,968,125
Times Mirror Series A 33,400 2,043,662
------------
29,799,475
------------
REAL ESTATE
INVESTMENT TRUST 1.06%
Golf Trust of America 25,000 815,625
Mills Corp 69,000 1,720,687
------------
2,536,312
------------
RETAIL 2.03%
Wal-Mart Stores 96,000 4,854,000
------------
SERVICES 10.63%
Cendant Corp* 97,367 2,434,175
Cordiant PLC UK 637,500 1,247,103
Omnicom Group 220,000 10,422,500
Saatchi & Saatchi PLC* UK 637,500 1,684,122
WPP Group PLC UK 1,525,000 9,676,491
------------
25,464,391
------------
TELECOMMUNICATIONS --
CELLULAR & WIRELESS 0.88%
Specialty Teleconstructors* 56,400 2,100,900
------------
TELECOMMUNICATIONS --
LONG DISTANCE 0.25%
PT Pasifik Satelit Nusantara
Sponsored ADR Representing
3 Ord Shrs* ID 40,000 605,000
------------
TELEPHONE 3.02%
US West Media Group* 191,400 7,225,350
------------
TOYS 2.42%
Galoob Toys* 91,700 991,506
Hasbro Inc 20,000 736,250
Mattel Inc 70,195 2,689,346
Nintendo Co Ltd JA 15,000 1,378,188
------------
5,795,290
------------
TOTAL COMMON STOCKS
& WARRANTS
(Cost $141,488,467) 218,317,222
------------
PREFERRED STOCKS 3.64%
ENTERTAINMENT 0.18%
Village Roadshow Ltd
Class A, Pfd AS 250,000 436,826
------------
LEISURE TIME 1.60%
Royal Caribbean Cruises Ltd
Series A, 7.250%, Conv Pfd 35,000 3,845,625
------------
<PAGE>
PUBLISHING 1.86%
News Corp Ltd Sponsored ADR
Representing 4 Ltd Voting
Pfd Shrs AS 190,978 $ 4,452,175
------------
TOTAL PREFERRED STOCKS
(Cost $4,919,946) 8,734,626
------------
OTHER SECURITIES 3.38%
TOBACCO 3.38%
Cie Financiere Richemont
"A" Units (Each unit
consists of 1 bearer shr
at 100 Swiss Francs par
in the Co and 1 bearer
participation certificate
at no par issued Richemont
SA, Luxembourg)
(Cost $8,234,891) SZ 5,655 8,105,825
------------
SHORT-TERM INVESTMENTS --
REPURCHASE AGREEMENTS 1.86%
Repurchase Agreement with
State Street Bank & Trust Co
dated 4/30/1998 due 5/1/1998
at 5.470%, repurchased at
$4,454,677 (Collateralized
by US Treasury Bonds due
11/15/2015 at 9.875%
value $4,576,548)
(Cost $4,454,000) $ 4,454,000 4,454,000
------------
TOTAL INVESTMENT
SECURITIES AT VALUE 100.00%
(Cost $159,097,304)
(Cost for Income Tax Purposes
$159,107,804) $239,611,673
============
TECHNOLOGY Portfolio
COMMON STOCKS 95.89%
AEROSPACE & DEFENSE 1.70%
Orbital Sciences* 425,000 $ 18,912,500
------------
BIOTECHNOLOGY 0.95%
Algos Pharmaceutical* 100,000 3,287,500
Genzyme Corp* 200,000 6,187,500
Titan Pharmaceuticals* 244,108 1,083,229
------------
10,558,229
------------
CABLE 0.00%
Future Communications*~ 160,000 1
------------
<PAGE>
COMMUNICATIONS -- EQUIPMENT
& MANUFACTURING 4.85%
Advanced Fibre
Communications* 65,000 $ 2,754,375
Comverse Technology* 75,000 3,553,125
DSP Communications* 100,000 1,668,750
GeoTel Communications* 300,000 8,287,500
JDS Fitel* 672,000 12,543,776
Pittway Corp Class A 296,700 22,178,325
Tellabs Inc* 40,000 2,835,000
------------
53,820,851
------------
COMPUTER SOFTWARE
& SERVICE 25.34%
BMC Software* 200,000 18,712,500
Brio Technology* 13,000 143,000
CBT Group PLC Sponsored
ADR Representing 1/2 Ord Shr* 600,000 30,525,000
Cadence Design Systems* 300,000 10,893,750
Computer Associates
International 200,000 11,712,500
Compuware Corp* 400,000 19,550,000
DataWorks Corp* 25,000 553,125
Edwards (J D) & Co* 712,000 25,365,000
Electronic Arts* 240,000 11,100,000
HNC Software* 138,800 5,413,200
Keane Inc* 450,000 22,612,500
Learning Co* 352,300 10,084,587
Made2Manage Systems* 62,200 898,013
MEMCO Software Ltd* 200,000 6,000,000
Microsoft Corp* 40,000 3,605,000
Networks Associates* 350,000 23,975,000
Oracle Corp* 40,000 1,035,000
PeopleSoft Inc* 400,000 18,600,000
PLATINUM technology* 125,000 3,187,500
Policy Management Systems* 300,000 24,187,500
Sapiens International NV* 100,000 900,000
Software AG Systems* 100,000 2,475,000
Sterling Commerce* 300,000 12,768,750
Sterling Software* 400,000 10,575,000
Symantec Corp* 100,000 2,900,000
Wind River Systems* 100,000 3,462,500
------------
281,234,425
------------
COMPUTER SYSTEMS 2.08%
GEAC Computer Ltd* 300,000 11,818,515
Systems & Computer
Technology* 200,000 11,300,000
------------
23,118,515
------------
COMPUTERS -- HARDWARE 11.95%
HMT Technology* 365,000 4,745,000
Hewlett-Packard Co 50,000 3,765,625
International Business Machines 427,500 49,536,562
Kentek Information Systems 67,000 586,250
Lexmark International Group
Class A* 600,000 34,725,000
<PAGE>
Network Appliance* 300,000 $ 10,818,750
Quantum Corp* 75,000 1,762,500
Sun Microsystems* 25,000 1,029,688
Unisys Corp* 1,100,000 24,681,250
Western Digital* 50,000 987,500
------------
132,638,125
------------
COMPUTERS -- NETWORKING 2.28%
Ascend Communications* 50,000 2,178,125
Cisco Systems* 275,000 20,143,750
Novell Inc* 100,000 1,000,000
XL Connect Solutions* 100,000 1,987,500
------------
25,309,375
------------
COMPUTERS -- PERIPHERALS 1.84%
EMC Corp* 350,000 16,143,750
Seagate Technology* 50,000 1,334,375
Storage Technology* 35,000 2,955,313
------------
20,433,438
------------
DISTRIBUTION 0.30%
Ingram Micro Class A* 71,700 3,271,312
------------
ELECTRICAL EQUIPMENT 1.39%
Alpine Group* 70,082 1,458,582
Honeywell Inc 150,000 13,968,750
------------
15,427,332
------------
ELECTRONICS -- COMPONENT
DISTRIBUTION 0.95%
Superior TeleCom 250,000 10,546,875
------------
ELECTRONICS --
INSTRUMENTS 1.96%
SanDisk Corp* 595,200 12,424,800
Symbol Technologies 37,500 1,443,750
Teradyne Inc* 140,000 5,110,000
Uniphase Corp* 50,000 2,712,500
------------
21,691,050
------------
ELECTRONICS --
SEMICONDUCTOR 2.42%
Applied Micro Circuits* 174,700 4,826,087
Artisan Components* 99,500 1,753,688
Intel Corp 65,000 5,252,812
Linear Technology 20,000 1,610,000
Maxim Integrated Products* 40,000 1,615,000
SIPEX Corp* 174,500 3,468,187
Texas Instruments 40,000 2,562,500
Xilinx Inc* 125,000 5,718,750
------------
26,807,024
------------
<PAGE>
ENTERTAINMENT 1.31%
Viacom Inc Class B* 250,000 14,500,000
------------
EQUIPMENT --
SEMICONDUCTOR 1.02%
Etec Systems* 200,000 11,350,000
------------
HEALTH CARE DRUGS --
PHARMACEUTICALS 0.95%
Medicis Pharmaceutical Class A* 10,000 $ 427,500
SangStat Medical* 300,000 10,143,750
------------
10,571,250
------------
HEALTH CARE RELATED 3.21%
Eclipse Surgical Technologies* 100,000 1,162,500
HBO & Co 200,000 11,962,500
Novoste Corp* 25,000 618,750
Shared Medical Systems 300,000 21,881,250
------------
35,625,000
------------
INVESTMENT BANK/
BROKER FIRM 0.17%
SEI Investments 25,000 1,846,875
------------
LEISURE TIME 3.76%
International Game Technology 1,500,000 41,718,750
------------
MANUFACTURING 0.90%
Thermo Electron* 250,000 9,953,125
------------
RETAIL 2.02%
Tandy Corp 450,000 22,387,500
------------
SERVICES 20.11%
America Online* 280,000 22,400,000
Automatic Data Processing 218,800 14,645,925
BISYS Group* 55,000 2,172,500
Ceridian Corp* 540,000 30,543,750
Comdisco Inc 400,000 17,700,000
Computer Sciences* 150,000 7,912,500
DST Systems* 300,000 16,537,500
Electronic Data Systems 60,000 2,580,000
Equifax Inc 600,000 23,212,500
First Data 100,000 3,387,500
Fiserv Inc* 400,000 26,150,000
Harbinger Corp* 50,000 1,818,750
LGS Group* 185,050 2,108,747
Manhattan Associates* 39,400 891,425
National Data 300,000 12,243,750
Paychex Inc 500,000 27,156,250
SunGard Data Systems* 200,000 7,125,000
TeleTech Holdings* 118,800 1,782,000
Xerox Corp 25,000 2,837,500
------------
223,205,597
------------
<PAGE>
TELECOMMUNICATIONS --
CELLULAR & WIRELESS 1.93%
AirTouch Communications* 350,000 18,593,750
NEXTEL Communications
Class A* 100,000 2,868,750
------------
21,462,500
------------
TELECOMMUNICATIONS --
LONG DISTANCE 2.50%
fONOROLA Inc* 200,000 8,976,619
General Instrument* 90,000 $ 2,019,375
LCI International* 300,000 11,925,000
Premiere Technologies* 150,000 4,781,250
------------
27,702,244
------------
TOTAL COMMON STOCKS
(Cost $859,424,402) 1,064,091,893
------------
PERFERRED STOCKS 0.03%
BIOTECHNOLOGY 0.03%
Ingenex Inc, Series B, Pfd*^
(Cost $300,000) 51,527 300,000
------------
SHORT-TERM INVESTMENTS --
REPURCHASE AGREEMENTS 4.08%
Repurchase Agreement with
State Street Bank & Trust Co
dated 4/30/1998 due 5/1/1998
at 5.470%, repurchased at
$45,298,882 (Collateralized
by US Treasury Bonds due
8/15/2017 at 8.875%
value $46,525,087)
(Cost $45,292,000) $ 45,292,000 45,292,000
------------
TOTAL INVESTMENT
SECURITIES AT VALUE 100.00%
(Cost $905,016,402)
(Cost for Income Tax Purposes
$907,323,367)
$1,109,683,893
============
UTILITIES Portfolio
COMMON STOCKS
& RIGHTS 100.00%
OIL & GAS RELATED 2.53%
Enron Corp 42,000 $2,065,875
Williams Cos 68,000 2,150,500
------------
4,216,375
------------
SERVICES 1.64%
Havas SA 30,000 2,721,942
------------
<PAGE>
TELECOMMUNICATIONS 21.96%
AT&T Corp 49,900 2,997,119
Advanced Communications Group* 90,400 1,254,300
ICG Communications* 118,000 4,130,000
LCI International* 84,900 3,374,775
MCI Communications 50,000 2,515,625
NEXTEL Communications
Class A* 100,000 2,868,750
Portugal Telecom SA Sponsored
ADR Representing Ord Shrs* 68,800 3,698,000
Sprint Corp 76,000 5,191,750
US WEST Communications Group 88,300 $ 4,657,825
WorldCom Inc* 137,295 5,873,655
------------
36,561,799
------------
Utilities 73.87%
ELECTRIC 32.37%
Allegheny Energy 70,100 2,146,812
CMS Energy 55,700 2,433,394
Carolina Power & Light 65,300 2,811,981
Consolidated Edison 67,000 3,031,750
DTE Energy 66,200 2,594,212
Duke Energy 45,009 2,604,896
Edison International 92,600 2,760,637
FPL Group 43,300 2,687,306
GPU Inc 53,700 2,127,862
Houston Industries 96,600 2,807,437
Interstate Energy 89,946 2,838,921
New Century Energies 65,400 3,106,500
NIPSCO Industries 105,400 2,826,038
Northern States Power 39,300 2,215,538
PG&E Corp 76,000 2,460,500
PP&L Resources 107,000 2,467,688
PacifiCorp 89,600 2,083,200
Pinnacle West Capital 58,700 2,597,475
SCANA Corp 77,200 2,306,350
Texas Utilities 53,900 2,156,000
Unicom Corp 81,700 2,839,075
------------
53,903,572
------------
NATURAL GAS 8.12%
Coastal Corp 47,000 3,357,562
Columbia Energy Group 26,000 2,112,500
NGC Corp 88,625 1,307,219
New Jersey Resources 55,800 2,106,450
ONEOK Inc 51,000 2,065,500
TransCanada PipeLines Ltd 115,000 2,565,938
------------
13,515,169
------------
<PAGE>
TELEPHONE 33.38%
ALLTEL Corp 71,300 3,048,075
Ameritech Corp 132,000 5,618,250
BCE Inc 117,600 5,005,350
Bell Atlantic 45,135 4,222,943
BellSouth Corp 80,900 5,192,769
Century Telephone Enterprises 92,550 3,939,159
Cincinnati Bell 123,300 4,716,225
GTE Corp 81,800 4,780,187
Intermedia Communications* 44,000 3,211,313
MetroNet Communications
Class B Non-Voting Shrs* 197,000 4,925,000
SBC Communications 145,000 6,008,438
Telefonica de Espana SA
Sponsored ADR Representing
3 Ord Shrs 39,272 $ 4,906,546
Telefonica de Espana SA
Sponsored ADR Rights(Exp 1998)* 8 18
------------
55,574,273
------------
TOTAL UTILTIES 122,993,014
------------
TOTAL INVESTMENT
SECURITIES AT VALUE 100.00%
(Cost $121,273,799)
(Cost for Income Tax Purposes
$121,274,476) $166,493,130
============
</TABLE>
* Security is non-income producing.
@ Security has no market value at April 30, 1998.
~ Security is an affiliated company (See Notes).
^^ Securities are registered pursuant to Rule 144A and
may be deemed to be restricted for resale to
institutional investors.
++ Security has been designated as collateral for
forward foreign currency contracts.
^ The following are restricted securities at April 30,
1998:
<PAGE>
<TABLE>
<CAPTION>
Value as
Acquisition Acquisition % of
Description Date(s) Cost Net Assets
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Environmental Services Portfolio
Cyclean Inc, Series D, Pfd 2/23/94 $499,998 0.00%
========
Health Sciences Portfolio
Clarus Medical Systems
Series I, Pfd 12/23/92 $2,000,000 0.05%
Series II, Pfd 5/3/95 111,196 0.01
Warrants 5/3/95 0 0.00
Ecogen Technologies I 11/18/92-
1/28/94 1,140,000 0.00
Ingenex Inc, Series B, Pfd 9/27/94 600,000 0.05
Janus Biomedical
Series A, Conv Pfd 3/2/94 1,000,000 0.09
MedClone Trust 9/30/97 101,310 0.00
MedClone Trust
Series G, Conv Pfd 10/21/93 1,000,001 0.01
OrbTek Inc, Series A
Conv Pfd 5/13/94 999,999 0.00
Osiris Therapeutics
Series C, Conv Pfd 5/26/94 $1,300,000 0.12
Physicians Online
Series A, Pfd 8/31/93 963,600 0.29
Unisyn Technologies 2/28/94 1,500,000 0.00
Unisyn Technologies
Series A, Conv Pfd 12/27/94 359,501 0.01
Series B, Pfd 2/5/96 250,500 0.01
Series C, Pfd 4/25/97 436,720 0.01
Xenometrix Inc 1/7/94 1,400,000 0.01
--------
0.66%
========
Technology Portfolio
Ingenex Inc, Series B, Pfd 9/27/94 $ 300,000 0.03%
--------
0.03%
========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Forward Foreign Currency Contracts
Open at April 30, 1998:
Currency Currency Unrealized
Units Value Gain
Currency/Value Date Sold (US$) (Loss)
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Health Sciences Portfolio
Swiss Franc
5/19/1998 15,000,000 $11,134,632 $543,616
=============================
Summary of Investments by Country
% of
Country Investment
Country Code Securities Value
- ---------------------------------------------------------------------------------------------
Gold Portfolio
Australia AS 9.25% $ 13,946,000
Canada CA 51.54 77,722,048
Cayman Islands CJ 3.87 5,843,750
France FR 1.00 1,503,094
South Africa SF 6.07 9,162,500
United States US 28.27 42,630,025
-------------------------
100.00% $150,807,417
=========================
Leisure Portfolio
Australia AS 3.22% $ 7,714,251
Belgium BE 0.20 486,000
Bermuda BD 0.97 2,313,225
Canada CA 0.97% 2,330,875
Hong Kong HK 0.42 994,323
Indonesia ID 0.25 605,000
Japan JA 0.58 1,378,188
Netherlands NL 3.83 9,184,081
South Africa SF 2.47 5,922,500
Switzerland SZ 3.72 8,921,450
United Kingdom UK 10.08 24,150,847
United States US 73.29 175,610,933
-------------------------
100.00% $239,611,673
=========================
See Notes to Financial Statements
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
INVESCO Strategic Portfolios, Inc.
Statement of Assets and Liabilities
April 30, 1998
UNAUDITED
Environmental Financial
Energy Services Services Gold
Portfolio Portfolio Portfolio Portfolio
--------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS
Investment Securities:
At Cost~ $181,498,140 $17,185,035 $1,198,368,235 $191,142,677
==========================================================================
At Value~ $192,737,989 $20,458,320 $1,606,845,965 $150,807,417
Cash 8,857,727 62,670 173,610 3,711,455
Receivables:
Investment Securities Sold 7,931,927 767,862 10,581,127 7,410,049
Fund Shares Sold 7,565,848 494,268 26,281,039 1,571,791
Dividends and Interest 100,220 8,408 2,496,619 142,862
Prepaid Expenses and Other Assets 68,709 40,204 123,042 67,842
--------------------------------------------------------------------------
TOTAL ASSETS 217,262,420 21,831,732 1,646,501,402 163,711,416
--------------------------------------------------------------------------
LIABILITIES
Payables:
Investment Securities Purchased 5,564,749 0 9,941,966 6,990,297
Fund Shares Repurchased 4,451,388 59,514 2,366,091 10,464,658
Depreciation on Forward Foreign
Currency Contracts 0 0 37,024 0
Accrued Distribution Expenses 40,888 3,714 201,969 32,608
Accrued Expenses and Other Payables 17,049 4,948 56,101 43,886
--------------------------------------------------------------------------
TOTAL LIABILITIES 10,074,074 68,176 12,603,151 17,531,449
--------------------------------------------------------------------------
Net Assets at Value $207,188,346 $21,763,556 $1,633,898,251 $146,179,967
==========================================================================
NET ASSETS
Paid-in Capital* $199,342,507 $17,814,246 $1,160,248,386 $303,072,832
Accumulated Undistributed
(Distributions in Excess of)
Net Investment Income (Loss) (55,802) (103,701) 6,214,477 (4,277,467)
Accumulated Undistributed Net
Realized Gain (Loss) on
Investment Securities and
Foreign Currency Transactions (3,338,208) 779,726 58,955,470 (112,281,661)
Net Appreciation (Depreciation)
of Investment Securities and
Foreign Currency Transactions 11,239,849 3,273,285 408,479,918 (40,333,737)
--------------------------------------------------------------------------
Net Assets at Value $207,188,346 $21,763,556 $1,633,898,251 $146,179,967
==========================================================================
Shares Outstanding 14,219,979 2,353,824 51,185,875 54,914,198
Net Asset Value, Offering
and Redemption
Price per Share $14.57 $9.25 $31.92 $2.66
==========================================================================
<PAGE>
</TABLE>
~ Investment securities at cost and value at April 30, 1998 include repurchase
agreements of $1,459,000 and $44,631,000 for Energy and Financial Services
Portfolios, respectively.
* 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>
<TABLE>
<CAPTION>
INVESCO Strategic Portfolios, Inc.
Statement of Assets and Liabilities (Continued)
April 30, 1998
UNAUDITED
Health
Sciences Leisure Technology Utilities
Portfolio Portfolio Portfolio Portfolio
----------------------------------------------------------------------------
ASSETS
Investment Securities:
<S> <C> <C> <C> <C>
At Cost~ $786,840,719 $159,097,304 $905,016,402 $121,273,799
============================================================================
At Value~ $1,099,551,591 $239,611,673 $1,109,683,893 $166,493,130
Cash 112 3,994 420 0
Receivables:
Investment Securities Sold 975,672 5,574,762 55,359,705 6,143,236
Fund Shares Sold 2,345,523 942,762 18,422,165 1,120,548
Dividends and Interest 1,173,461 368,546 119,057 570,397
Appreciation on Forward Foreign
Currency Contracts 541,171 0 0 0
Prepaid Expenses and Other Assets 97,730 48,339 106,621 67,209
----------------------------------------------------------------------------
TOTAL ASSETS 1,104,685,260 246,550,076 1,183,691,861 174,394,520
----------------------------------------------------------------------------
LIABILITIES
Payables:
Custodian 0 0 0 2,753,234
Distributions to Shareholders 0 0 0 46,991
Investment Securities Purchased 3,166,880 367,909 17,284,430 0
Fund Shares Repurchased 2,056,283 401,711 4,015,686 779,397
Accrued Distribution Expenses 120,855 27,121 164,349 38,520
Accrued Expenses and Other Payables 87,781 41,279 72,175 16,160
----------------------------------------------------------------------------
TOTAL LIABILITIES 5,431,799 838,020 21,536,640 3,634,302
----------------------------------------------------------------------------
Net Assets at Value $1,099,253,461 $245,712,056 $1,162,155,221 $170,760,218
============================================================================
NET ASSETS
Paid-in Capital* $678,684,068 $154,015,870 $991,894,629 $120,911,424
Accumulated Undistributed
(Distributions in Excess of)
Net Investment Income (Loss) 2,081,385 140,841 (1,725,289) (5,831)
Accumulated Undistributed Net
Realized Gain (Loss) on
Investment Securities and
Foreign Currency Transactions 105,239,557 11,041,148 (32,681,610) 4,635,294
Net Appreciation of Investment
Securities and Foreign
Currency Transactions 313,248,451 80,514,197 204,667,491 45,219,331
----------------------------------------------------------------------------
Net Assets at Value $1,099,253,461 $245,712,056 $1,162,155,221 $170,760,218
============================================================================
Shares Outstanding 18,950,284 8,363,479 37,589,195 11,643,944
Net Asset Value, Offering and
Redemption Price per Share $58.01 $29.38 $30.92 $14.67
============================================================================
<PAGE>
</TABLE>
~ Investment securities at cost and value at April 30, 1998 include repurchase
agreements of $44,582,000, $4,454,000 and $45,292,000 for Health Sciences,
Leisure and Technology Portfolios, respectively.
* 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>
<TABLE>
<CAPTION>
INVESCO Strategic Portfolios, Inc.
Statement of Operations
Six Months Ended April 30, 1998
UNAUDITED
Environmental Financial
Energy Services Services Gold
Portfolio Portfolio Portfolio Portfolio
------------------------------------------------------------------------
INVESTMENT INCOME
INCOME
<S> <C> <C> <C> <C>
Dividends $1,364,062 $ 55,781 $9,323,929 $ 434,653
Interest 126,555 42,429 3,453,955 240,607
Foreign Taxes Withheld (13,804) (924) (181,476) (25,872)
------------------------------------------------------------------------
TOTAL INCOME 1,476,813 97,286 12,596,408 649,388
------------------------------------------------------------------------
EXPENSES
Investment Advisory Fees 797,357 77,734 4,217,192 483,978
Distribution Expenses 179,241 11,086 673,921 120,693
Transfer Agent Fees 414,861 82,317 1,334,830 428,356
Administrative Fees 20,947 6,555 105,814 14,680
Custodian Fees and Expenses 28,014 5,366 95,153 36,128
Directors' Fees and Expenses 11,288 5,277 29,889 9,640
Professional Fees and Expenses 8,413 6,147 17,925 8,542
Registration Fees and Expenses 65,669 11,883 99,171 48,742
Reports to Shareholders 41,092 12,787 169,913 50,838
Other Expenses 7,233 1,138 29,573 4,387
------------------------------------------------------------------------
TOTAL EXPENSES 1,574,115 220,290 6,773,381 1,205,984
Fees and Expenses Absorbed by
Investment Adviser 0 (19,653) 0 0
Fees and Expenses Paid Indirectly (71,620) (1,217) (395,290) (38,708)
------------------------------------------------------------------------
NET EXPENSES 1,502,495 199,420 6,378,091 1,167,276
------------------------------------------------------------------------
NET INVESTMENT INCOME (LOSS) (25,682) (102,134) 6,218,317 (517,888)
------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENT SECURITIES
Net Realized Gain (Loss) on
Investment Securities and
Foreign Currency Transactions (2,924,600) 800,991 59,240,106 (44,181,837)
Change in Net Appreciation
(Depreciation) of Investment
Securities and Foreign Currency
Transactions (29,690,158) 1,496,868 221,732,018 22,705,103
-------------------------------------------------------------------------
NET GAIN (LOSS) ON
INVESTMENT SECURITIES (32,614,758) 2,297,859 280,972,124 (21,476,734)
-------------------------------------------------------------------------
Net Increase (Decrease) in
Net Assets from Operations $(32,640,440) $2,195,725 $287,190,441 $(21,994,622)
=========================================================================
See Notes to Financial Statements
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
INVESCO Strategic Portfolios, Inc.
Statement of Operations (Continued)
Six Months Ended April 30, 1998
UNAUDITED
Health
Sciences Leisure Technology Utilities
Portfolio Portfolio Portfolio Portfolio
------------------------------------------------------------------------
INVESTMENT INCOME
INCOME
<S> <C> <C> <C> <C>
Dividends $4,096,214 $ 999,091 $ 1,536,908 $2,496,112
Interest 3,579,982 544,804 2,451,643 402,845
Other Income 0 155,625 0 0
Foreign Taxes Withheld (160,919) (13,227) (19,276) (34,514)
-------------------------------------------------------------------------
TOTAL INCOME 7,515,277 1,686,293 3,969,275 2,864,443
-------------------------------------------------------------------------
EXPENSES
Investment Advisory Fees 3,318,949 847,102 3,398,406 678,451
Distribution Expenses 416,374 91,022 610,995 193,719
Transfer Agent Fees 1,400,933 466,392 1,456,845 263,949
Administrative Fees 81,316 21,942 83,483 18,569
Custodian Fees and Expenses 72,070 30,088 75,309 10,703
Directors' Fees and Expenses 28,271 9,975 29,313 8,163
Professional Fees and Expenses 19,503 9,699 17,296 8,370
Registration Fees and Expenses 54,340 28,566 90,001 16,792
Reports to Shareholders 223,435 67,483 206,095 30,097
Other Expenses 24,288 5,634 27,033 4,661
-------------------------------------------------------------------------
TOTAL EXPENSES 5,639,479 1,577,903 5,994,776 1,233,474
Fees and Expenses Absorbed by
Investment Adviser 0 0 0 (35,384)
Fees and Expenses Paid Indirectly (244,370) (49,233) (298,212) (52,406)
-------------------------------------------------------------------------
NET EXPENSES 5,395,109 1,528,670 5,696,564 1,145,684
-------------------------------------------------------------------------
NET INVESTMENT INCOME (LOSS) 2,120,168 157,623 (1,727,289) 1,718,759
-------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENT SECURITIES
Net Realized Gain (Loss) on
Investment Securities and
Foreign Currency Transactions 105,647,122 11,878,921 (30,671,871) 4,671,865
Change in Net Appreciation of
Investment Securities and
Foreign Currency Transactions 78,391,124 31,669,537 110,476,377 27,702,785
--------------------------------------------------------------------------
NET GAIN ON INVESTMENT SECURITIES 184,038,246 43,548,458 79,804,506 32,374,650
--------------------------------------------------------------------------
Net Increase in Net Assets from
Operations $186,158,414 $43,706,081 $78,077,217 $34,093,409
==========================================================================
See Notes to Financial Statements
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
INVESCO Strategic Portfolios, Inc.
Statement of Changes in Net Assets
Energy Environmental Services Financial Services
Portfolio Portfolio Portfolio
Six Months Year Six Months Year Six Months Year
Ended Ended Ended Ended Ended Ended
April 30 October 31 April 30 October 31 April 30 October 31
---------------------------- ---------------------------- -----------------------------
1998 1997 1998 1997 1998 1997
UNAUDITED UNAUDITED UNAUDITED
OPERATIONS
<S> <C> <C> <C> <C> <C> <C>
Net Investment Income (Loss) $ (25,682) $ 934,679 $ (102,134) $ (99,589) $ 6,218,317 $ 10,182,137
Net Realized Gain
(Loss) on Investment
Securities and Foreign
Currency Transactions (2,924,600) 40,217,487 800,991 5,641,836 59,240,106 147,813,499
Change in Net Appreciation
(Depreciation) of
Investment Securities
and Foreign Currency
Transactions (29,690,158) 23,498,589 1,496,868 (1,079,626) 221,732,018 97,578,701
---------------------------- ---------------------------- -----------------------------
NET INCREASE (DECREASE)
IN NET ASSETS FROM
OPERATIONS (32,640,440) 64,650,755 2,195,725 4,462,621 287,190,441 255,574,337
---------------------------- ---------------------------- -----------------------------
DISTRIBUTIONS TO
SHAREHOLDERS
Net Investment Income (181,054) (766,993) 0 0 0 (10,174,253)
In Excess of Net
Investment Income 0 0 0 (12,314) 0 0
Net Realized Gain on
Investment Securities
and Foreign Currency
Transactions (40,011,576) (16,796,928) (5,533,022) (1,266,766) (148,103,290) (48,464,760)
---------------------------- ---------------------------- ------------------------------
TOTAL DISTRIBUTIONS (40,192,630) (17,563,921) (5,533,022) (1,279,080) (148,103,290) (58,639,013)
---------------------------- ---------------------------- ------------------------------
FUND SHARE TRANSACTIONS
Proceeds from Sales
of Shares 354,670,328 1,133,329,398 16,008,221 80,565,921 966,104,740 1,852,179,285
Reinvestment of
Distributions 37,625,318 16,740,539 5,273,814 1,239,463 138,336,187 54,645,985
---------------------------- ---------------------------- ------------------------------
392,295,646 1,150,069,937 21,282,035 81,805,384 1,104,440,927 1,906,825,270
Amounts Paid for
Repurchases of
Shares (431,925,474) (1,113,674,939) (19,332,177) (88,631,624) (722,884,529) (1,533,193,829)
NET INCREASE
(DECREASE) IN NET
ASSETS FROM FUND
SHARE TRANSACTIONS (39,629,828) 36,394,998 1,949,858 (6,826,240) 381,556,398 373,631,441
---------------------------- ---------------------------- ------------------------------
Total Increase (Decrease)
in Net Assets (112,462,898) 83,481,832 (1,387,439) (3,642,699) 520,643,549 570,566,765
<PAGE>
NET ASSETS
Beginning of Period 319,651,244 236,169,412 23,150,995 26,793,694 1,113,254,702 542,687,937
---------------------------- ----------------------------- ------------------------------
End of Period $207,188,346 $319,651,244 $ 21,763,556 $23,150,995 $1,633,898,251 $1,113,254,702
============================ ============================= ==============================
Accumulated Undistributed
(Distributions in Excess
of) Net Investment
Income (Loss) Included
in Net Assets at
End of Period $ (55,802) $ 150,934 $ (103,701) $ (1,567) $ 6,214,477 $ (3,840)
FUND SHARE TRANSACTIONS
Shares Sold 24,328,547 69,488,349 1,764,032 7,527,335 32,190,166 72,520,136
Shares Issued from
Reinvestment of
Distributions 2,795,344 1,194,637 655,942 127,595 5,043,203 2,428,228
---------------------------- ---------------------------- ------------------------------
27,123,891 70,682,986 2,419,974 7,654,930 37,233,369 74,948,364
Shares Repurchased (29,399,914) (69,903,722) (2,089,170) (8,275,001) (24,250,370) (60,404,260)
---------------------------- ---------------------------- ------------------------------
Net Increase (Decrease)
in Fund Shares (2,276,023) 779,264 330,804 (620,071) 12,982,999 14,544,104
============================ ============================ ==============================
See Notes to Financial Statements
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
INVESCO Strategic Portfolios, Inc.
Statement of Changes in Net Assets (Continued)
Gold Health Sciences Leisure
Portfolio Portfolio Portfolio
Six Months Year Six Months Year Six Months Year
Ended Ended Ended Ended Ended Ended
April 30 October 31 April 30 October 31 April 30 October 31
---------------------------- ---------------------------- ----------------------------
1998 1997 1998 1997 1998 1997
UNAUDITED UNAUDITED UNAUDITED
OPERATIONS
<S> <C> <C> <C> <C> <C> <C>
Net Investment Income (Loss) $ (517,888) $ (924,221) $ 2,120,168 $ 1,048,707 $ 157,623 $ 107,837
Net Realized Gain (Loss) on
Investment Securities and
Foreign Currency
Transactions (44,181,837) (30,717,664) 105,647,122 150,514,154 11,878,921 21,991,252
Change in Net Appreciation
(Depreciation) of
Investment Securities
and Foreign Currency
Transactions 22,705,103 (94,168,901) 78,391,124 41,293,920 31,669,537 18,919,855
---------------------------- ----------------------------- -----------------------------
NET INCREASE (DECREASE)
IN NET ASSETS FROM
OPERATIONS (21,994,622) (125,810,786) 186,158,414 192,856,781 43,706,081 41,018,944
---------------------------- ----------------------------- -----------------------------
DISTRIBUTIONS TO
SHAREHOLDERS
Net Investment Income (1,637,410) 0 (2,057,826) (982,628) (4,131) (106,433)
In Excess of Net
Investment Income 0 (64,909,867) 0 0 0 (8,905)
Net Realized Gain on
Investment Securities
and Foreign Currency
Transactions 0 0 (147,808,837) (138,286,646) (22,815,995) (6,650,312)
---------------------------- ----------------------------- -----------------------------
TOTAL DISTRIBUTIONS (1,637,410) (64,909,867) (149,866,663) (139,269,274) (22,820,126) (6,765,650)
---------------------------- ----------------------------- -----------------------------
FUND SHARE TRANSACTIONS
Proceeds from Sales
of Shares 383,514,099 1,024,175,443 491,850,238 846,691,468 114,790,864 188,164,769
Reinvestment of
Distributions 1,519,355 61,300,192 139,652,687 134,000,802 21,894,578 6,513,122
---------------------------- ----------------------------- -----------------------------
385,033,454 1,085,475,635 631,502,925 980,692,270 136,685,442 194,677,891
Amounts Paid for
Repurchases of Shares (366,306,698) (1,021,562,103) (513,039,077) (1,023,610,028) (128,475,105) (264,612,549)
---------------------------- ----------------------------- -----------------------------
NET INCREASE (DECREASE) IN
NET ASSETS FROM FUND
SHARE TRANSACTIONS 18,726,756 63,913,532 118,463,848 (42,917,758) 8,210,337 (69,934,658)
---------------------------- ----------------------------- -----------------------------
Total Increase (Decrease)
in Net Assets (4,905,276) (126,807,121) 154,755,599 10,669,749 29,096,292 (35,681,364)
<PAGE>
NET ASSETS
Beginning of Period 151,085,243 277,892,364 944,497,862 933,828,113 216,615,764 252,297,128
---------------------------- ----------------------------- -----------------------------
End of Period $146,179,967 $151,085,243 $1,099,253,461 $944,497,862 $245,712,056 $216,615,764
============================ ============================= =============================
Accumulated Undistributed
(Distributions in
Excess of) Net Investment
Income (Loss) Included
in Net Assets at
End of Period $ (4,277,467) $ (2,122,169) $ 2,081,385 $ 2,019,043 $ 140,841 $ (12,651)
FUND SHARE TRANSACTIONS
Shares Sold 153,770,429 210,893,300 9,019,092 15,734,775 4,215,516 7,514,363
Shares Issued from
Reinvestment of
Distributions 652,082 11,026,021 2,936,955 2,804,756 899,529 290,394
---------------------------- ----------------------------- -----------------------------
154,422,511 221,919,321 11,956,047 18,539,531 5,115,045 7,804,757
Shares Repurchased (146,612,772) (209,545,027) (9,431,657) (19,017,914) (4,713,331) (10,864,156)
---------------------------- ----------------------------- -----------------------------
Net Increase (Decrease)
in Fund Shares 7,809,739 12,374,294 2,524,390 (478,383) 401,714 (3,059,399)
============================ ============================= =============================
See Notes to Financial Statements
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
INVESCO Strategic Portfolios, Inc.
Statement of Changes in Net Assets (Continued)
Technology Utilities
Portfolio Portfolio
Six Months Year Six Months Year
Ended Ended Ended Ended
April 30 October 31 April 30 October 31
--------------------------------- ----------------------------------
1998 1997 1998 1997
UNAUDITED UNAUDITED
OPERATIONS
<S> <C> <C> <C> <C>
Net Investment Income (Loss) $ (1,727,289) $ 3,859,471 $ 1,718,759 $ 3,885,836
Net Realized Gain (Loss) on
Investment Securities and
Foreign Currency Transactions (30,671,871) 191,768,642 4,671,865 3,976,158
Change in Net Appreciation
(Depreciation) of Investment
Securities and Foreign
Currency Transactions 110,476,377 (21,199,698) 27,702,785 10,184,614
--------------------------------- ---------------------------------
NET INCREASE IN NET
ASSETS FROM OPERATIONS 78,077,217 174,428,415 34,093,409 18,046,608
--------------------------------- ---------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
Net Investment Income 0 (3,844,605) (1,723,057) (3,883,534)
Net Realized Gain on Investment
Securities and Foreign
Currency Transactions (192,588,440) (105,677,534) (3,969,860) (10,429,174)
---------------------------------- ---------------------------------
TOTAL DISTRIBUTIONS (192,588,440) (109,522,139) (5,692,917) (14,312,708)
---------------------------------- ---------------------------------
FUND SHARE TRANSACTIONS
Proceeds from Sales of Shares 699,319,714 1,630,735,648 305,650,977 213,563,256
Reinvestment of Distributions 181,463,934 104,735,865 5,240,277 13,624,733
---------------------------------- --------------------------------
880,783,648 1,735,471,513 310,891,254 227,187,989
Amounts Paid for Repurchases
of Shares (644,085,608) (1,550,020,036) (300,954,677) (251,580,295)
---------------------------------- --------------------------------
NET INCREASE (DECREASE) IN NET
ASSETS FROM FUND SHARE
TRANSACTIONS 236,698,040 185,451,477 9,936,577 (24,392,306)
---------------------------------- --------------------------------
Total Increase (Decrease)
in Net Assets 122,186,817 250,357,753 38,337,069 (20,658,406)
NET ASSETS
Beginning of Period 1,039,968,404 789,610,651 132,423,149 153,081,555
---------------------------------- --------------------------------
End of Period $1,162,155,221 $1,039,968,404 $170,760,218 $132,423,149
================================== ================================
Accumulated Undistributed
(Distributions in Excess of)
Net Investment Income (Loss)
Included in Net Assets at
End of Period $ (1,725,289) $ 2,000 $ (5,831) $ (1,533)
<PAGE>
FUND SHARE TRANSACTIONS
Shares Sold 23,421,152 48,520,411 22,618,645 18,030,968
Shares Issued from Reinvestment
of Distributions 7,021,482 3,352,065 391,129 1,209,641
---------------------------------- --------------------------------
30,442,634 51,872,476 23,009,774 19,240,609
Shares Repurchased (21,766,121) (46,024,492) (22,030,646) (21,291,670)
---------------------------------- --------------------------------
Net Increase (Decrease)
in Fund Shares 8,676,513 5,847,984 979,128 (2,051,061)
================================== ================================
See Notes to Financial Statements
</TABLE>
<PAGE>
INVESCO Strategic Portfolios, Inc.
Notes to Financial Statements
UNAUDITED
NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES. INVESCO Strategic
Portfolios, Inc. (the "Fund") is 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 are to seek capital appreciation through investments in
specific business sectors. Additionally, 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.
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
under procedures established 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.
Assets and liabilities initially expressed in terms of foreign currencies
are translated into U.S. dollars at the prevailing market rates as quoted
by one or more banks or dealers on the date of valuation. The cost of
securities is translated into U.S. dollars at the rates of exchange
prevailing when such securities are acquired. Income and expenses are
translated into U.S. dollars at rates of exchange prevailing when accrued.
B. REPURCHASE AGREEMENTS - Repurchase agreements held by the Fund are fully
collateralized by U.S. Government securities and such collateral is in the
possession of the Fund's custodian. The collateral is evaluated daily to
ensure its market value exceeds the current market value of the repurchase
agreements including accrued interest. In the event of default on the
obligation to repurchase, the Fund has the right to liquidate the
collateral and apply the proceeds in satisfaction of the obligation. In the
event of default or bankruptcy by the other party to the agreement,
realization and/or retention of the collateral or proceeds may be subject
to legal proceedings.
<PAGE>
C. 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,
original issue discount and amortized premium, is recorded on the accrual
basis. Discounts and premiums 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 investment securities 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 net position of such forward contracts is presented in the Statement
of Assets and Liabilities and may have additional elements of risk which
may not necessarily be reflected.
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.
D. 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, 1997, Gold Portfolio had $1,051,643
and $65,690,036 in net capital loss carryovers which expire in the years
2003 and 2005, respectively.
To the extent future capital gains are offset by capital loss carryovers,
such gains will not be distributed to shareholders.
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.
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.
<PAGE>
E. 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 amortized premiums, foreign currency transactions,
nontaxable dividends, net operating losses and expired capital loss
carryforwards.
F. 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
appreciation or depreciation of the contracts is presented in the Statement
of Assets and Liabilities.
At April 30, 1998, Health Sciences Portfolio had outstanding forward
foreign currency contracts. Unrealized gain or loss on forward foreign
currency contracts is calculated daily as the difference between the
contract exchange rate and the closing forward rate applied to the face
amount of the contract.
Forward foreign currency contracts held by the Fund are fully
collateralized by other securities which are notated in the Statement of
Investment Securities and such collateral is in the possession of the
Fund's custodian. The collateral is evaluated daily to ensure its market
value exceeds the current market value of the forward foreign currency
contract.
G. 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, Custodian
Fees and Expenses for Health Sciences and Financial Services Portfolios and
Transfer Agent Fees for all Portfolios 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 six months ended April 30, 1998, Fees and Expenses Paid
Indirectly consisted of the following:
<TABLE>
<CAPTION>
Custodian Fees Transfer
Portfolio and Expenses Agent Fees
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Energy Portfolio $ 2,924 $ 68,696
Environmental Services Portfolio 1,217 0
Financial Services Portfolio 77,328 317,962
Gold Portfolio 14,277 24,431
Health Sciences Portfolio 73,917 170,453
Leisure Portfolio 11,999 37,234
Technology Portfolio 35,282 262,930
Utilities Portfolio 6,123 46,283
</TABLE>
<PAGE>
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. 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 $6 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 were made by ITC. Fees for such sub-advisory services were paid by
IFG. Effective February 4, 1998, such responsibilities were transferred to 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 receives a transfer agent fee at an annual rate of $20.00 per shareholder
account, or, where applicable, per participant in an omnibus account, per year.
IFG may pay such fee for participants in omnibus accounts to affiliates or third
parties. The fee is paid monthly at one-twelfth of the annual fee and is based
upon the actual number of accounts in existence during each month.
A plan of distribution pursuant to Rule 12b-1 of the Act (the "Plan") became
effective November 1, 1997 for Energy, Financial Services, Gold, Health
Sciences, Leisure, Technology and Utilities Portfolios, and December 1, 1997 for
Environmental Services Portfolio. The Plan provides for compensation of
marketing and advertising expenditures to INVESCO Distributors, Inc. ("IDI") to
a maximum of 0.25% of net assets. For the period ended April 30, 1998, Energy,
Environmental Services, Financial Services, Gold, Health Sciences, Leisure,
Technology, and Utilities Portfolios paid the Distributor $138,353, $7,372,
$471,952, $88,086, $295,519, $63,901, $446,646, and $155,199, respectively under
the plan of distribution.
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 six months ended
April 30, 1998, 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:
<PAGE>
<TABLE>
<CAPTION>
Portfolio Purchases Sales
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Energy Portfolio $141,684,788 $217,876,730
Environmental Services Portfolio 10,301,018 13,565,059
Financial Services Portfolio 464,097,399 208,376,734
Gold Portfolio 106,251,812 81,143,782
Health Sciences Portfolio 477,129,117 473,681,438
Leisure Portfolio 41,697,139 48,582,912
Technology Portfolio 991,927,943 964,903,569
Utilities Portfolio 64,572,401 55,507,871
</TABLE>
There were no purchases or sales of U.S. Government securities.
NOTE 4 - APPRECIATION AND DEPRECIATION. At April 30, 1998, 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:
<TABLE>
<CAPTION>
Net
Gross Gross Appreciation
Portfolio Appreciation Depreciation (Depreciation)
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Energy Portfolio $ 17,330,891 $ 6,236,883 $ 11,094,008
Environmental Services Portfolio 4,189,830 936,229 3,253,601
Financial Services Portfolio 414,103,955 5,820,530 408,283,425
Gold Portfolio 13,320,670 56,036,770 (42,716,100)
Health Sciences Portfolio 320,876,049 10,525,873 310,350,176
Leisure Portfolio 84,979,819 4,475,950 80,503,869
Technology Portfolio 220,908,028 18,547,502 202,360,526
Utilities Portfolio 45,755,735 537,081 45,218,654
</TABLE>
NOTE 5 - TRANSACTIONS WITH AFFILIATES AND AFFILIATED COMPANIES. Certain of the
Fund's officers and directors are also officers and directors of IFG, IDI 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 are based on an annual rate equal to 40% of the retainer fee at the time of
retirement. As of July 1, 1998, benefits will be based on an annual rate of 50%
of the sum of the retainer fee at the time of retirement plus the annual meeting
fee.
Pension expenses for the six months ended April 30, 1998, 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>
<TABLE>
<CAPTION>
Unfunded
Pension Accrued Pension
Portfolio Expenses Pension Costs Liability
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Energy Portfolio $ 3,358 $ 7,614 $ 15,328
Environmental Services Portfolio 438 1,755 3,765
Financial Services Portfolio 10,106 23,332 50,802
Gold Portfolio 3,008 16,908 34,410
Health Sciences Portfolio 11,795 34,840 81,671
Leisure Portfolio 2,764 13,516 30,122
Technology Portfolio 11,691 27,023 62,835
Utilities Portfolio 1,544 6,895 15,194
</TABLE>
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 six months ended April 30, 1998, in which
the issuer was an affiliate of the Portfolio, is as follows:
<TABLE>
<CAPTION>
Realized
Gain
Purchases Sales (Loss) on
-------------------- -------------------- Investment Value at
Affiliate Shares Cost Shares Cost Securities 4/30/98
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Gold Portfolio
Crown Resources - - - - - $ 4,200,000
Guyanor Ressources SA
Class B - - - - - 1,503,094
Pacific Rim Mining - - - - - 905,254
Star Resources 3,370,000 $ 603,921 - - - 612,563
Sutton Resources Ltd 270,000 2,165,129 - - - 6,125,963
Health Sciences
Portfolio
Ecogen Technologies I - - - - - 1
Electroscope Inc - - 399,000 $ 1,039,500 $ (640,500) 0
Emisphere Technologies - - 198,600 2,656,800 586,127 6,591,562
Janus Biomedical
Series A, Conv Pfd - - - - - 1,000,000
Multum Information
Services
Series C, Pfd - - 571,429 1,000,001 (1,000,001) 0
Series E, Pfd - - 142,941 486,001 (408,670) 0
Orbtek Inc - - - - - 1
Physicians Online
Series A, Pfd - - - - - 3,219,629
ResMed Inc - - - - - 17,605,313
Unisyn Technologies - - - - - 10,896
Unisyn Technologies
Series A Conv Pfd - - - - - 125,825
Series B, Pfd - - - - - 87,675
Series C, Pfd - - - - - 122,282
Technology Portfolio
Future Communications - - - - - 1
</TABLE>
<PAGE>
No dividend income was received from any affiliated companies.
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 April 30, 1998, there were no such borrowings.
<TABLE>
<CAPTION>
INVESCO Strategic Portfolios, Inc.
Financial Highlights
(For a Fund Share Outstanding Throughout Each Period)
Six Months
Ended
April 30 Year Ended October 31
------------ ------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1998 1997 1996 1995 1994 1993
UNAUDITED
Energy Portfolio
PER SHARE DATA
Net Asset Value --
Beginning of Period $ 19.38 $ 15.03 $ 10.09 $ 10.77 $ 11.53 $ 9.14
------------ ------------------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income# (0.00) 0.06 0.04 0.09 0.06 0.13
Net Gains or (Losses) on
Securities (Both Realized
and Unrealized) (1.77) 5.56 4.94 (0.68) (0.76) 2.36
------------ ------------------------------------------------------------------------
Total from Investment
Operations (1.77) 5.62 4.98 (0.59) (0.70) 2.49
------------ ------------------------------------------------------------------------
LESS DISTRIBUTIONS
Dividends from Net
Investment Income+ 0.01 0.05 0.04 0.09 0.06 0.10
Distributions from
Capital Gains 3.03 1.22 0.00 0.00 0.00 0.00
------------ ------------------------------------------------------------------------
Total Distributions 3.04 1.27 0.04 0.09 0.06 0.10
------------ ------------------------------------------------------------------------
Net Asset Value --
End of Period $ 14.57 $ 19.38 $ 15.03 $ 10.09 $ 10.77 $ 11.53
============ ========================================================================
TOTAL RETURN (7.82%)* 40.65% 49.33% (5.45%) (6.04%) 27.18%
RATIOS
Net Assets -- End of Period
($000 Omitted) $207,188 $319,651 $236,169 $48,284 $73,767 $50,272
Ratio of Expenses to
Average Net Assets 0.73%*@ 1.21%@ 1.30%@ 1.53%@ 1.35% 1.18%
Ratio of Net Investment
Income (Loss) to Average
Net Assets (0.01%)* 0.39% 0.54% 0.72% 0.65% 0.86%
Portfolio Turnover Rate 66%* 249% 392% 300% 123% 190%
</TABLE>
<PAGE>
# Less than $0.01 on a per share basis.
+ Distributions in excess of net investment income for the year ended October
31, 1996, aggregated less than $0.01 on a per share basis.
* Based on operations for the period shown and, accordingly, are not
representative of a full year.
@ Ratio is based on Total Expenses of the Portfolio, which is before any offset
arrangements.
<TABLE>
<CAPTION>
INVESCO Strategic Portfolios, Inc.
Financial Highlights (Continued)
(For a Fund Share Outstanding Throughout Each Period)
Six Months
Ended
April 30 Year Ended October 31
------------ ------------------------------------------------------------------------
1998 1997 1996 1995 1994+ 1993+
UNAUDITED
Environmental Services Portfolio
PER SHARE DATA
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value -
Beginning of Period $ 11.44 $ 10.14 $ 8.12 $ 6.50 $ 6.80 $ 7.54
------------ ------------------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income
(Loss) (0.04) (0.04) 0.06 0.08 0.06 (0.02)
Net Gains or (Losses) on
Securities (Both Realized
and Unrealized) 0.92 1.89 2.02 1.62 (0.30) (0.72)
------------ ------------------------------------------------------------------------
Total from Investment
Operations 0.88 1.85 2.08 1.70 (0.24) (0.74)
------------ ------------------------------------------------------------------------
LESS DISTRIBUTIONS
Dividends from Net
Investment Income 0.00 0.00 0.06 0.08 0.06 0.00
In Excess of Net
Investment Income 0.00 0.01 0.00 0.00 0.00 0.00
Distributions from
Capital Gains 3.07 0.54 0.00 0.00 0.00 0.00
------------ ------------------------------------------------------------------------
Total Distributions 3.07 0.55 0.06 0.08 0.06 0.00
------------ ------------------------------------------------------------------------
Net Asset Value -
End of Period $ 9.25 $ 11.44 $ 10.14 $ 8.12 $ 6.50 $ 6.80
============ ========================================================================
TOTAL RETURN 11.70%* 19.13% 25.58% 26.09% (3.51%) (9.85%)
<PAGE>
RATIOS
Net Assets - End of Period
($000 Omitted) $21,764 $23,151 $26,794 $22,756 $29,276 $40,589
Ratio of Expenses to
Average Net Assets# 0.96%*@ 1.72%@ 1.61%@ 1.57%@ 1.29% 1.62%
Ratio of Net Investment
Income (Loss) to Average
Net Assets# (0.49%)* (0.40%) 0.47% 0.65% 0.61% (0.40%)
Portfolio Turnover Rate 53%* 187% 142% 195% 211% 155%
</TABLE>
+ The per share information was computed based on weighted average shares.
# Various expenses of the Portfolio were voluntarily absorbed by IFG for the
six months ended April 30, 1998 and the years ended October 31, 1997, 1996,
1995 and 1994. If such expenses had not been voluntarily absorbed, ratio of
expenses to average net assets would have been 1.05% (not annualized), 2.16%,
1.85%, 1.93% and 1.43%, respectively, and ratio of net investment income
(loss) to average net assets would have been (0.58%) (not annualized),
(0.84%), 0.23%, 0.29% and 0.47%, respectively.
* Based on operations for the period shown and, accordingly, are not
representative of a full year.
@ Ratio is based on Total Expenses of the Portfolio, less Expenses Absorbed by
Investment Adviser, which is before an expense offset arrangements.
<PAGE>
<TABLE>
<CAPTION>
INVESCO Strategic Portfolios, Inc.
Financial Highlights (Continued)
(For a Fund Share Outstanding Throughout Each Period)
Six Months
Ended
April 30 Year Ended October 31
------------ ------------------------------------------------------------------------
1998 1997 1996 1995 1994 1993
UNAUDITED
Financial Services Portfolio
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value -
Beginning of Period $ 29.14 $ 22.94 $ 18.95 $ 15.31 $ 20.28 $ 15.28
------------ ------------------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income 0.12 0.28 0.50 0.29 0.29 0.24
Net Gains or (Losses)
on Securities (Both
Realized and Unrealized) 6.36 8.14 5.18 3.64 (0.66) 5.00
------------ ------------------------------------------------------------------------
Total from Investment
Operations 6.48 8.42 5.68 3.93 (0.37) 5.24
------------ ------------------------------------------------------------------------
LESS DISTRIBUTIONS
Dividends from Net
Investment Income 0.00 0.28 0.50 0.29 0.29 0.24
In Excess of Net
Investment Income 0.00 0.00 0.05 0.00 0.00 0.00
Distributions from
Capital Gains 3.70 1.94 1.14 0.00 4.31 0.00
------------ ------------------------------------------------------------------------
Total Distributions 3.70 2.22 1.69 0.29 4.60 0.24
------------ ------------------------------------------------------------------------
Net Asset Value -
End of Period $ 31.92 $ 29.14 $ 22.94 $ 18.95 $ 15.31 $ 20.28
============ ========================================================================
TOTAL RETURN 24.31%* 39.80% 31.48% 25.80% (2.24%) 34.33%
RATIOS
Net Assets - End of Period
($000 Omitted) $1,633,898 $1,113,255 $542,688 $410,048 $266,170 $384,131
Ratio of Expenses to
Average Net Assets 0.50%*@ 0.99%@ 1.11%@ 1.26%@ 1.18% 1.03%
Ratio of Net Investment
Income to Average
Net Assets 0.46%* 1.19% 2.48% 2.10% 1.66% 1.16%
Portfolio Turnover Rate 17%* 96% 11% 171% 88% 236%
</TABLE>
* Based on operations for the period shown and, accordingly, are not
representative of a full year.
@ Ratio is based on Total Expenses of the Portfolio, which is before any
expense offset arrangements.
<PAGE>
<TABLE>
<CAPTION>
INVESCO Strategic Portfolios, Inc.
Financial Highlights (Continued)
(For a Fund Share Outstanding Throughout Each Period)
Six Months
Ended
April 30 Year Ended October 31
------------ ------------------------------------------------------------------------
1998^ 1997^ 1996 1995 1994 1993+
UNAUDITED
Gold Portfolio
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value -
Beginning of Period $ 3.21 $ 8.00 $ 5.21 $ 5.68 $ 6.23 $ 3.99
------------ ------------------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income
(Loss) (0.01) (0.02) (0.01) 0.01 (0.02) (0.01)
Net Gains or (Losses) on
Securities (Both
Realized and Unrealized) (0.51) (2.62) 2.80 (0.47) (0.53) 2.25
------------ ------------------------------------------------------------------------
Total from Investment
Operations (0.52) (2.64) 2.79 (0.46) (0.55) 2.24
------------ ------------------------------------------------------------------------
LESS DISTRIBUTIONS
Dividends from Net
Investment Income 0.03 0.00 0.00 0.01 0.00 0.00
In Excess of Net
Investment Income 0.00 2.15 0.00 0.00 0.00 0.00
------------ ------------------------------------------------------------------------
Total Distributions 0.03 2.15 0.00 0.01 0.00 0.00
------------ ------------------------------------------------------------------------
Net Asset Value -
End of Period $ 2.66 $ 3.21 $ 8.00 $ 5.21 $ 5.68 $ 6.23
============ ========================================================================
TOTAL RETURN (15.97%)* (44.38%) 53.55% (8.12%) (8.83%) 56.27%
RATIOS
Net Assets - End of Period
($000 Omitted) $146,180 $151,085 $277,892 $151,779 $271,163 $292,940
Ratio of Expenses to
Average Net Assets 0.93%*@ 1.47%@ 1.22%@ 1.32%@ 1.07% 1.03%
Ratio of Net Investment
Income (Loss) to
Average Net Assets (0.40%)* (0.41%) (0.08%) 0.13% (0.32%) (0.21%)
Portfolio Turnover Rate 62%* 148% 155% 72% 97% 142%
</TABLE>
^ The per share information was computed based on average shares.
+ The per share information was computed based on weighted average shares.
* Based on operations for the period shown and, accordingly, are not
representative of a full year.
@ Ratio is based on Total Expenses of the Portfolio, which is before any
expense offset arrangements.
<PAGE>
<TABLE>
<CAPTION>
INVESCO Strategic Portfolios, Inc.
Financial Highlights (Continued)
(For a Fund Share Outstanding Throughout Each Period)
Six Months
Ended
April 30 Year Ended October 31
------------ ------------------------------------------------------------------------
1998 1997 1996 1995 1994 1993
UNAUDITED
Health Sciences Portfolio
PER SHARE DATA
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value -
Beginning of Period $ 57.50 $ 55.24 $ 50.47 $ 35.09 $ 33.49 $ 35.65
------------ -------------------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income
(Loss) 0.11 0.06 0.07 (0.03) (0.24) (0.13)
Net Gains or (Losses) on
Securities (Both Realized
and Unrealized) 9.32 10.85 8.78 15.41 1.84 (2.02)
------------ ------------------------------------------------------------------------
Total from Investment
Operations 9.43 10.91 8.85 15.38 1.60 (2.15)
------------ ------------------------------------------------------------------------
LESS DISTRIBUTIONS
Dividends from Net
Investment Income 0.12 0.06 0.07 0.00 0.00 0.01
Distributions from
Capital Gains+ 8.80 8.59 4.01 0.00 0.00 0.00
------------ ------------------------------------------------------------------------
Total Distributions 8.92 8.65 4.08 0.00 0.00 0.01
------------ ------------------------------------------------------------------------
Net Asset Value -
End of Period $ 58.01 $ 57.50 $ 55.24 $ 50.47 $ 35.09 $ 33.49
============ ========================================================================
TOTAL RETURN 19.83%* 22.96% 17.99% 43.83% 4.78% (6.01%)
RATIOS
Net Assets - End of Period
($000 Omitted) $1,099,253 $944,498 $933,828 $860,926 $473,926 $560,294
Ratio of Expenses to
Average Net Assets 0.55%*@ 1.08%@ 0.98%@ 1.15%@ 1.19% 1.16%
Ratio of Net Investment
Income (Loss) to Average
Net Assets 0.21%* 0.11% 0.11% (0.08%) (0.57%) (0.34%)
Portfolio Turnover Rate 52%* 143% 90% 107% 80% 87%
</TABLE>
+ For the year ended October 31, 1993, the Portfolio declared a Capital Gain
distribution which aggregated less than $0.01 on a per share basis.
* Based on operations for the period shown and, accordingly, are not
representative of a full year.
@ Ratio is based on Total Expenses of the Portfolio, which is before any offset
arrangements.
<PAGE>
<TABLE>
<CAPTION>
INVESCO Strategic Portfolios, Inc.
Financial Highlights (Continued)
(For a Fund Share Outstanding Throughout Each Period)
Six Months
Ended
April 30 Year Ended October 31
------------ ------------------------------------------------------------------------
1998 1997 1996 1995 1994 1993+
UNAUDITED
Leisure Portfolio
PER SHARE DATA
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value -
Beginning of Period $ 27.21 $ 22.89 $ 23.78 $ 22.63 $ 25.47 $ 16.29
------------ ------------------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income
(Loss) 0.02 0.02 0.04 0.08 (0.01) (0.02)
Net Gains or (Losses)
on Securities (Both
Realized and Unrealized) 5.13 4.96 2.25 2.06 (0.94) 9.20
------------ ------------------------------------------------------------------------
Total from Investment
Operations 5.15 4.98 2.29 2.14 (0.95) 9.18
------------ ------------------------------------------------------------------------
LESS DISTRIBUTIONS
Dividends from Net
Investment Income+ 0.00 0.02 0.04 0.08 0.00 0.00
Distributions from
Capital Gains 2.98 0.64 2.25 0.91 1.89 0.00
In Excess of Capital Gains 0.00 0.00 0.89 0.00 0.00 0.00
------------ ------------------------------------------------------------------------
Total Distributions 2.98 0.66 3.18 0.99 1.89 0.00
------------ ------------------------------------------------------------------------
Net Asset Value -
End of Period $ 29.38 $ 27.21 $ 22.89 $ 23.78 $ 22.63 $ 25.47
============ ========================================================================
TOTAL RETURN 21.18%* 22.32% 10.66% 9.98% (3.92%) 56.36%
RATIOS
Net Assets - End of Period
($000 Omitted) $245,712 $216,616 $252,297 $265,181 $282,649 $351,685
Ratio of Expenses to
Average Net Assets 0.69%*@ 1.41%@ 1.30%@ 1.29%@ 1.17% 1.14%
Ratio of Net Investment
Income (Loss) to
Average Net Assets 0.07%* 0.05% 0.18% 0.31% 0.00% (0.11%)
Portfolio Turnover Rate 19%* 25% 56% 119% 116% 116%
</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, 1997, 1996, and 1995 aggregated less than $0.01 on a per share basis and
distributions declared for the period ended October 31, 1998 aggregated less
than $0.01 on a per share basis.
* Based on operations for the period shown and, accordingly, are not
representative of a full year.
@ Ratio is based on Total Expenses of the Portfolio, which is before expense of
set arrangements.
<PAGE>
<TABLE>
<CAPTION>
INVESCO Strategic Portfolios, Inc.
Financial Highlights (Continued)
(For a Fund Share Outstanding Throughout Each Period)
Six Months
Ended
April 30 Year Ended October 31
------------ ------------------------------------------------------------------------
1998 1997 1996 1995 1994 1993
UNAUDITED
Technology Portfolio
PER SHARE DATA
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value -
Beginning of Period $ 35.97 $ 34.23 $ 34.33 $ 24.94 $ 26.99 $ 20.20
------------ ------------------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income
(Loss) (0.05) 0.13 0.07 (0.02) (0.02) (0.15)
Net Gains on Securities
(Both Realized and
Unrealized) 1.45 6.23 5.76 10.20 1.19 6.94
------------ ------------------------------------------------------------------------
Total from Investment
Operations 1.40 6.36 5.83 10.18 1.17 6.79
------------ ------------------------------------------------------------------------
LESS DISTRIBUTIONS
Dividends from Net
Investment Income+ 0.00 0.13 0.07 0.00 0.00 0.00
Distributions from
Capital Gains 6.45 4.49 5.86 0.79 3.22 0.00
------------ ------------------------------------------------------------------------
Total Distributions 6.45 4.62 5.93 0.79 3.22 0.00
------------ ------------------------------------------------------------------------
Net Asset Value -
End of Period $ 30.92 $ 35.97 $ 34.23 $ 34.33 $ 24.94 $ 26.99
============ ========================================================================
TOTAL RETURN 7.43%* 20.71% 19.98% 42.19% 5.04% 33.63%
RATIOS
Net Assets - End of Period
($000 Omitted) $1,162,155 $1,039,968 $789,611 $563,109 $327,260 $248,803
Ratio of Expenses to
Average Net Assets 0.57%*@ 1.05%@ 1.08%@ 1.12%@ 1.17% 1.13%
Ratio of Net Investment
Income (Loss) to
Average Net Assets (0.16%)* 0.41% 0.24% (0.06%) (0.55%) (0.69%)
Portfolio Turnover Rate 99%* 237% 168% 191% 145% 184%
</TABLE>
+ Distributions in excess of net investment income for the year ended October
31, 1995, aggregated less than $0.01 on a per share basis.
* Based on operations for the period shown and, accordingly, are not
representative of a full year.
@ Ratio is based on Total Expenses of the Portfolio, which is before any offset
arrangements.
<PAGE>
<TABLE>
<CAPTION>
INVESCO Strategic Portfolios, Inc.
Financial Highlights (Continued)
(For a Fund Share Outstanding Throughout Each Period)
Six Months
Ended
April 30 Year Ended October 31
------------ ------------------------------------------------------------------------
1998 1997 1996 1995 1994 1993
UNAUDITED
Utilities Portfolio
PER SHARE DATA
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value -
Beginning of Period $ 12.42 $ 12.04 $ 10.61 $ 9.76 $ 12.80 $ 10.10
------------ ------------------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income 0.13 0.32 0.37 0.44 0.33 0.29
Net Gains or (Losses) on
Securities (Both
Realized and Unrealized) 2.54 1.25 1.43 0.84 (1.12) 2.71
------------ -------------------------------------------------------------------------
Total from Investment
Operations 2.67 1.57 1.80 1.28 (0.79) 3.00
------------ ------------------------------------------------------------------------
LESS DISTRIBUTIONS
Dividends from Net
Investment Income+ 0.13 0.32 0.37 0.43 0.25 0.30
Distributions from
Capital Gains 0.29 0.87 0.00 0.00 2.00 0.00
------------ ------------------------------------------------------------------------
Total Distributions 0.42 1.19 0.37 0.43 2.25 0.30
------------ ------------------------------------------------------------------------
Net Asset Value -
End of Period $14.67 $12.42 $12.04 $10.61 $9.76 $12.80
============ ========================================================================
TOTAL RETURN 21.89%* 14.37% 17.18% 13.48% (7.22%) 29.88%
RATIOS
Net Assets - End of Period
($000 Omitted) $170,760 $132,423 $153,082 $134,468 $139,579 $181,738
Ratio of Expenses to
Average Net Assets# 0.66%*@ 1.22%@ 1.17%@ 1.18%@ 1.13% 1.06%
Ratio of Net Investment
Income to Average
Net Assets# 0.94%* 2.74% 3.28% 4.47% 3.33% 2.66%
Portfolio Turnover Rate 33%* 55% 141% 185% 180% 202%
</TABLE>
<PAGE>
+ 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
six months ended April 30, 1998 and the years ended October 31, 1997, 1996,
1995 and 1994. If such expenses had not been voluntarily absorbed, ratio of
expenses to average net assets would have been 0.68% (not annualized), 1.27%,
1.25%, 1.30% and 1.14%, respectively, and ratio of net investment income to
average net assets would have been 0.92% (not annualized), 2.69%, 3.20%,
4.34% and 3.32%, respectively.
* Based on operations for the period shown and, accordingly, are not
representative of a full year.
@ Ratio is based on Total Expenses of the Portfolio, less Expenses Absorbed by
Investment Adviser, which is before any expense offset arrangements.
<PAGE>
EasiVest makes it easy to pay yourself first.
It seems that for most of us the hardest part of investing at regular
intervals comes down to imply writing the check, finding the stamp, and putting
it in the mail. But with INVESCO's EasiVest it's so easy that we'll do almost
all the work for you.
After you fill out the authorization and return it with a voided check, the
exact dollar amount you specify will be electronically transferred from your
bank account to your designated fund on the same day each month.
Using EasiVest is one of the few times when you'll find the easy way may also be
one of the best.
For years smart investors have used an investment strategy known as
dollar-cost averaging. It only makes sense that when prices are high an investor
will want to buy fewer shares, and when prices are low he will want to buy more.
By investing a fixed amount at regular intervals with INVESCO's EasiVest, you
can take advantage of these market fluctuations.
Over a sufficient period of time, dollar-cost averaging may make the
average price you pay per share less than the actual average price per share. So
follow the lead of successful investors and take advantage of dollar-cost
averaging with INVESCO's EasiVest.
Like other investment systems, periodic investment plans to not insure a
profit, nor do they protect against loss in a falling market. Since these plans
involve continuous investment in securities regardless of fluctuating price
levels in the market, you should consider your financial ability to continue
purchases through low price levels. Finally, be aware that you will incur a loss
under the plan if you decide to liquidate your account when the market value of
accumulated shares is less than their cost.
Just follow these simple authorization instructions and let INVESCO's
EasiVest help you build for your future.
1. Call your bank for their ABA and account numbers. Then complete the
EasiVest authorization and sign it the same way you would your personal
checks.
2. Enclose an unsigned, personal check or savings deposit slip marked "Void."
3. Place a voided check or savings deposit slip and signed authorization form
in an envelope; then mail it to us.
It's that easy to start building your mutual fund portfolio. And you can take
advantage of INVESCO's EasiVest with as little as $50 a month.
Questions? Call us at 1-800-525-8085.
Start building for your future today.
<PAGE>
EASIVEST AUTHORIZATION FOR AUTOMATIC INVESTMENTS
Before returning this Authorization, please be sure to contact your bank for
the correct ABA number and account number.
I authorize INVESCO Funds Group to transfer money from my checking or savings
account on or about the 7th or 21st (check one) day of each month for the
amounts and funds indicated below:
Fund___________________________________ Acct.#_______________________________
$__________________________ ($50 minimum) ___ 7th ___21st
- ----------------------------------------------------------------------------
Bank Name
- ----------------------------------------------------------------------------
Bank Street Address
- ----------------------------------------------------------------------------
City, State, Zip
- ----------------------------------------------------------------------------
ABA Number (available from your bank) Bank Phone Number
__________________________________This is a __Checking Account __ Savings
Account Bank Account Number
- ----------------------------------------------------------------------------
Owner's Name (First, Middle Initial, Last)
- ----------------------------------------------------------------------------
Joint Owner's Name (First, Middle Initial, Last)
- ----------------------------------------------------------------------------
Owner Street Address
- ----------------------------------------------------------------------------
City, State, Zip
- ----------------------------------------------------------------------------
Signature Date
- ----------------------------------------------------------------------------
Signature Date
- ---------------------------------- ------------------------------------
Daytime Telephone Number Evening Telephone Number
Don't forget to attach a voided check or deposit slip.
This authority is to remain in effect until I revoke it in writing and, until
INVESCO receives such notification, I agree INVESCO will be fully protected in
honoring any such electronic debit. I further agree that if any such electronic
debit is not honored, whether with cause or without cause and whether
intentionally or unintentionally, INVESCO will not be liable whatsoever. This
authorization will become a part of the fund application subject to the terms,
representations and conditions thereof.
<PAGE>
Like other investment systems, period investment plans do not insure a profit,
nor do they protect against loss in a falling market. Since these plans involve
continuous investment in securities regardless of fluctuating price levels in
the market, you should consider your financial ability to continue purchases
through low price levels. Finally, be aware that you will incur a loss under the
plan if you decide to liquidate your account when the market value of
accumulated shares is less than their cost.
<PAGE>
INVESCO FUNDS
INVESCO Distributors, Inc.,(SM)
Distributor
Post Office Box 173706
Denver, Colorado 80217-3706
1-800-525-8085
PAL(R): 1-800-424-8085
http://www.invesco.com
In Denver, 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 a current prospectus.
