SEPTEMBER 30, 2000
SEMIANNUAL REPORT
--------------------------------------------------------------------------------
INVESCO Sector Funds, Inc.
ENERGY FUND
FINANCIAL SERVICES FUND
GOLD FUND
HEALTH SCIENCES FUND
LEISURE FUND
REAL ESTATE OPPORTUNITY FUND
TECHNOLOGY FUND
TELECOMMUNICATIONS FUND
UTILITIES FUND
"OUR FOCUS ON ENERGY COMPANIES AT THE LEADING EDGE OF THE MULTI-YEAR EXPANSION
CYCLE HAS HELPED US OUTPERFORM -- NOT ONLY RELATIVE TO THE MARKET -- BUT TO
COMPETING ENERGY FUNDS AS WELL."
SEE PAGE 3
[INVESCO ICON] INVESCO FUNDS(R)
A Member of the AMVESCAP Group
<PAGE>
[PHOTOGRAPH OF MARK H. WILLIAMSON OMITTED]
INVESTING IN A DIVERSIFIED MIX OF SECTOR FUNDS CAN HELP YOU MANAGE RISK AND
MAXIMIZE RETURN
FELLOW SHAREHOLDER:
Imagine the surprise of a Rip Van Winkle who went to sleep only last year and
woke up last month to check his portfolio. Energy shares way up, while
communication holdings suffered? Real estate investment trusts jumping back?
Financial stocks soaring even as many technology stocks languished?
Once again, the decline in the major indexes over the past six months has masked
the wildly disparate performance of individual sectors. And the sectors that
have done the best are not necessarily those that pundits were favoring even a
short time ago.
This is one reason why sector funds can offer so much opportunity -- but also
why sophisticated investors use them in combination. They know that some sectors
flourish at the start of an economic cycle, for example, while others perform
well as the cycle nears its peak. At INVESCO Funds, we've always believed that
sector funds, if employed properly, can help diminish the overall volatility of
an investor's portfolio. (Of course, sector funds may be more volatile than
diversified equity funds, and are most suitable for the aggressive portion of
your portfolio.)
Inside this INVESCO Sector Funds Semiannual Report, you'll see our managers
discuss what worked -- and what did not -- over the past six months. You'll find
an overall sense of optimism, it's fair to say, but few firm predictions of
where the markets are headed next. As always, I would urge you to examine your
portfolio with a sense of this uncertainty in mind, seeking to smooth your
returns as well as maximize them.
Thank you for your continued faith in INVESCO Funds.
Sincerely,
/s/ Mark H. Williamson
----------------------
Mark H. Williamson
Chairman and CEO, INVESCO Funds Group, Inc.
<PAGE>
"FINANCIAL STOCKS STAGED A SOLID RALLY IN THE PAST SIX MONTHS, ONE IN WHICH OUR
PORTFOLIO WAS ABLE TO PARTICIPATE FULLY." - PAGE 5
TABLE OF CONTENTS
LETTER FROM THE CHAIRMAN.............................1
FUND REPORTS.........................................3
AN INTERVIEW WITH BILL KEITHLER.....................21
MARKET HEADLINES....................................23
INVESTMENT HOLDINGS.................................24
FINANCIAL STATEMENTS................................48
NOTES TO FINANCIAL STATEMENTS.......................74
FINANCIAL HIGHLIGHTS................................80
INVESCO SECTOR FUNDS, INC.
TOTAL RETURN
PERIODS ENDED 9/30/00#
<TABLE>
<CAPTION>
Manager's
Cumulative 10 years* or Report
Fund (Inception) 6 months 1 year 5 years* Since Inception^ Page No.
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ENERGY FUND-INVESTOR CLASS (1/84)+ 29.02% 54.51% 23.32% 9.06% 3
---------------------------------------------------------------------------------------------------------------
ENERGY FUND-CLASS C (2/00)+ 28.65% N/A N/A 55.82%^ 3
---------------------------------------------------------------------------------------------------------------
FINANCIAL SERVICES FUND-INVESTOR CLASS (6/86) 20.68% 39.29% 22.82% 26.62% 5
---------------------------------------------------------------------------------------------------------------
FINANCIAL SERVICES FUND-CLASS C (2/00) 20.44% N/A N/A 38.16%^ 5
---------------------------------------------------------------------------------------------------------------
GOLD FUND-INVESTOR CLASS (1/84) (7.50%) (29.52%) (18.26%) (8.40%) 7
---------------------------------------------------------------------------------------------------------------
GOLD FUND-CLASS C (2/00) (8.75%) N/A N/A (16.57%)^ 7
---------------------------------------------------------------------------------------------------------------
HEALTH SCIENCES FUND-INVESTOR CLASS (1/84)+ 30.30% 46.97% 22.99% 22.15% 9
---------------------------------------------------------------------------------------------------------------
HEALTH SCIENCES FUND-CLASS C (2/00) 29.87% N/A N/A 16.16%^ 9
---------------------------------------------------------------------------------------------------------------
LEISURE FUND-INVESTOR CLASS (1/84) (3.50%) 19.97% 23.01% 24.73% 11
---------------------------------------------------------------------------------------------------------------
LEISURE FUND-CLASS C (2/00) (3.86%) N/A N/A (0.53%)^ 11
---------------------------------------------------------------------------------------------------------------
REAL ESTATE OPPORTUNITY FUND-INVESTOR CLASS (1/97) 17.34% 21.89% N/A 1.76%^ 13
---------------------------------------------------------------------------------------------------------------
REAL ESTATE OPPORTUNITY FUND-CLASS C (2/00) 16.81% N/A N/A 19.26%^ 13
---------------------------------------------------------------------------------------------------------------
TECHNOLOGY FUND-INSTITUTIONAL CLASS (12/98)+ (3.71%) 102.92% N/A 88.92%^ 15
---------------------------------------------------------------------------------------------------------------
TECHNOLOGY FUND-INVESTOR CLASS (1/84)+ (3.87%) 102.26% 39.61% 36.47% 15
---------------------------------------------------------------------------------------------------------------
TECHNOLOGY FUND-CLASS C (2/00) (4.36%) N/A N/A 1.98%^ 15
---------------------------------------------------------------------------------------------------------------
TELECOMMUNICATIONS FUND-INVESTOR CLASS (8/94)+ (13.79%) 74.47% 42.49% 38.76%^ 17
---------------------------------------------------------------------------------------------------------------
TELECOMMUNICATIONS FUND-CLASS C (2/00) (14.12%) N/A N/A (6.75%)^ 17
---------------------------------------------------------------------------------------------------------------
UTILITIES FUND-INVESTOR CLASS (5/96) (3.63%) 24.08% 19.51% 16.96% 19
---------------------------------------------------------------------------------------------------------------
UTILITIES FUND-CLASS C (2/00) (3.95%) N/A N/A (1.48%)^ 19
---------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
# PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. TOTAL RETURN ASSUMES
REINVESTMENT OF DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS. INVESTMENT RETURN AND
PRINCIPAL VALUE WILL VARY SO THAT, WHEN REDEEMED, AN INVESTOR'S SHARES MAY BE
WORTH MORE OR LESS THAN WHEN PURCHASED.
* AVERAGE ANNUALIZED
^ FOR FUNDS INTRODUCED MORE RECENTLY
+ PLEASE KEEP IN MIND THAT TRIPLE-DIGIT AND HIGH DOUBLE-DIGIT RETURNS ARE HIGHLY
UNUSUAL AND CANNOT BE SUSTAINED. INVESTORS SHOULD ALSO BE AWARE THAT RECENT
RETURNS WERE PRIMARILY ACHIEVED DURING FAVORABLE MARKET CONDITIONS, ESPECIALLY
WITHIN THE ENERGY, HEALTH CARE AND TECHNOLOGY SECTORS.
<PAGE>
ENERGY FUND
YOUR FUND'S REPORT
FUND PERFORMANCE
Dear Shareholder:
The six-month period ended September 30, 2000, has been a successful one for the
fund. As we have written to you previously, our faith in the energy markets
remained unshaken, even as demand tapered and prices plunged a few years ago.
Despite this, the long-term direction of energy supply and demand suggested to
us that a multi-year expansion cycle within the industry would soon be at hand.
This spring, encouraged by rapidly increasing prices, energy shares shot upward
as other investors began to share our optimism. Our focus on companies at the
leading edge of the multi-year expansion cycle has helped us outperform -- not
only relative to the market -- but to competing energy funds as well.
--------------------------------------------------------------------------------
ENERGY FUND--
TOP 10 COMMON STOCK HOLDINGS
% of Total Net Assets as of 9/30/00
--------------------------------------------------------------------------------
Coastal Corp...............................................................5.29%
Nabors Industries..........................................................4.45%
Murphy Oil.................................................................4.29%
Chevron Corp...............................................................4.29%
Anadarko Petroleum.........................................................4.13%
Kerr-McGee Corp............................................................4.11%
Noble Drilling.............................................................4.09%
Phillips Petroleum.........................................................3.90%
Canadian Occidental Petroleum..............................................3.65%
Devon Energy...............................................................3.36%
HOLDINGS AND COMPOSITION OF HOLDINGS ARE SUBJECT TO CHANGE.
--------------------------------------------------------------------------------
For the six-month period ended September 30, 2000, the value of Energy
Fund-Investor Class shares rose 29.02%. This return dramatically outpaced that
of the S&P 500 Index, which fell 3.60% during the same period. (Of course, past
performance is no guarantee of future results.)1,2
Our fund's performance has been driven by fundamentals in two subsectors, oil
and natural gas. Many investors are aware of the steep rise in the price of
crude oil that seemed to take hold following the announcement of production cuts
by the Organization of Petroleum Exporting Countries (OPEC) last year.
Unfortunately, this has left the mistaken impression in many minds that OPEC is
driving the price increases -- and that prices would quickly fall should the
cartel reverse course and expand production.
TIGHTENING OIL RESERVES
In reality, as we have noted in past reports, the world's oil production
facilities are already operating at near-capacity levels. Demand, which has been
on the rise since the end of the Asian economic crisis, has come perilously
close to reaching the ceiling set by supply, leading to the lowest oil reserves
the world has seen in years. In some ways, OPEC is merely an observer to this
larger phenomenon.
The only solution to this situation will come from increased production. And to
increase production, the industry will have to fund years of exploration and
drilling, together with the necessary services, to bring new wells online. This
compelling need has already led to vastly brighter prospects for oil service,
drilling, and exploration firms, many of which are scrambling to meet demand.
One of our portfolio's brightest performers over the period, for example, was
Veritas DGC, which provides geophysical surveys and analysis to the petroleum
industry worldwide. The drilling company Nabors Industries, another strong
performer and one of our largest holdings, serves another part of the production
chain.
<PAGE>
NATURAL GAS PRICES SOAR
The situation with natural gas is similar, although natural gas's significant
transportation costs make the dynamic a national and regional one rather than
global. Demand for natural gas continues to increase dramatically, due in large
part to the increasing reliance on gas by the electric utility industry.
Gas-fired plants are exceptionally clean and environmentally friendly. Indeed,
every new utility plant currently under construction will use natural gas.
Simultaneously, however, the rate at which we are using up our current gas
reserves -- or depletion rate -- is also on the rise. Increased demand and
higher depletion rates have combined to produce some of the highest prices in
memory for natural gas. This has encouraged an expansion cycle within the
natural gas industry, creating opportunities for producers and suppliers alike.
One of our most successful holdings over the past several months has been Kinder
Morgan, which operates 30,000 miles of gas pipelines in 26 states.
We should note that we have taken care to include oil and gas producers in the
portfolio alongside more specialized firms. One of our most successful
investments over the past several months has been Anadarko Petroleum, which has
been aggressively acquiring oil reserves in the United States and abroad.
Overall, however, many of the largest international producers have not performed
as impressively, and our relatively low exposure to them has helped our returns.
LINE GRAPH: INVESCO ENERGY FUND - CLASS C
GROWTH OF $10,000 (1)
This line graph compares the value of a $10,000 investment in INVESCO Energy
Fund - Class C to the value of a $10,000 investment in the S&P 500 Index(2),
assuming in each case reinvestment of all dividends and capital gain
distributions, for the seven month period ended 9/30/00.
INVESCO Energy Fund - Class C S&P 500 Index(2)
02/00 $10,000 02/00 $10,000
09/00 $15,582 09/00 $10,583
FUNDAMENTAL FORCES
Of course, oil prices might well moderate over the coming months. Still, we see
little reason that fundamental forces driving the current production cycle will
change. Leading companies, we believe, will still enjoy ample profit
opportunities even if oil prices fall back. A delay in the expansion cycle could
occur should demand drop dramatically, as was the case during the Asian economic
recession a few years ago. Still, we remain optimistic for the performance of
both the sector and our fund.
LINE GRAPH: INVESCO ENERGY FUND - INVESTOR CLASS
GROWTH OF $10,000(1)
This line graph compares the value of a $10,000 investment in INVESCO Energy
Fund - Investor Class to the value of a $10,000 investment in the S&P 500
Index(2), assuming in each case reinvestment of all dividends and capital gain
distributions, for the ten year period ended 9/30/00.
INVESCO Energy Fund S&P 500 Index (2)
Investor Class
09/90 $10,000 09/90 $10,000
09/91 8,509 09/91 13,109
09/92 7,303 09/92 14,556
09/93 9,217 09/93 16,444
09/94 8,231 09/94 17,049
09/95 8,342 09/95 22,115
09/96 11,168 09/96 26,608
09/97 17,212 09/97 37,366
09/98 11,595 09/98 40,759
09/99 15,975 09/99 52,086
09/00 23,798 09/00 58,998
<PAGE>
FUND MANAGEMENT
[PHOTOGRAPH OF JOHN S. SEGNER OMITTED]
JOHN S. SEGNER
ENERGY FUND
JOHN SEGNER IS A VICE PRESIDENT OF INVESCO FUNDS GROUP. 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. HE ALSO PREVIOUSLY HELD ENGINEERING RESPONSIBILITIES
WITH TEXACO INC. AND FINANCIAL RESPONSIBILITIES WITH AMERADA HESS CORP. JOHN
BEGAN HIS INVESTMENT CAREER IN 1980.
PIE CHART: ENERGY FUND
INDUSTRY BREAKDOWN
AS OF 9/30/00
[PIE CHART]
% OF TOTAL ASSETS
Oil & Gas - Drilling & Equipment........27.71%
Oil & Gas - Exploration & Production....27.06%
Oil-International Integrated............18.61%
Natural Gas Pipelines...................12.59%
Oil Well Equipment & Services............8.27%
Electric Utilities.......................3.25%
Electric Equipment.......................1.77%
Cash & Cash Equivalents..................0.74%
(1) PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. TOTAL RETURN ASSUMES
REINVESTMENT OF DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS. INVESTMENT RETURN
AND PRINCIPAL VALUE WILL VARY SO THAT, WHEN REDEEMED, AN INVESTOR'S SHARES
MAY BE WORTH MORE OR LESS THAN WHEN PURCHASED. THE LINE GRAPHS ILLUSTRATE
THE VALUE OF A $10,000 INVESTMENT, PLUS REINVESTED DIVIDENDS AND CAPITAL
GAIN DISTRIBUTIONS. THE CHARTS AND OTHER TOTAL RETURN FIGURES CITED REFLECT
THE FUND'S OPERATING EXPENSES, BUT THE INDEX DOES NOT HAVE EXPENSES, WHICH
WOULD HAVE LOWERED ITS PERFORMANCE.
(2) THE S&P 500 INDEX IS AN UNMANAGED INDEX CONSIDERED REPRESENTATIVE OF THE
BROAD STOCK MARKET. THE INDEX IS NOT MANAGED; THEREFORE, ITS PERFORMANCE
DOES NOT REFLECT MANAGEMENT FEES AND OTHER EXPENSES ASSOCIATED WITH THE
FUND.
<PAGE>
FINANCIAL SERVICES FUND
YOUR FUND'S REPORT
LINE GRAPH: INVESCO FINANCIAL SERVICES FUND - CLASS C
GROWTH OF $10,000(3)
This line graph compares the value of a $10,000 investment in INVESCO Financial
Services Fund - Class C to the value of a $10,000 investment in the S&P 500
Index(4) and S&P Financial Index(4), assuming in each case reinvestment of all
dividends and capital gain distributions, for the seven month period ended
9/30/00.
INVESCO Financial Services Fund S&P Financial
Class C S&P 500 INDEX (4) Index (4)
02/00 $10,000 02/00 $10,000 02/00 $10,000
09/00 $13,816 09/00 $10,583 02/00 $14,243
LINE GRAPH: INVESCO FINANCIAL SERVICES FUND - INVESTOR CLASS
GROWTH OF $10,000(3)
This line graph compares the value of a $10,000 investment in INVESCO Financial
Services Fund - Investor Class to the value of a $10,000 investment in the S&P
500 Index(4) and S&P Financial Index(4), assuming in each case reinvestment of
all dividends and capital gain distributions, for the ten year period ended
9/30/00.
INVESCO Financial Services Fund S&P Financial
Investor Class S&P 500 Index (4) Index (4)
09/90 $10,000 09/90 $10,000 09/90 $10,000
09/91 19,389 09/91 13,109 09/90 15,815
09/92 21,579 09/92 14,556 09/92 18,538
09/93 31,296 09/93 16,444 09/93 25,323
09/94 29,581 09/94 17,049 09/94 23,434
09/95 37,920 09/95 22,115 09/95 32,171
09/96 46,139 09/96 26,608 09/96 40,342
09/97 70,139 09/97 37,366 09/97 63,458
09/98 71,297 09/98 40,759 09/98 61,846
09/99 76,077 09/99 52,086 09/99 72,286
09/00 105,970 09/00 58,998 09/00 96,704
FUND PERFORMANCE
DEAR SHAREHOLDER:
The fund has enjoyed a very successful six months since our last report in
March. Financial stocks staged a solid rally, one in which our portfolio was
able to participate fully. But we also enter the coming months with a sense of
optimism that the current rally still has a way to go. Even after the recent
price appreciation, carefully chosen financial stocks appear to offer
considerable opportunities for growth-oriented investors.
For the six-month period ended September 30, 2000, the value of Financial
Services Fund-Investor Class shares rose 20.68%. This greatly exceeded the
return of the S&P 500 Index, which fell 3.60% during the same period. (Of
course, past performance is no guarantee of future results.)(3),(4)
LOWER INTEREST RATES, CONSOLIDATION BENEFIT THE SECTOR
Several factors helped financial stocks move higher during the past six months.
First, investors began to sense that the Federal Reserve would soon conclude the
cycle of monetary tightening it had begun last year, and market interest rates
began to fall as a result. Several signs of a slowing economy, combined with
subdued inflation signals, led to optimism that the Fed had succeeded in
relieving any inflationary pressures that usually accompany rapid economic
growth. Indeed, after raising rates again in May, the Federal Reserve's Open
Market Committee left short-term interest rates unchanged at its June and August
meetings. As in the past, declining rates led to rising prices for financial
stocks.
<PAGE>
Second, a wave of consolidation in the sector helped fuel investor interest.
This wave began in January 2000 with the acquisition of U.S. Trust by Schwab
(Charles) Corp, one of our largest holdings. It was followed by an onrush of
mergers and acquisitions that saw the combination of several giant financial
firms -- most noteworthy, perhaps, banking behemoths Morgan (JP) & Co and Chase
Manhattan. The consolidation was particularly prominent in the brokerage
industry. Several firms, including Morgan Stanley Dean Witter & Co, were
absorbed by larger banking concerns. Notably absent from the consolidation trend
were the cross-industry banking and insurance mergers that many had expected to
follow recent banking deregulation.
EARNINGS GARNER ATTENTION
Finally, and perhaps most importantly, the strong earnings and fundamentals that
many financial services had been enjoying for years became more attractive to
growth-oriented investors. Steep pullbacks in the technology and
telecommunications sectors, in particular, led many to look for growing firms
with lower valuations. The financial services group, which had been quietly
prospering for several quarters, gained newfound respect.
As noted in past reports, our emphasis has always been on these
strong-performing companies, many of which have tended to prosper no matter what
is happening with interest rates or other commonly watched factors. These
"secular" growers are using new technologies and competitive strategies to
increase revenues and gain an increased share of the financial marketplace --
itself growing steadily as retirement savings and world financial integration
become more important. We have long held that there are many poorly run
financial services firms -- offering all the more potential for those able to
aggressively seize opportunities.
RAPID REVENUE GROWTH
Some of the strongest performers in our portfolio were in this category. Capital
One Financial, a top portfolio holding and one of the largest credit card
issuers in the country, continued to enjoy rapid account and revenue growth, as
a result of its innovative marketing and customer service strategies. Bank of
New York, a leading provider of back-office processing, has also been a top
performer for the fund. Brokerage firms and investment banking firms, which have
flourished during the long bull market, have also contributed attractive gains
for the fund. Finally, Marsh & McLennan, which provides a range of services to
the strengthening insurance industry, substantially aided our returns during the
period.
In many ways, the past six months witnessed a tide in the sector that lifted all
ships. Going forward, we expect that ample opportunities remain -- although
these will be concentrated in the best companies. Firms now face a level of
expectations for future profit growth that did not exist even last year. While
well-positioned companies should have no trouble meeting them, second- and
third-tier firms pulled upward in the market's wake will face more substantial
difficulties. This is one reason we expect the coming period to be exceptionally
hospitable to our particular approach of growth stock investing in financial
services.
<PAGE>
PIE CHART: FINANCIAL SERVICES FUND
INDUSTRY BREAKDOWN
AS OF 9/30/00
[PIE CHART]
% OF TOTAL NET ASSETS
Banks-Regional..........................19.35%
Financial-Diversified...................15.88%
Investment Bank/Broker Firm.............15.51%
Insurance - Multiline....................9.98%
Insurance - Life.........................7.70%
Banks - Money Center.....................6.49%
Insurance - Property & Casualty..........6.01%
Consumer Finance.........................4.75%
Insurance Brokers........................4.45%
Savings & Loan Companies.................2.93%
Cash & Cash Equivalents..................6.95%
--------------------------------------------------------------------------------
FINANCIAL SERVICES FUND--
TOP 10 COMMON STOCK HOLDINGS
% of Total Net Assets as of 9/30/00
--------------------------------------------------------------------------------
Citigroup Inc..............................................................4.79%
Capital One Financial......................................................4.45%
Marsh & McLennan...........................................................4.44%
Bank of New York...........................................................4.39%
American Express...........................................................3.62%
Wells Fargo & Co...........................................................3.33%
AFLAC Inc..................................................................3.12%
American International Group...............................................3.08%
Hartford Financial Services Group..........................................3.06%
St Paul Cos................................................................2.94%
HOLDINGS AND COMPOSITION OF HOLDINGS ARE SUBJECT TO CHANGE.
--------------------------------------------------------------------------------
FUND MANAGEMENT
[PHOTOGRAPH OF JEFFREY G. MORRIS OMITTED]
JEFFREY G. MORRIS, CFA
FINANCIAL SERVICES FUND
JEFF MORRIS IS A VICE PRESIDENT OF INVESCO FUNDS GROUP. PRIOR TO JOINING
INVESCO, JEFF WORKED FOR NORWEST MORTGAGE. HE RECEIVED A BS FROM COLORADO STATE
UNIVERSITY AND AN MS FROM THE UNIVERSITY OF COLORADO-DENVER. JEFF IS A CHARTERED
FINANCIAL ANALYST AND BEGAN HIS INVESTMENT CAREER IN 1991.
(3) PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. TOTAL RETURN ASSUMES
REINVESTMENT OF DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS. INVESTMENT RETURN AND
PRINCIPAL VALUE WILL VARY SO THAT, WHEN REDEEMED, AN INVESTOR'S SHARES MAY BE
WORTH MORE OR LESS THAN WHEN PURCHASED. THE LINE GRAPHS ILLUSTRATE THE VALUE OF
A $10,000 INVESTMENT, PLUS REINVESTED DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS.
THE CHARTS AND OTHER TOTAL RETURN FIGURES CITED REFLECT THE FUND'S OPERATING
EXPENSES, BUT THE INDEXES DO NOT HAVE EXPENSES, WHICH WOULD HAVE LOWERED THEIR
PERFORMANCE.
(4) THE S&P 500 INDEX IS AN UNMANAGED INDEX CONSIDERED REPRESENTATIVE OF THE
BROAD STOCK MARKET, WHILE THE S&P FINANCIAL INDEX REFLECTS THE FINANCIAL
SERVICES SECTOR. THE INDEXES ARE NOT MANAGED; THEREFORE, THEIR PERFORMANCE DOES
NOT REFLECT MANAGEMENT FEES AND OTHER EXPENSES ASSOCIATED WITH THE FUND.
<PAGE>
GOLD FUND
YOUR FUND'S REPORT
FUND PERFORMANCE
DEAR SHAREHOLDER:
This has been another dismal six months for the gold markets, one which defied
even the cautious observation in our last report that, while we had yet to see a
catalyst that might drive stock and bullion prices higher, we found them
exceptionally inexpensive. Indeed, what had been inexpensive has become even
more so. Stock prices, particularly based on price-to-asset multiples, are as
cheap as they have been in many years.
For the six-month period ended September 30, 2000, the value of Gold
Fund-Investor Class shares declined 7.50%. This performance compares to the
return of the S&P 500 Index, which fell 3.60% during the same period. (Of
course, past performance is no guarantee of future results.)(5),(6)
--------------------------------------------------------------------------------
GOLD FUND--
TOP 10 COMMON STOCK HOLDINGS
% of Total Net Assets as of 9/30/00
--------------------------------------------------------------------------------
Meridian Gold..............................................................6.99%
Barrick Gold...............................................................6.02%
Placer Dome................................................................6.00%
Franco-Nevada Mining Ltd...................................................5.08%
Newmont Mining.............................................................5.06%
Agnico-Eagle Mines Ltd.....................................................4.16%
Goldcorp Inc Class A Shrs..................................................3.74%
AngloGold Ltd Sponsored ADR
Representing 1/2 Ord Shr.................................................3.53%
IAMGOLD Corp...............................................................3.37%
Star Resources.............................................................2.57%
HOLDINGS AND COMPOSITION OF HOLDINGS ARE SUBJECT TO CHANGE.
--------------------------------------------------------------------------------
STRONG DOLLAR TRANSLATES INTO WEAK GOLD PRICES
Many of the same factors we've described in past reports continued to weigh on
gold prices. As we have noted, gold serves as a substitute for the U.S. dollar.
When the dollar is weak and investors are searching for another source of value,
gold prices tend to rise. Conversely, when the dollar is strong, gold prices
tend to fall. As you may know, the U.S. dollar has continued to thrive in line
with the American economy over the past year, hitting record levels against
other currencies, such as the euro. Consequently, foreign investors seeking a
haven for their assets have seen little need to invest in gold.
Additionally, demand from one of the most important gold markets, Asia, has
continued to lag. Led by the sluggish Japanese giant, Asia's economy has yet to
resume its role as the leading gold consumer. Indeed, tumbling Asian markets
began to raise warning signals in the summer suggesting that their recovery
might be faltering.
A PRODUCTION PRICE FLOOR
We had noted in previous reports that production costs for gold could be
expected to set some sort of floor on the market, given that world prices were
hovering slightly above the $250 to $270 an ounce level needed to extract and
refine the ore. Nonetheless, it would appear that current gold stocks have been
supplying demand, leading to the closure of higher-cost mines. Some indication
of the extreme weakness in gold prices was provided recently by the closure of
the Homestake Mine in South Dakota, which had been in operation for 120 years.
<PAGE>
Our response to these difficult conditions has been two-fold. First, we have
concentrated our investments in larger, low-cost producers. Within this group,
we have been especially interested in companies that do not hedge their
production, so that they will benefit fully from a rise in gold prices.
Secondly, we have devoted a substantial minority position of the fund to gold
bullion. This approach has helped improve our performance relative to other gold
funds, and we believe it provides a focused investment opportunity for
shareholders who anticipate that gold prices will rally.
SEVERAL WILDCARDS
While gold markets have been depressingly consistent as of late, we believe
there are several wildcards that could dramatically alter their performance. On
the negative side, we have noted that problems in Asian demand could worsen. On
the flip side, however, it is possible that the dollar will weaken, whether due
to capital flight from the United States or a substantial slowdown in the U.S.
economy. It is also possible that an unforeseen event, such as the backing of
the euro with gold by the European Central Bank, would dramatically increase
prices.
Over the long-term, we continue to believe that gold prices and gold stocks have
considerable appreciation potential -- even if they experience further
depreciation in the short term. In the meantime, we will continue to invest in
companies that are best positioned to benefit from rising gold prices once that
rebound occurs.
PIE CHART: GOLD FUND
INDUSTRY BREAKDOWN
AS OF 9/30/00
[PIE CHART]
% OF TOTAL NET ASSETS
Gold & Precious Metals Mining...........69.55%
Gold Bullion............................12.16%
Cash & Cash Equivalents.................18.29%
LINE GRAPH: INVESCO GOLD FUND - INVESTOR CLASS
GROWTH OF $10,000(5)
This line graph compares the value of a $10,000 investment in INVESCO Gold Fund
- Investor Class to the value of a $10,000 investment in the S&P 500 Index(6),
assuming in each case reinvestment of all dividends and capital gain
distributions, for the ten year period ended 9/30/00.
INVESCO Gold Fund S&P 500 Index (6)
Investor Class
09/90 $10,000 09/90 $10,000
09/91 7,991 09/91 13,109
09/92 8,336 09/92 14,556
09/93 10,476 09/93 16,444
09/94 12,352 09/94 17,049
09/95 11,394 09/95 22,115
09/96 16,511 09/96 26,608
09/97 10,973 09/97 37,366
09/98 5,620 09/98 40,759
09/99 5,901 09/99 52,086
09/00 4,159 09/00 58,998
<PAGE>
LINE GRAPH: INVESCO GOLD FUND - CLASS C
GROWTH OF $10,000(5)
This line graph compares the value of a $10,000 investment in INVESCO Gold Fund
- Class C to the value of a $10,000 investment in the S&P 500 Index(6), assuming
in each case reinvestment of all dividends and capital gain distributions, for
the seven month period ended 9/30/00.
INVESCO Gold Fund - Class C S&P 500 Index(2)
02/00 $10,000 02/00 $10,000
09/00 $8,343 09/00 $10,583
FUND MANAGEMENT
[PHOTOGRAPH OF JOHN S. SEGNER OMITTED]
JOHN S. SEGNER
GOLD FUND
JOHN SEGNER IS A VICE PRESIDENT OF INVESCO FUNDS GROUP. 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. HE ALSO PREVIOUSLY HELD ENGINEERING RESPONSIBILITIES
WITH TEXACO INC. AND FINANCIAL RESPONSIBILITIES WITH AMERADA HESS CORP. JOHN
BEGAN HIS INVESTMENT CAREER IN 1980.
(5) PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. TOTAL RETURN ASSUMES
REINVESTMENT OF DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS. INVESTMENT RETURN
AND PRINCIPAL VALUE WILL VARY SO THAT, WHEN REDEEMED, AN INVESTOR'S SHARES
MAY BE WORTH MORE OR LESS THAN WHEN PURCHASED. THE LINE GRAPHS ILLUSTRATE
THE VALUE OF A $10,000 INVESTMENT, PLUS REINVESTED DIVIDENDS AND CAPITAL
GAIN DISTRIBUTIONS. THE CHARTS AND OTHER TOTAL RETURN FIGURES CITED REFLECT
THE FUND'S OPERATING EXPENSES, BUT THE INDEX DOES NOT HAVE EXPENSES, WHICH
WOULD HAVE LOWERED ITS PERFORMANCE.
(6) THE S&P 500 INDEX IS AN UNMANAGED INDEX CONSIDERED REPRESENTATIVE OF THE
BROAD STOCK MARKET. THE INDEX IS NOT MANAGED; THEREFORE, ITS PERFORMANCE
DOES NOT REFLECT MANAGEMENT FEES AND OTHER EXPENSES ASSOCIATED WITH THE
FUND.
<PAGE>
HEALTH SCIENCES FUND
YOUR FUND'S REPORT
FUND PERFORMANCE
DEAR SHAREHOLDER:
The past six months have been encouraging ones for many stocks in the health
care sector. While most industries within the sector witnessed advances,
biotechnology shares proved dominant. These were led higher by encouraging
testing results, a series of lucrative partnerships with other firms, and strong
sales of new drugs. Our fund's heavy investment in biotechnology helped the
portfolio move solidly higher during the period.
--------------------------------------------------------------------------------
HEALTH SCIENCES FUND
TOP 10 COMMON STOCK HOLDINGS
% of Total Net Assets as of 9/30/00
--------------------------------------------------------------------------------
Pharmacia Corp.............................................................4.46%
Lilly (Eli) & Co...........................................................4.14%
IDEC Pharmaceuticals.......................................................3.90%
American Home Products.....................................................3.84%
Merck & Co.................................................................3.47%
MedImmune Inc..............................................................3.46%
Pfizer Inc.................................................................3.43%
Bristol-Myers Squibb.......................................................3.26%
Amgen Inc..................................................................2.90%
Protein Design Labs........................................................2.73%
HOLDINGS AND COMPOSITION OF HOLDINGS ARE SUBJECT TO CHANGE.
--------------------------------------------------------------------------------
PIE CHART: HEALTH SCIENCES FUND
INDUSTRY BREAKDOWN
AS OF 9/30/00
[PIE CHART]
% OF TOTAL NET ASSETS
Health Care Drugs - Pharmaceuticals.....41.79%
Biotechnology-Health Care...............31.73%
Medical Equipment & Devices..............9.41%
Biotechnology............................3.19%
Health Care - Services...................2.66%
Electronics - Instruments................2.45%
Other....................................1.40%
Cash & Cash Equivalents..................7.37%
For the six-month period ended September 30, 2000, the value of Health Sciences
Fund-Investor Class shares increased 30.30%. This return greatly exceeded that
of the S&P 500 Index, which suffered a decline of 3.60% during the same period.
(Of course, past performance is no guarantee of future results.)(7),(8)
The unlocking of the human genome, while destined to have only a modest
short-term impact on the industry, was an important factor in driving investor
interest in biotechnology. The joint announcement by British Prime Minister Tony
Blair and President Bill Clinton that the human genome sequence should be made
public had sent biotechnology shares temporarily lower in March. (This despite
the fact that the sequence itself -- as opposed to drugs based on the sequence
-- is of little import to the industry.) In April, however, investors rushed
back into biotech stocks as Celera Genomics announced that it had finally
completed mapping of the genome.
<PAGE>
PROMISING BIOTECH FUNDAMENTALS
On the more important level of business fundamentals, biotechnology firms
continued to show promising results for their products, with more achieving
profitability. Several of our leading holdings enjoyed strong gains based on
positive results for their products. Strong sales of its flagship heart drug
helped COR Therapeutics post better-than-expected operating results, which in
turn sent its stock higher. Protein Design Labs also leaped higher, helped by
its drug development partnership with pharmaceutical giant Lilly (Eli) & Co, as
well as healthy profits from its antibody technology.
Many of our large pharmaceutical holdings also gained ground during the period,
although the gains were generally more subdued. In their favor, drug stocks
reassumed their role in the fall as a safe haven for investors worried both
about valuations in sectors such as technology and communications and the
possibility of an economic slowdown. Working against them, however, was
increasing debate about extending the purview of the Medicare program to
prescription drugs, which led to worries about price controls in the industry.
Partly due to these concerns, we have reduced our pharmaceutical exposure well
below its historical range, maintaining substantial holdings only in those
leading companies, such as Merck & Co and Pfizer Inc, in which we have the most
faith.
A FOCUS ON SPECIALTY PHARMACEUTICALS
Another part of our strategy has been to focus on so-called "specialty
pharmaceutical" firms. These smaller firms either create and market a smaller
range of targeted drugs, or specialize in producing generic versions of popular
medications. Inhale Therapeutic Systems, for example, develops drugs that can be
delivered to the deep lung. The stock moved solidly higher in the early summer,
aided by its development partnerships with larger pharmaceutical firms.
Most of the remaining areas of the portfolio have also helped our performance.
Medical device makers have continued to occupy a smaller, but important,
position in the fund. PE Corp-PE Biosystems Group, which makes equipment for the
burgeoning field of biotechnology research, shot upward in line with many of its
clients. Industry leader Medtronic Inc also moved higher.
We believe our roughly equal focus on high-growth biotechnology stocks and
stable pharmaceutical firms is nicely positioned to take advantage of several
different market scenarios. As we saw in 1998, fears about an economic slowdown
generally led investors to the health care sector, which tends to see strong
demand for its products no matter where the economy is headed. On the other
hand, should investors regain their appetite for high-growth companies, it may
well be our biotechnology holdings that continue to drive the portfolio higher.
While events can always take us by surprise, we are optimistic that we will be
able to offer even more good news in future reports.
LINE GRAPH: INVESCO HEALTH SCIENCES FUND - CLASS C
GROWTH OF $10,000(7)
This line graph compares the value of a $10,000 investment in INVESCO Health
Sciences Fund - Class C to the value of a $10,000 investment in the S&P 500
Index(8), assuming in each case reinvestment of all dividends and capital gain
distributions, for the seven month period ended 9/30/00.
INVESCO Health Sciences Fund - Class C S&P 500 Index (8)
02/00 $10,000 02/00 $10,000
09/00 $11,616 09/00 $10,583
<PAGE>
LINE GRAPH: INVESCO HEALTH SCIENCES FUND - INVESTOR CLASS
GROWTH OF $10,000(7)
This line graph compares the value of a $10,000 investment in INVESCO Health
Sciences Fund - Investor Class to the value of a $10,000 investment in the S&P
500 Index(8), assuming in each case reinvestment of all dividends and capital
gain distributions, for the ten year period ended 9/30/00.
INVESCO Health Sciences Fund S&P 500 Index (8)
Investor Class
09/90 $10,000 09/90 $10,000
09/91 19,292 09/91 13,109
09/92 17,909 09/92 14,556
09/93 16,870 09/93 16,444
09/94 18,423 09/94 17,049
09/95 26,265 09/95 22,115
09/96 32,936 09/96 26,608
09/97 38,790 09/97 37,366
09/98 48,240 09/98 40,759
09/99 50,299 09/99 52,086
09/00 73,926 09/00 58,998
FUND MANAGEMENT
[PHOTOGRAPH OF JOHN R. SCHROER OMITTED]
JOHN R. SCHROER, CFA
HEALTH SCIENCES FUND
JOHN SCHROER IS A SENIOR VICE PRESIDENT AND DIRECTOR OF RESEARCH OF INVESCO
FUNDS GROUP. JOHN BEGAN HIS INVESTMENT CAREER IN 1989 AFTER EARNING AN MBA AND
BA FROM THE UNIVERSITY OF WISCONSIN-MADISON. HE IS A CHARTERED FINANCIAL
ANALYST.
[PHOTOGRAPH OF THOMAS R. WALD OMITTED]
THOMAS R. WALD, CFA
EFFECTIVE NOVEMBER 15, 2000, VICE PRESIDENT TOM WALD BEGAN CO-MANAGING HEALTH
SCIENCES FUND. TOM BEGAN HIS INVESTMENT CAREER IN 1988. PRIOR TO JOINING INVESCO
FUNDS GROUP IN 1997, HE WAS THE SENIOR HEALTH CARE ANALYST AT MUNDER CAPITAL
MANAGEMENT IN BIRMINGHAM, MICHIGAN. TOM HOLDS A MBA FROM THE WHARTON SCHOOL,
UNIVERSITY OF PENNSYLVANIA, AND A BA FROM TULANE UNIVERSITY. HE IS ALSO A
CHARTERED FINANCIAL ANALYST.
(7) PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. TOTAL RETURN ASSUMES
REINVESTMENT OF DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS. INVESTMENT RETURN AND
PRINCIPAL VALUE WILL VARY SO THAT, WHEN REDEEMED, AN INVESTOR'S SHARES MAY BE
WORTH MORE OR LESS THAN WHEN PURCHASED. THE LINE GRAPHS ILLUSTRATE THE VALUE OF
A $10,000 INVESTMENT, PLUS REINVESTED DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS.
THE CHARTS AND OTHER TOTAL RETURN FIGURES CITED REFLECT THE FUND'S OPERATING
EXPENSES, BUT THE INDEX DOES NOT HAVE EXPENSES, WHICH WOULD HAVE LOWERED ITS
PERFORMANCE.
(8) THE S&P 500 INDEX IS AN UNMANAGED INDEX CONSIDERED REPRESENTATIVE OF THE
BROAD STOCK MARKET. THE INDEX IS NOT MANAGED; THEREFORE, ITS PERFORMANCE DOES
NOT REFLECT MANAGEMENT FEES AND OTHER EXPENSES ASSOCIATED WITH THE FUND.
<PAGE>
LEISURE FUND
YOUR FUND'S REPORT
FUND PERFORMANCE
DEAR SHAREHOLDER:
The past six months have seen a shift in investor sentiment from fears of higher
interest rates to concerns over the impact of slower economic growth on consumer
spending and corporate earnings. Despite high levels of consumer confidence and
robust household spending, the threat of an economic slowdown has fallen
especially hard on consumer-related stocks, including companies in
leisure-related industries. Yet we have been encouraged that many of the
companies represented in the fund continue to report strong business.
For the six-month period ended September 30, 2000, the value of Leisure
Fund-Investor Class shares declined 3.50%, roughly in line with the 3.60% drop
in the S&P 500 Index during the same period. Over the past twelve months,
however, the fund has returned a strong 19.97%, well outpacing the 13.27% gain
in the S&P 500 Index. (Of course, past performance is no guarantee of future
results.)9,10
LINE GRAPH: INVESCO LEISURE FUND - CLASS C
GROWTH OF $10,000(9)
This line graph compares the value of a $10,000 investment in INVESCO Leisure
Fund - Class C to the value of a $10,000 investment in the S&P 500 Index(10),
assuming in each case reinvestment of all dividends and capital gain
distributions, for the seven month period ended 9/30/00.
INVESCO Leisure Fund - Class C S&P 500 Index(10)
02/00 $10,000 02/00 $10,000
09/00 $9,947 09/00 $10,583
LINE GRAPH: INVESCO LEISURE FUND - INVESTOR CLASS
GROWTH OF $10,000(9)
This line graph compares the value of a $10,000 investment in INVESCO Leisure
Fund - Investor Class to the value of a $10,000 investment in the S&P 500
Index(10), assuming in each case reinvestment of all dividends and capital gain
distributions, for the ten year period ended 9/30/00.
INVESCO Leisure Fund S&P 500 Index (10)
Investor Class
09/90 $10,000 09/90 $10,000
09/91 15,515 09/91 13,109
09/92 18,363 09/92 14,556
09/93 28,547 09/93 16,444
09/94 28,168 09/94 17,049
09/95 32,353 09/95 22,115
09/96 35,350 09/96 26,608
09/97 42,394 09/97 37,366
09/98 46,156 09/98 40,759
09/99 75,958 09/99 52,086
09/00 91,128 09/00 58,998
<PAGE>
GAMING STOCKS PAY OFF
While the pressure on consumer stocks has fallen hard on several of our cruise
ship and retailing holdings, the fund has benefited from strong performance by
our hotel and casino stocks, which have continued to show strong results. One of
our strongest performers over the period was Harrah's Entertainment -- a gaming
powerhouse that owns popular casinos in Las Vegas and Atlantic City. Harrah's
management is using technology to enhance business and cross-sell products,
while also working to contain costs and boost profits at its existing
properties.
BEVERAGE SHARES AID PERFORMANCE
Brewing is an industry that tends to perform well even in economic slowdowns,
and our brewery stocks have rewarded us with strong performance. One standout is
Heineken NV. Even in the relatively mature beer industry, Heineken has been able
to sustain brand loyalty by building an emotional connection between consumers
and its products. We also benefited from our decision earlier this year to add a
position in Anheuser-Busch, a solid company with strong cash flow that was
trading at a discounted valuation. Since we purchased the stock, it has rallied
and we expect it to perform well going forward.
We also added a position in Carlsberg A/S, a Danish brewer serving a broad
global market. Carlsberg is starting to adopt many of the production,
distribution and marketing techniques used so effectively by competitors such as
Heineken, and we have been encouraged by management's efforts to streamline
operations, spin off non-core businesses, and improve returns for shareholders.
Moreover, the stock is trading at a discounted valuation relative to other
brewing shares, offering the potential for healthy appreciation.
LEISURE SPENDING CONTINUES TO OUTPACE ECONOMIC GROWTH
We continue to believe that leisure stocks remain a sound investment alternative
in any environment. Leisure spending has outpaced overall economic growth over
the long term, and consumers tend to spend money on leisure activities even in
economic downturns. Furthermore, many of the trends and companies we monitor
have been evolving over decades and have solid track records that appeal to
investors and customers alike. For this reason, the fund has a low turnover rate
-- once we invest in a company, we tend to own it for the long haul. At the same
time, we continue to travel extensively, scrutinizing the performance of our
companies, while also remaining on the lookout for promising leisure companies
selling at attractive valuations.
PIE CHART: LEISURE FUND
INDUSTRY BREAKDOWN
AS OF 9/30/00
[PIE CHART]
% OF TOTAL NET ASSETS
Cable...................................11.12%
Broadcasting............................10.93%
Leisure Time............................10.71%
Entertainment............................9.87%
Services-Advertising & Marketing.........9.78%
Gaming...................................9.45%
Publishing...............................6.96%
Lodging-Hotels...........................5.37%
Toys.....................................3.63%
Beverages - Alcoholic....................3.32%
Textile-Apparel Manufacturing............2.17%
Other...................................10.68%
Cash & Cash Equivalents..................6.01%
<PAGE>
--------------------------------------------------------------------------------
LEISURE FUND
TOP 10 COMMON STOCK HOLDINGS
% of Total Net Assets as of 9/30/00
--------------------------------------------------------------------------------
Harrah's Entertainment.....................................................7.82%
AT&T Corp-Liberty Media Group Class A Shrs.................................5.07%
Marriott International Class A Shrs........................................4.92%
Omnicom Group..............................................................3.97%
Mattel Inc.................................................................3.26%
Pegasus Communications.....................................................3.05%
Valassis Communications....................................................3.04%
International Game Technology..............................................2.59%
Comcast Corp Special Class A Shrs..........................................2.56%
Gemstar-TV Guide International.............................................2.51%
HOLDINGS AND COMPOSITION OF HOLDINGS ARE SUBJECT TO CHANGE.
--------------------------------------------------------------------------------
FUND MANAGEMENT
[PHOTOGRAPH OF MARK GREENBERG OMITTED]
MARK GREENBERG, CFA
LEISURE FUND
MARK GREENBERG IS A SENIOR VICE PRESIDENT OF INVESCO FUNDS GROUP. HE BEGAN HIS
INVESTMENT CAREER IN 1980 AND HAS MORE THAN 16 YEARS OF EXPERIENCE IN THE
LEISURE SECTOR. MARK RECEIVED A BSBA FROM MARQUETTE UNIVERSITY AND IS A
CHARTERED FINANCIAL ANALYST.
(9) Past performance is not a guarantee of future results. Total return assumes
reinvestment of dividends and capital gain distributions. Investment return
and principal value will vary so that, when redeemed, an investor's shares
may be worth more or less than when purchased. The line graphs illustrate
the value of a $10,000 investment, plus reinvested dividends and capital
gain distributions. The charts and other total return figures cited reflect
the fund's operating expenses, but the index does not have expenses, which
would have lowered its performance.
(10) The S&P 500 Index is an unmanaged index considered representative of the
broad stock market. The index is not managed; therefore, its performance
does not reflect management fees and other expenses associated with the
fund.
<PAGE>
REAL ESTATE OPPORTUNITY FUND
YOUR FUND'S REPORT
FUND PERFORMANCE
DEAR SHAREHOLDER:
The past six months have been an encouraging period for real estate-related
investments. The real estate investment trust (REIT) market received heightened
attention from investors attracted to its consistent yields and relative
stability in what has been a volatile period for the equity markets. The real
estate market has also benefited from the continued economic expansion, low
unemployment rates, and tight capacity in a number of urban markets.
For the six-month period ended September 30, 2000, the value of Real Estate
Opportunity Fund-Investor Class shares rose 17.34%. This return slightly lagged
that of the NAREIT-Equity REIT Index, which rose 18.98%, but far outpaced the
S&P 500 Index, which declined 3.60% during the period. (Of course, past
performance is no guarantee of future results.)(11),(12)
--------------------------------------------------------------------------------
REAL ESTATE OPPORTUNITY FUND--
TOP 10 C0MMON STOCK HOLDINGS
% of Total Net Assets as of 9/30/00
--------------------------------------------------------------------------------
Alexandria Real Estate Equities............................................3.95%
Apartment Investment & Management Class A Shrs.............................3.95%
Cousins Properties.........................................................3.92%
Spieker Properties.........................................................3.79%
SL Green Realty............................................................3.71%
Trizec Hahn................................................................3.44%
Boston Properties..........................................................3.43%
Equity Office Properties Trust.............................................3.40%
Simon Property Group.......................................................3.37%
BRE Properties Class A Shrs................................................3.32%
HOLDINGS AND COMPOSITION OF HOLDINGS ARE SUBJECT TO CHANGE.
--------------------------------------------------------------------------------
URBAN MARKET REITS ARE STRONG PERFORMERS
The fund continued its strategy of seeking out real estate investments that
provide stable yields as well as the potential for healthy price appreciation.
Our focus has been on the strongest areas of the real estate market, including
the office, industrial and apartment sectors. In particular, we have emphasized
the central business districts of urban markets where demand is strong, and
geography or other constraints make it difficult to add capacity.
Many of the most attractive urban markets are on the East and West coasts. Among
our top performing positions were REITs with solid footholds in the California
office market, including Essex Property Trust and Spieker Properties. Our
apartment REITs also performed well. Furthermore, these holdings offer us a
hedge against any additional rise in interest rates, since demand for apartment
space tends to increase when people find it more expensive to purchase homes.
DIVERSIFIED PROPERTY REITS, REGIONAL MALLS ADD PORTFOLIO DIVERSIFICATION
Our emphasis on broad diversification has also led us to other opportunities. We
increased our exposure to diversified property REITs, including Cousins
Properties. While this group has lagged the office market this year, these
investments continue to exhibit strong fundamentals. They are also attractively
priced relative to other areas of the real estate market, suggesting further
appreciation potential. Additionally, we raised our exposure to regional malls
to take advantage of some consolidation in the space.
<PAGE>
REAL ESTATE-RELATED EQUITIES PROVIDED MIXED RESULTS
Our efforts to enhance the fund's potential return while reducing its risk
profile encouraged us to explore real estate-related equity investments that may
have higher growth potential in an expanding stock market. These holdings
include investments in retailers, casinos, and Web-hosting facility providers,
as well as companies that own and lease space on antenna towers serving the
wireless communications and broadcast industries.
While a number of these holdings have been hindered by the recent downward
volatility in equity prices, we did have successes. One standout was Harrah's
Entertainment, a gaming enterprise that owns casinos and river boats across the
United States. Another strong performer, RadioShack Corp, is capitalizing on
consumer interest in upgrading to digital electronics. Given the crosscurrents
affecting the stock market, we have trimmed back our exposure to
real-estate-related equities -- focusing our interest on companies that can
maintain solid earnings growth in any kind of economic environment.
Going forward, we remain upbeat on the outlook for the real estate investment
trust market. Healthy employment growth, robust consumer confidence, and a pause
in interest rate hikes all bode well for the office and residential real estate
markets. Additionally, REITs continue to sell at attractive prices relative to
their asset value, suggesting further upside potential even with their recent
gains. We believe the fund is well positioned to outperform in any market
environment and may benefit, in particular, from any ongoing volatility in the
equity markets.
PIE CHART: REAL ESTATE OPPORTUNITY
FUND INDUSTRY BREAKDOWN
AS OF 9/30/00
[PIE CHART]
% OF TOTAL NET ASSETS
Real Estate Investment Trust............72.62%
Telecommunications-Cellular & Wireless...6.38%
Real Estate..............................4.75%
Gaming...................................2.44%
Paper & Forest Products..................2.13%
Retail-Computers & Electronics...........1.98%
Other....................................3.80%
Cash & Cash Equivalents..................5.90%
LINE GRAPH: INVESCO REAL ESTATE OPPORTUNITY FUND - INVESTOR CLASS
GROWTH OF $10,000(11)
This line graph compares the value of a $10,000 investment in INVESCO Real
Estate Opportunity Fund - Investor Class to the value of a $10,000 investment in
the S&P 500 Index(12) and NAREIT-Equity REIT Index(12), assuming in each case
reinvestment of all dividends and capital gain distributions, for the ten year
period ended 9/30/00.
INVESCO Real Estate Opportunity S&P 500 Index (12) NAREIT-Equity
Fund - Investor Class REIT Index (12)
01/97 $10,000 01/97 $10,000 01/97 $10,000
09/97 12,164 09/97 12,963 09/98 11,822
09/98 9,094 09/98 14,140 09/99 10,222
09/99 8,757 09/99 18,070 09/00 9,561
09/00 10,674 09/00 20,467 09/00 11,532
<PAGE>
LINE GRAPH: INVESCO REAL ESTATE OPPORTUNITY FUND - CLASS C
GROWTH OF $10,000(11)
This line graph compares the value of a $10,000 investment in INVESCO Real
Estate Opportunity Fund - Class C to the value of a $10,000 investment in the
S&P 500 Index(12) and NAREIT-Equity REIT Index(12), assuming in each case
reinvestment of all dividends and capital gain distributions, for the seven
month period ended 9/30/00.
INVESCO Real Estate Opportunity S&P 500 Index (12) NAREIT-Equity
Fund - Class C REIT Index (12)
02/00 $10,000 02/00 $10,000 2/00 $10,000
09/00 $11,926 09/00 $10,583 9/00 $11,822
FUND MANAGEMENT
[PHOTOGRAPH OF SEAN D. KATOF OMITTED]
SEAN D. KATOF
REAL ESTATE OPPORTUNITY FUND
SEAN KATOF IS A PORTFOLIO MANAGER FOR INVESCO FUNDS GROUP. HE RECEIVED A BSBA
FROM THE UNIVERSITY OF COLORADO AT BOULDER AND HIS MS IN FINANCE FROM THE
UNIVERSITY OF COLORADO AT DENVER. SEAN BEGAN HIS INVESTMENT CAREER IN 1994.
(11) PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. TOTAL RETURN ASSUMES
REINVESTMENT OF DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS. INVESTMENT RETURN
AND PRINCIPAL VALUE WILL VARY SO THAT, WHEN REDEEMED, AN INVESTOR'S SHARES
MAY BE WORTH MORE OR LESS THAN WHEN PURCHASED. THE LINE GRAPHS ILLUSTRATE
THE VALUE OF A $10,000 INVESTMENT, PLUS REINVESTED DIVIDENDS AND CAPITAL
GAIN DISTRIBUTIONS. THE CHARTS AND OTHER TOTAL RETURN FIGURES CITED REFLECT
THE FUND'S OPERATING EXPENSES, BUT THE INDEXES DO NOT HAVE EXPENSES, WHICH
WOULD HAVE LOWERED THEIR PERFORMANCE.
(12) THE NAREIT-EQUITY REIT INDEX IS AN UNMANAGED INDEX REFLECTING PERFORMANCE
OF THE U.S. REAL ESTATE INVESTMENT TRUST EQUITY MARKET. THE S&P 500 INDEX
IS AN UNMANAGED INDEX CONSIDERED REPRESENTATIVE OF THE BROAD STOCK MARKET.
THE INDEXES ARE NOT MANAGED; THEREFORE, THEIR PERFORMANCE DOES NOT REFLECT
MANAGEMENT FEES AND OTHER EXPENSES ASSOCIATED WITH THE FUND.
THE REAL ESTATE INDUSTRY IS HIGHLY CYCLICAL, AND THE VALUE OF SECURITIES ISSUED
BY COMPANIES DOING BUSINESS IN THAT SECTOR MAY FLUCTUATE WIDELY.
<PAGE>
TECHNOLOGY FUND
YOUR FUND'S REPORT
FUND PERFORMANCE
DEAR SHAREHOLDER:
Technology markets have seesawed over the past six months, as fear of rising
interest rates gave way to concerns over earnings and industry demand. While the
threat of rising interest rates pressured high valuation shares early in the
period, many leading technology stocks rebounded in the summer on signs the
Federal Reserve Board was finished with this round of credit tightening.
By late summer, however, shares succumbed to new concerns over the strength of
several industry demand drivers. These concerns included a slowdown in wireless
subscriber growth, a softening of the semiconductor investment cycle, and
funding problems facing a number of "dot com" and emerging telecommunications
companies. Adding to these pressures, September witnessed a cascade of
disappointing earnings pre-announcements by technology companies ranging from
Intel to Apple Computer. The result was a widespread sell-off in technology
shares that affected both weak companies and those continuing to execute on
their solid, well-funded business plans.
--------------------------------------------------------------------------------
TECHNOLOGY FUND--
TOP 10 COMMON STOCK HOLDINGS
% of Total Net Assets as of 9/30/00
--------------------------------------------------------------------------------
CIENA Corp.................................................................2.31%
i2 Technologies............................................................2.19%
Siebel Systems.............................................................2.05%
Applied Micro Circuits.....................................................1.99%
Mercury Interactive........................................................1.89%
Network Appliance..........................................................1.81%
EMC Corp...................................................................1.80%
Brocade Communications Systems.............................................1.75%
SDL Inc....................................................................1.74%
PMC-Sierra Inc.............................................................1.69%
HOLDINGS AND COMPOSITION OF HOLDINGS ARE SUBJECT TO CHANGE.
--------------------------------------------------------------------------------
For the six-month period ended September 30, 2000, the value of Technology
Fund-Investor Class shares declined 3.87%, compared to a 3.60% drop in the S&P
500 Index. Despite giving ground, the fund performed far better than the Nasdaq
Composite, which lost 19.68%. It's important to keep performance in perspective:
For the most recent 12-month period, the fund was up 102.26%, far outpacing a
13.27% increase in the S&P 500 Index and a 33.74% gain in the Nasdaq Composite.
(Of course, past performance is no guarantee of future results.)(13),(14)
TECHNOLOGY DEMAND REMAINS STRONG
In a market where many of our competitors suffered sizable losses, the fund
fared relatively well, keeping pace with the broader equity market. The fund's
ability to largely sidestep many of the stocks that disappointed investors
reflects our intensive research and careful attention to fundamentals. For the
year, the fund remains one of the leading technology funds and continues to
sport the best performance among large technology funds.
<PAGE>
While many of the recent concerns over valuations are legitimate, we also
believe overall technology demand remains very strong, if not as robust as it
was in 1999. For one, existing voice networks do not have the scale or
efficiency to accommodate the explosion in data traffic we have witnessed in
recent years. Consequently, carriers are spending billions of dollars to upgrade
their networks. Standing to benefit from this investment are optical networking
companies, such as CIENA Corp, which supplies technology that breaks light into
the full spectrum with each color capable of transmitting a separate data
stream. Applied Micro Circuits, one of our largest holdings, manufactures a
variety of chips for optical networks. Both stocks have been strong performers.
SORTING OUT THE WINNERS AND LOSERS
Despite the concerns in the marketplace and the poor performance of technology
stocks of late, we believe that we are relatively close to reaching bottom. The
market has been doing its job of sorting out the winners and losers. Losers have
been discarded with considerable relish, and valuation excesses and speculation
are being corrected with a vengeance. Once this process is further along, we
expect that investors will come back to well-managed companies that address
large and growing markets and that have a large, if not dominant, market share
and strong earnings potential. We expect to have the fund well positioned for
this turn in psychology, which could come as early as the presidential election.
FOR MORE DETAILS ON BILL'S CURRENT OUTLOOK ON TECHNOLOGY STOCKS,
PLEASE SEE PAGE 21.
LINE GRAPH: INVESCO TECHNOLOGY FUND - INVESTOR CLASS
GROWTH OF $10,000(13)
This line graph compares the value of a $10,000 investment in INVESCO Technology
Fund - Investor Class to the value of a $10,000 investment in the S&P 500
Index(14), assuming in each case reinvestment of all dividends and capital gain
distributions, for the ten year period ended 9/30/00.
INVESCO Technology Fund S&P 500 Index (14)
Investor Class
09/90 $10,000 09/90 $10,000
09/91 18,064 09/91 13,109
09/92 20,037 09/92 14,556
09/93 28,627 09/93 16,444
09/94 28,892 09/94 17,049
09/95 42,234 09/95 22,115
09/96 52,645 09/96 26,608
09/97 66,507 09/97 37,366
09/98 60,260 09/98 40,759
09/99 110,757 09/99 52,086
09/00 224,011 09/00 58,998
LINE GRAPH: INVESCO TECHNOLOGY FUND - CLASS C
GROWTH OF $10,000(13)
This line graph compares the value of a $10,000 investment in INVESCO Technology
Fund - Class C to the value of a $10,000 investment in the S&P 500 Index(14),
assuming in each case reinvestment of all dividends and capital gain
distributions, for the seven month period ended 9/30/00.
INVESCO Technology Fund - Class C S&P 500 Index(14)
02/00 $10,000 02/00 $10,000
09/00 $10,198 09/00 $10,583
<PAGE>
LINE GRAPH: INVESCO TECHNOLOGY FUND - INSTITUTIONAL CLASS
GROWTH OF $10,000(13)
This line graph compares the value of a $10,000 investment in INVESCO Technology
Fund - Institutional Class to the value of a $10,000 investment in the S&P 500
Index(14), assuming in each case reinvestment of all dividends and capital gain
distributions, for the twenty-one month period ended 9/30/00.
INVESCO Technology Fund -
Institutional Class S&P 500 Index (14)
12/98 $10,000 12/98 $10,000
09/00 $30,938 09/00 $11,935
PIE CHART: TECHNOLOGY FUND
INDUSTRY BREAKDOWN
AS OF 9/30/00
[PIE CHART]
% OF TOTAL NET ASSETS
Computer Software & Services............20.73%
Electronics-Semiconductor...............19.31%
Communications-Equipment
& Manufacturing.......................11.08%
Electrical Equipment.....................7.81%
Computers-Networking.....................6.56%
Services-Computer Systems................4.31%
Computer Systems.........................3.70%
Computers-Peripherals....................3.18%
Telecommunications-Cellular & Wireless...2.45%
Other...................................12.68%
Cash & Cash Equivalents..................8.19%
FUND MANAGEMENT
[PHOTO OF WILLIAM R. KEITHLER OMITTED]
WILLIAM R. KEITHLER, CFA
TECHNOLOGY FUND
BILL KEITHLER IS A SENIOR VICE PRESIDENT AND DIRECTOR OF SECTOR MANAGEMENT AT
INVESCO FUNDS GROUP. A CHARTERED FINANCIAL ANALYST, BILL RECEIVED AN MS FROM THE
UNIVERSITY OF WISCONSIN-MADISON AND A BS FROM WEBSTER COLLEGE. HE BEGAN HIS
INVESTMENT CAREER IN 1982.
(13) PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. TOTAL RETURN ASSUMES
REINVESTMENT OF DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS. INVESTMENT RETURN
AND PRINCIPAL VALUE WILL VARY SO THAT, WHEN REDEEMED, AN INVESTOR'S SHARES
MAY BE WORTH MORE OR LESS THAN WHEN PURCHASED. THE LINE GRAPHS ILLUSTRATE
THE VALUE OF A $10,000 INVESTMENT, PLUS REINVESTED DIVIDENDS AND CAPITAL
GAIN DISTRIBUTIONS. THE CHARTS AND OTHER TOTAL RETURN FIGURES CITED REFLECT
THE FUND'S OPERATING EXPENSES, BUT THE INDEX DOES NOT HAVE EXPENSES, WHICH
WOULD HAVE LOWERED ITS PERFORMANCE.
(14) THE S&P 500 INDEX IS AN UNMANAGED INDEX CONSIDERED REPRESENTATIVE OF THE
BROAD STOCK MARKET. THE NASDAQ COMPOSITE INDEX IS AN UNMANAGED INDEX OF
STOCKS TRADED OVER-THE-COUNTER. THE INDEXES ARE NOT MANAGED; THEREFORE,
THEIR PERFORMANCE DOES NOT REFLECT MANAGEMENT FEES AND OTHER EXPENSES
ASSOCIATED WITH THE FUND.
<PAGE>
TELECOMMUNICATIONS FUND
YOUR FUND'S REPORT
FUND PERFORMANCE
DEAR SHAREHOLDER:
While investors entered 2000 with bullish expectations for the
telecommunications sector, a number of developments have called into question
the industry's demand drivers and have -- at least temporarily -- cooled
investors' ardor.
--------------------------------------------------------------------------------
TELECOMMUNICATIONS FUND--
TOP 10 COMMON STOCK HOLDINGS
% of Total Net Assets as of 9/30/00
--------------------------------------------------------------------------------
EMC Corp...................................................................3.63%
Applied Micro Circuits.....................................................3.63%
Juniper Networks...........................................................3.59%
SDL Inc....................................................................3.47%
CIENA Corp.................................................................3.34%
PMC-Sierra Inc.............................................................3.15%
Corning Inc................................................................2.50%
Nortel Networks............................................................2.49%
Qwest Communications International.........................................2.34%
Cisco Systems..............................................................2.17%
HOLDINGS AND COMPOSITION OF HOLDINGS ARE SUBJECT TO CHANGE.
--------------------------------------------------------------------------------
First, wireless service and equipment providers were hit by a slowdown in
subscriber growth and a subsequent profits warning from equipment powerhouse
Nokia Corp. Meanwhile, long distance and European telecom companies continued to
see their margins squeezed by pricing pressures. More recently, a number of
competitive local exchange carriers (CLECs), which compete with incumbent baby
Bells, encountered a funding drought in the high yield market that threatened to
delay their growth plans. These concerns cast a pall over most areas of the
telecommunications market, affecting service providers and equipment
manufacturers alike.
PIE CHART: TELECOMMUNICATIONS FUND
INDUSTRY BREAKDOWN
AS OF 9/30/00
[PIE CHART]
% OF TOTAL NET ASSETS
Communications-Equipment
& Manufacturing.......................19.21%
Electronics-Semiconductor...............15.21%
Telephone...............................13.14%
Telecommunications-Cellular
& Wireless.............................9.50%
Computers-Networking.....................8.31%
Telecommunications-Long Distance.........5.75%
Computers-Peripherals....................4.07%
Broadcasting.............................3.58%
Computer Software & Services.............3.50%
Manufacturing-Diviersified...............2.50%
Other....................................7.09%
Cash & Cash Equivalents..................8.14%
<PAGE>
Over this challenging six-month period ended September 30, 2000, the value of
Telecommunications Fund-Investor Class shares declined 13.79%, compared to a
3.60% drop in the S&P 500 Index. Over the past 12 months, however, the fund
gained 74.47%, well ahead of the 13.27% gain in the S&P 500 Index. (Of course,
past performance is no guarantee of future results).(15),(16)
TELECOMMUNICATIONS SPENDING GROWTH SHOULD CONTINUE
While we have long recognized that the pace of telecommunications spending over
the past few years was unsustainable, we believe that the sector continues to
offer strong growth potential. Even if the market slows from the 30% gain
recorded this year, we still expect annual telecommunications spending to grow
at a double-digit rate -- faster than overall economic growth.
For one, recent forecasts of decelerating spending growth have reflected annual
capital spending surveys that habitually underestimate actual behavior.
Moreover, the funding problems in the CLECs have been relatively isolated. Even
if the entire CLEC group cut back its spending, this market only accounts for 8%
of the industry's total capital spending. Incumbent regional Bell operating
companies, long distance companies and European national telecommunications
providers continue to invest in new equipment, particularly technology to
accommodate the recent explosion in data traffic.
OPTICAL NETWORKING: THE SECTOR'S NEXT BIG DRIVER
One area that continues to benefit from vigorous telecommunications spending is
optical networking -- a technology that improves the efficiency and carrying
capacity of fiber optic networks. Many of the fund's top performers were in this
industry. One standout was CIENA Corp, a leader in wave division multiplexing
that breaks light into the full spectrum -- each color capable of transmitting a
separate data stream. Another strong performer was Juniper Networks, which
provides next-generation Internet routers designed specifically for carrier
networks.
RBOCS AND CONSOLIDATION AID PERFORMANCE
Our results over the period were cushioned somewhat by our decision to trim our
exposure to the troubled wireless market ahead of Nokia's profit warning. Our
results were also aided by the relatively stable performance by the regional
Bell operating companies, or RBOCs. Investors are starting to recognize the
strategic importance of the RBOCs' control of the crucial last mile of phone
lines into consumers' homes. In particular, we benefited from the consummation
of the merger of US WEST and Qwest Communications International, and we are
enthusiastic about the resulting synergies. Industry consolidation also worked
in our favor when our position in Internet hosting provider Verio Inc was
acquired by Japan's Nippon Telegraph & Telephone.
While we believe the weakness in the telecommunications market has been
overstated, we caution that these stocks could remain volatile over the
near-term until investors become more discriminating and reward the kind of
solid, well-managed, well-funded businesses we own. Our focus going forward will
be on areas of the telecommunications sector -- such as optical networking --
where we foresee accelerating growth opportunities in 2001.
LINE GRAPH: INVESCO TELECOMMUNICATIONS FUND - INVESTOR CLASS
GROWTH OF $10,000(15)
This line graph compares the value of a $10,000 investment in INVESCO
Telecommunications Fund - Investor Class to the value of a $10,000 investment in
the S&P 500 Index (16) and MSCI-EAFE Index(16), assuming in each case
reinvestment of all dividends and capital gain distributions, for the six year
period ended 9/30/00.
<PAGE>
INVESCO Telecommunications Fund MSCI-EAFE
Investor Class S&P 500 Index (16) Index (16)
08/94 $10,000 08/94 $10,000 08/94 $10,000
09/94 10,440 09/94 10 155 09/94 9,919
09/95 12,838 09/95 13,172 09/95 10,525
09/96 14,783 09/96 15,849 09/96 11,466
09/97 20,506 09/97 22,256 09/97 12,898
09/98 20,422 09/98 24,277 09/98 11,856
09/99 43,217 09/99 31,024 09/99 15,569
09/00 75,402 09/00 35,141 09/00 16,102
LINE GRAPH: INVESCO TELECOMMUNICATIONS FUND - CLASS C
GROWTH OF $10,000(15)
This line graph compares the value of a $10,000 investment in INVESCO
Telecommunications Fund - Class C to the value of a $10,000 investment in the
S&P 500 Index(16) and MSCI-EAFE Index(16), assuming in each case reinvestment of
all dividends and capital gain distributions, for the seven month period ended
9/30/00.
INVESCO Telecommunications MSCI-EAFE
Fund - Class C S&P 500 Index(16) Index (16)
02/00 $10,000 02/00 $10,000 02/00 $10,000
09/00 $9,325 09/00 $10,583 09/00 $9,184
FUND MANAGEMENT
[PHOTOGRAPH OF BRIAN B. HAYWARD OMITTED]
BRIAN B. HAYWARD, CFA
TELECOMMUNICATIONS FUND
BRIAN HAYWARD IS A SENIOR VICE PRESIDENT OF INVESCO FUNDS GROUP. PRIOR TO
JOINING INVESCO IN 1997, HE WAS A SENIOR EQUITY ANALYST FOR MISSISSIPPI VALLEY
ADVISORS. BRIAN HAS A BA IN MATHEMATICS AND AN MA IN ECONOMICS FROM THE
UNIVERSITY OF MISSOURI. HE IS A CHARTERED FINANCIAL ANALYST AND BEGAN HIS
INVESTMENT CAREER IN 1985.
(15) PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. TOTAL RETURN ASSUMES
REINVESTMENT OF DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS. INVESTMENT RETURN
AND PRINCIPAL VALUE WILL VARY SO THAT, WHEN REDEEMED, AN INVESTOR'S SHARES
MAY BE WORTH MORE OR LESS THAN WHEN PURCHASED. THE LINE GRAPHS ILLUSTRATE
THE VALUE OF A $10,000 INVESTMENT, PLUS REINVESTED DIVIDENDS AND CAPITAL
GAIN DISTRIBUTIONS. THE CHARTS AND OTHER TOTAL RETURN FIGURES CITED REFLECT
THE FUND'S OPERATING EXPENSES, BUT THE INDEXES DO NOT HAVE EXPENSES, WHICH
WOULD HAVE LOWERED THEIR PERFORMANCE.
(16) THE S&P 500 INDEX IS AN UNMANAGED INDEX CONSIDERED REPRESENTATIVE OF THE
BROAD STOCK MARKET, WHILE THE MSCI-EAFE INDEX REFLECTS THE PERFORMANCE OF
COMMON STOCKS FOR EUROPE, ASIA AND THE FAR EAST. THE INDEXES ARE NOT
MANAGED; THEREFORE, THEIR PERFORMANCE DOES NOT REFLECT MANAGEMENT FEES AND
OTHER EXPENSES ASSOCIATED WITH THE FUND.
<PAGE>
UTILITIES FUND
YOUR FUND'S REPORT
FUND PERFORMANCE
DEAR SHAREHOLDER:
The performance of utility stocks over the past six months has been mixed.
Electric utility shares have surged on strong usage, tight industry capacity,
and higher oil and natural gas prices. These shares have also been rewarded by
investors seeking a defensive haven against heightened equity market volatility.
On the downside, telecommunications shares have struggled against concerns over
slowing wireless demand, heightened price competition in the long distance
market, and credit concerns facing some emerging telecom carriers.
--------------------------------------------------------------------------------
UTILITIES FUND--
TOP 10 COMMON STOCK HOLDINGS
% of Total Net Assets as of 9/30/00
--------------------------------------------------------------------------------
Calpine Corp...............................................................5.41%
SBC Communications.........................................................4.14%
Duke Energy................................................................3.64%
Dynegy Inc Class A Shrs....................................................3.33%
AES Corp...................................................................3.31%
Coastal Corp...............................................................3.24%
Qwest Communications International.........................................3.18%
Enron Corp.................................................................3.11%
Amdocs Ltd.................................................................2.80%
Unicom Corp................................................................2.80%
HOLDINGS AND COMPOSITION OF HOLDINGS ARE SUBJECT TO CHANGE.
--------------------------------------------------------------------------------
For the six-month period ended September 30, 2000, the value of Utilities
Fund-Investor Class shares declined 3.63%, in line with the 3.60% decline in the
S&P 500 Index. But the fund's performance fell well short of the 41.33% surge in
the S&P Utilities Index, which reflected a recent jump in electric and natural
gas utility stocks fueled by soaring prices. (Of course, past performance is no
guarantee of future results).(17),(18)
TELECOMMUNICATIONS SHARES HINDER PERFORMANCE
The fund's performance relative to the utilities index reflects our weighting in
telecommunications shares, which struggled during the period. Among the hardest
hit were competitive local exchange carriers (CLECs) -- telephone providers that
compete with the regional Bell companies. The CLEC group has been plagued by a
drought in high-yield financing, as well as by the bankruptcy and disposition of
GST Communications, which effectively broke an industry valuation benchmark.
These pressures also extended to utility companies with embedded
telecommunications assets, as well as incumbent telecom providers, such as
Verizon Communications, hurt by labor problems and a threatened delay in the
digital services rollout.
While we have been disappointed with the performance of our telecommunications
shares, we feel the recent contraction in valuations has been overstated.
Furthermore, we are confident in the growth potential of the carriers we own --
all of which are well funded through 2002.
ELECTRIC UTILITY STOCKS SHINE
On a positive note, our performance did benefit from our decision earlier this
year to increase our weighting in electric utility stocks benefiting from higher
usage rates. Many electric utility companies pre-announced better-than-expected
earnings, providing further support for their share prices.
<PAGE>
Recently, our focus has been on the electricity generation market, where
national players such as Duke Energy are taking advantage of deregulation and
tight capacity to aggressively pursue market share. Calpine Corp, the nation's
largest producer of renewable geothermal energy, saw its earnings jump on
increased demand and higher prices in some of its U.S. markets. The company's
shares also benefited from Calpine's recent acquisitions of geothermal steam
fields and energy facilities.
As some regions of the country suffer energy shortages while others are saddled
with excess supply, the trading of energy has become big business. To take
advantage of the opportunities in energy trading, we added to our position in
Enron Corp, a leading arbitrageur in energy markets.
Looking ahead, we are upbeat on the outlook for utilities stocks, particularly
in the electricity generation area. Even if the economy slows, we believe energy
demand will remain high as Internet use continues to grow. At the same time,
supply constraints in the natural gas and electric generation markets have
supported higher rates. Given that it takes at least 18 months to build new
power plants, we believe supply and demand dynamics will remain favorable for
some time. In this volatile market, we will continue to focus on utility and
telecom stocks that offer long-term growth potential to augment their more
defensive characteristics.
PIE CHART: UTILITIES FUND
INDUSTRY BREAKDOWN
AS OF 9/30/00
[PIE CHART]
% OF TOTAL NET ASSETS
Electric Utilities......................35.46%
Telephone...............................25.56%
Natural Gas Pipelines...................13.82%
Telecommunications-Cellular & Wireless...7.46%
Telecommunications - Long Distance.......3.18%
Broadcasting.............................1.51%
Communications-Equipment
& Manufacturing........................1.36%
Cash & Cash Equivalents.................11.65%
LINE GRAPH: INVESCO UTILITIES FUND - CLASS C
GROWTH OF $10,000(17)
This line graph compares the value of a $10,000 investment in INVESCO Utilities
Fund - Class C to the value of a $10,000 investment in the S&P 500 Index (18)
and S&P Utilities Index(18), assuming in each case reinvestment of all dividends
and capital gain distributions, for the seven month period ended 9/30/00.
INVESCO Utilities S&P Utilities
Fund - Class C S&P 500 Index (18) Index (18)
02/00 $10,000 02/00 $10,000 02/00 $10,000
09/00 $9,852 09/00 $10,583 09/00 $14,628
<PAGE>
LINE GRAPH: INVESCO UTILITIES FUND - INVESTOR CLASS
GROWTH OF $10,000(17)
This line graph compares the value of a $10,000 investment in INVESCO Utilities
Fund - Investor Class to the value of a $10,000 investment in the S&P 500 Index
(18) and S&P Utilities Index(18), assuming in each case reinvestment of all
dividends and capital gain distributions, for the ten year period ended 9/30/00.
INVESCO Utilities Fund S&P Utilities
Investor Class S&P 500 Index (18) Index (18)
09/90 $10,000 09/90 $10,000 09/90 $10,000
09/91 12,596 09/91 13,109 09/91 11,587
09/92 14,188 09/92 14,556 09/92 13,252
09/93 18,795 09/93 16,444 09/93 16,488
09/94 17,291 09/94 17,049 09/94 14,328
09/95 19,644 09/95 22,115 09/95 18,281
09/96 22,316 09/96 26,608 09/96 19,528
09/97 26,361 09/97 37,366 09/97 22,334
09/98 31,281 09/98 40,759 09/98 29,041
09/99 38,598 09/99 52,086 09/99 28,702
09/00 47,894 09/00 58,998 09/00 41,480
FUND MANAGEMENT
[PHOTOGRAPH OF BRIAN B. HAYWARD OMITTED]
BRIAN B. HAYWARD, CFA
UTILITIES FUND
BRIAN HAYWARD IS A SENIOR VICE PRESIDENT OF INVESCO FUNDS GROUP. PRIOR TO
JOINING INVESCO IN 1997, HE WAS A SENIOR EQUITY ANALYST FOR MISSISSIPPI VALLEY
ADVISORS. BRIAN HAS A BA IN MATHEMATICS AND AN MA IN ECONOMICS FROM THE
UNIVERSITY OF MISSOURI. HE IS A CHARTERED FINANCIAL ANALYST AND BEGAN HIS
INVESTMENT CAREER IN 1985.
(17) PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. TOTAL RETURN ASSUMES
REINVESTMENT OF DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS. INVESTMENT RETURN
AND PRINCIPAL VALUE WILL VARY SO THAT, WHEN REDEEMED, AN INVESTOR'S SHARES
MAY BE WORTH MORE OR LESS THAN WHEN PURCHASED. THE LINE GRAPHS ILLUSTRATE
THE VALUE OF A $10,000 INVESTMENT, PLUS REINVESTED DIVIDENDS AND CAPITAL
GAIN DISTRIBUTIONS. THE CHARTS AND OTHER TOTAL RETURN FIGURES CITED REFLECT
THE FUND'S OPERATING EXPENSES, BUT THE INDEXES DO NOT HAVE EXPENSES, WHICH
WOULD HAVE LOWERED THEIR PERFORMANCE.
(18) THE S&P 500 INDEX IS AN UNMANAGED INDEX CONSIDERED REPRESENTATIVE OF THE
BROAD STOCK MARKET. THE S&P UTILITIES INDEX IS AN UNMANAGED INDEX
CONSIDERED REPRESENTATIVE OF THE UTILITIES SECTOR. THE INDEXES ARE NOT
MANAGED; THEREFORE, THEIR PERFORMANCE DOES NOT REFLECT MANAGEMENT FEES AND
OTHER EXPENSES ASSOCIATED WITH THE FUND.
<PAGE>
QUESTIONS & ANSWERS
AN INTERVIEW WITH DIRECTOR OF SECTOR MANAGEMENT BILL KEITHLER
WHAT'S NEXT FOR TECHNOLOGY STOCKS?
HOW WOULD YOU DESCRIBE YOUR INVESTMENT APPROACH?
BILL KEITHLER: Our strategy is to identify industry leaders, or companies vying
for a leadership position, in technology markets that are growing fairly
rapidly. We are growth investors, and there has to be a fundamental growth story
supporting the stock, or we won't even look at it.
First, we forecast earnings, because we believe earnings growth drives stock
prices. We try to anticipate the market's expansion, and then estimate the
company's future share of that market. Then we estimate the company's likely
income statement several years out to produce our forecasts of future earnings.
We'll also assess a company's risks -- including strength of demand,
availability of components, liquidity of its stock, and financial risks tied to
its balance sheet. Another important element is the quality and experience of
the management team. We will also take valuations into account, primarily as a
tool to estimate the company's upside potential and downside risk. All things
being equal, if a company's valuation is high relative to the leading companies
in its market, we may give it a smaller weighting in the portfolio than its
business outlook might suggest. But we rarely make a buy or sell decision based
on valuation alone.
This is an ongoing process, and we never rest on our assumptions. In the
technology universe, dynamics can change rapidly. For that reason, we have to
continuously return to our analysis, taking into account new information and any
additional data points. We are constantly fine-tuning the portfolio.
[PHOTOGRAPH OF BILL KEITHLER OMITTED]
BILL KEITHLER IS A SENIOR VICE PRESIDENT AND DIRECTOR OF SECTOR MANAGEMENT AT
INVESCO FUNDS GROUP
WHAT RESOURCES DO YOU CALL ON IN MANAGING THE FUND?
BILL KEITHLER: We have four full-time investment professionals, including
myself, who focus solely on technology stocks. Our efforts are augmented by the
three-person team managing INVESCO Telecommunications Fund. We are constantly
meeting with companies, attending trade shows, reading industry research and
trade publications. This kind of attention is especially critical because of the
rapid pace of change within the technology industry. It would be very difficult
for individual investors to replicate this kind of process, which we believe is
critical to successful technology investing.
WHERE DO YOU SEE INVESTMENT OPPORTUNITIES IN THE TECHNOLOGY SECTOR?
BILL KEITHLER: One reason technology investing can be so compelling, and at
times so frustrating, is that the dynamics are always changing, and new
opportunities are forever being created. As investors, our goal is to identify
the best investment potential within the technology sector at any point in time.
We may find these opportunities in telecommunications firms, Internet companies,
semiconductor manufacturers, software designers, or companies capitalizing on
the outsourcing of manufacturing.
<PAGE>
Right now, one area where we continue to see opportunity is the optical
networking market. For the first time, the volume of data traffic has exceeded
the volume of voice traffic on public telecommunications networks. While the
volume of data traffic continues to grow exponentially, networks carrying all
this traffic were designed for analog voice signals and don't have the
efficiency or scale to accommodate the demands of data traffic. Consequently,
the entire telecommunications backbone is being rebuilt, and carriers are
spending billions of dollars to upgrade their networks. Standing to benefit from
this investment are optical networking companies, which make equipment that
improves the efficiency and carrying capacity of networks. This investment is
going to continue, regardless of who wins the "dot-com" wars.
TECHNOLOGY STOCKS HAVE EXHIBITED HEIGHTENED VOLATILITY IN RECENT MONTHS, DUE IN
PART TO A SHAKE-OUT IN THE DOT-COM MARKET. WHAT IS YOUR OUTLOOK FOR TECHNOLOGY
STOCKS?
BILL KEITHLER: The outlook for technology stocks, while still good, is probably
less certain than it's been at any time since the 1998 Asian financial crisis.
Many of the demand drivers for technology companies are now being questioned,
and the meltdown in the dot-com space is only the most highly publicized of
these concerns. Notably, the wireless communications market has fallen under a
cloud since equipment powerhouse Nokia Corp guided down earnings expectations in
July.
Meanwhile, emerging telecommunications carriers have been besieged by funding
problems and credit concerns. Adding to these worries are new doubts over the
strength and duration of the semiconductor investment cycle, since supply in
that market now appears to be catching up to demand. All of these developments
have called into question near-term spending on everything from Internet
infrastructure to online advertising to telecommunications equipment,
contributing to stock volatility. While many of these concerns are legitimate,
we believe overall technology demand remains very strong, if not as robust as it
was last year.
DO YOU THINK INVESTORS HAVE LOST THEIR APPETITE FOR TECHNOLOGY STOCKS, OR DO YOU
THINK IT'S TIME TO REVISIT OPPORTUNITIES IN THE SECTOR?
BILL KEITHLER: I don't think investor interest in technology has changed, but I
think expectations certainly have. A year ago, investors probably had
unrealistically high expectations -- particularly when it came to wireless
subscriber growth. Expectations have probably moved closer to reality, and
valuations have retreated as a result -- but still remain high by historical
comparisons. As far as stock performance goes, the returns generated by
technology stocks in 1998 and 1999 were extraordinary. It would be misleading to
extrapolate them and assume those figures to be the norm.
DO YOU THINK THE RECENT MELTDOWN IN DOT-COM STOCKS HAS JEOPARDIZED
INTERNET-RELATED INVESTMENT?
BILL KEITHLER: Regardless of what happens with dot-com revenues, there is no
question that the Internet is here to stay. The Internet is already
revolutionizing the way that brick and mortar retailers do business. Traditional
retailers see the Web not as a substitute for their physical stores, but as
another distribution channel they can leverage to reach additional customers and
improve efficiency. Consequently, they are investing a tremendous amount of
money in software, servers, and outsourced services like Web hosting. There are
no signs that this investment is slowing down, and it remains a strong demand
driver.
"...ONE AREA WHERE WE CONTINUE TO SEE OPPORTUNITY IS THE OPTICAL NETWORKING
MARKET."
--BILL KEITHLER
<PAGE>
YOUR FUND'S REPORT
"FINANCIAL SERVICES STOCKS SURGED AHEAD ON EASING INTEREST RATE FEARS AND
ACCELERATING MERGER ACTIVITY."
MARKET HEADLINES:
APRIL 2000 TO SEPTEMBER 2000
Uncertainty over interest rates and corporate earnings kept equity markets
extremely volatile over the past six months. Concerned investors witnessed
several previously fast-growing sectors give back some of their gains, while
other areas surged ahead.
Early in the period, higher interest rates remained the focus of investors as
the "virtuous economy"-- neither too hot nor too cold -- showed signs of finally
heating up. Labor markets remained tight and wage pressures were simmering,
while consumers were studying the impressive balances on their investment
statements and spending like never before.
Meanwhile, economies in Europe and Asia were picking up steam, and oil prices
surged to new highs. With the global economy firing on all cylinders, inflation
became the dominant concern. The Federal Reserve responded to these pressures by
tightening credit conditions. Between June of 1999 and May of 2000, the Fed
raised short-term interest rates six times -- for a total of 1.75% --
culminating in a 0.50% rate increase in May.
By June, signs that the economy was starting to cool helped ease interest rate
concerns. Investors began to hope that an end to central bank interest rate
hikes was in sight, and revisited many of the New Economy shares sold off during
the spring correction. Growth stocks rallied in June, aided by the Fed's widely
anticipated decision to leave interest rates unchanged. The Federal Reserve Open
Market Committee also voted to leave rates unchanged in August, and policymakers
hinted that this recent round of monetary tightening might be over -- barring a
significant reacceleration in the expansion.
While easing interest rate fears initially alleviated pressure on high valuation
stocks, the subsequent rally proved short-lived as a spate of earnings
disappointments quickly focused investor attention on the upcoming earnings
season. In particular, a number of companies warned that slowing economic
growth, higher fuel prices, and a sagging euro currency had hindered their
results.
<PAGE>
These pressures fell especially hard on cyclically sensitive businesses and
those with multinational exposure. But New Economy companies were not immune
from these pressures, as evidenced by surprise earnings disappointments from
several New Economy stalwarts. Most recently, semiconductor manufacturer Intel
warned of disappointing third quarter results -- news that triggered a global
technology sell-off in September.
Behind this correction were growing concerns that technology spending was
starting to slow amid a deceleration in wireless subscriber growth, and funding
pressures on a number of emerging dot-com companies and telecommunications
providers. Despite these fears, overall industry spending plans remain robust,
if not as strong as they were last year. Moreover, productivity gains created by
this technology investment continue to keep inflation contained -- good news for
the economy, interest rates, and financial markets.
On another positive note, a number of market sectors have outperformed recently.
Financial services stocks surged ahead on easing interest rate fears and
accelerating merger activity. Energy and utility stocks were buoyed by high
usage rates, and rising oil and natural gas prices. In the health care industry,
euphoria over the mapping of the human genome continued to fuel strong, if
volatile, performance by biotechnology stocks.
Looking ahead, we recognize that markets could remain volatile as investors
assess the earnings climate. If anything, however, we believe this setting will
make investors more discriminating in their choice of investments, and will
reward stock pickers, such as ourselves, who can identify companies able to
perform in any kind of market environment.
<PAGE>
INVESTMENT HOLDINGS
STATEMENT OF INVESTMENT SECURITIES
INVESCO SECTOR FUNDS, INC.
SEPTEMBER 30, 2000
UNAUDITED
<TABLE>
<CAPTION>
SHARES,
COUNTRY UNITS OR
CODE IF PRINCIPAL
% DESCRIPTION NON US AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ENERGY FUND
96.39 COMMON STOCKS
3.15 ELECTRIC UTILITIES
Southern Energy(a) $ 500,000 $ 15,687,500
========================================================================================================================
1.72 ELECTRICAL EQUIPMENT
Active Power(a) 70,000 4,340,000
Capstone Turbine(a) 30,000 2,077,500
Proton Energy Systems(a) 75,000 2,146,875
========================================================================================================================
8,564,375
12.23 NATURAL GAS PIPELINES
Coastal Corp 345,000 25,573,125
Enron Corp 177,000 15,509,625
Kinder Morgan 195,000 7,982,812
Western Gas Resources 468,500 11,741,781
========================================================================================================================
60,807,343
18.07 OIL--INTERNATIONAL INTEGRATED
Chevron Corp 243,000 20,715,750
Conoco Inc Class A Shrs 573,500 14,982,688
Exxon Mobil 164,000 14,616,500
Murphy Oil 320,000 20,740,000
Phillips Petroleum 300,000 18,825,000
========================================================================================================================
89,879,938
26.91 OIL & GAS--DRILLING & EQUIPMENT
Atwood Oceanics(a) 275,000 11,464,062
Cooper Cameron(a) 81,700 6,020,269
Dril-Quip Inc(a) 216,000 8,613,000
Grant Prideco(a) 335,600 7,362,225
Grey Wolf(a) 1,700,000 9,775,000
Nabors Industries(a) 410,000 21,484,000
Noble Drilling(a) 393,000 19,748,250
OSCA Inc Class A Shrs(a)(b) 162,800 2,706,550
Rowan Cos(a) 450,000 13,050,000
Santa Fe International 350,000 15,771,875
Smith International(a) 65,800 5,366,813
Varco International(a) 600,000 12,487,500
========================================================================================================================
133,849,544
26.28 OIL & GAS--EXPLORATION & PRODUCTION
Anadarko Petroleum 300,000 19,938,000
Apache Corp 145,000 8,573,125
Canadian Occidental Petroleum 700,000 17,631,250
Devon Energy 270,000 16,240,500
EOG Resources 385,000 14,966,875
Kerr-McGee Corp 300,000 19,875,000
Louis Dreyfus Natural Gas(a) 220,000 8,717,500
Noble Affiliates 186,000 6,905,250
<PAGE>
SHARES,
COUNTRY UNITS OR
CODE IF PRINCIPAL
% DESCRIPTION NON US AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------------
Ocean Energy(a) 525,000 $ 8,104,687
Unocal Corp 275,000 9,745,313
========================================================================================================================
130,697,500
8.03 OIL WELL EQUIPMENT & SERVICES
Cal Dive International(a) 216,400 12,375,375
Coflexip SA Sponsored ADR
Representing 1/2 Ord Shr 133,000 8,279,250
Halliburton Co 148,000 7,242,750
Weatherford International(a) 280,600 12,065,800
========================================================================================================================
39,963,175
TOTAL COMMON STOCKS (Cost $370,431,947) 479,449,375
========================================================================================================================
3.61 SHORT-TERM INVESTMENTS
2.01 Commercial Paper
2.01 COMMERCIAL FINANCE
CIT Group, Discount Notes
6.660%, 10/2/2000 (Amortized
Cost $9,998,150) $ 10,000,000 9,998,150
========================================================================================================================
1.60 REPURCHASE AGREEMENTS
Repurchase Agreement with State Street
dated 9/29/2000 due 10/2/2000
at 6.380%, repurchased at $7,940,219
(Collateralized by US Treasury Bonds,
due 8/15/2013 at 12.000%,
value $8,112,191)(Cost $7,936,000) $ 7,936,000 7,936,000
========================================================================================================================
TOTAL SHORT-TERM INVESTMENTS
(AMORTIZED COST $17,934,150) 17,934,150
========================================================================================================================
100.00 TOTAL INVESTMENT SECURITIES AT VALUE
(Cost $388,366,097)
(Cost for Income Tax Purposes $389,475,889) $ 497,383,525
========================================================================================================================
FINANCIAL SERVICES FUND
93.32 COMMON STOCKS
6.51 BANKS--MONEY CENTER
Banco Bilbao Vizcaya Argentina SA
Registered Shrs 461,700 $ 6,975,548
Chase Manhattan 481,050 22,218,497
Morgan (J P) & Co 110,000 17,971,250
Wells Fargo & Co 1,082,000 49,704,375
========================================================================================================================
96,869,670
19.41 BANKS--REGIONAL
Bank of New York 1,169,300 65,553,881
City National 396,100 15,299,362
Fifth Third Bancorp 756,650 40,764,519
Firstar Corp 777,616 17,399,158
FleetBoston Financial 1,008,500 39,331,500
Northern Trust 426,500 37,905,188
Royal Bank of Canada 220,000 13,090,000
State Street 302,300 39,299,000
Synovus Financial 290,000 6,144,375
Toronto-Dominion Bank 471,500 13,909,250
========================================================================================================================
288,696,233
<PAGE>
SHARES,
COUNTRY UNITS OR
CODE IF PRINCIPAL
% DESCRIPTION NON US AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------------
4.77 CONSUMER FINANCE
American Express 889,500 $ 54,037,125
Countrywide Credit Industries 446,500 16,855,375
========================================================================================================================
70,892,500
15.92 FINANCIAL--DIVERSIFIED
Ambac Financial Group 200,400 14,679,300
Associates First Capital Class A Shrs 293,000 11,134,000
Capital One Financial 948,000 66,419,250
Citigroup Inc 1,320,400 71,384,125
Freddie Mac 631,800 34,156,687
Providian Financial 307,750 39,084,250
========================================================================================================================
236,857,612
4.46 INSURANCE BROKERS
Marsh & McLennan 499,400 66,295,350
========================================================================================================================
7.73 INSURANCE--LIFE
AFLAC Inc 726,500 46,541,406
Jefferson-Pilot Corp 200,000 13,575,000
John Hancock Financial Services(a) 1,482,200 39,834,125
Nationwide Financial Services
Class A Shrs 400,000 14,950,000
========================================================================================================================
114,900,531
10.00 INSURANCE--MULTILINE
American International Group 479,502 45,882,348
AXA Financial 445,800 22,707,937
Hartford Financial Services Group 626,200 45,673,462
Radian Group 511,800 34,546,500
========================================================================================================================
148,810,247
6.03 INSURANCE--PROPERTY & CASUALTY
ACE Ltd(a) 668,200 26,226,850
PMI Group 288,900 19,572,975
St Paul Cos 889,400 43,858,538
========================================================================================================================
89,658,363
15.56 INVESTMENT BANK/BROKER FIRM
Donaldson Lufkin & Jenrette(a) 100,000 687,500
Eaton Vance 80,000 4,080,000
E*TRADE Group(a) 1,303,800 21,431,213
Federated Investors Class B Shrs 518,750 12,839,062
Gallagher (Arthur J) & Co 275,000 16,259,375
Goldman Sachs Group 103,600 11,803,925
Lehman Brothers Holdings 248,300 36,686,325
Merrill Lynch 93,000 6,138,000
Morgan Stanley Dean Witter & Co 408,800 37,379,650
Price (T Rowe) Associates 450,000 21,121,875
Schwab (Charles) Corp 644,400 22,876,200
Stilwell Financial(a) 670,300 29,158,050
Waddell & Reed Financial
Class A Shrs 300,000 9,300,000
Class B Shrs 57,000 1,653,000
========================================================================================================================
231,414,175
<PAGE>
SHARES,
COUNTRY UNITS OR
CODE IF PRINCIPAL
% DESCRIPTION NON US AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------------
2.93 SAVINGS & LOAN COMPANIES
Charter One Financial 610,085 $ 14,870,822
Golden West Financial 195,000 10,456,875
TCF Financial 486,900 18,319,613
========================================================================================================================
43,647,310
TOTAL COMMON STOCKS (Cost $948,377,226) 1,388,041,991
========================================================================================================================
6.68 SHORT-TERM INVESTMENTS
5.04 COMMERCIAL PAPER
2.69 CONSUMER FINANCE
American Express Credit,
6.600%, 10/2/2000 $ 40,000,000 40,000,000
========================================================================================================================
2.35 FINANCIAL--DIVERSIFIED
Associates Corp of North America
6.630%, 10/2/2000 $ 35,000,000 35,000,000
========================================================================================================================
TOTAL COMMERCIAL PAPER
(Cost $75,000,000) 75,000,000
========================================================================================================================
1.35 INVESTMENT COMPANIES
INVESCO Treasurer's Series
Money Market Reserve Fund,
6.415% (Cost $20,066,520) 20,066,520 20,066,520
========================================================================================================================
0.29 REPURCHASE AGREEMENTS
Repurchase Agreement with State
Street dated 9/29/2000 due
10/2/2000 at 6.380%, repurchased
at $4,314,293 (Collateralized by
US Treasury Bonds, due 11/15/2016
at 7.500%, value $4,367,363)
(Cost $4,312,000) $ 4,312,000 4,312,000
========================================================================================================================
TOTAL SHORT-TERM INVESTMENTS
(Cost $99,378,520) 99,378,520
========================================================================================================================
100.00 TOTAL INVESTMENT SECURITIES AT VALUE
(Cost $1,047,755,746)
(Cost for Income Tax
Purposes $1,053,058,677) $1,487,420,511
========================================================================================================================
GOLD FUND
62.78 COMMON STOCKS
62.78 GOLD & PRECIOUS METALS MINING
Agnico-Eagle Mines Ltd CA 540,000 $ 3,138,750
AngloGold Ltd Sponsored ADR
Representing 1/2 Ord Shr SF 145,000 2,664,375
Barrick Gold CA 297,900 4,542,975
Battle Mountain Gold(a) 900,000 1,575,000
Claude Resources(a) CA 346,700 126,735
Francisco Gold(a) CA 256,700 1,023,661
Franco-Nevada Mining Ltd CA 390,000 3,836,236
Freeport-McMoRan Copper & Gold
Class B Shrs(a) 175,000 1,542,187
Glamis Gold Ltd(a) CA 86,000 129,000
Goldcorp Inc Class A Shrs(a) CA 418,600 2,825,550
Harmony Gold Mining Ltd
Sponsored ADR Representing
Ord Shrs SF 200,000 1,025,000
Homestake Mining(a) 288,000 1,494,000
IAMGOLD Corp(a) CA 1,530,800 2,543,533
Manhattan Minerals(a) CA 350,000 583,876
<PAGE>
SHARES,
COUNTRY UNITS OR
CODE IF PRINCIPAL
% DESCRIPTION NON US AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------------
Meridian Gold(a) CA 775,000 $ 5,279,687
Metallica Resources(a) CA 500,000 135,000
Newmont Mining 225,000 3,825,000
Pacific Rim Mining(a)(b) CA 1,264,900 1,261,033
Placer Dome CA 480,000 4,530,000
Repadre Capital(a) CA 500,000 614,781
Rio Narcea Gold Mines Ltd(a) CA 545,900 308,398
Solitario Resources(a) CA 191,000 176,452
Star Resources(a)(b) CA 4,499,500 1,943,822
Stillwater Mining(a) 45,000 1,218,150
Teck Corp Class B Shrs CA 250,000 1,669,879
========================================================================================================================
TOTAL COMMON STOCKS (Cost $58,700,730) 48,013,080
========================================================================================================================
5.90 PREFERRED STOCKS
GOLD & PRECIOUS METALS MINING
Freeport-McMoRan Copper & Gold
Depository Shrs Representing
1/20 Series Gold Pfd Shr
(Cost $4,991,632) 255,000 4,510,313
========================================================================================================================
12.01 OTHER
12.01 GOLD BULLION
Gold Bullion Troy Ounce(a)
(Cost $9,475,205) 33,478(c) 9,181,320
========================================================================================================================
19.31 SHORT-TERM INVESTMENTS
13.07 COMMERCIAL PAPER
13.07 COMMERCIAL FINANCE
CIT Group, Discount Notes,
6.660%, 10/1/2000
(Amortized Cost $9,998,150) $ 10,000,000 9,998,150
========================================================================================================================
6.24 REPURCHASE AGREEMENTS
Repurchase Agreement with State
Street dated 9/29/2000 due
10/2/2000 at 6.380%, repurchased
at $4,772,536 (Collateralized by
US Treasury Bonds, due 8/15/2013
at 12.000%, value $4,879,721)
(Cost $4,770,000) $ 4,770,000 4,770,000
========================================================================================================================
TOTAL SHORT-TERM INVESTMENTS
(AMORTIZED COST $14,768,150) 14,768,150
========================================================================================================================
100.00 TOTAL INVESTMENT SECURITIES AT VALUE
(Cost $87,935,717)
(Cost for Income Tax Purposes $89,250,549) $ 76,472,863
========================================================================================================================
HEALTH SCIENCES FUND
92.07 COMMON STOCKS
3.18 BIOTECHNOLOGY
Titan Pharmaceuticals(a) 488,165 $ 31,730,725
Vertex Pharmaceuticals(a) 461,900 39,030,550
========================================================================================================================
70,761,275
31.58 BIOTECHNOLOGY--HEALTH CARE
Abgenix Inc(a) 740,260 59,822,261
Affymetrix Inc(a) 207,200 10,334,100
Alexion Pharmaceuticals(a) 301,590 34,381,260
<PAGE>
SHARES,
COUNTRY UNITS OR
CODE IF PRINCIPAL
% DESCRIPTION NON US AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------------
Amgen Inc(a) 922,600 $ 64,423,428
Amylin Pharmaceuticals(a) 295,000 3,171,250
Biogen Inc(a) 320,000 19,520,000
Celgene Corp(a) 138,600 8,246,700
Cell Therapeutics(a) 595,600 39,719,075
Celltech Group PLC(a) 255,245 5,090,853
Cephalon Inc(a) 188,700 9,151,950
Collateral Therapeutics(a) 8,400 243,075
COR Therapeutics(a) 806,800 50,273,725
Cubist Pharmaceuticals(a) 483,400 25,167,012
Curis Inc(a) 317,160 6,323,378
Deltagen Inc(a) 31,600 977,625
Ecogen Technologies I(a)(b)(h) 100 1
Genentech Inc(a) 161,000 29,895,687
Gilead Sciences(a) 168,700 18,504,281
IDEC Pharmaceuticals(a) 493,600 86,557,388
ILEX Oncology(a) 342,500 10,317,813
Immunex Corp(a) 462,900 20,136,150
Medarex Inc(a) 357,100 41,892,294
MedClone Trust(a)(h) 144,405 1
MedImmune Inc(a) 993,700 76,763,325
NPS Pharmaceuticals(a) 382,100 21,612,531
Protein Design Labs(a) 503,880 60,717,540
Xenometrix Inc(a)(h) 121,058 57,881
========================================================================================================================
703,300,584
2.44 ELECTRONICS--INSTRUMENTS
Waters Corp(a) 610,300 54,316,700
========================================================================================================================
2.65 HEALTH CARE--SERVICES
Edwards Lifesciences(a) 785,812 17,140,524
First Health Group(a) 95,100 3,066,975
Mediconsult.com Inc(a)(h) 933,434 607,461
Mediconsult.com Inc Escrowed Shrs(a)(h) 103,715 39,703
SYNAVANT Inc(a) 34,800 232,725
UnitedHealth Group 385,500 38,068,125
========================================================================================================================
59,155,513
41.67 HEALTH CARE DRUGS--PHARMACEUTICALS
Alkermes Inc(a) 195,340 7,545,007
Allergan Inc 535,800 45,241,612
ALZA Corp(a) 517,030 44,723,095
American Home Products 1,507,675 85,277,867
AmeriSource Health Class A Shrs(a) 607,500 28,552,500
Andrx Group(a) 79,400 7,413,975
AstraZeneca Group PLC Sponsored ADR
Representing Ord Shrs 193,950 10,194,497
Bristol-Myers Squibb 1,268,200 72,445,925
DUSA Pharmaceuticals(a)(b) 682,500 21,029,531
Forest Laboratories(a) 65,300 7,489,094
Fujisawa Pharmaceutical Ltd 928,900 34,212,678
Glaxo Wellcome PLC Sponsored ADR
Representing 2 Ord Shrs 17,700 1,069,744
Human Genome Sciences(a) 207,800 35,975,375
<PAGE>
SHARES,
COUNTRY UNITS OR
CODE IF PRINCIPAL
% DESCRIPTION NON US AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------------
Inhale Therapeutic Systems(a) 420,000 $ 23,677,500
Lilly (Eli) & Co 1,132,500 91,874,062
Merck & Co 1,036,400 77,147,025
Millennium Pharmaceuticals(a) 231,400 33,798,862
Pfizer Inc 1,693,211 76,088,669
Pharmacia Corp 1,643,867 98,940,245
QLT Inc(a) 109,700 7,774,987
Sanofi-Synthelabo SA 479,900 25,791,866
Schering AG 500,800 32,748,940
SmithKline Beecham PLC Sponsored ADR
Representing 5 Ord Shrs 15,625 1,072,266
Takeda Chemical Industries Ltd 256,700 16,961,299
Teva Pharmaceutical Industries
Sponsored ADR Representing Ord Shrs 333,600 24,415,350
Yamanouchi Pharmaceutical Ltd 346,600 16,678,882
========================================================================================================================
928,140,853
0.43 INSURANCE--MULTILINE
CIGNA Corp 91,500 9,552,600
========================================================================================================================
9.16 MEDICAL EQUIPMENT & DEVICES
Baxter International 376,700 30,065,369
Boston Scientific(a) 215,300 3,538,994
Bruker Daltonics(a) 20,000 887,500
Guidant Corp(a) 415,700 29,384,794
Invitrogen Corp(a) 453,800 32,276,525
Laboratory Corp of America Holdings(a) 148,100 17,734,975
Medtronic Inc 183,389 9,501,843
PE Corp-PE Biosystems Group 408,700 47,613,550
St Jude Medical(a) 470,700 24,005,700
Targeted Genetics(a) 759,300 9,016,688
========================================================================================================================
204,025,938
0.96 SERVICES--COMPUTER SYSTEMS
IMS Health 1,032,200 21,418,150
========================================================================================================================
TOTAL COMMON STOCKS (Cost $1,416,960,783) 2,050,671,613
========================================================================================================================
0.29 PREFERRED STOCKS
0.07 BIOTECHNOLOGY--HEALTH CARE
Ingenex Inc, Pfd, Series B Shrs(a)(h) 103,055 62,864
MedClone Inc, Conv Pfd,
Series G Shrs(a)(h) 581,396 75,581
Osiris Therapeutics, Conv Pfd,
Series C Shrs(a)(h) 382,353 1,300,000
========================================================================================================================
1,438,445
0.22 MEDICAL EQUIPMENT & DEVICES
Athersys Inc, Conv Pfd,
Class F Shrs(a)(h) 416,667 5,000,000
Janus Biomedical, Conv Pfd,
Series A Shrs(a)(h) 400,000 1
========================================================================================================================
5,000,001
TOTAL PREFERRED STOCKS (Cost $8,900,001) 6,438,446
========================================================================================================================
<PAGE>
SHARES,
COUNTRY UNITS OR
CODE IF PRINCIPAL
% DESCRIPTION NON US AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------------
7.64 SHORT-TERM INVESTMENTS
0.01 FIXED INCOME SECURITIES
0.01 HEALTH CARE--SERVICES
Mediconsult.com Inc,
Bridge Notes 12.500%(d),
10/31/2000(h)
(Cost $292,070) $ 292,070 $ 292,070
========================================================================================================================
5.39 COMMERCIAL PAPER
3.14 COMMERCIAL FINANCE
CIT Group, Discount Notes,
6.660%, 10/2/2000 $ 20,000,000 19,996,299
Heller Financial,
6.560%, 10/4/2000 $ 50,000,000 50,000,000
========================================================================================================================
69,996,299
2.25 CONSUMER FINANCE
American Express Credit,
6.550%, 10/2/2000 $ 50,000,000 50,000,000
========================================================================================================================
TOTAL COMMERCIAL PAPER
(Amortized Cost
$119,996,299) 119,996,299
========================================================================================================================
1.13 INVESTMENT COMPANIES
INVESCO Treasurer's Series
Money Market Reserve Fund,
6.415% (Cost $25,179,644) 25,179,644 25,179,644
========================================================================================================================
1.11 REPURCHASE AGREEMENTS
Repurchase Agreement with
State Street dated
9/29/2000 due 10/2/2000
at 6.380%, repurchased
at $8,227,372
(Collateralized by US
Treasury Notes, due
5/15/2002 at 7.500%,
value $8,392,957) $ 8,223,000 8,223,000
Repurchase Agreement with
State Street dated 9/29/2000
due 10/2/2000 at 6.380%,
repurchased at $16,408,719
(Collateralized by US
Treasury Notes, due 6/30/2001
at 5.750%, value $16,735,412) $ 16,400,000 16,400,000
========================================================================================================================
TOTAL REPURCHASE AGREEMENTS
(Cost $24,623,000) 24,623,000
========================================================================================================================
TOTAL SHORT-TERM INVESTMENTS
(Amortized Cost $170,091,013) 170,091,013
========================================================================================================================
100.00 TOTAL INVESTMENT SECURITIES AT VALUE
(Cost $1,595,951,797)
(Cost for Income Tax
Purposes $1,651,756,994) $2,227,201,072
========================================================================================================================
<PAGE>
SHARES,
COUNTRY UNITS OR
CODE IF PRINCIPAL
% DESCRIPTION NON US AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------------
LEISURE FUND
91.93 COMMON STOCKS
3.31 BEVERAGES--ALCOHOLIC
Anheuser-Busch Cos 177,600 $ 7,514,700
Heineken NV 214,900 11,947,903
========================================================================================================================
19,462,603
10.91 BROADCASTING
Belo (A H) Corp Series A Shrs 135,400 2,496,437
Clear Channel Communications(a) 148,328 8,380,532
EchoStar Communications Class A Shrs(a) 210,400 11,098,600
General Motors Class H Shrs(a) 253,900 9,440,002
Infinity Broadcasting Class A Shrs(a) 120,300 3,969,900
Pegasus Communications(a) 370,900 17,919,106
Radio One
Class A Shrs(a) 67,500 $ 561,094
Class D Shrs(a) 80,400 567,825
Sinclair Broadcast Group(a) 385,200 4,213,125
Television Broadcasts Ltd
Sponsored ADR
Representing 2 Ord Shrs 154,500 1,854,742
UnitedGlobalCom Inc Class A Shrs(a) 121,050 3,631,500
========================================================================================================================
64,132,863
11.11 CABLE
AT&T Corp-Liberty Media Group
Class A Shrs(a) 1,651,564 29,728,152
Cablevision Systems Class A Shrs(a) 73,000 4,840,812
Comcast Corp Special Class A Shrs(a) 366,356 14,997,699
Liberty Satellite & Technology
Class A Shrs(a) 313,900 3,335,187
NTL Inc(a) 186,397 8,632,511
USA Networks(a) 169,900 3,727,181
========================================================================================================================
65,261,542
1.59 COMPUTER SOFTWARE & SERVICES
Activision Inc(a) 348,600 5,229,000
Electronic Arts(a) 50,000 2,468,750
Intertrust Technologies(a) 138,035 1,665,047
========================================================================================================================
9,362,797
0.99 CONSUMER--JEWELRY, NOVELTIES & GIFTS
De Beers Consolidated Mines ADR
Representing Ord Shrs 208,900 5,783,919
========================================================================================================================
8.90 ENTERTAINMENT
Disney (Walt) Co 205,499 7,860,337
Gemstar-TV Guide International(a) 168,689 14,707,572
Seagram Co 125,500 7,208,406
Time Warner 151,400 11,847,050
Viacom Inc
Class A Shrs(a) 82,080 4,801,680
Class B Non-Voting Shrs(a) 100,598 5,884,983
========================================================================================================================
52,310,028
0.48 FOOTWEAR
NIKE Inc Class B Shrs 71,100 2,848,444
========================================================================================================================
9.44 GAMING
Harrah's Entertainment(a) 1,667,800 45,864,500
MGM Mirage 161,278 6,158,804
Park Place Entertainment(a) 227,300 3,437,913
========================================================================================================================
<PAGE>
SHARES,
COUNTRY UNITS OR
CODE IF PRINCIPAL
% DESCRIPTION NON US AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------------
0.30 HOUSEHOLD FURNITURE & APPLIANCES
Harman International Industries 45,540 1,780,614
========================================================================================================================
10.69 LEISURE TIME
Carlsberg A/S Class B Shrs 255,584 10,581,060
Carnival Corp 304,200 7,490,925
Cedar Fair LP 97,800 1,803,187
International Game Technology(a) 452,621 15,219,381
Intrawest Corp 126,000 2,094,750
Royal Caribbean Cruises Ltd 184,224 $ 4,741,926
Six Flags(a) 380,200 5,893,100
Steiner Leisure Ltd(a) 328,500 7,350,188
Vail Resorts(a) 45,100 913,275
WMS Industries(a) 299,800 6,745,500
========================================================================================================================
62,833,292
5.36 LODGING--HOTELS
Extended Stay America(a) 201,600 2,671,200
Marriott International Class A Shrs 791,500 28,840,281
========================================================================================================================
31,511,481
6.95 PUBLISHING
Gannett Co 44,400 2,353,200
Harcourt General 157,100 9,268,900
Houghton Mifflin 68,000 2,669,000
McGraw-Hill Cos 70,000 4,449,375
Meredith Corp 98,000 2,891,000
Pearson PLC 50,000 1,389,051
Valassis Communications(a) 802,100 17,846,725
========================================================================================================================
40,867,251
1.53 PUBLISHING--NEWSPAPERS
McClatchy Co Class A Shrs 87,700 3,085,944
New York Times Class A Shrs 74,900 2,944,506
Scripps (E W) Co Class A Shrs 54,900 2,964,600
========================================================================================================================
1.37 REAL ESTATE INVESTMENT TRUST
Starwood Hotels & Resorts Worldwide SBI 258,500 8,078,125
========================================================================================================================
1.48 RETAIL--COMPUTERS & ELECTRONICS
RadioShack Corp 134,400 8,685,600
========================================================================================================================
0.22 RETAIL--FOOD CHAINS
Wild Oats Markets(a) 110,300 1,296,025
========================================================================================================================
0.54 RETAIL--SPECIALTY
Tuesday Morning(a) 406,700 3,177,344
========================================================================================================================
9.76 SERVICES--ADVERTISING & MARKETING
Catalina Marketing(a) 24,600 925,575
Harte-Hanks Inc 427,300 11,643,925
Interpublic Group 119,200 4,060,250
Omnicom Group 319,200 23,281,650
True North Communications 191,500 6,846,125
WPP Group PLC 700,400 8,387,885
Young & Rubicam 44,800 2,217,600
========================================================================================================================
57,363,010
0.64 SERVICES--COMMERCIAL & CONSUMER
Cendant Corp(a) 207,400 2,255,475
Fairfield Communities(a) 147,500 1,493,437
========================================================================================================================
8,995,050
<PAGE>
SHARES,
COUNTRY UNITS OR
CODE IF PRINCIPAL
% DESCRIPTION NON US AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------------
0.21 SPECIALIZED SERVICES
Granada Compass PLC(a) 130,908 $ 1,225,156
========================================================================================================================
2.16 TEXTILE--APPAREL MANUFACTURING
Donna Karan International(a) 72,800 450,450
Jones Apparel Group(a) 313,100 8,297,150
Liz Claiborne 26,600 1,024,100
Polo Ralph Lauren(a) 182,700 2,946,038
========================================================================================================================
12,717,738
0.36 TOBACCO
Philip Morris 71,000 2,090,063
========================================================================================================================
3.63 TOYS
Hasbro Inc 193,000 2,207,437
Mattel Inc 1,707,500 19,102,656
========================================================================================================================
21,310,093
TOTAL COMMON STOCKS
(Cost $394,588,810) 540,303,167
========================================================================================================================
0.96 PREFERRED STOCKS
0.96 ENTERTAINMENT
News Corp Ltd Sponsored ADR
Representing
4 Pfd Ltd Voting Ord Shrs
(Cost $1,410,246) 119,778 5,614,594
========================================================================================================================
0.95 OTHER SECURITIES
0.95 CONSUMER--JEWELRY, NOVELTIES
& GIFTS
Cie Financiere Richemont AG A,
Units (Each unit consists of
one bearer shr at 100 Swiss
Francs par in the Company
and one bearer participation
certificate at no par issued
by Richemont SA Luxembourg)
(Cost $2,197,113) 1,860 5,590,546
========================================================================================================================
6.16 SHORT-TERM INVESTMENTS
2.82 COMMERCIAL PAPER
0.46 FINANCIAL--DIVERSIFIED
American General Finance,
6.680%, 10/2/2000 $ 2,700,000 2,700,000
========================================================================================================================
2.36 INSURANCE--MULTILINE
American General,
6.680%, 10/2/2000 $ 13,900,000 13,900,000
========================================================================================================================
TOTAL COMMERCIAL PAPER
(Cost $16,600,000) 16,600,000
========================================================================================================================
1.75 INVESTMENT COMPANIES
INVESCO Treasurer's Series
Money Market Reserve Fund,
6.415% (Cost $10,278,547) 10,278,547 10,278,547
========================================================================================================================
<PAGE>
SHARES,
COUNTRY UNITS OR
CODE IF PRINCIPAL
% DESCRIPTION NON US AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------------
1.59 Repurchase Agreements
Repurchase Agreement with State
Street dated 9/29/2000 due
10/2/2000 at 6.380%,
repurchased at $9,331,959
(Collateralized by US
Treasury Notes, due 5/15/2002
at 7.500%, value $9,522,172)
(Cost $9,327,000) $ 9,327,000 9,327,000
========================================================================================================================
TOTAL SHORT-TERM INVESTMENTS
(Cost $36,205,547) 36,205,547
========================================================================================================================
<PAGE>
SHARES,
COUNTRY UNITS OR
CODE IF PRINCIPAL
% DESCRIPTION NON US AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------------
100.00 TOTAL INVESTMENT SECURITIES AT VALUE
(Cost $434,401,716)
(Cost for Income Tax
Purposes $434,413,160) $ 587,713,854
========================================================================================================================
REAL ESTATE OPPORTUNITY FUND
92.90 COMMON STOCKS
2.41 GAMING
Harrah's Entertainment(a) 21,700 $ 596,750
Park Place Entertainment(a) 25,900 391,737
========================================================================================================================
988,487
1.19 LODGING--HOTELS
Marriott International Class A Shrs 13,400 488,263
========================================================================================================================
2.11 PAPER & FOREST PRODUCTS
Bowater Inc 13,200 612,975
Weyerhaeuser Co 6,200 250,325
========================================================================================================================
863,300
4.69 REAL ESTATE
HomeStore.com Inc(a) 11,400 532,950
Trizec Hahn 82,800 1,392,075
========================================================================================================================
1,925,025
71.69 REAL ESTATE INVESTMENT TRUST
Alexandria Real Estate Equities 46,600 1,598,962
Apartment Investment & Management
Class A Shrs 34,700 1,598,369
Avalonbay Communities 22,700 1,082,506
Boston Properties 32,400 1,391,175
BRE Properties Class A Shrs 42,000 1,344,000
CarrAmerica Realty 14,300 432,575
Chateau Communities 34,100 914,306
Cousins Properties 36,900 1,589,006
Developers Diversified Realty 28,600 368,225
Equity Office Properties Trust 44,300 1,376,069
Equity Residential Properties Trust SBI 28,000 1,344,000
Essex Property Trust 22,500 1,245,937
First Industrial Realty Trust 36,800 1,131,600
General Growth Properties 28,500 917,344
Health Care Property Investors 15,600 462,150
Kimco Realty 14,400 608,400
Liberty Property Trust SBI 43,300 1,190,750
Public Storage 49,100 1,175,331
Reckson Associates Realty 38,200 974,100
Rouse Co 38,300 955,106
Simon Property Group 58,300 1,366,406
SL Green Realty 53,600 1,504,150
Smith (Charles E) Residential Realty 26,700 1,211,512
Spieker Properties 26,700 1,536,919
Vornado Realty Trust 29,900 1,110,038
Washington Real Estate Investment Trust SBI 49,100 985,069
========================================================================================================================
29,414,005
<PAGE>
SHARES,
COUNTRY UNITS OR
CODE IF PRINCIPAL
% DESCRIPTION NON US AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------------
1.95 RETAIL--COMPUTERS & ELECTRONICS
RadioShack Corp 12,400 $ 801,350
========================================================================================================================
0.95 RETAIL--GENERAL MERCHANDISE CHAIN
Wal-Mart Stores 8,100 389,813
========================================================================================================================
6.30 TELECOMMUNICATIONS--CELLULAR & WIRELESS
Crown Castle International(a) 41,400 1,285,988
Spectrasite Holdings(a) 70,000 1,299,375
========================================================================================================================
2,585,363
1.61 TELECOMMUNICATIONS--LONG DISTANCE
Exodus Communications(a) 13,400 661,625
========================================================================================================================
TOTAL COMMON STOCKS (Cost $35,339,915) 38,117,231
========================================================================================================================
7.10 SHORT-TERM INVESTMENTS--
REPURCHASE AGREEMENTS
Repurchase Agreement with
State Street dated 9/29/2000
due 10/2/2000 at 6.380%,
repurchased at $2,916,550
(Collateralized by US
Treasury Bonds, due
2/15/2026 at 6.000%,
value $2,970,318)
(Cost $2,915,000) $ 2,915,000 2,915,000
========================================================================================================================
100.00 TOTAL INVESTMENT SECURITIES AT VALUE
(Cost $38,254,915)
(Cost for Income Tax
Purposes $39,422,170) $ 41,032,231
========================================================================================================================
TECHNOLOGY FUND
90.86 COMMON STOCKS
0.47 BIOTECHNOLOGY--HEALTH CARE
Protein Design Labs(a) 354,300 $ 42,693,150
========================================================================================================================
0.26 BROADCASTING
EchoStar Communications Class A Shrs(a) 458,700 24,196,425
========================================================================================================================
11.02 COMMUNICATIONS--EQUIPMENT & MANUFACTURING
ADC Telecommunications(a) 2,867,500 77,108,867
Bookham Technology PLC Sponsored ADR
Representing Ord Shrs(a) 185,900 7,970,463
CIENA Corp(a) 1,719,600 211,188,375
Corvis Corp(a)(h) 2,235,204 115,984,387
JDS Uniphase(a) 1,393,080 131,907,262
Nokia Corp Sponsored ADR
Representing Ord Shrs 2,494,900 99,328,206
Nortel Networks 1,860,000 110,786,250
Polycom Inc(a) 1,619,000 108,422,456
Powerwave Technologies(a) 1,392,600 52,875,324
Scientific-Atlanta Inc 1,511,000 96,137,375
========================================================================================================================
1,011,708,965
20.07 COMPUTER SOFTWARE & SERVICES
Art Technology Group(a) 679,900 64,420,525
BEA Systems(a) 1,845,600 143,726,100
Check Point Software Technologies Ltd(a) 788,900 124,251,750
<PAGE>
SHARES,
COUNTRY UNITS OR
CODE IF PRINCIPAL
% DESCRIPTION NON US AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------------
Inktomi Corp(a) 476,000 $ 54,264,000
Intuit Inc(a) 1,362,600 77,668,200
i2 Technologies(a) 1,072,650 200,652,591
Mercury Interactive(a) 1,104,300 173,099,025
Micromuse Inc(a) 251,000 50,435,313
Microsoft Corp(a) 732,300 44,121,075
Network Associates(a) 736,600 16,665,575
Oracle Corp(a) 871,600 68,638,500
Peregrine Systems(a) 2,439,183 46,192,028
Quest Software(a) 1,136,800 70,605,938
RealNetworks Inc(a) 997,600 39,654,600
Siebel Systems(a) 1,688,400 187,940,025
SmartForce PLC Sponsored ADR
Representing Ord Shrs(a) 2,169,400 102,775,325
Software.com Inc(a) 801,700 145,458,444
TIBCO Software(a) 928,900 78,433,994
VERITAS Software(a) 956,100 135,766,200
Vignette Corp(a) 600,600 17,942,925
========================================================================================================================
1,842,712,133
3.70 COMPUTER SYSTEMS
Apple Computer(a) 1,202,700 30,969,525
Brocade Communications Systems(a) 680,300 160,550,800
CacheFlow Inc(a) 482,700 69,026,100
Compaq Computer 2,074,500 57,214,710
McDATA Corp(a) 174,600 21,456,703
========================================================================================================================
339,217,838
1.64 COMPUTERS--HARDWARE
Sun Microsystems(a) 1,290,300 150,642,525
========================================================================================================================
6.47 COMPUTERS--NETWORKING
Cabletron Systems(a) 1,536,500 45,134,687
Cisco Systems(a) 2,211,860 122,205,265
Extreme Networks(a) 588,000 67,326,000
Juniper Networks(a) 628,300 137,558,431
Network Appliance(a) 1,300,000 165,587,500
Redback Networks(a) 343,600 56,328,925
========================================================================================================================
594,140,808
3.17 COMPUTERS--PERIPHERALS
EMC Corp(a) 1,660,200 164,567,325
Palm Inc(a) 2,045,700 108,294,244
SanDisk Corp(a) 275,000 18,356,250
========================================================================================================================
291,217,819
0.58 DISTRIBUTION--DURABLES
Ingram Micro Class A Shrs(a) 1,016,400 13,975,500
Tech Data(a) 912,700 39,017,925
========================================================================================================================
52,993,425
7.79 ELECTRICAL EQUIPMENT
Celestica Inc(a) 1,943,400 134,580,450
Flextronics International Ltd(a) 1,399,800 114,958,575
Furukawa Electric Ltd 2,279,000 62,954,053
<PAGE>
SHARES,
COUNTRY UNITS OR
CODE IF PRINCIPAL
% DESCRIPTION NON US AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------------
Jabil Circuit(a) 1,677,500 $ 95,198,125
Sanmina Corp(a) 1,284,800 120,289,400
SCI Systems(a) 2,096,515 85,957,115
Solectron Corp(a) 2,197,000 101,336,625
========================================================================================================================
715,274,343
19.26 ELECTRONICS--SEMICONDUCTOR
Altera Corp(a) 2,236,400 106,788,100
Analog Devices(a) 1,223,000 100,973,937
Applied Micro Circuits(a) 881,000 182,422,062
Broadcom Corp Class A Shrs(a) 198,800 48,457,500
Chartered Semiconductor ADR
Representing 10 Ord Shrs(a) 564,300 34,245,956
Cirrus Logic(a) 639,700 25,787,906
Conexant Systems(a) 1,245,600 52,159,500
Cypress Semiconductor(a) 442,600 18,395,562
GlobeSpan Inc(a) 309,600 37,771,200
Infineon Technologies AG ADR
Representing Ord Shrs(a) 832,200 39,529,500
Integrated Device Technology(a) 1,295,000 117,197,500
Intel Corp 1,710,600 71,203,725
Linear Technology 1,692,800 109,608,800
Maxim Integrated Products(a) 1,706,700 137,282,681
Microchip Technology(a) 1,703,100 56,308,744
National Semiconductor(a) 668,500 26,907,125
New Focus(a) 395,800 31,292,938
PMC-Sierra Inc(a) 720,400 155,066,100
RF Micro Devices(a) 1,068,200 34,182,400
SDL Inc(a) 515,400 159,419,663
Vitesse Semiconductor(a) 1,499,300 133,343,994
Xilinx Inc(a) 1,048,600 89,786,375
========================================================================================================================
1,768,131,268
0.98 ENTERTAINMENT
Gemstar-TV Guide International(a) 1,031,500 89,933,906
========================================================================================================================
0.75 EQUIPMENT--SEMICONDUCTOR
ASM Lithography Holding NV
New York Registered Shrs(a) 758,500 24,509,031
Credence Systems(a) 421,000 12,630,000
Novellus Systems(a) 554,700 25,828,219
Taiwan Semiconductor
Manufacturing Ltd Sponsored
ADR Representing 5 Ord Shrs(a) 272,948 5,561,316
========================================================================================================================
68,528,566
0.26 FINANCIAL--DIVERSIFIED
BlueStream Ventures LP(a)(h) 23,500,000 23,500,000
========================================================================================================================
0.25 INVESTMENT BANK/BROKER FIRM
B2B Internet HOLDRs Trust(e) 483,700 22,824,594
========================================================================================================================
1.47 MANUFACTURING--DIVERSIFIED
Corning Inc 459,000 136,323,000
========================================================================================================================
<PAGE>
SHARES,
COUNTRY UNITS OR
CODE IF PRINCIPAL
% DESCRIPTION NON US AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------------
1.08 NATURAL GAS PIPELINES
Enron Corp 1,136,300 $ 99,568,287
========================================================================================================================
0.75 SERVICES--COMMERCIAL & CONSUMER
America Online(a) 1,278,200 68,703,250
========================================================================================================================
4.30 SERVICES--COMPUTER SYSTEMS
Ariba Inc(a) 456,100 65,343,452
Commerce One(a) 1,109,600 87,103,600
DoubleClick Inc(a) 1,444,100 46,211,200
Safeguard Scientifics(a) 919,500 18,332,531
Sapient Corp(a) 1,273,200 51,803,325
VeriSign Inc(a) 622,092 126,012,511
========================================================================================================================
394,806,619
1.27 SERVICES--DATA PROCESSING
Fiserv Inc(a) 1,941,200 116,229,350
========================================================================================================================
1.19 SERVICES--PAYROLL PROCESSING
Paychex Inc 2,076,350 109,008,375
========================================================================================================================
2.44 TELECOMMUNICATIONS--CELLULAR & WIRELESS
Nextel Communications Class A Shrs(a) 1,197,600 55,987,800
NTT DoCoMo 2,000 57,375,532
Proxim Inc(a) 790,000 35,155,000
Telecom Italia Mobile SpA 2,728,800 22,058,801
VoiceStream Wireless(a) 460,100 53,400,356
========================================================================================================================
223,977,489
0.94 TELECOMMUNICATIONS--LONG DISTANCE
Qwest Communications International(a) 1,793,823 86,215,618
========================================================================================================================
0.75 TELEPHONE
Amdocs Ltd(a) 1,104,720 68,906,910
========================================================================================================================
TOTAL COMMON STOCKS (Cost $4,574,843,071) 8,341,454,663
========================================================================================================================
0.67 PREFERRED STOCKS
0.00 BIOTECHNOLOGY--HEALTH CARE
Ingenex Inc, Pfd,
Series B Shrs(a)(g) 51,527 31,431
========================================================================================================================
0.60 COMPUTER SOFTWARE & SERVICES
SAP AG Sponsored ADR
Representing 1/4 Pfd Shr 894,600 55,017,900
========================================================================================================================
0.07 COMPUTERS--NETWORKING
Tellium Inc, Pfd, Series E Shrs(a)(h) 224,150 6,724,500
========================================================================================================================
TOTAL PREFERRED STOCKS (Cost $61,856,028) 61,773,831
========================================================================================================================
0.03 FIXED INCOME SECURITIES
0.03 CORPORATE BONDS
0.03 COMMUNICATIONS--EQUIPMENT & MANUFACTURING
Kestrel Solutions, Conv Sub Notes(f)
5.500%, 7/15/2005 (Cost $2,500,000) $ 2,500,000 2,700,000
========================================================================================================================
<PAGE>
SHARES,
COUNTRY UNITS OR
CODE IF PRINCIPAL
% DESCRIPTION NON US AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------------
8.44 SHORT-TERM INVESTMENTS
2.73 COMMERCIAL PAPER
0.54 BANKS--MONEY CENTER
UBS Finance, Discount Notes,
6.680%, 10/2/2000 $ 50,000,000 $ 49,990,681
========================================================================================================================
1.09 CONSUMER FINANCE
Ford Motor Credit,
6.510%, 10/3/2000 $ 50,000,000 50,000,000
General Motors Acceptance,
6.560%, 10/6/2000 $ 50,000,000 50,000,000
========================================================================================================================
100,000,000
0.55 INSURANCE--MULTILINE
Prudential Funding,
6.470%, 10/6/2000 $ 50,000,000 50,000,000
========================================================================================================================
0.55 INVESTMENT BANK/BROKER FIRM
Morgan Stanley Dean Witter & Co
Discount Notes, 6.650%, 10/2/2000 $ 50,000,000 49,990,806
========================================================================================================================
TOTAL COMMERCIAL PAPER
(Amortized Cost $249,981,487) 249,981,487
========================================================================================================================
5.16 INVESTMENT COMPANIES
INVESCO Treasurer's Series
Money Market Reserve Fund,
6.415% (Cost $473,557,379) 473,557,379 473,557,379
========================================================================================================================
0.55 REPURCHASE AGREEMENTS
Repurchase Agreement with
State Street dated 9/29/2000
due 10/2/2000 at 6.380%,
repurchased at $5,212,770
(Collateralized by US Treasury
Bonds, due 11/15/2016 at 7.500%,
value $5,308,254) $ 5,210,000 5,210,000
Repurchase Agreement with
State Street dated 9/29/2000
due 10/2/2000 at 6.380%,
repurchased at $45,524,191
(Collateralized by US Treasury
Notes, due 2/28/2001 at 5.000%,
value $46,439,092) $ 45,500,000 45,500,000
========================================================================================================================
TOTAL REPURCHASE AGREEMENTS
(Cost $50,710,000) 50,710,000
========================================================================================================================
TOTAL SHORT-TERM INVESTMENTS
(Amortized Cost $774,248,866) 774,248,866
========================================================================================================================
100.00 TOTAL INVESTMENT SECURITIES AT VALUE
(Cost $5,413,447,965)
(Cost for Income
Tax Purposes $5,427,379,365) $9,180,177,360
========================================================================================================================
TELECOMMUNICATIONS FUND
89.70 COMMON STOCKS
3.51 BROADCASTING
EchoStar Communications
Class A Shrs(a) 1,501,600 $ 79,209,400
General Motors Class H Shrs(a) 1,393,800 51,821,484
========================================================================================================================
<PAGE>
SHARES,
COUNTRY UNITS OR
CODE IF PRINCIPAL
% DESCRIPTION NON US AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------------
131,030,884
18.80 COMMUNICATIONS--EQUIPMENT & MANUFACTURING
ADC Telecommunications(a) 1,076,600 28,950,447
Avanex Corp(a) 41,700 4,490,569
CIENA Corp(a) 996,000 122,321,250
Comverse Technology(a) 693,800 74,930,400
Copper Mountain Networks(a) 170,900 $ 6,408,750
Corvis Corp(a)(h) 894,060 46,392,634
JDS Uniphase(a) 697,660 66,059,681
Lucent Technologies 778,000 23,777,625
Metasolv Software(a) 222,500 9,094,687
Metromedia Fiber Network
Class A Shrs(a) 1,225,800 29,802,262
Nokia Corp Sponsored ADR
Representing Ord Shrs FI 1,338,400 53,285,050
Nortel Networks CA 1,534,300 91,386,744
QUALCOMM Inc(a) 242,600 17,285,250
Scientific-Atlanta Inc 795,700 50,626,413
Tekelec(a) 1,597,700 52,524,388
Telefonaktiebolaget
LM Ericsson AB Sponsored ADR
Representing Series B Shrs SW 1,610,350 23,853,309
========================================================================================================================
701,189,459
16.44 COMPUTER SOFTWARE & SERVICES
Inktomi Corp(a) 324,000 36,936,000
Internap Network Services(a) 919,200 29,701,650
Phone.com Inc(a) 114,800 13,044,150
Software.com Inc(a) 194,900 35,362,169
Vitria Technology(a) 284,400 13,260,150
========================================================================================================================
128,304,119
0.42 COMPUTER SYSTEMS
Psion PLC UK 1,416,400 15,496,691
========================================================================================================================
0.51 COMPUTERS--HARDWARE
Handspring Inc(a) 273,800 18,909,312
========================================================================================================================
8.08 COMPUTERS--NETWORKING
Cisco Systems(a) 1,440,400 79,582,100
Juniper Networks(a) 601,400 131,669,012
ONI Systems(a) 75,900 6,551,119
Redback Networks(a) 425,000 69,673,438
Sycamore Networks(a) 59,700 6,447,600
Turnstone Systems(a) 159,300 7,387,538
========================================================================================================================
301,310,807
4.00 COMPUTERS--PERIPHERALS
EMC Corp(a) 1,342,200 133,045,575
Palm Inc(a) 304,500 16,119,469
========================================================================================================================
149,165,044
1.20 ELECTRICAL EQUIPMENT
Celestica Inc(a) CA 266,100 18,427,425
Flextronics
International Ltd(a) SN 262,000 21,516,750
PSINet Inc(a) 490,200 4,718,175
========================================================================================================================
<PAGE>
SHARES,
COUNTRY UNITS OR
CODE IF PRINCIPAL
% DESCRIPTION NON US AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------------
44,662,350
14.93 ELECTRONICS--SEMICONDUCTOR
Applied Micro Circuits(a) 641,800 132,892,712
Broadcom Corp Class A Shrs(a) 203,800 49,676,250
Conexant Systems(a) 632,200 26,473,375
Motorola Inc 539,295 15,235,084
New Focus(a) 141,800 $ 11,211,062
PMC-Sierra Inc(a) 536,500 115,481,625
RF Micro Devices(a) 827,600 26,483,200
SDL Inc(a) 410,600 127,003,713
Texas Instruments 207,200 9,777,250
Vitesse Semiconductor(a) 482,300 42,894,556
========================================================================================================================
557,128,827
1.55 ENTERTAINMENT
Gemstar-TV Guide International(a) 664,000 57,892,500
========================================================================================================================
0.62 FINANCIAL--DIVERSIFIED
BlueStream Ventures LP(a)(h) 23,125,000 23,125,000
========================================================================================================================
2.45 MANUFACTURING--DIVERSIFIED
Corning Inc 308,300 91,565,100
========================================================================================================================
0.53 RETAIL--COMPUTERS & ELECTRONICS
RadioShack Corp 308,600 19,943,275
========================================================================================================================
1.23 SERVICES--COMMERCIAL & CONSUMER
America Online(a) 679,800 36,539,250
CSG Systems International(a) 1,153,600 33,454,400
Yahoo! Inc(a) 104,200 9,482,200
========================================================================================================================
46,021,450
0.90 SERVICES--DATA PROCESSING
CSG Systems International(a) 1,153,600 33,454,400
========================================================================================================================
9.33 TELECOMMUNICATIONS--CELLULAR & WIRELESS
Aether Systems(a) 227,000 23,948,500
China Mobile Ltd(a) HK 5,889,000 39,086,784
Crown Castle International(a) 971,400 30,174,112
Dobson Communications(a) 355,200 5,217,000
Leap Wireless International(a) 270,600 16,929,412
Nextel Communications
Class A Shrs(a) 712,600 33,314,050
Nextel Partners(a) 873,500 25,440,688
NTT DoCoMo JP 1,855 53,215,806
Partner Communications
Ltd ADR Representing
Ord Shrs(a) IS 116,850 898,284
Spectrasite Holdings(a) 356,000 6,608,250
Telecom Italia Mobile SpA IT 2,600,200 21,019,237
Vodafone Group PLC(a) UK 14,298,915 53,380,889
VoiceStream Wireless(a) 268,300 31,139,569
Winstar Communications(a) 500,400 7,756,200
========================================================================================================================
<PAGE>
SHARES,
COUNTRY UNITS OR
CODE IF PRINCIPAL
% DESCRIPTION NON US AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------------
348,128,781
5.29 TELECOMMUNICATIONS--LONG DISTANCE
Allegiance Telecom(a) 1,007,700 37,536,825
Completel Europe NV(a) NL 588,200 4,671,779
Exodus Communications(a) 720,000 35,550,000
Global TeleSystems(a) 681,800 3,110,712
GT Group Telecom Class B Shrs(a) CA 432,700 5,706,231
KPN Qwest NV Class C Shrs(a) NL 333,200 $ 9,662,800
Nippon Telegraph & Telephone(a) JP 1,564 15,341,847
Qwest Communications
International(a) 1,785,731 85,826,696
========================================================================================================================
197,406,890
12.91 TELEPHONE
Amdocs Ltd(a) 1,205,800 75,211,775
AT&T Canada Class B
Depository Receipts(a) CA 703,900 21,468,950
BellSouth Corp 1,278,600 51,463,650
Cable & Wireless PLC UK 934,700 13,335,856
COLT Telecom Group PLC
Sponsored ADR Representing
4 Ord Shrs(a) UK 236,100 26,030,025
Hanaro Telecom Sponsored ADR
Representing Ord Shrs(a) KS 574,200 2,512,125
Illuminet Holdings(a) 387,100 10,742,025
McLeodUSA Inc Class A Shrs(a) 3,469,800 49,661,512
NEXTLINK Communications Class A Shrs(a) 1,227,800 43,203,213
RCN Corp(a) 793,700 16,469,275
SBC Communications 1,445,886 72,294,300
Tele1 Europe Holding AB(a) SW 637,900 5,959,826
Time Warner Telecom Class A Shrs(a) 1,039,000 50,196,688
Verizon Communications 885,300 42,881,719
========================================================================================================================
481,430,939
TOTAL COMMON STOCKS (Cost $2,157,715,244) 3,346,165,828
========================================================================================================================
0.18 PREFERRED STOCKS
0.09 COMPUTERS--NETWORKING
Tellium Inc, Pfd,
Series E Shrs(a)(h) 109,184 3,275,520
========================================================================================================================
0.09 TELECOMMUNICATIONS--LONG DISTANCE
Broadwing Communications,
Jr Exchangeable Pfd
Series B Shrs, 12.500% 3,500 3,535,000
========================================================================================================================
TOTAL PREFERRED STOCKS (Cost $7,169,270) 6,810,520
========================================================================================================================
0.33 FIXED INCOME SECURITIES
0.07 COMMUNICATIONS--EQUIPMENT
& MANUFACTURING
Kestrel Solutions, Conv Sub
Notes(f), 5.500%, 7/15/2005 $ 2,500,000 2,700,000
========================================================================================================================
0.26 TELECOMMUNICATIONS--LONG DISTANCE
Esat Telecom Group PLC
Sr Notes, Series B,
11.875%, 12/1/2008 IE $ 2,500,000 2,950,000
Sr Deferred Step-Up Notes,
Zero Coupon(g), 2/1/2007 IE $ 7,154,000 6,814,185
========================================================================================================================
9,764,185
TOTAL FIXED INCOME SECURITIES
(Cost $12,301,106) 12,464,185
========================================================================================================================
<PAGE>
SHARES,
COUNTRY UNITS OR
CODE IF PRINCIPAL
% DESCRIPTION NON US AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------------
9.79 SHORT-TERM INVESTMENTS
4.69 COMMERCIAL PAPER
1.34 COMMERCIAL FINANCE
Heller Financial,
6.600%, 10/5/2000 $ 50,000,000 50,000,000
========================================================================================================================
1.34 CONSUMER FINANCE
American Express Credit,
6.600%, 10/2/2000 $ 50,000,000 50,000,000
========================================================================================================================
0.67 FINANCIAL--DIVERSIFIED
Associates Corp of North America,
6.630%, 10/2/2000 $ 25,000,000 $ 25,000,000
========================================================================================================================
1.34 INSURANCE--MULTILINE
Prudential Funding,
6.470%, 10/6/2000 $ 50,000,000 50,000,000
========================================================================================================================
TOTAL COMMERCIAL PAPER
(Cost $175,000,000) 175,000,000
========================================================================================================================
5.10 INVESTMENT COMPANIES
INVESCO Treasurer's Series
Money Market Reserve Fund,
6.415% (Cost $190,098,218) 190,098,218 190,098,218
========================================================================================================================
TOTAL SHORT-TERM INVESTMENTS
(Cost $365,098,218) 365,098,218
========================================================================================================================
100.00 TOTAL INVESTMENT SECURITIES AT VALUE
(Cost $2,542,283,838)
(Cost for Income
Tax Purposes $2,543,942,571) $3,730,538,751
========================================================================================================================
UTILITIES FUND
87.71 COMMON STOCKS
1.50 BROADCASTING
General Motors Class H Shrs(a) 112,600 $ 4,186,468
========================================================================================================================
1.36 COMMUNICATIONS--EQUIPMENT & MANUFACTURING
Lucent Technologies 58,600 1,790,962
Nortel Networks 33,400 1,989,388
========================================================================================================================
3,780,350
35.20 ELECTRIC UTILITIES
AES Corp(a) 133,700 9,158,450
Alliant Energy 181,046 5,318,226
Calpine Corp(a) 143,600 14,988,250
Consolidated Edison 67,000 2,286,375
Constellation Energy Group 131,500 6,542,125
Duke Energy 117,509 10,076,397
FPL Group 49,900 3,280,925
GPU Inc 33,700 1,093,144
Montana Power 175,200 5,847,300
PG&E Corp 55,800 1,349,662
Pinnacle West Capital 106,800 5,433,450
Reliant Energy 145,500 6,765,750
SCANA Corp 181,100 5,591,462
Scottish Power PLC Sponsored ADR
Representing 4 Ord Shrs 117,710 3,538,657
Southern Energy(a) 166,000 5,208,250
TXU Corp 100,400 3,978,350
Unicom Corp 137,800 7,742,638
========================================================================================================================
<PAGE>
SHARES,
COUNTRY UNITS OR
CODE IF PRINCIPAL
% DESCRIPTION NON US AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------------
98,199,411
13.72 NATURAL GAS PIPELINES
Coastal Corp 121,200 8,983,950
Columbia Energy Group 39,000 2,769,000
Dynegy Inc Class A Shrs 162,000 9,234,000
Enron Corp 98,400 8,622,300
ONEOK Inc 51,000 $ 2,027,250
Williams Cos 157,100 6,637,475
========================================================================================================================
38,273,975
7.40 TELECOMMUNICATIONS--
CELLULAR & WIRELESS
Crown Castle International(a) 147,400 4,578,612
Nextel Communications Class A Shrs(a) 107,900 5,044,325
Nextel Partners(a) 90,300 2,629,987
Spectrasite Holdings(a) 23,800 441,788
Vodafone Group PLC(a) 1,069,572 3,992,940
VoiceStream Wireless(a) 34,200 3,969,338
========================================================================================================================
<PAGE>
SHARES,
COUNTRY UNITS OR
CODE IF PRINCIPAL
% DESCRIPTION NON US AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------------
20,656,990
3.15 TELECOMMUNICATIONS--LONG DISTANCE
Qwest Communications International(a) 183,100 8,800,244
========================================================================================================================
25.38 TELEPHONE
ALLTEL Corp 100,400 5,239,625
Amdocs Ltd(a) 124,500 7,765,688
AT&T Canada Class B Depository Receipts(a) 127,300 3,882,650
BellSouth Corp 161,800 6,512,450
Cable & Wireless PLC 63,700 908,841
Citizens Communications 418,100 5,618,219
COLT Telecom Group PLC Sponsored ADR
Representing 4 Ord Shrs(a) 42,400 4,674,600
McLeodUSA Inc Class A Shrs(a) 368,100 5,268,431
SBC Communications 229,112 11,455,600
Telefonica SA Sponsored ADR
Representing 3 Ord Shrs(a) 125,025 7,431,173
Time Warner Telecom Class A Shrs(a) 88,500 4,275,656
Verizon Communications 99,796 4,833,869
WorldCom Inc(a) 96,735 2,938,326
========================================================================================================================
70,805,128
TOTAL COMMON STOCKS (Cost $158,659,319) 244,702,566
========================================================================================================================
12.29 SHORT-TERM INVESTMENTS
4.31 COMMERCIAL PAPER
4.31 COMMERCIAL FINANCE
CIT Group, Discount Notes,
6.660%, 10/1/2000
(Amortized Cost $12,035,773) $ 12,038,000 12,035,773
========================================================================================================================
3.73 INVESTMENT COMPANIES
INVESCO Treasurer's Series
Money Market Reserve Fund,
6.415% (Cost $10,414,589) 10,414,589 10,414,589
========================================================================================================================
4.25 REPURCHASE AGREEMENTS
Repurchase Agreement with
State Street dated 9/29/2000
due 10/2/2000 at 6.380%,
repurchased at $11,851,298
(Collateralized by US Treasury
Notes, due 5/15/2002 at 7.500%,
value $12,090,479) (Cost $11,845,000) $ 11,845,000 11,845,000
========================================================================================================================
TOTAL SHORT-TERM INVESTMENTS
(Amortized Cost $34,295,362) 34,295,362
========================================================================================================================
<PAGE>
SHARES,
COUNTRY UNITS OR
CODE IF PRINCIPAL
% DESCRIPTION NON US AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------------
100.00 TOTAL INVESTMENT SECURITIES
AT VALUE
(Cost $192,954,681)
(Cost for Income Tax
Purposes $192,955,358) $ 278,997,928
========================================================================================================================
</TABLE>
(a) Security is non-income producing.
(b) Security is an affiliated company (See Notes).
(c) Represents troy ounces.
(d) Rate is subject to change. Rate shown reflects current rate.
(e) HOLDRs--Holding Company Depository Receipts.
(f) Securities acquired pursuant to Rule 144A. The Fund deems such securities
to be "liquid" because an institutional market exists.
(g) Step-up bonds are obligations which increase the interest payment rate at a
specific point in time. Rate shown reflects current rate which may step up
at a future time.
(h) The following are restricted securities at September 30, 2000:
<PAGE>
SCHEDULE OF RESTRICTED OR ILLIQUID SECURITIES
VALUE AS
ACQUISITION ACQUISITION % OF
DESCRIPTION DATE(S) COST NET ASSETS
--------------------------------------------------------------------------------
HEALTH SCIENCES FUND
Athersys Inc, Conv Pfd,
Class F Shrs 4/17/00 $ 5,000,000 0.23%
Ecogen Technologies I 11/18/92-
1/28/94 1,140,000 0.00
Ingenex Inc, Pfd, Series B Shrs 9/27/94 600,000 0.00
Janus Biomedical, Conv Pfd,
Series A Shrs 3/2/94 1,000,000 0.00
MedClone Inc, Conv Pfd,
Series G Shrs 10/21/93 1,000,001 0.00
MedClone Trust 9/30/97 101,310 0.00
Mediconsult.com Inc 12/31/99 897,145 0.03
Mediconsult.com Inc
Bridge Notes, 12.500%,
10/31/2000 6/10/98 292,070 0.01
Escrowed Shrs 12/31/99 66,455 0.00
Osiris Therapeutics, Conv Pfd,
Series C Shrs 5/26/94 1,300,000 0.06
Xenometrix Inc 1/7/94 1,163,691 0.00
================================================================================
0.33%
================================================================================
TECHNOLOGY FUND
BlueStream Ventures LP 8/3/00 $ 23,500,000 0.26%
Corvis Corp 12/16/99 15,000,082 1.27
Ingenex Inc, Pfd, Series B Shrs 9/27/94 300,000 0.00
Tellium Inc, Pfd, Series E Shrs 9/20/00 6,724,500 0.07
================================================================================
1.60%
================================================================================
TELECOMMUNICATIONS FUND
BlueStream Ventures LP 8/3/00 $ 23,125,000 0.63%
Corvis Corp 12/16/99 5,999,888 1.27
Tellium Inc, Pfd, Series E Shrs 9/20/00 3,275,520 0.09
================================================================================
1.99%
================================================================================
<PAGE>
SUMMARY OF INVESMENTS BY COUNTRY
% OF
COUNTRY INVESTMENT
COUNTRY CODE SECURITIES VALUE
--------------------------------------------------------------------------------
GOLD FUND
Canada CA 45.34% $ 34,669,368
South Africa SF 4.82 3,689,375
United States 49.84 38,114,120
================================================================================
100.00% $ 76,472,863
================================================================================
TELECOMMUNICATIONS FUND
Canada CA 3.67% $ 136,989,350
Finland FI 1.43 53,285,050
Hong Kong HK 1.05 39,086,784
Ireland IE 0.26 9,764,185
Israel IS 0.02 898,284
Italy IT 0.56 21,019,237
Japan JP 1.84 68,557,653
Republic of South Korea KS 0.07 2,512,125
Netherlands NL 0.38 14,334,579
Singapore SN 0.58 21,516,750
Sweden SW 0.80 29,813,135
United Kingdom UK 2.90 108,243,461
United States 86.44 3,224,518,158
================================================================================
100.00% $3,730,538,751
================================================================================
See Notes to Financial Statements
<PAGE>
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
INVESCO SECTOR FUNDS, INC.
SEPTEMBER 30, 2000
UNAUDITED
FINANCIAL
ENERGY SERVICES
FUND FUND
--------------------------------------------------------------------------------
ASSETS
Investment Securities:
At Cost(a) $ 388,366,097 $ 1,047,755,746
================================================================================
At Value(a) $ 497,383,525 $ 1,487,420,511
Foreign Currency (Cost $11,758
and $0, respectively) 11,429 0
Receivables:
Investment Securities Sold 1,594,446 14,020,015
Fund Shares Sold 7,257,325 16,126,351
Dividends and Interest 256,418 1,658,284
Prepaid Expenses and Other Assets 49,599 66,116
================================================================================
TOTAL ASSETS 506,552,742 1,519,291,277
================================================================================
LIABILITIES
Payables:
Custodian 56,493 14,020
Investment Securities Purchased 21,067,132 9,666,695
Fund Shares Repurchased 2,270,928 17,558,962
Accrued Distribution Expenses
Investor Class 99,269 291,045
Class C 3,529 6,107
Accrued Expenses and Other Payables 8,685 74,149
================================================================================
TOTAL LIABILITIES 23,506,036 27,610,978
================================================================================
NET ASSETS AT VALUE $ 483,046,706 $ 1,491,680,299
================================================================================
NET ASSETS
Paid-in Capital(b) $ 376,277,438 $ 1,020,935,683
Accumulated Undistributed Net
Investment Income (Loss) (334,742) 2,547,341
Accumulated Undistributed Net
Realized Gain (Loss)
Investment Securities and
Foreign Currency Transactions (1,913,089) 28,535,271
Net Appreciation of Investment Securities
and Foreign Currency Transactions 109,017,099 439,662,004
================================================================================
NET ASSETS AT VALUE, Applicable to
Shares Outstanding $ 483,046,706 $ 1,491,680,299
================================================================================
NET ASSETS AT VALUE:
Investor Class $ 477,370,299 $ 1,483,827,786
================================================================================
Class C $ 5,676,407 $ 7,852,513
================================================================================
Shares Outstanding
Investor Class 21,261,670 45,327,265
Class C 253,855 240,952
NET ASSET VALUE, Offering and Redemption
Price per Share
Investor Class $ 22.45 $ 32.74
Class C (excludes applicable
contingent deferred sales charge) $ 22.36 $ 32.59
================================================================================
<PAGE>
(a) Investment securities at cost and value at September 30, 2000 include
repurchase agreements of $7,936,000 and $4,312,000 for Energy and Financial
Services Funds, respectively.
(b) The Fund has four billion authorized shares of common stock, par value
$0.01 per share. Of such shares, 200 milion have been allocated to Energy
Fund and 400 million to Financial Services Fund: 100 million to Energy Fund
- Investor Class, 100 million to Energy Fund - Class C, 300 million to
Financial Services Fund - Investor Class and 100 million to Financial
Services Fund - Class C.
See Notes to Financial Statements
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES (CONTINUED)
INVESCO SECTOR FUNDS, INC.
SEPTEMBER 30, 2000
UNAUDITED
HEALTH
GOLD SCIENCES
FUND FUND
--------------------------------------------------------------------------------
ASSETS
Investment Securities:
At Cost(a)(b) $ 87,935,717 $ 1,595,951,797
================================================================================
At Value(a)(b) $ 76,472,863 $ 2,227,201,072
Cash 5,571 1,502
Receivables:
Investment Securities Sold 0 48,042,144
Fund Shares Sold 2,316,680 20,779,317
Dividends and Interest 81,701 719,986
Prepaid Expenses and Other Assets 45,765 133,940
================================================================================
TOTAL ASSETS 78,922,580 2,296,877,961
================================================================================
LIABILITIES
Payables:
Investment Securities Purchased 2,301,496 54,286,084
Fund Shares Repurchased 1,048,495 21,286,450
Depreciation on Foreign Currency Contracts 1,561 0
Accrued Distribution Expenses
Investor Class 15,171 421,382
Class C 2 3,867
Accrued Expenses and Other Payables 36,169 96,872
================================================================================
TOTAL LIABILITIES 3,402,894 76,094,655
================================================================================
NET ASSETS AT VALUE $ 75,519,686 $ 2,220,783,306
================================================================================
NET ASSETS
Paid-in Capital(c) $ 291,413,828 $ 1,398,542,106
Accumulated Undistributed (Distributions
in Excess of) Net Investment Loss (1,484,548) (4,778,097)
Accumulated Undistributed Net Realized
Gain (Loss) on Investment Securities
and Foreign Currency Transactions (202,946,740) 195,788,652
Net Appreciation (Depreciation) of
Investment Securities and Foreign
Currency Transactions (11,462,854) 631,230,645
================================================================================
NET ASSETS AT VALUE, Applicable to
Shares Outstanding $ 75,519,686 $ 2,220,783,306
================================================================================
NET ASSETS AT VALUE:
Investor Class $ 75,517,547 $ 2,213,890,243
================================================================================
Class C $ 2,139 $ 6,893,063
================================================================================
Shares Outstanding
Investor Class 50,917,760 30,603,963
Class C 1,463 95,626
NET ASSET VALUE, Offering and Redemption
Price per Share Investor Class $ 1.48 $ 72.34
Class C (excludes applicable contingent
deferred sales charge) $ 1.46 $ 72.08
================================================================================
<PAGE>
(a) Investment securities at cost and value at September 30, 2000 include
repurchase agreements of $4,770,000 and $24,623,000 for Gold and Health
Sciences Funds, respectively.
(b) Investment securities at September 30, 2000 include gold bullion cost of
$9,475,205 and value of $9,181,320 for Gold Fund.
(c) The Fund has four billion authorized shares of common stock, par value
$0.01 per share. Of such shares, 400 million have been allocated to Gold
Fund and 200 million to Health Sciences Fund: 200 million to Gold Fund -
Investor Class, 200 million to Gold Fund - Class C, 100 million to Health
Sciences Fund - Investor Class and 100 million to Health Sciences Fund -
Class C.
See Notes to Financial Statements
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES (CONTINUED)
INVESCO SECTOR FUNDS, INC.
SEPTEMBER 30, 2000
UNAUDITED
REAL ESTATE
LEISURE OPPORTUNITY
FUND FUND
--------------------------------------------------------------------------------
ASSETS
Investment Securities:
At Cost(a) $ 434,401,716 $ 38,254,915
================================================================================
At Value(a) $ 587,713,854 $ 41,032,231
Cash 0 38,930
Foreign Currency (Cost $25,757
and $0, respectively) 25,793 0
Receivables:
Investment Securities Sold 3,270,261 0
Fund Shares Sold 4,728,091 725,637
Dividends and Interest 509,462 242,391
Prepaid Expenses and Other Assets 65,828 89,704
================================================================================
TOTAL ASSETS 596,313,289 42,128,893
================================================================================
LIABILITIES
Payables:
Custodian 332 0
Distributions to Shareholders 0 7,719
Investment Securities Purchased 6,595,296 1,155,455
Fund Shares Repurchased 2,813,023 449,374
Accrued Distribution Expenses
Investor Class 120,214 8,018
Class C 874 1,131
Accrued Expenses and Other Payables 26,656 1,106
================================================================================
TOTAL LIABILITIES 9,556,395 1,622,803
================================================================================
NET ASSETS AT VALUE $ 586,756,894 $ 40,506,090
================================================================================
NET ASSETS
Paid-in Capital(b) $ 341,523,512 $ 45,343,450
Accumulated Undistributed
(Distributions in Excess of) Net
Investment Income (Loss) (1,477,090) (879)
Accumulated Undistributed Net
Realized Gain (Loss) on Investment
Securities and Foreign Currency
Transactions 93,398,166 (7,613,797)
Net Appreciation of Investment
Securities and Foreign Currency
Transactions 153,312,306 2,777,316
================================================================================
NET ASSETS AT VALUE, Applicable to
Shares Outstanding $ 586,756,894 $ 40,506,090
================================================================================
NET ASSETS AT VALUE:
Investor Class $ 585,378,057 $ 38,961,096
================================================================================
Class C $ 1,378,837 $ 1,544,994
================================================================================
Shares Outstanding
Investor Class 12,877,078 5,103,070
Class C 30,455 203,174
NET ASSET VALUE, Offering and
Redemption Price per Share
Investor Class $ 45.46 $ 7.63
Class C (excludes applicable
contingent deferred sales charge) $ 45.27 $ 7.60
================================================================================
<PAGE>
(a) Investment securities at cost and value at September 30, 2000 include
repurchase agreements of $9,327,000 and $2,915,000 for Leisure and Real
Estate Opportunity Funds, respectively.
(b) The Fund has four billion authorized shares of common stock, par value
$0.01 per share. Of such shares, 200 million have been allocated to Leisure
Fund and 200 million to Real Estate Opportunity Fund: 100 million to each
Investor Class and 100 million to each Class C.
See Notes to Financial Statements
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES (CONTINUED)
INVESCO SECTOR FUNDS, INC.
SEPTEMBER 30, 2000
UNAUDITED
TECHNOLOGY TELECOMMUNICATIONS
FUND FUND
--------------------------------------------------------------------------------
ASSETS
Investment Securities:
At Cost(a) $ 5,413,447,965 $ 2,542,283,838
================================================================================
At Value(a) $ 9,180,177,360 $ 3,730,538,751
Cash 77,241 0
Receivables:
Investment Securities Sold 50,352,622 16,742,529
Fund Shares Sold 34,560,098 14,723,878
Dividends and Interest 311,507 275,145
Prepaid Expenses and Other Assets 972,633 526,353
================================================================================
TOTAL ASSETS 9,266,451,461 3,762,806,656
================================================================================
LIABILITIES
Payables:
Custodian 0 94,169
Investment Securities Purchased 52,338,303 49,697,978
Fund Shares Repurchased 56,725,398 44,083,441
Borrowings on Line of Credit 0 4,300,000
Accrued Distribution Expenses
Investor Class 1,140,674 777,400
Class C 11,810 10,228
Accrued Expenses and Other Payables 6,501 48,001
================================================================================
TOTAL LIABILITIES 110,222,686 99,011,217
================================================================================
NET ASSETS AT VALUE $ 9,156,228,775 $ 3,663,795,439
================================================================================
NET ASSETS
Paid-in Capital(b) $ 5,337,935,166 $ 2,478,787,975
Accumulated Undistributed Net
Investment Loss (14,840,740) (5,094,478)
Accumulated Undistributed Net
Realized Gain on Investment
Securities and Foreign Currency
Transactions 66,405,435 1,847,781
Net Appreciation of Investment Securities
and Foreign Currency Transactions 3,766,728,914 1,188,254,161
================================================================================
NET ASSETS AT VALUE, Applicable to
Shares Outstanding $ 9,156,228,775 $ 3,663,795,439
================================================================================
NET ASSETS AT VALUE:
Institutional Class $ 3,764,452,252 --
================================================================================
Investor Class $ 5,377,091,611 $ 3,650,663,982
================================================================================
Class C $ 14,684,912 $ 13,131,457
================================================================================
Shares Outstanding
Institutional Class 38,121,660 --
Investor Class 54,878,135 65,738,155
Class C 150,767 237,524
NET ASSET VALUE, Offering and
Redemption Price per Share
Institutional Class $ 98.75 --
Investor Class $ 97.98 $ 55.53
Class C (excludes applicable
contingent deferred sales charge) $ 97.40 $ 55.28
================================================================================
<PAGE>
(a) Investment securities at cost and value at September 30, 2000 includes a
repurchase agreement of $50,710,000 for Technology Fund.
(b) The Fund has four billion authorized shares of common stock, par value
$0.01 per share. Of such shares, 700 million have been allocated to
Technology Fund and 400 million to Telecommunications Fund: 300 million to
Technology Fund - Institutional Class, 300 million to Technology Fund -
Investor Class, 100 million to Technology Fund - Class C, 300 million to
Telecommunications Fund - Investor Class and 100 million to
Telecommunications Fund - Class C.
See Notes to Financial Statements
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES (CONTINUED)
INVESCO SECTOR FUNDS, INC.
SEPTEMBER 30, 2000
UNAUDITED
UTILITIES
FUND
--------------------------------------------------------------------------------
ASSETS
Investment Securities:
At Cost(a) $ 192,954,681
================================================================================
At Value(a) $ 278,997,928
Cash 7,919
Foreign Currency (Cost $2,353) 2,239
Receivables:
Fund Shares Sold 1,781,327
Dividends and Interest 228,177
Prepaid Expenses and Other Assets 157,103
================================================================================
TOTAL ASSETS 281,174,693
================================================================================
LIABILITIES
Payables:
Distributions to Shareholders 14,964
Investment Securities Purchased 3,669,264
Fund Shares Repurchased 452,120
Accrued Distribution Expenses
Investor Class 53,451
Class C 550
Accrued Expenses and Other Payables 15,345
================================================================================
TOTAL LIABILITIES 4,205,694
================================================================================
NET ASSETS AT VALUE $ 276,968,999
================================================================================
NET ASSETS
Paid-in Capital(b) $ 168,409,108
Accumulated Undistributed (Distributions
in Excess of) Net Investment Loss (8,848)
Accumulated Undistributed Net
Realized Gain on Investment Securities
and Foreign Currency Transactions 22,525,606
Net Appreciation of Investment Securities
and Foreign Currency Transactions 86,043,133
================================================================================
NET ASSETS AT VALUE, Applicable to
Shares Outstanding $ 276,968,999
================================================================================
NET ASSETS AT VALUE:
Investor Class $ 275,886,585
================================================================================
Class C $ 1,082,414
================================================================================
Shares Outstanding
Investor Class 14,066,261
Class C 55,355
NET ASSET VALUE, Offering and Redemption
Price per Share
Investor Class $ 19.61
Class C (excludes applicable contingent
deferred sales charge) $ 19.55
================================================================================
(a) Investment securities at cost and value at September 30, 2000 includes a
repurchase agreement of $11,845,000.
(b) The Fund has four billion authorized shares of common stock, par value
$0.01 per share. Of such shares, 200 million have been allocated to
Utilities Fund: 100 million to Investor Class and 100 million to Class C.
See Notes to Financial Statements
<PAGE>
STATEMENT OF OPERATIONS
INVESCO SECTOR FUNDS, INC.
SIX MONTHS ENDED SEPTEMBER 30, 2000
UNAUDITED
FINANCIAL
ENERGY SERVICES
FUND FUND
--------------------------------------------------------------------------------
INVESTMENT INCOME
INCOME
Dividends $ 1,705,166 $ 7,211,139
Dividends from Affiliated
Investment Companies 83,414 1,151,657
Interest 343,377 2,051,957
Foreign Taxes Withheld (43,558) (76,008)
================================================================================
TOTAL INCOME 2,088,399 10,338,745
================================================================================
EXPENSES
Investment Advisory Fees 1,256,727 3,865,953
Distribution Expenses
Investor Class 421,984 1,515,138
Class C 6,929 11,320
Transfer Agent Fees 444,917 1,742,479
Administrative Services Fees 81,269 278,234
Custodian Fees and Expenses 15,731 46,799
Directors' Fees and Expenses 8,046 22,052
Interest Expenses 75,907 0
Professional Fees and Expenses 9,088 14,653
Registration Fees and
Expenses - Investor Class 35,410 29,841
Reports to Shareholders 62,396 231,054
Other Expenses 4,006 14,434
================================================================================
TOTAL EXPENSES 2,422,410 7,771,957
Fees and Expenses Paid Indirectly (15,731) (46,265)
================================================================================
NET EXPENSES 2,406,679 7,725,692
================================================================================
NET INVESTMENT INCOME (LOSS) (318,280) 2,613,053
================================================================================
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENT SECURITIES
Net Realized Gain (Loss) on:
Investment Securities 18,113,081 11,306,645
Foreign Currency Transactions (33) (231,689)
================================================================================
TOTAL NET REALIZED GAIN 18,113,048 11,074,956
================================================================================
Change in Net Appreciation (Depreciation) of:
Investment Securities 57,360,862 219,886,625
Foreign Currency Transactions (329) (215,618)
================================================================================
TOTAL NET APPRECIATION 57,360,533 219,671,007
================================================================================
NET GAIN ON INVESTMENT SECURITIES
AND FOREIGN CURRENCY TRANSACTIONS 75,473,581 230,745,963
================================================================================
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 75,155,301 $ 233,359,016
================================================================================
See Notes to Financial Statements
<PAGE>
STATEMENT OF OPERATIONS (CONTINUED)
INVESCO SECTOR FUNDS, INC.
SIX MONTHS ENDED SEPTEMBER 30, 2000
UNAUDITED
HEALTH
GOLD SCIENCES
FUND FUND
--------------------------------------------------------------------------------
INVESTMENT INCOME
INCOME
Dividends $ 318,668 $ 3,170,486
Dividends from Affiliated
Investment Companies 0 1,826,905
Interest 139,924 5,318,709
Foreign Taxes Withheld (15,022) (53,217)
================================================================================
TOTAL INCOME 443,570 10,262,883
================================================================================
EXPENSES
Investment Advisory Fees 295,589 5,483,920
Distribution Expenses
Investor Class 98,527 2,253,701
Class C 9 11,000
Transfer Agent Fees 353,065 2,380,477
Administrative Services Fees 22,735 411,161
Custodian Fees and Expenses 22,340 107,079
Directors' Fees and Expenses 5,740 29,583
Interest Expenses 10,385 0
Professional Fees and Expenses 9,020 21,123
Registration Fees and Expenses - Investor Class 25,405 79,746
Reports to Shareholders 54,540 339,198
Other Expenses 2,837 21,316
================================================================================
TOTAL EXPENSES 900,192 11,138,304
Fees and Expenses Paid Indirectly (12,032) (103,487)
================================================================================
NET EXPENSES 888,160 11,034,817
================================================================================
NET INVESTMENT LOSS (444,590) (771,934)
================================================================================
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENT SECURITIES
Net Realized Gain (Loss) on:
Investment Securities (8,235,359) 112,383,309
Foreign Currency Transactions (226,051) (932,761)
================================================================================
Total Net Realized Gain (Loss) (8,461,410) 111,450,548
================================================================================
Change in Net Appreciation (Depreciation) of:
Investment Securities 3,750,442 393,656,275
Foreign Currency Transactions (776,209) (2,792,542)
================================================================================
Total Net Appreciation 2,974,233 390,863,733
================================================================================
NET GAIN (LOSS) ON INVESTMENT SECURITIES
AND FOREIGN CURRENCY TRANSACTIONS (5,487,177) 502,314,281
================================================================================
NET INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS $ (5,931,767) $ 501,542,347
================================================================================
See Notes to Financial Statements
<PAGE>
STATEMENT OF OPERATIONS (CONTINUED)
INVESCO SECTOR FUNDS, INC.
SIX MONTHS ENDED SEPTEMBER 30, 2000
UNAUDITED
REAL ESTATE
LEISURE OPPORTUNITY
FUND FUND
--------------------------------------------------------------------------------
INVESTMENT INCOME
INCOME
Dividends $ 1,401,510 $ 869,428
Dividends from Affiliated
Investment Companies 254,281 0
Interest 609,017 112,038
Foreign Taxes Withheld (27,711) (2,160)
================================================================================
TOTAL INCOME 2,237,097 979,306
================================================================================
EXPENSES
Investment Advisory Fees 1,977,121 133,792
Distribution Expenses
Investor Class 692,197 43,723
Class C 2,978 3,498
Transfer Agent Fees 696,974 83,099
Administrative Services Fees 129,729 13,027
Custodian Fees and Expenses 42,323 8,309
Directors' Fees and Expenses 11,988 4,823
Interest Expenses 1,228 26,370
Professional Fees and Expenses 11,821 10,182
Registration Fees and Expenses - Investor Class 42,280 19,207
Reports to Shareholders 116,032 20,100
Other Expenses 6,744 912
================================================================================
TOTAL EXPENSES 3,731,415 367,042
Fees and Expenses Absorbed
by Investment Adviser 0 (80,505)
Fees and Expenses Paid Indirectly (43,215) (8,309)
================================================================================
NET EXPENSES 3,688,200 278,228
================================================================================
NET INVESTMENT INCOME (LOSS) (1,451,103) 701,078
================================================================================
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENT SECURITIES
Net Realized Gain (Loss) on:
Investment Securities 41,197,106 1,570,030
Foreign Currency Transactions (1,242,472) 0
================================================================================
Total Net Realized Gain 39,954,634 1,570,030
================================================================================
Change in Net Appreciation (Depreciation) of:
Investment Securities (56,935,450) 2,336,552
Foreign Currency Transactions (120,080) 0
================================================================================
Total Net Appreciation (Depreciation) (57,055,530) 2,336,552
================================================================================
NET GAIN (LOSS) ON INVESTMENT SECURITIES
AND FOREIGN CURRENCY TRANSACTIONS (17,100,896) 3,906,582
================================================================================
NET INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS $ (18,551,999) $ 4,607,660
================================================================================
See Notes to Financial Statements
<PAGE>
STATEMENT OF OPERATIONS (CONTINUED)
INVESCO SECTOR FUNDS, INC.
SIX MONTHS ENDED SEPTEMBER 30, 2000
UNAUDITED
TECHNOLOGY TELECOMMUNICATIONS
FUND FUND
--------------------------------------------------------------------------------
INVESTMENT INCOME
INCOME
Dividends $ 2,197,955 $ 3,346,693
Dividends from Affiliated
Investment Companies 8,209,162 4,607,867
Interest 7,380,810 5,364,211
Foreign Taxes Withheld (205,623) (116,672)
================================================================================
TOTAL INCOME 17,582,304 13,202,099
================================================================================
EXPENSES
Investment Advisory Fees 19,112,046 8,841,699
Distribution Expenses
Investor Class 6,005,728 4,485,644
Class C 40,313 36,270
Transfer Agent Fees 3,980,506 3,184,801
Administrative Services Fees 1,914,537 814,048
Custodian Fees and Expenses 352,095 252,567
Directors' Fees and Expenses 99,590 45,453
Interest Expenses 169,821 10,379
Professional Fees and Expenses 60,880 34,729
Registration Fees and Expenses
Institutional Class 249,258 --
Investor Class 185,748 289,828
Reports to Shareholders 439,371 498,044
Other Expenses 76,972 33,526
================================================================================
TOTAL EXPENSES 32,686,865 18,526,988
Fees and Expenses Paid Indirectly (355,394) (251,135)
================================================================================
NET EXPENSES 32,331,471 18,275,853
================================================================================
NET INVESTMENT LOSS (14,749,167) (5,073,754)
================================================================================
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENT SECURITIES
Net Realized Gain (Loss) on:
Investment Securities (189,197,476) (86,943,873)
Foreign Currency Transactions 2,001,292 (5,176,112)
================================================================================
Total Net Realized Loss (187,196,184) (92,119,985)
================================================================================
Change in Net Depreciation of:
Investment Securities (295,915,354) (476,981,724)
Foreign Currency Transactions (10,285,216) (10,355,342)
================================================================================
Total Net Depreciation (306,200,570) (487,337,066)
================================================================================
NET LOSS ON INVESTMENT SECURITIES
AND FOREIGN CURRENCY TRANSACTIONS (493,396,754) (579,457,051)
================================================================================
NET DECREASE IN NET ASSETS
FROM OPERATIONS $ (508,145,921) $ (584,530,805)
================================================================================
See Notes to Financial Statements
<PAGE>
STATEMENT OF OPERATIONS (CONTINUED)
INVESCO Sector Funds, Inc.
Six Months Ended September 30, 2000
UNAUDITED
UTILITIES
FUND
--------------------------------------------------------------------------------
INVESTMENT INCOME
INCOME
Dividends $ 1,705,910
Dividends from Affiliated Investment Companies 321,064
Interest 495,369
Foreign Taxes Withheld (12,848)
================================================================================
TOTAL INCOME 2,509,495
================================================================================
EXPENSES
Investment Advisory Fees 938,676
Distribution Expenses
Investor Class 312,356
Class C 2,145
Transfer Agent Fees 309,606
Administrative Services Fees 61,321
Custodian Fees and Expenses 15,825
Directors' Fees and Expenses 8,058
Professional Fees and Expenses 9,322
Registration Fees and Expenses - Investor Class 25,881
Reports to Shareholders 52,103
Other Expenses 3,538
================================================================================
TOTAL EXPENSES 1,738,831
Fees and Expenses Absorbed by Investment Adviser (111,339)
Fees and Expenses Paid Indirectly (16,122)
================================================================================
NET EXPENSES 1,611,370
================================================================================
NET INVESTMENT INCOME 898,125
================================================================================
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENT SECURITIES
Net Realized Gain (Loss) on:
Investment Securities 14,583,757
Foreign Currency Transactions (329,900)
================================================================================
Total Net Realized Gain 14,253,857
================================================================================
Change in Net Depreciation of:
Investment Securities (23,780,240)
Foreign Currency Transactions (165,002)
================================================================================
Total Net Depreciation (23,945,242)
================================================================================
NET LOSS ON INVESTMENT SECURITIES
AND FOREIGN CURRENCY TRANSACTIONS (9,691,385)
================================================================================
NET DECREASE IN NET ASSETS FROM OPERATIONS $ (8,793,260)
================================================================================
See Notes to Financial Statements
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
ENERGY FUND
SIX MONTHS PERIOD YEAR
ENDED ENDED ENDED
SEPTEMBER 30 MARCH 31 OCTOBER 31
--------------------------------------------------------------------------------
2000 2000(a) 1999
UNAUDITED
OPERATIONS
Net Investment Loss $ (318,280) $ (194,158) $ (82,989)
Net Realized Gain on
Investment Securities
and Foreign Currency
Transactions 18,113,048 8,756,728 6,804,236
Change in Net Appreciation
of Investment Securities
and Foreign Currency
Transactions 57,360,533 32,665,684 18,193,660
================================================================================
NET INCREASE IN NET ASSETS
FROM OPERATIONS 75,155,301 41,228,254 24,914,907
================================================================================
DISTRIBUTIONS TO SHAREHOLDERS
In Excess of Net Investment
Income - Investor Class 0 0 (115,167)
================================================================================
FUND SHARE TRANSACTIONS
Proceeds from Sales of Shares
Investor Class 861,164,034 377,979,679 943,138,107
Class C 5,615,185 14,738 --
Reinvestment of Distributions
- Investor Class 0 0 108,078
================================================================================
866,779,219 377,994,417 943,246,185
Amounts Paid for Repurchases
of Shares
Investor Class (680,075,764) (393,910,969) (909,365,271)
Class C (259,801) 0 --
================================================================================
(680,335,565) (393,910,969) (909,365,271)
NET INCREASE (DECREASE) IN
NET ASSETS FROM FUND SHARE
TRANSACTIONS 186,443,654 (15,916,552) 33,880,914
================================================================================
TOTAL INCREASE IN NET ASSETS 261,598,955 25,311,702 58,680,654
NET ASSETS
Beginning of Period 221,447,751 196,136,049 137,455,395
================================================================================
End of Period (Including
Accumulated Undistributed
(Distributions in Excess
of) Net Investment Loss of
($334,742), ($16,462) and
($14,351), respectively) $ 483,046,706 $ 221,447,751 $ 196,136,049
================================================================================
<PAGE>
_________________________________________________
FUND SHARE TRANSACTIONS
Shares Sold
Investor Class 43,173,363 25,616,841 74,761,155
Class C 266,564 913 --
Shares Issued from Reinvestment
of Distributions
- Investor Class 0 0 10,747
================================================================================
43,439,927 25,617,754 74,771,902
Shares Repurchased
Investor Class (34,635,414) (27,227,033) (72,598,537)
Class C (13,622) 0 --
================================================================================
(34,649,036) (27,227,033) (72,598,537)
NET INCREASE (DECREASE) IN
FUND SHARES 8,790,891 (1,609,279) 2,173,365
================================================================================
(a) From November 1, 1999 to March 31, 2000, the Fund's current fiscal year
end.
See Notes to Financial Statements
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
FINANCIAL SERVICES FUND
SIX MONTHS PERIOD YEAR
ENDED ENDED ENDED
SEPTEMBER 30 MARCH 31 OCTOBER 31
--------------------------------------------------------------------------------
2000 2000(a) 1999
UNAUDITED
OPERATIONS
Net Investment Income $ 2,613,053 $ 1,116,743 $ 3,414,058
Net Realized Gain on
Investment Securities
and Foreign Currency
Transactions 11,074,956 18,617,747 106,704,595
Change in Net Appreciation
(Depreciation) of Investment
Securities and Foreign
Currency Transactions 219,671,007 (24,563,334) 63,074,194
================================================================================
NET INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS 233,359,016 (4,828,844) 173,192,847
================================================================================
DISTRIBUTIONS TO SHAREHOLDERS
Net Investment Income
Investor Class 0 (1,119,811) (3,356,533)
Class C 0 (19) --
In Excess of Net Investment Income
Investor Class 0 (64,486) 0
Class C 0 (398) --
Net Realized Gain on Investment
Securities and Foreign Currency
Transactions - Investor Class 0 (107,176,405) (109,018,838)
================================================================================
TOTAL DISTRIBUTIONS 0 (108,361,119) (112,375,371)
================================================================================
FUND SHARE TRANSACTIONS
Proceeds from Sales of Shares
Investor Class 974,659,088 833,986,456 1,613,190,305
Class C 8,305,833 130,118 --
Reinvestment of Distributions
Investor Class 0 104,460,580 108,801,157
Class C 0 387 --
================================================================================
982,964,921 938,577,541 1,721,991,462
Amounts Paid for
Repurchases of Shares
Investor Class (856,849,310) (934,454,266) (1,957,908,508)
Class C (1,282,629) 0 --
================================================================================
(858,131,939) (934,454,266) (1,957,908,508)
NET INCREASE (DECREASE) IN
NET ASSETS FROM FUND
SHARE TRANSACTIONS 124,832,982 4,123,275 (235,917,046)
================================================================================
TOTAL INCREASE (DECREASE)
IN NET ASSETS 358,191,998 (109,066,688) (175,099,570)
NET ASSETS
Beginning of Period 1,133,488,301 1,242,554,989 1,417,654,559
================================================================================
End of Period (Including
Accumulated Undistributed
(Distributions in Excess of)
Net Investment Income of
$2,547,341 ($65,712) and
$3,087 respectively) $1,491,680,299 $1,133,488,301 $1,242,554,989
================================================================================
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
FINANCIAL SERVICES FUND (CONTINUED)
SIX MONTHS PERIOD YEAR
ENDED ENDED ENDED
SEPTEMBER 30 MARCH 31 OCTOBER 31
--------------------------------------------------------------------------------
2000 2000(a) 1999
UNAUDITED
FUND SHARE TRANSACTIONS
Shares Sold
Investor Class 33,721,505 32,076,355 55,199,855
Class C 277,781 5,090 --
Shares Issued from Reinvestment
of Distributions
Investor Class 0 3,991,575 4,049,413
Class C 0 14 --
================================================================================
33,999,286 36,073,034 59,249,268
Shares Repurchased
Investor Class (30,167,796) (36,083,954) (67,294,030)
Class C (41,934) 0 --
================================================================================
(30,209,730) (36,083,954) (67,294,030)
NET INCREASE (DECREASE) IN
FUND SHARES 3,789,556 (10,920) (8,044,762)
================================================================================
(a) From November 1, 1999 to March 31, 2000, the Fund's current year end.
See Notes to Financial Statements
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
GOLD FUND
SIX MONTHS PERIOD YEAR
ENDED ENDED ENDED
SEPTEMBER 30 MARCH 31 OCTOBER 31
--------------------------------------------------------------------------------
2000 2000(a) 1999
UNAUDITED
OPERATIONS
Net Investment Loss $ (444,590) $ (289,172) $ (1,639,042)
Net Realized Loss on
Investment Securities
and Foreign Currency
Transactions (8,461,410) (27,939,242) (32,020,620)
Change in Net Appreciation
of Investment Securities
and Foreign Currency
Transactions 2,974,233 14,432,798 28,110,121
================================================================================
NET DECREASE IN NET ASSETS
FROM OPERATIONS (5,931,767) (13,795,616) (5,549,541)
================================================================================
FUND SHARE TRANSACTIONS
Proceeds from Sales of Shares
Investor Class 179,897,086 247,805,590 662,595,028
Class C 1,524 1,000 --
================================================================================
179,898,610 247,806,590 662,595,028
Amounts Paid for Repurchases
of Shares - Investor Class (179,918,190) (252,292,879) (664,541,935)
================================================================================
NET DECREASE IN NET ASSETS
FROM FUND SHARE TRANSACTIONS (19,580) (4,486,289) (1,946,907)
================================================================================
TOTAL DECREASE IN NET ASSETS (5,951,347) (18,281,905) (7,496,448)
NET ASSETS
Beginning of Period 81,471,033 99,752,938 107,249,386
================================================================================
End of Period (Including
Accumulated Undistributed
Net Investment Loss of
(1,484,548), ($1,039,958)
and ($754,980),
respectively) $ 75,519,686 $ 81,471,033 $ 99,752,938
================================================================================
<PAGE>
_________________________________________________
FUND SHARE TRANSACTIONS
Shares Sold
Investor Class 111,176,389 144,269,152 348,656,765
Class C 891 572 --
================================================================================
111,177,280 144,269,724 348,656,765
Shares Repurchased
- Investor Class (111,254,348) (147,646,997) (350,729,790)
================================================================================
NET DECREASE IN FUND SHARES (77,068) (3,377,273) (2,073,025)
================================================================================
(a) From November 1, 1999 to March 31, 2000, the Fund's current fiscal year
end.
See Notes to Financial Statements
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
HEALTH SCIENCES FUND
SIX MONTHS PERIOD YEAR
ENDED ENDED ENDED
SEPTEMBER 30 MARCH 31 OCTOBER 31
--------------------------------------------------------------------------------
2000 2000(a) 1999
UNAUDITED
OPERATIONS
Net Investment Income (Loss) $ (771,934) $ (1,546,109) $ 1,047,766
Net Realized Gain on
Investment Securities
and Foreign Currency
Transactions 111,450,548 97,143,857 155,541,144
Change in Net Appreciation
(Depreciation) of Investment
Securities and Foreign
Currency Transactions 390,863,733 (12,364,408) (50,467,574)
================================================================================
NET INCREASE IN NET ASSETS
FROM OPERATIONS 501,542,347 83,233,340 106,121,336
================================================================================
DISTRIBUTIONS TO SHAREHOLDERS
Net Investment Income
- Investor Class 0 (1,284,813) (985,748)
In Excess of Net Investment
Income - Investor Class (5,741,493) (12,718)
Net Realized Gain on
Investment Securities
and Foreign Currency
Transactions - Investor Class 0 (161,053,946) (198,906,192)
================================================================================
TOTAL DISTRIBUTIONS 0 (168,080,252) (199,904,658)
================================================================================
FUND SHARE TRANSACTIONS
Proceeds from Sales of Shares
Investor Class 1,050,607,388 943,045,132 1,811,722,158
Class C 8,128,225 616,031 --
Reinvestment of Distributions
- Investor Class 0 161,314,490 190,797,614
================================================================================
1,058,735,613 1,104,975,653 2,002,519,772
Amounts Paid for
Repurchases of Shares
Investor Class (959,954,186) (971,010,944) (1,662,903,600)
Class C (2,633,831) (53,039) --
================================================================================
(962,588,017) (971,063,983) (1,662,903,600)
NET INCREASE IN NET ASSETS
FROM FUND SHARE TRANSACTIONS 96,147,596 133,911,670 339,616,172
================================================================================
TOTAL INCREASE IN NET ASSETS 597,689,943 49,064,758 245,832,850
NET ASSETS
Beginning of Period 1,623,093,363 1,574,028,605 1,328,195,755
================================================================================
End of Period (Including
Accumulated Undistributed
(Distributions in Excess
of) Net Investment Income
(Loss) of ($4,778,097),
($4,006,163) and $2,830,922,
respectively) $2,220,783,306 $1,623,093,363 $1,574,028,605
================================================================================
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
HEALTH SCIENCES FUND (CONTINUED)
SIX MONTHS PERIOD YEAR
ENDED ENDED ENDED
SEPTEMBER 30 MARCH 31 OCTOBER 31
--------------------------------------------------------------------------------
2000 2000(a) 1999
UNAUDITED
FUND SHARE TRANSACTIONS
Shares Sold
Investor Class 17,255,144 15,593,547 30,290,410
Class C 126,780 9,263 --
Shares Issued from
Reinvestment of Distributions
- Investor Class 0 2,986,867 3,296,314
================================================================================
17,381,924 18,589,677 33,586,724
Shares Repurchased
Investor Class (15,877,362) (16,312,035) (28,009,716)
Class C (39,615) (802) --
================================================================================
(15,916,977) (16,312,837) (28,009,716)
Net Increase in Fund Shares 1,464,947 2,276,840 5,577,008
================================================================================
(a) From November 1, 1999 to March 31, 2000, the Fund's current fiscal year
end.
See Notes to Financial Statements
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
LEISURE FUND
SIX MONTHS PERIOD YEAR
ENDED ENDED ENDED
SEPTEMBER 30 MARCH 31 OCTOBER 31
--------------------------------------------------------------------------------
2000 2000(a) 1999
UNAUDITED
OPERATIONS
Net Investment Loss $ (1,451,103) $ (1,439,320) $ (2,320,139)
Net Realized Gain on
Investment Securities
and Foreign Currency
Transactions 39,954,634 55,649,250 36,627,789
Change in Net Appreciation
(Depreciation) of Investment
Securities and Foreign
Currency Transactions (57,055,530) 23,206,312 122,596,304
================================================================================
NET INCREASE (DECREASE) IN
NET ASSETS FROM OPERATIONS (18,551,999) 77,416,242 156,903,954
================================================================================
DISTRIBUTIONS TO SHAREHOLDERS
Net Realized Gain on Investment
Securities and Foreign
Currency Transactions
- Investor Class 0 (34,134,824) (15,505,553)
================================================================================
FUND SHARE TRANSACTIONS
Proceeds from Sales of Shares
Investor Class 206,341,364 243,268,565 398,970,871
Class C 1,302,488 81,160 --
Reinvestment of Distributions
Investor Class 0 32,575,033 15,149,269
================================================================================
207,643,852 275,924,758 414,120,140
Amounts Paid for
Repurchases of Shares
Investor Class (151,926,732) (212,946,686) (340,851,793)
Class C (15,532) 0 --
================================================================================
(151,942,264) (212,946,686) (340,851,793)
NET INCREASE IN NET ASSETS
FROM FUND SHARE TRANSACTIONS 55,701,588 62,978,072 73,268,347
================================================================================
TOTAL INCREASE IN NET ASSETS 37,149,589 106,259,490 214,666,748
NET ASSETS
Beginning of Period 549,607,305 443,347,815 228,681,067
================================================================================
End of Period (Including
Accumulated Undistributed
Net Investment Loss of
($1,477,090), ($25,987) and
($40,573), respectively) $ 586,756,894 $ 549,607,305 $ 443,347,815
================================================================================
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
LEISURE FUND (CONTINUED)
SIX MONTHS PERIOD YEAR
ENDED ENDED ENDED
SEPTEMBER 30 MARCH 31 OCTOBER 31
--------------------------------------------------------------------------------
2000 2000(a) 1999
UNAUDITED
FUND SHARE TRANSACTIONS
Shares Sold
Investor Class 4,612,728 5,361,158 10,888,255
Class C 29,010 1,781 --
Shares Issued from
Reinvestment of Distributions
- Investor Class 0 768,823 532,486
================================================================================
4,641,738 6,131,762 11,420,741
Shares Repurchased
Investor Class (3,398,500) (4,727,142) (9,350,638)
Class C (336) 0 --
================================================================================
(3,398,836) (4,727,142) (9,350,638)
Net Increase in Fund Shares 1,242,902 1,404,620 2,070,103
================================================================================
(a)From November 1, 1999 to March 31, 2000, the Fund's current fiscal year end.
See Notes to Financial Statements
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
REAL ESTATE OPPORTUNITY FUND
SIX MONTHS PERIOD YEAR
ENDED ENDED ENDED
SEPTEMBER 30 MARCH 31 OCTOBER 31
--------------------------------------------------------------------------------
2000 2000(a) 1999
UNAUDITED
OPERATIONS
Net Investment Income $ 701,078 $ 670,466 $ 887,199
Net Realized Gain (Loss)
on Investment Securities 1,570,030 (1,571,098) (7,214,616)
Change in Net Appreciation
of Investment Securities 2,336,552 1,039,189 3,469,151
================================================================================
NET INCREASE (DECREASE) IN
NET ASSETS FROM OPERATIONS 4,607,660 138,557 (2,858,266)
================================================================================
DISTRIBUTIONS TO SHAREHOLDERS
Net Investment Income
Investor Class (686,153) (656,613) (860,435)
Class C (20,553) (687) --
In Excess of Net Investment Income
Investor Class 0 (79,423) 0
Class C 0 (1,049) --
In Excess of Net Realized Gain on
Investment Securities and
Foreign Currency Transactions
- Investor Class 0 0 (1,731,958)
================================================================================
TOTAL DISTRIBUTIONS (706,706) (737,772) (2,592,393)
================================================================================
FUND SHARE TRANSACTIONS
Proceeds from Sales of Shares
Investor Class 140,513,394 59,587,645 116,589,416
Class C 2,477,502 142,000 --
Reinvestment of Distributions
Investor Class 643,023 712,651 2,451,567
Class C 18,818 631 --
================================================================================
143,652,737 60,442,927 119,040,983
Amounts Paid for
Repurchases of Shares
Investor Class (126,082,432) (57,061,000) (119,732,760)
Class C (1,153,571) 0 --
================================================================================
(127,236,003) (57,061,000) (119,732,760)
NET INCREASE (DECREASE) IN
NET ASSETS FROM FUND
SHARE TRANSACTIONS 16,416,734 3,381,927 (691,777)
================================================================================
TOTAL INCREASE (DECREASE)
IN NET ASSETS 20,317,688 2,782,712 (6,142,436)
NET ASSETS
Beginning of Period 20,188,402 17,405,690 23,548,126
================================================================================
End of Period (Including
Accumulated Undistributed
(Distributions in Excess
of) Net Investment Income
of ($879), $4,749 and
($13,166), respectively) $ 40,506,090 $ 20,188,402 $ 17,405,690
================================================================================
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
(CONTINUED)
REAL ESTATE OPPORTUNITY FUND (CONTINUED)
SIX MONTHS PERIOD YEAR
ENDED ENDED ENDED
SEPTEMBER 30 MARCH 31 OCTOBER 31
--------------------------------------------------------------------------------
2000 2000(a) 1999
UNAUDITED
FUND SHARE TRANSACTIONS
Shares Sold
Investor Class 19,109,630 9,075,124 15,431,175
Class C 330,129 21,490 --
Shares Issued from
Reinvestment of Distributions
Investor Class 86,152 109,583 346,136
Class C 2,512 95 --
================================================================================
19,528,423 9,206,292 15,777,311
Shares Repurchased
Investor Class (17,117,658) (8,683,241) (15,826,855)
Class C (151,052) 0 --
================================================================================
(17,268,710) (8,683,241) (15,826,855)
NET INCREASE (DECREASE)
IN FUND SHARES 2,259,713 523,051 (49,544)
================================================================================
(a)From August 1, 1999 to March 31, 2000, the Fund's current fiscal year end.
See Notes to Financial Statements
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
TECHNOLOGY FUND
SIX MONTHS PERIOD YEAR
ENDED ENDED ENDED
SEPTEMBER 30 MARCH 31 OCTOBER 31
--------------------------------------------------------------------------------
2000 2000(a) 1999
UNAUDITED
OPERATIONS
Net Investment Loss $ (14,749,167) $ (9,508,681) $ (12,386,705)
Net Realized Gain
(Loss) on Investment
Securities and Foreign
Currency Transactions (187,196,184) 272,767,421 341,752,269
Change in Net Appreciation
(Depreciation) of Investment
Securities and Foreign
Currency Transactions (306,200,570) 2,972,527,290 930,472,339
================================================================================
NET INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS (508,145,921) 3,235,786,030 1,259,837,903
================================================================================
DISTRIBUTIONS TO SHAREHOLDERS
Net Realized Gain on
Investment Securities and
Foreign Currency Transactions
Institutional Class 0 (93,076,664) 0
Investor Class 0 (147,899,340) 0
================================================================================
TOTAL DISTRIBUTIONS 0 (240,976,004) 0
================================================================================
FUND SHARE TRANSACTIONS
Proceeds from Sales of Shares
Institutional Class 1,751,610,320 3,012,863,434 835,394,390
Investor Class 3,016,048,287 2,898,277,563 2,550,589,823
Class C 14,954,221 3,279,829 --
Reinvestment of Distributions
Institutional Class 0 93,076,664 0
Investor Class 0 143,222,652 0
================================================================================
4,782,612,828 6,150,720,142 3,385,984,213
Amounts Paid for Repurchases
of Shares
Institutional Class (2,124,991,560) (810,896,463) (128,663,679)
Investor Class (2,480,299,149) (1,877,537,925) (2,492,391,489)
Class C (3,524,082) (56,864) --
================================================================================
(4,608,814,791) (2,688,491,252) (2,621,055,168)
================================================================================
NET INCREASE IN NET ASSETS
FROM FUND SHARE TRANSACTIONS 173,798,037 3,462,228,890 764,929,045
================================================================================
TOTAL INCREASE (DECREASE)
IN NET ASSETS (334,347,884) 6,457,038,916 2,024,766,948
NET ASSETS
Beginning of Period 9,490,576,659 3,033,537,743 1,008,770,795
================================================================================
End of Period (Including
Accumulated Undistributed
Net Investment Loss of
($14,840,740), ($91,573)
and ($64,798), respectively) $9,156,228,775 $9,490,576,659 $3,033,537,743
================================================================================
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
TECHNOLOGY FUND (CONTINUED)
SIX MONTHS PERIOD YEAR
ENDED ENDED ENDED
SEPTEMBER 30 MARCH 31 OCTOBER 31
--------------------------------------------------------------------------------
2000 2000(a) 1999
UNAUDITED
FUND SHARE TRANSACTIONS
Shares Sold
Institutional Class 18,965,235 34,320,746 19,201,080
Investor Class 32,892,880 32,937,088 61,886,040
Class C 157,883 29,684 --
Shares Issued from Reinvestment
of Distributions
Institutional Class 0 1,440,043 0
Investor Class 0 2,226,662 0
================================================================================
52,015,996 70,954,223 81,087,120
Shares Repurchased
Institutional Class (24,271,390) (8,625,790) (2,908,262)
Investor Class (27,405,064) (21,560,644) (62,037,041)
Class C (36,276) (524) --
================================================================================
(51,712,730) (30,186,958) (64,945,303)
NET INCREASE IN FUND SHARES 303,266 40,767,265 16,141,817
================================================================================
(a)From November 1, 1999 to March 31, 2000, the Fund's current fiscal year end.
See Notes to Financial Statements
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
(CONTINUED)
TELECOMMUNICATIONS FUND
SIX MONTHS PERIOD YEAR
ENDED ENDED ENDED
SEPTEMBER 30 MARCH 31 JULY 31
--------------------------------------------------------------------------------
2000 2000(a) 1999
UNAUDITED
OPERATIONS
Net Investment Loss $ (5,073,754) $ (4,594,030) $ (2,448,036)
Net Realized Gain (Loss)
on Investment Securities
and Foreign Currency
Transactions (92,119,985) 103,221,894 1,700,782
Change in Net Appreciation
(Depreciation) of Investment
Securities and Foreign
Currency Transactions (487,337,066) 1,387,851,623 245,324,402
================================================================================
NET INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS (584,530,805) 1,486,479,487 244,577,148
================================================================================
DISTRIBUTIONS TO SHAREHOLDERS
In Excess of Net Investment
Income - Investor Class 0 (1,760) 0
Net Realized Gain on Investment
Securities and Foreign Currency
Transactions - Investor Class 0 (6,140,564) (5,207,012)
================================================================================
TOTAL DISTRIBUTIONS 0 (6,142,324) (5,207,012)
================================================================================
FUND SHARE TRANSACTIONS
Proceeds from Sales of Shares
Investor Class 1,717,957,550 3,173,803,984 1,499,364,986
Class C 11,864,203 2,702,673 --
Reinvestment of Distributions
- Investor Class 0 5,888,130 5,082,544
================================================================================
1,729,821,753 3,182,394,787 1,504,447,530
Amounts Paid for Repurchase
of Shares
Investor Class 1,609,055,358 (1,563,433,689) (991,137,779)
Class C 860,239 (134,566) --
================================================================================
1,609,915,597 (1,563,568,255) (991,137,779)
NET INCREASE IN NET ASSETS FROM
FUND SHARE TRANSACTIONS 119,906,156 1,618,826,532 513,309,751
================================================================================
TOTAL INCREASE (DECREASE)
IN NET ASSETS (464,624,649) 3,099,163,695 752,679,887
NET ASSETS
Beginning of Period 4,128,420,088 1,029,256,393 276,576,506
================================================================================
End of Period (Including
Accumulated Undistributed
(Distributions in Excess of)
Net Investment Loss of
($5,094,478), ($20,724) and
($147,992), respectively) $3,663,795,439 $4,128,420,088 $1,029,256,393
================================================================================
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
TELECOMMUNICATIONS FUND (CONTINUED)
SIX MONTHS PERIOD YEAR
ENDED ENDED ENDED
SEPTEMBER 30 MARCH 31 JULY 31
--------------------------------------------------------------------------------
2000 2000(a) 1999
UNAUDITED
FUND SHARE TRANSACTIONS
Shares Sold
Investor Class 31,116,542 64,878,508 57,707,098
Class C 214,347 41,292 --
Shares Issued from
Reinvestment of Distributions
- Investor Class 0 140,450 268,634
================================================================================
31,330,889 65,060,250 57,975,732
Shares Repurchased
Investor Class (29,428,762) (33,337,392) (39,721,071)
Class C (16,121) (1,994) --
================================================================================
(29,444,883) (33,339,386) (39,721,071)
NET INCREASE IN FUND SHARES 1,886,006 31,720,864 18,254,661
================================================================================
(a) From August 1, 1999 to March 31, 2000, the Fund's current fiscal year end.
See Notes to Financial Statements
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
UTILITIES FUND
SIX MONTHS PERIOD YEAR
ENDED ENDED ENDED
SEPTEMBER 30 MARCH 31 OCTOBER 31
--------------------------------------------------------------------------------
2000 2000(a) 1999
UNAUDITED
OPERATIONS
Net Investment Income $ 898,125 $ 480,288 $ 2,031,165
Net Realized Gain on
Investment Securities and
Foreign Currency Transactions 14,253,857 8,837,351 13,598,751
Change in Net Appreciation
(Depreciation) of Investment
Securities and Foreign
Currency Transactions (23,945,242) 38,316,856 24,011,435
================================================================================
NET INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS (8,793,260) 47,634,495 39,641,351
================================================================================
DISTRIBUTIONS TO SHAREHOLDERS
Net Investment Income
Investor Class (890,709) (466,273) (2,503,335)
Class C (1,586) (279) --
Net Realized Gain on Investment
Securities and Foreign Currency
Transactions - Investor Class 0 (13,863,914) (2,496,522)
================================================================================
TOTAL DISTRIBUTIONS (892,295) (14,330,466) (4,999,857)
================================================================================
FUND SHARE TRANSACTIONS
Proceeds from Sales of Shares
Investor Class 95,643,921 114,901,422 245,057,189
Class C 1,005,913 246,653 --
Reinvestment of Distributions
Investor Class 848,510 13,509,969 4,762,842
Class C 1,503 279 --
================================================================================
97,499,847 128,658,323 249,820,031
Amounts Paid for
Repurchases of Shares
Investor Class (71,456,794) (124,495,345) (238,436,543)
Class C (189,823) 0 --
================================================================================
(71,646,617) (124,495,345) (238,436,543)
NET INCREASE IN NET ASSETS
FROM FUND SHARE TRANSACTIONS 25,853,230 4,162,978 11,383,488
================================================================================
TOTAL INCREASE IN NET ASSETS 16,167,675 37,467,007 46,024,982
NET ASSETS
Beginning of Period 260,801,324 223,334,317 177,309,335
================================================================================
End of Period (Including
Accumulated Undistributed
(Distributions in Excess of)
Net Investment Loss of
($8,848), ($14,678) and
($12,297), respectively) $ 276,968,999 $ 260,801,324 $ 223,334,317
================================================================================
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
UTILITIES FUND (CONTINUED)
SIX MONTHS PERIOD YEAR
ENDED ENDED ENDED
SEPTEMBER 30 MARCH 31 OCTOBER 31
--------------------------------------------------------------------------------
2000 2000(a) 1999
UNAUDITED
FUND SHARE TRANSACTIONS
Shares Sold
Investor Class 5,016,913 5,988,181 14,379,908
Class C 53,203 12,124 --
Shares Issued from Reinvestment
of Distributions
Investor Class 44,796 794,840 297,014
Class C 78 14 --
================================================================================
5,114,990 6,795,159 14,676,922
Shares Repurchased
Investor Class (3,755,198) (6,654,534) (14,079,699)
Class C (10,064) 0 --
================================================================================
(3,765,262) (6,654,534) (14,079,699)
NET INCREASE IN FUND SHARES 1,349,728 140,625 597,223
================================================================================
(a) From November 1, 1999 to March 31, 2000, the Fund's current year end.
See Notes to Financial Statements
<PAGE>
NOTES TO FINANCIAL STATEMENTS
INVESCO SECTOR FUNDS, INC.
UNAUDITED
NOTE 1 -- ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES. INVESCO Sector
Funds, Inc. is incorporated in Maryland and presently consists of nine separate
Funds: Energy Fund, Financial Services Fund, Gold Fund, Health Sciences Fund,
Leisure Fund, Real Estate Opportunity Fund, Technology Fund, Telecommunications
Fund and Utilities Fund (individually the "Fund" and collectively, the "Funds").
The investment objectives of the Funds are: to seek capital appreciation through
investments in specific business sectors for Energy, Financial Services, Gold,
Health Sciences, Leisure and Technology Funds; to achieve current income for
Real Estate Opportunity Fund; to achieve a high total return on investments
through capital appreciation and current income for Telecommunications Fund; and
to seek capital appreciation and income through investments in a specific
business sector for Utilities Fund. INVESCO Sector Funds, Inc. is registered
under the Investment Company Act of 1940 (the "Act") as a diversified, open-end
management investment company.
Effective December 22, 1998, Technology Fund offers two classes of shares,
referred to as Institutional Class and Investor Class. Institutional Class
shares are not subject to any distribution fees, while Investor Class shares are
subject to an annual distribution fee of 0.25% of the Fund's annual net assets
attributable to Investor Class shares. Effective February 15, 2000, each Fund
began offering an additional class of shares, referred to as Class C shares.
Investor Class and Class C shares are subject to an annual distribution fee of
0.25% and 1.00%, respectively, of the Fund's annual average net assets
attributable to each Class' shares. Income, expenses (other than those
attributable to a specific class) and gains and losses are allocated daily to
each class of shares based on the relative proportion of net assets represented
by such class. Operating expenses directly attributable to a specific class are
charged against operations of that class.
The following is a summary of significant accounting policies consistently
followed by the Funds in the preparation of their financial statements. The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States 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
at the close of the regular trading day on the exchange (generally 4:00 p.m.
Eastern time) where such securities are primarily traded. If last sales prices
are not available, securities are valued at the highest closing bid prices at
the close of the regular trading day as obtained from one or more dealers making
a market for such securities or by a pricing service approved by the Fund's
board of directors.
Debt securities are valued at evaluated bid prices as determined by a pricing
service approved by the Fund's board of directors. If evaluated bid prices are
not available, debt securities are valued by averaging the bid prices obtained
from one or more dealers making a market for such securities.
Foreign securities are valued at the closing price on the principal stock
exchange on which they are traded. In the event that closing prices are not
available for foreign securities, prices will be obtained from the principal
stock exchange at or prior to the close of the New York Stock Exchange. Foreign
currency exchange rates are determined daily prior to the close of the New York
Stock Exchange. Gold bullion is valued at the close of the New York Stock
Exchange. Gold bullion valuation is obtained by a pricing service approved by
the Fund's board of directors.
<PAGE>
Investments in shares of investment companies are valued at the net asset value
of the respective mutual fund as calculated each day.
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.
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.
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. Income and expenses on foreign
securities are translated into U.S. dollars at rates of exchange prevailing when
accrued. 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 cost of foreign securities
is translated into U.S. dollars at the rates of exchange prevailing when such
securities are acquired.
Each Fund may invest in securities issued by other INVESCO Investment Companies
that invest in short-term debt securities and seek to maintain a net asset value
of one dollar per share.
The Fund may have elements of risk due to concentrated investments in specific
industries or foreign issuers located in a specific country. Such investments
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 Gold Fund may invest in gold bullion which may have significant price
movements over short periods of time and may be affected by unpredictable
international monetary and political policies. Further, gold bullion may have
storage and transaction costs associated with its ownership which may be higher
than that of other types of securities.
Restricted securities held by a 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.
<PAGE>
Lack of a secondary market and resale restrictions may result in the inability
of a Fund to sell a security at a fair price and may substantially delay the
sale of the security which each Fund 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 March 31, 2000, Energy Fund had $18,021,703 in net capital loss carry-overs
which expire in the year 2006, Gold Fund had $1,051,643, $66,206,106,
$64,536,948 and $30,924,521 in net capital loss carryovers which expire in the
years 2003, 2005, 2006 and 2007, respectively, and Real Estate Opportunity Fund
had $6,119,366 and $1,790,021 in net capital loss carryovers which expire in the
years 2007 and 2008, respectively.
Gold and Real Estate Opportunity Funds incurred and elected to defer
post-October 31 net capital losses of $29,794,570 and $624,691, respectively, to
the year ended March 31, 2001. To the extent future capital gains and income are
offset by capital loss carryovers and deferred post-October 31 losses, 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.
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 accounting principles generally accepted in
the United States. These differences are primarily due to differing treatments
for amortized premiums, foreign currency transactions, market discounts,
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. Any realized
gain or loss incurred by the Fund upon the sale of securities is included in the
Statement of Operations.
G. EXPENSES -- Each Fund or Class bears expenses incurred specifically on its
behalf and, in addition, each Fund or Class bears a portion of general expenses,
based on the relative net assets of each Class.
Under an agreement between each Fund and the Fund's Custodian, agreed upon
Custodian Fees and Expenses are reduced by credits granted by the Custodian from
any temporarily uninvested cash. Such credits are included in Fees and Expenses
Paid Indirectly in the Statement of Operations.
<PAGE>
NOTE 2 -- INVESTMENT ADVISORY AND OTHER AGREEMENTS. INVESCO Funds Group, Inc.
("IFG") serves as the Funds' investment adviser. As compensation for its
services to the Funds, IFG receives an investment advisory fee which is accrued
daily at the applicable rate and paid monthly. The fee is based on the annual
rate of each Fund's average net assets as follows:
<TABLE>
<CAPTION>
AVERAGE NET ASSETS
-------------------------------------------------------------------------------------------
$700 $2 $4 $6
$0 TO $350 TO MILLION BILLION BILLION BILLION OVER
$350 $700 TO $2 TO $4 TO $6 TO $8 $8
MILLION MILLION BILLION BILLION BILLION BILLION BILLION
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Energy Fund 0.75% 0.65% 0.55% 0.45% 0.40% 0.375% 0.35%
Financial Services Fund 0.75% 0.65% 0.55% 0.45% 0.40% 0.375% 0.35%
Gold Fund 0.75% 0.65% 0.55% 0.45% 0.40% 0.375% 0.35%
Health Sciences Fund 0.75% 0.65% 0.55% 0.45% 0.40% 0.375% 0.35%
Leisure Fund 0.75% 0.65% 0.55% 0.45% 0.40% 0.375% 0.35%
Technology Fund 0.75% 0.65% 0.55% 0.45% 0.40% 0.375% 0.35%
Utilities Fund 0.75% 0.65% 0.55% 0.45% 0.40% 0.375% 0.35%
AVERAGE NET ASSETS
------------------------------------------------------------------------------------------
$500 $1 $2 $4 $6
$0 TO MILLION BILLION BILLION BILLION BILLION OVER
$500 TO $1 TO $2 TO $4 TO $6 TO $8 $8
MILLION BILLION BILLION BILLION BILLION BILLION BILLION
-----------------------------------------------------------------------------------------
Real Estate Opportunity Fund 0.75% 0.65% 0.55% 0.45% 0.40% 0.375% 0.35%
Telecommunications Fund 0.65% 0.55% 0.45% 0.45% 0.40% 0.375% 0.35%
</TABLE>
A plan of distribution pursuant to Rule 12b-1 of the Act (the "Plan") provides
for compensation of marketing and advertising expenditures to INVESCO
Distributors, Inc. ("IDI" or the "Distributor"), a wholly owned subsidiary of
IFG, of 0.25% of annual average net assets of Investor Class shares. A master
distribution plan and agreement pursuant to Rule 12b-1 of the Act provides for
financing the distribution and shareholder servicing of Class C shares of 1.00%
per annum of average daily net assets. Any unreimbursed expenses IDI incurs with
respect to Investor Class and Class C shares in any fiscal year can not be
recovered in subsequent years. For the six months ended September 30, 2000,
amounts paid to the Distributor were as follows:
INVESTOR CLASS
FUND CLASS C
--------------------------------------------------------------------------------
Energy Fund $ 360,985 $ 3,404
Financial Services Fund 1,431,188 5,252
Gold Fund 101,236 8
Health Sciences Fund 2,244,711 7,369
Leisure Fund 684,893 2,131
Real Estate Opportunity Fund 39,615 2,396
Technology Fund 6,012,108 30,232
Telecommunications Fund 4,585,433 27,195
Utilities Fund 313,868 1,758
<PAGE>
IFG receives a transfer agent fee from each Class at an annual rate of $22.50
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. Prior to June 1, 2000, each Class paid an annual rate of $20.00 per
shareholder account, or, where applicable, per participant in an omnibus
account, per year.
In accordance with an Administrative Services Agreement, each Fund pays IFG an
annual fee of $10,000, plus an additional amount computed at an annual rate of
0.045% of average net assets to provide administrative, accounting and clerical
services. The fee is accrued daily and paid monthly.
IFG has voluntarily agreed to absorb certain fees and expenses incurred by Real
Estate Opportunity and Utilities Funds for the six months ended September 30,
2000.
NOTE 3 -- PURCHASES AND SALES OF INVESTMENT SECURITIES. For the six months ended
September 30, 2000, 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:
FUND PURCHASES SALES
--------------------------------------------------------------------------------
Energy Fund $ 444,050,968 $ 260,018,680
Financial Services Fund 673,666,875 491,556,728
Gold Fund 32,760,536 36,104,438
Health Sciences Fund 1,654,828,947 1,347,028,975
Leisure Fund 146,432,104 103,222,532
Real Estate Opportunity Fund 89,940,402 72,817,395
Technology Fund 3,057,822,545 3,388,619,290
Telecommunications Fund 987,058,835 862,325,682
Utilities Fund 54,929,257 36,790,064
There were no purchases or sales of U.S. Government Securities.
NOTE 4 -- APPRECIATION AND DEPRECIATION. At September 30, 2000, 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 Fund were as
follows:
NET
GROSS GROSS APPRECIATION
FUND APPRECIATION DEPRECIATION (DEPRECIATION)
--------------------------------------------------------------------------------
Energy Fund $108,422,334 $ 514,698 $ 107,907,636
Financial Services Fund 440,161,611 5,799,777 434,361,834
Gold Fund 6,538,741 19,316,427 (12,777,686)
Health Sciences Fund 635,658,278 60,214,200 575,444,078
Leisure Fund 179,955,389 26,654,695 153,300,694
Real Estate Opportunity Fund 2,477,437 867,376 1,610,061
Technology Fund 3,988,408,226 235,610,231 3,752,797,995
Telecommunications Fund 1,398,506,083 211,909,903 1,186,596,180
Utilities Fund 92,133,501 6,090,931 86,042,570
NOTE 5 -- TRANSACTIONS WITH AFFILIATES AND AFFILIATED COMPANIES. Certain of the
Funds' officers and directors are also officers and directors of IFG or IDI.
Each Fund has adopted an unfunded defined benefit 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 50% of the sum of the
retainer fee plus the meeting attendance fees.
Pension expenses for the six months ended September 30, 2000, included in
Directors' Fees and Expenses in the Statement of Operations, and unfunded
accrued pension costs and pension liability included in Prepaid Expenses and
Accrued Expenses, respectively, in the Statement of Assets and Liabilities were
as follows:
<PAGE>
UNFUNDED
PENSION ACCRUED PENSION
FUND EXPENSES PENSION COSTS LIABILITY
--------------------------------------------------------------------------------
Energy Fund $ 1,636 $ 1,931 $ 19,526
Financial Services Fund 10,518 15,548 101,919
Gold Fund 842 14,476 36,870
Health Sciences Fund 13,225 24,453 130,776
Leisure Fund 3,705 8,315 37,087
Real Estate Opportunity Fund 143 0 1,691
Technology Fund 25,354 0 114,677
Telecommunications Fund 11,166 0 27,693
Utilities Fund 1,878 5,216 21,239
The independent directors have contributed to a deferred fee agreement plan,
pursuant to which they have deferred receipt of a portion of the compensation
which they would otherwise have been paid as directors of the INVESCO Funds. The
deferred amounts may be invested in the shares of any of the INVESCO Funds,
excluding the INVESCO Variable Investment Funds.
An affiliated company represents ownership by a Fund 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 September 30, 2000, in
which the issuer was an affiliate of the Fund, is as follows:
<TABLE>
<CAPTION>
REALIZED
PURCHASES SALES LOSS ON
-------------------------------------------- INVESTMENT VALUE AT
AFFILIATE SHARES COST SHARES COST SECURITIES 9/30/2000
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ENERGY FUND
OSCA Inc
Class A Shrs 380,000 $6,141,880 217,200 $3,618,480 $ (749,844) $2,706,550
GOLD FUND
Pacific Rim Mining -- -- -- -- -- 1,261,033
Star Resources 330,000 118,631 -- -- -- 1,943,822
HEALTH SCIENCES FUND
DUSA Pharmaceuticals -- -- -- -- -- 21,029,531
Ecogen Technologies I -- -- -- -- -- 1
</TABLE>
No dividend or interest income was received from any affiliated companies.
NOTE 6 -- INTERFUND BORROWING AND LENDING. Each Fund is party to an interfund
lending agreement between each Fund and other INVESCO sponsored mutual funds,
which permit it to borrow or lend cash, at rates beneficial to both the
borrowing and lending funds. Loans totaling 10% or more of a borrowing Fund's
total assets are collateralized at 102% of the value of the loan; loans of less
than 10% are unsecured. Pursuant to each Fund's prospectus, each Fund may borrow
up to 33 1/3% of its total assets for temporary or emergency purposes. During
the six months ended September 30, 2000, Energy, Gold, Real Estate Opportunity
and Technology Funds borrowed cash at a weighted average rate ranging from 6.24%
to 6.68%, respectively. Health Sciences, Technology and Telecommunications Funds
lent cash at a weighted average rate ranging from 6.32% - 6.69%. At September
30, 2000 there were no such borrowings and/or lendings for any Fund.
<PAGE>
NOTE 7 -- LINE OF CREDIT. Each 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
Fund. Each Fund agrees to pay annual fees and interest on the unpaid principal
balance based on prevailing market rates as defined in the agreement. At
September 30, 2000, Telecommunications Fund had an outstanding line of credit at
an interest rate of 7.25%. The amount of the borrowing and the related accrued
interest are presented in the Statement of Assets and Liabilities. On October 2,
2000, Telecommunications Fund paid the line of credit in full including
interest. There were no such borrowings in any other Fund.
NOTE 8 -- CONTINGENT DEFERRED SALES CHARGE ("CDSC"). A 1.00% CDSC is charged by
each Fund's Class C shares on redemptions or exchanges of shares held thirteen
months or less (other than shares acquired through reinvestment of dividends or
other distributions). The CDSC is paid by the redeeming shareholder and
therefore; it is not an expense of the Fund. For the six months ended September
30, 2000, the Distributor received the following CDSC fees from Class C
shareholders:
FUND CDSC FEE
--------------------------------------------------------------------------------
Energy Fund $ 225
Financial Services Fund 625
Gold Fund Insignificant
Health Sciences Fund 349
Leisure Fund Insignificant
Real Estate Opportunity Fund 145
Technology Fund 2,981
Telecommunications Fund 2,118
Utilities Fund 81
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
ENERGY FUND -- INVESTOR CLASS
------------------------------------------------------------------------------------------------------------
(FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
SIX MONTHS PERIOD
ENDED ENDED
SEPTEMBER 30 MARCH 31 YEAR ENDED OCTOBER 31
-------------------------------------------------------------------------------------------------------------
2000 2000(a) 1999 1998 1997 1996 1995
UNAUDITED
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value--Beginning
of Period $ 17.40 $ 13.68 $ 11.30 $ 19.38 $ 15.03 $ 10.09 $ 10.77
=============================================================================================================
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income (Loss)(b) (0.01) 0.00 0.00 0.00 0.06 0.04 0.09
Net Gains or (Losses)
on Securities (Both
Realized and Unrealized) 5.06 3.72 2.39 (5.04) 5.56 4.94 (0.68)
=============================================================================================================
TOTAL FROM INVESTMENT
OPERATIONS 5.05 3.72 2.39 (5.04) 5.62 4.98 (0.59)
=============================================================================================================
LESS DISTRIBUTIONS
Dividends from Net
Investment Income(c) 0.00 0.00 0.01 0.01 0.05 0.04 0.09
Distributions from
Capital Gains 0.00 0.00 0.00 0.34 1.22 0.00 0.00
In Excess of Capital Gains 0.00 0.00 0.00 2.69 0.00 0.00 0.00
=============================================================================================================
TOTAL DISTRIBUTIONS 0.00 0.00 0.01 3.04 1.27 0.04 0.09
=============================================================================================================
Net Asset Value--
End of Period $ 22.45 $ 17.40 $ 13.68 $ 11.30 $ 19.38 $ 15.03 $ 10.09
=============================================================================================================
TOTAL RETURN 29.02%(d) 27.19%(d) 21.19% (28.51%) 40.65% 49.33% (5.45%)
RATIOS
Net Assets--End of Period
($000 Omitted) $ 477,370 $ 221,432 $ 196,136 $137,455 $319,651 $236,169 $ 48,284
Ratio of Expenses
to Average
Net Assets(e) 0.72%(d) 1.60%(f) 1.68% 1.58% 1.21% 1.30% 1.53%
Ratio of Net Investment
Income (Loss) to
Average Net Assets (0.09%)(d) (0.26%)(f) (0.05%) 0.01% 0.39% 0.54% 0.72%
Portfolio Turnover Rate 79%(d) 109%(d) 279% 192% 249% 392% 300%
</TABLE>
<PAGE>
(a) From November 1, 1999 to March 31, 2000, the Fund's current fiscal year end.
(b) Net Investment Income (Loss) aggregated less than $0.01 on a per share basis
for the period ended March 31, 2000 and for the years ended October 31, 1999
and 1998.
(c) Distributions in excess of net investment income for the years ended October
31, 1999, 1998 and 1996, aggregated less than $0.01 on a per share basis.
(d) Based on operations for the period shown and, accordingly, is not
representative of a full year.
(e) Ratio is based on Total Expenses of the Class, which is before any expense
offset arrangements (which may include custodian, distribution and transfer
agent fees).
(f) Annualized
<PAGE>
FINANCIAL HIGHLIGHTS
ENERGY FUND -- CLASS C
--------------------------------------------------------------------------------
(FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
SIX MONTHS PERIOD
ENDED ENDED
SEPTEMBER 30 MARCH 31
--------------------------------------------------------------------------------
2000 2000(a)
UNAUDITED
PER SHARE DATA
Net Asset Value--Beginning of Period $ 17.39 $ 14.35
================================================================================
INCOME FROM INVESTMENT OPERATIONS(b)
Net Investment Loss (0.04) (0.01)
Net Gains on Securities
(Both Realized and Unrealized) 5.01 3.05
================================================================================
TOTAL FROM INVESTMENT OPERATIONS 4.97 3.04
================================================================================
Net Asset Value--End of Period $ 22.36 $ 17.39
================================================================================
TOTAL RETURN(c) 28.65%(d) 21.11%(d)
RATIOS
Net Assets--End of Period ($000 Omitted) $ 5,676 $ 16
Ratio of Expenses to Average Net Assets(e) 1.01%(d) 2.05%(f)
Ratio of Net Investment Loss to Average Net Assets (0.49%)(d) (1.11%)(f)
Portfolio Turnover Rate 79%(d) 109%(g)
(a) From February 15, 2000, since inception of Class C, to March 31, 2000.
(b) The per share information was computed based on average shares for the
period ended March 31, 2000.
(c) The applicable CDSC fees are not included in the Total Return calculation.
(d) Based on operations for the period shown and, accordingly, is not
representative of a full year.
(e) Ratio is based on Total Expenses of the Class, which is before any expense
offset arrangements (which may include custodian fees).
(f) Annualized
(g) Portfolio turnover is calculated at the Fund level, and therefore represents
the period from November 1, 1999 to March 31, 2000.
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
FINANCIAL SERVICES FUND -- INVESTOR CLASS
------------------------------------------------------------------------------------------------------------------
(FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
SIX MONTHS PERIOD
ENDED ENDED
SEPTEMBER 30 MARCH 31 YEAR ENDED OCTOBER 31
------------------------------------------------------------------------------------------------------------------
2000 2000(a) 1999 1998 1997 1996 1995
UNAUDITED
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value--Beginning
of Period $ 27.13 $ 29.73 $ 28.45 $ 29.14 $ 22.94 $ 18.95 $ 15.31
==================================================================================================================
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income 0.06 0.03 0.08 0.25 0.28 0.50 0.29
Net Gains on Securities (Both
Realized and Unrealized) 5.55 0.05 3.52 3.01 8.14 5.18 3.64
==================================================================================================================
TOTAL FROM INVESTMENT
OPERATIONS 5.61 0.08 3.60 3.26 8.42 5.68 3.93
==================================================================================================================
LESS DISTRIBUTIONS
Dividends from Net
Investment Income 0.00 0.03 0.08 0.25 0.28 0.50 0.29
In Excess of Net
Investment Income(b) 0.00 0.00 0.00 0.00 0.00 0.05 0.00
Distributions from
Capital Gains 0.00 2.65 2.24 3.70 1.94 1.14 0.00
==================================================================================================================
TOTAL DISTRIBUTIONS 0.00 2.68 2.32 3.95 2.22 1.69 0.29
==================================================================================================================
Net Asset Value--
End of Period $ 32.74 $ 27.13 $ 29.73 $ 28.45 $ 29.14 $ 22.94 $ 18.95
==================================================================================================================
TOTAL RETURN 20.68%(c) 0.60%(c) 13.52% 11.76% 39.80% 31.48% 25.80%
RATIOS
Net Assets--End of Period
($000 Omitted) $1,483,828 $1,133,350 $1,242,555 $1,417,655 $1,113,255 $542,688 $ 410,048
Ratio of Expenses
to Average Net Assets(d) 0.64%(c) 1.29%(e) 1.26% 1.05% 0.99% 1.11% 1.26%
Ratio of Net Investment
Income to Average Net Assets 0.22%(c) 0.25%(e) 0.25% 0.85% 1.19% 2.48% 2.10%
Portfolio Turnover Rate 44%(c) 38%(c) 83% 52% 96% 141% 171%
</TABLE>
(a) From November 1, 1999 to March 31, 2000, the Fund's current fiscal year end.
(b) Distributions in Excess of Net Investment Income aggregated less than $0.01
on a per share basis for the period ended March 31, 2000.
(c) Based on operations for the period shown and, accordingly, is not
representative of a full year.
(d) Ratio is based on Total Expenses of the Class, which is before any expense
offset arrangements (which may include custodian, distribution and transfer
agent fees).
(e) Annualized
<PAGE>
FINANCIAL HIGHLIGHTS
FINANCIAL SERVICES FUND -- CLASS C
--------------------------------------------------------------------------------
(For a Fund Share Outstanding Throughout Each Period)
SIX MONTHS PERIOD
ENDED ENDED
SEPTEMBER 30 MARCH 31
--------------------------------------------------------------------------------
2000 2000(a)
UNAUDITED
PER SHARE DATA
Net Asset Value--Beginning of Period $ 27.06 $ 23.66
================================================================================
INCOME FROM INVESTMENT OPERATIONS(b)
Net Investment Income (Loss)(c) (0.03) 0.00
Net Gains on Securities
(Both Realized and Unrealized) 5.56 3.48
================================================================================
TOTAL FROM INVESTMENT OPERATIONS 5.53 3.48
================================================================================
LESS DISTRIBUTIONS
Dividends from Net Investment Income(d) 0.00 0.00
In Excess of Net Investment Income 0.00 0.08
================================================================================
TOTAL DISTRIBUTIONS 0.00 0.08
================================================================================
Net Asset Value--End of Period $ 32.59 $ 27.06
================================================================================
TOTAL RETURN(e) 20.44%(f) 14.72%(f)
RATIOS
Net Assets--End of Period ($000 Omitted) $ 7,853 $ 138
Ratio of Expenses to Average Net Assets(g) 0.91%(f) 1.63%(h)
Ratio of Net Investment Income (Loss)
to Average Net Assets (0.15%)(f) (0.39%)(h)
Portfolio Turnover Rate 44%(f) 38%(i)
(a) From February 15, 2000, since inception of Class C, to March 31, 2000.
(b) The per share information was computed based on average shares for the six
months ended September 30, 2000.
(c) Net Investment Income aggregated less than $0.01 on a per share basis for
the period ended March 31, 2000.
(d) Dividends from Net Investment Income aggregated less than $0.01 on a per
share basis for the period ended March 31, 2000.
(e) The applicable CDSC fees are not included in the Total Return calculation.
(f) Based on operations for the period shown and, accordingly, is not
representative of a full year.
(g) Ratio is based on Total Expenses of the Class, which is before any expense
offset arrangements (which may include custodian fees).
(h) Annualized
(i) Portfolio Turnover is calculated at the Fund level, and therefore represents
the period from November 1, 1999 to March 31, 2000.
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
GOLD FUND -- INVESTOR CLASS
-------------------------------------------------------------------------------------------------------------
(FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
SIX MONTHS PERIOD
ENDED ENDED
SEPTEMBER 30 MARCH 31 YEAR ENDED OCTOBER 31
-------------------------------------------------------------------------------------------------------------
2000 2000(a) 1999 1998 1997 1996 1995
UNAUDITED
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value--Beginning
of Period $ 1.60 $ 1.83 $ 1.90 $ 3.21 $ 8.00 $ 5.21 $ 5.68
=============================================================================================================
INCOME FROM INVESTMENT
OPERATIONS(b)
Net Investment Income (Loss) (0.01) (0.01) (0.03) 0.01 (0.02) (0.01) 0.01
Net Gains or (Losses) on Securities
(Both Realized and Unrealized) (0.11) (0.22) (0.04) (1.29) (2.62) 2.80 (0.47)
=============================================================================================================
TOTAL FROM INVESTMENT
OPERATIONS (0.12) (0.23) (0.07) (1.28) (2.64) 2.79 (0.46)
=============================================================================================================
LESS DISTRIBUTIONS
Dividends from Net
Investment Income 0.00 0.00 0.00 0.00 0.00 0.00 0.01
In Excess of Net
Investment Income 0.00 0.00 0.00 0.03 2.15 0.00 0.00
=============================================================================================================
TOTAL DISTRIBUTIONS 0.00 0.00 0.00 0.03 2.15 0.00 0.01
=============================================================================================================
Net Asset Value--
End of Period $ 1.48 $ 1.60 $ 1.83 $ 1.90 $ 3.21 $ 8.00 $ 5.21
=============================================================================================================
TOTAL RETURN (7.50%)(c) (12.58%)(c) (3.68%) (39.98%) (44.38%) 53.55% (8.12%)
RATIOS
Net Assets--End of Period
($000 Omitted) $75,518 $81,470 $99,753 $107,249 $151,085 $277,892 $151,779
Ratio of Expenses to Average
Net Assets(d) 1.15%(c) 2.08%(e) 2.20% 1.90% 1.47% 1.22% 1.32%
Ratio of Net Investment
Income (Loss) to
Average Net Assets (0.57%)(c) (0.76%)(e) (1.60%) (0.93%) (0.41%) (0.08%) 0.13%
Portfolio Turnover Rate 53%(c) 37%(c) 141% 133% 148% 155% 72%
</TABLE>
(a) From November 1, 1999 to March 31, 2000, the Fund's current fiscal year end.
(b) The per share information was computed based on average shares for the years
ended October 31, 1999 and 1997.
(c) Based on operations for the period shown and, accordingly, is not
representative of a full year.
(d) Ratio is based on Total Expenses of the Class, which is before any expense
offset arrangements (which may include custodian, distribution and transfer
agent fees).
(e) Annualized
<PAGE>
FINANCIAL HIGHLIGHTS
GOLD FUND-- CLASS C
--------------------------------------------------------------------------------
(FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
SIX MONTHS PERIOD
ENDED ENDED
SEPTEMBER 30 MARCH 31
--------------------------------------------------------------------------------
2000 2000(a)
UNAUDITED
PER SHARE DATA
Net Asset Value--Beginning of Period $ 1.60 $ 1.75
================================================================================
INCOME FROM INVESTMENT OPERATIONS
Net Investment Loss (b) (0.02) (0.00)
Net Losses on Securities
(Both Realized and Unrealized) (0.12) (0.15)
================================================================================
TOTAL FROM INVESTMENT OPERATIONS (0.14) (0.15)
================================================================================
Net Asset Value--End of Period $ 1.46 $ 1.60
================================================================================
TOTAL RETURN(c) (8.75%)(d) (8.57%)(d)
RATIOS
Net Assets--End of Period ($000 Omitted) $ 2 $ 1
Ratio of Expenses to Average Net Assets(e) 2.80%(d) 3.54%(f)
Ratio of Net Investment Loss to Average Net Assets (2.17%)(d) (0.82%)(f)
Portfolio Turnover Rate 53%(d) 37%(g)
(a) From February 15, 2000, since inception of Class C, to March 31, 2000.
(b) Net Investment Loss for the period ended March 31, 2000 aggregated less than
$0.01 on a per share basis.
(c) The applicable CDSC fees are not included in the Total Return calculation.
(d) Based on operations for the period shown and, accordingly, is not
representative of a full year.
(e) Ratio is based on Total Expenses of the Class, which is before any expense
offset arrangements (which may include custodian, distribution and transfer
agent fees).
(f) Annualized
(g) Portfolio Turnover is calculated at the Fund level, and therefore represents
the period from November 1, 1999 to March 31, 2000.
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
HEALTH SCIENCES FUND -- INVESTOR CLASS
-------------------------------------------------------------------------------------------------------------
(FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
SIX MONTHS PERIOD
ENDED ENDED
SEPTEMBER 30 MARCH 31 YEAR ENDED OCTOBER 31
-------------------------------------------------------------------------------------------------------------
2000 2000(a) 1999 1998 1997 1996 1995
UNAUDITED
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value--Beginning
of Period $ 55.52 $ 58.39 $ 62.12 $ 57.50 $ 55.24 $ 50.47 $ 35.09
=============================================================================================================
INCOME FROM INVESTMENT
OPERATIONS (b)
Net Investment Income (Loss) (0.02) (0.06) 0.14 0.13 0.06 0.07 (0.03)
Net Gains on Securities (Both
Realized and Unrealized) 16.84 3.53 5.02 13.55 10.85 8.78 15.41
=============================================================================================================
TOTAL FROM INVESTMENT
OPERATIONS 16.82 3.47 5.16 13.68 10.91 8.85 15.38
=============================================================================================================
LESS DISTRIBUTIONS
Dividends from Net
Investment Income(c) 0.00 0.04 0.04 0.25 0.06 0.07 0.00
In Excess of Net
Investment Income 0.00 0.21 0.00 0.00 0.00 0.00 0.00
Distributions from
Capital Gains 0.00 6.09 8.85 8.81 8.59 4.01 0.00
=============================================================================================================
TOTAL DISTRIBUTIONS 0.00 6.34 8.89 9.06 8.65 4.08 0.00
=============================================================================================================
Net Asset Value--
End of Period $ 72.34 $ 55.52 $ 58.39 $ 62.12 $ 57.50 $ 55.24 $ 50.47
=============================================================================================================
TOTAL RETURN 30.30%(d) 6.30%(d) 8.44% 28.58% 22.96% 17.99% 43.83%
RATIOS
Net Assets--End of Period
($000 Omitted) $2,213,890 $1,622,624 $1,574,020 $1,328,196 $944,498 $933,828 $860,926
Ratio of Expenses
to Average
Net Assets(e) 0.62%(d) 1.18%(f) 1.22% 1.12% 1.08% 0.98% 1.15%
Ratio of Net Investment
Income (Loss) to
Average Net Assets (0.04%)(d) (0.22%)(f) 0.07% 0.25% 0.11% 0.11% (0.08%)
Portfolio Turnover Rate 85%(d) 107%(d) 127% 92% 143% 90% 107%
</TABLE>
<PAGE>
(a) From November 1, 1999 to March 31, 2000, the Fund's current fiscal year end.
(b) The per share information was computed based on average shares for the
period ended March 31, 2000.
(c) Distributions In Excess of Net Investment Income for the years ended October
31, 1999 and 1998, aggregated less than $0.01 on a per share basis.
(d) Based on operations for the period shown and, accordingly, is not
representative of a full year.
(e) Ratio is based on Total Expenses of the Class, which is before any expense
offset arrangements (which may include custodian, distribution and transfer
agent fees).
(f) Annualized
<PAGE>
FINANCIAL HIGHLIGHTS
HEALTH SCIENCES FUND -- CLASS C
--------------------------------------------------------------------------------
(FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
SIX MONTHS PERIOD
ENDED ENDED
SEPTEMBER 30 MARCH 31
--------------------------------------------------------------------------------
2000 2000(a)
UNAUDITED
PER SHARE DATA
Net Asset Value--Beginning of Period $ 55.50 $ 62.05
================================================================================
INCOME FROM INVESTMENT OPERATIONS(b)
Net Investment Loss (0.14) (0.03)
Net Gains or (Losses) on Securities
(Both Realized and Unrealized) 16.72 (6.52)
================================================================================
TOTAL FROM INVESTMENT OPERATIONS 16.58 (6.55)
================================================================================
Net Asset Value--End of Period $ 72.08 $ 55.50
================================================================================
TOTAL RETURN(c) 29.87%(d) (10.56%)(d)
RATIOS
Net Assets--End of Period ($000 Omitted) $ 6,893 $ 470
Ratio of Expenses to Average Net Assets(e) 0.96%(d) 1.65%(f)
Ratio of Net Investment Loss to Average Net Assets (0.45%)(d) (0.54%)(f)
Portfolio Turnover Rate 85%(d) 107%(g)
(a) From February 15, 2000, since inception of Class C, to March 31, 2000.
(b) The per share information was computed based on average shares for the
period ended March 31, 2000.
(c) The applicable CDSC fees are not included in the Total Return calculation.
(d) Based on operations for the period shown and, accordingly, is not
representative of a full year.
(e) Ratio is based on Total Expenses of the Class, which is before any expense
offset arrangements (which may include custodian fees).
(f) Annualized
(g) Portfolio Turnover is calculated at the Fund level, and therefore represents
the period from November 1, 1999 to March 31, 2000.
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
LEISURE FUND -- INVESTOR CLASS
-------------------------------------------------------------------------------------------------------------
(FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
SIX MONTHS PERIOD
ENDED ENDED
SEPTEMBER 30 MARCH 31 YEAR ENDED OCTOBER 31
-------------------------------------------------------------------------------------------------------------
2000 2000(a) 1999 1998 1997 1996 1995
UNAUDITED
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value--Beginning
of Period $ 47.12 $ 43.21 $ 27.92 $ 27.21 $ 22.89 $ 23.78 $ 22.63
=============================================================================================================
INCOME FROM INVESTMENT
OPERATIONS(b)
Net Investment Income (Loss)(c) (0.11) (0.13) 0.00 0.00 0.02 0.04 0.08
Net Gains or (Losses)
on Securities (Both
Realized and Unrealized) (1.55) 7.27 17.20 3.69 4.96 2.25 2.06
=============================================================================================================
TOTAL FROM INVESTMENT
OPERATIONS (1.66) 7.14 17.20 3.69 4.98 2.29 2.14
=============================================================================================================
LESS DISTRIBUTIONS
Dividends from Net
Investment Income(d) 0.00 0.00 0.00 0.00 0.02 0.04 0.08
Distributions from
Capital Gains 0.00 3.23 1.91 2.98 0.64 2.25 0.91
In Excess of Capital Gains 0.00 0.00 0.00 0.00 0.00 0.89 0.00
=============================================================================================================
TOTAL DISTRIBUTIONS 0.00 3.23 1.91 2.98 0.66 3.18 0.99
=============================================================================================================
Net Asset Value--
End of Period $ 45.46 $ 47.12 $ 43.21 $ 27.92 $ 27.21 $ 22.89 $ 23.78
=============================================================================================================
TOTAL RETURN (3.50%)(e) 17.34%(e) 65.13% 15.16% 22.32% 10.66% 9.98%
RATIOS
Net Assets--End of Period
($000 Omitted) $585,378 $549,523 $443,348 $228,681 $216,616 $252,297 $265,181
Ratio of Expenses
to Average
Net Assets(f) 0.67%(e) 1.28%(g) 1.44% 1.41% 1.41% 1.30% 1.29%
Ratio of Net Investment
Income (Loss) to
Average Net Assets (0.26%)(e) (0.65%)(g) (0.68%) (0.09%) 0.05% 0.18% 0.31%
Portfolio Turnover Rate 19%(e) 23%(e) 35% 31% 25% 56% 119%
</TABLE>
<PAGE>
(a) From November 1, 1999 to March 31, 2000, the Fund's current fiscal year end.
(b) The per share information was computed based on average shares for the
period ended March 31, 2000.
(c) Net Investment Income aggregated less than $0.01 on a per share basis for
the years ended October 31, 1999 and 1998.
(d) Distributions in excess of net investment income for the years ended October
31, 1998, 1997, 1996 and 1995, aggregated less than $0.01 on a per share
basis.
(e) Based on operations for the period shown and, accordingly, is not
representative of a full year.
(f) Ratio is based on Total Expenses of the Class, which is before any expense
offset arrangements (which may include custodian, distribution and transfer
agent fees).
(g) Annualized
<PAGE>
FINANCIAL HIGHLIGHTS
LEISURE FUND -- CLASS C
--------------------------------------------------------------------------------
(FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
SIX MONTHS PERIOD
ENDED ENDED
SEPTEMBER 30 MARCH 31
--------------------------------------------------------------------------------
2000 2000(a)
UNAUDITED
PER SHARE DATA
Net Asset Value--Beginning of Period $ 47.09 $ 45.51
================================================================================
INCOME FROM INVESTMENT OPERATIONS(b)
Net Investment Loss (0.26) (0.02)
Net Gains or (Losses) on Securities
(Both Realized and Unrealized) (1.56) 1.60
================================================================================
TOTAL FROM INVESTMENT OPERATIONS (1.82) 1.58
================================================================================
Net Asset Value--End of Period $ 45.27 $ 47.09
================================================================================
TOTAL RETURN(c) (3.86%)(d) 3.47%(d)
RATIOS
Net Assets--End of Period ($000 Omitted) $ 1,379 $ 84
Ratio of Expenses to Average Net Assets(e) 1.05%(d) 1.71%(f)
Ratio of Net Investment Loss to Average Net Assets (0.57%)(d) (0.42%)(f)
Portfolio Turnover Rate 19%(d) 23%(g)
(a) From February 15, 2000, since inception of Class C, to March 31, 2000.
(b) The per share information was computed based on average shares for the
period ended March 31, 2000.
(c) The applicable CDSC fees are not included in the Total Return calculation.
(d) Based on operations for the period shown and, accordingly, is not
representative of a full year.
(e) Ratio is based on Total Expenses of the Class, which is before any expense
offset arrangements (which may include custodian fees).
(f) Annualized
(g) Portfolio Turnover is calculated at the Fund level, and therefore represents
the period from November 1, 1999 to March 31, 2000.
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
REAL ESTATE OPPORTUNITY FUND -- INVESTOR CLASS
----------------------------------------------------------------------------------------
(FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
SIX MONTHS PERIOD PERIOD
ENDED ENDED ENDED
SEPTEMBER 30 MARCH 31 YEAR ENDED JULY 31 JULY 31
----------------------------------------------------------------------------------------
2000 2000(a) 1999 1998 1997
UNAUDITED
<S> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value--Beginning
of Period $ 6.63 $ 6.90 $ 9.15 $ 10.99 $ 10.00
========================================================================================
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income 0.14 0.27 0.33 0.38 0.22
Net Gains or (Losses)
on Securities (Both
Realized and Unrealized) 1.00 (0.28) (1.56) (0.96) 0.99
========================================================================================
TOTAL FROM INVESTMENT
OPERATIONS 1.14 (0.01) (1.23) (0.58) 1.21
========================================================================================
LESS DISTRIBUTIONS
Dividends from Net
Investment Income 0.14 0.23 0.34 0.39 0.22
In Excess of Net
Investment Income 0.00 0.03 0.00 0.00 0.00
Distributions from
Capital Gains 0.00 0.00 0.00 0.87 0.00
In Excess of Capital Gains 0.00 0.00 0.68 0.00 0.00
========================================================================================
TOTAL DISTRIBUTIONS 0.14 0.26 1.02 1.26 0.22
========================================================================================
Net Asset Value--
End of Period $ 7.63 $ 6.63 $ 6.90 $ 9.15 $ 10.99
========================================================================================
TOTAL RETURN 17.34%(c) (0.03%)(c) (13.29%) (6.49%) 12.24%(c)
RATIOS
Net Assets--End of Period
($000 Omitted) $38,961 $20,046 $17,406 $23,548 $36,658
Ratio of Expenses
to Average
Net Assets(d)(e) 0.80%(c) 1.34%(f) 1.34% 1.22% 1.20%(f)
Ratio of Net Investment
Income to
Average Net Assets (d) 1.97%(c) 5.54%(f) 4.23% 3.53% 4.08%(f)
Portfolio Turnover Rate 246%(c)(g) 272%(c)(g) 697%(g) 258% 70%(c)
</TABLE>
<PAGE>
(a) From August 1, 1999 to March 31, 2000, the Fund's current fiscal year end.
(b) From January 1, 1997, commencement of investment operations, to July 31,
1997.
(c) Based on operations for the period shown and, accordingly, is not
representative of a full year.
(d) Various expenses of the Class were voluntarily absorbed by IFG for the six
months ended September 30, 2000, the period ended March 31, 2000, the years
ended July 31, 1999 and 1998 and the period ended July 31, 1997. If such
expenses had not been voluntarily absorbed, ratio of expenses to average net
assets would have been 1.03%, 2.73% (annualized), 2.76%, 1.97% and 1.83%
(annualized), respectively, and ratio of net investment income to average
net assets would have been 1.74%, 4.15% (annualized), 2.81%, 2.78% and 3.45%
(annualized), respectively.
(e) Ratio is based on Total Expenses of the Class, less Expenses Absorbed by
Investment Adviser, which is before any expense offset arrangements (which
may include custodian fees).
(f) Annualized
(g) Portfolio Turnover was greater than expected during the year due to active
trading undertaken in response to market conditions.
<PAGE>
FINANCIAL HIGHLIGHTS
REAL ESTATE OPPORTUNITY FUND -- CLASS C
--------------------------------------------------------------------------------
(FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
SIX MONTHS PERIOD
ENDED ENDED
SEPTEMBER 30 MARCH 31
--------------------------------------------------------------------------------
2000 2000(a)
UNAUDITED
PER SHARE DATA
Net Asset Value--Beginning of Period $ 6.62 $ 6.58
================================================================================
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.12 0.08
Net Gains on Securities
(Both Realized and Unrealized) 0.99 0.06
================================================================================
TOTAL FROM INVESTMENT OPERATIONS 1.11 0.14
================================================================================
LESS DISTRIBUTIONS
Dividends from Net Investment Income 0.13 0.04
In Excess of Net Investment Income 0.00 0.06
================================================================================
TOTAL DISTRIBUTIONS 0.13 0.10
================================================================================
Net Asset Value--End of Period $ 7.60 $ 6.62
================================================================================
TOTAL RETURN(b) 16.81%(c) 2.10%(c)
RATIOS
Net Assets--End of Period ($000 Omitted) $ 1,545 $ 143
Ratio of Expenses to Average Net Assets(d)(e) 1.17%(c) 1.77%(f)
Ratio of Net Investment Income to
Average Net Assets(d) 2.03%(c) 19.13%(f)
Portfolio Turnover Rate 246%(c)(h) 272%(g)(h)
<PAGE>
(a) From February 15, 2000, since inception of Class C, to March 31, 2000.
(b) The applicable CDSC fees are not included in the Total Return calculation.
(c) Based on operations for the period shown and, accordingly, is not
representative of a full year.
(d) Various expenses of the Class were voluntarily absorbed by IFG for the six
months ended September 30, 2000 and the period ended March 31, 2000. If such
expenses had not been voluntarily absorbed, ratio of expenses to average net
assets would have been 1.17% and 2.04% (annualized), respectively, and ratio
of net investment income to average net assets would have been 2.03% and
18.86% (annualized), respectively.
(e) Ratio is based on Total Expenses of the Class, less Expenses Absorbed by
Investment Adviser, which is before any expense offset arrangements (which
may include custodian fees).
(f) Annualized
(g) Portfolio Turnover is calculated at the Fund level, and therefore represents
for the period from August 1, 1999 to March 31, 2000.
(h) Portfolio Turnover was greater than expected during the year due to active
trading undertaken in response to market conditions.
<PAGE>
FINANCIAL HIGHLIGHTS
TECHNOLOGY FUND -- INSTITUTIONAL CLASS
--------------------------------------------------------------------------------
(FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
SIX MONTHS PERIOD PERIOD
ENDED ENDED ENDED
SEPTEMBER 30 MARCH 31 OCTOBER 31
--------------------------------------------------------------------------------
2000 2000(a) 1999(b)
UNAUDITED
PER SHARE DATA
Net Asset Value--
Beginning of Period $ 102.55 $ 58.43 $ 33.85
================================================================================
INCOME FROM INVESTMENT
OPERATIONS(c)
Net Investment Loss (0.05) (0.04) (0.16)
Net Gains or (Losses)
on Securities (Both
Realized and Unrealized) (3.75) 48.07 24.74
================================================================================
TOTAL FROM INVESTMENT
OPERATIONS (3.80) 48.03 24.58
================================================================================
LESS DISTRIBUTIONS
DISTRIBUTIONS FROM
CAPITAL GAINS 0.00 3.91 0.00
================================================================================
Net Asset Value--
End of Period $ 98.75 $ 102.55 $ 58.43
================================================================================
TOTAL RETURN (3.71%)(d) 86.14%(d) 72.61%(d)
RATIOS
Net Assets--End of Period
($000 Omitted) $ 3,764,452 $4,453,520 $ 951,925
Ratio of Expenses
to Average Net Assets(e) 0.28%(d) 0.56%(f) 0.74%(f)
Ratio of Net Investment
Loss to Average Net Assets (0.07%)(d) (0.15%)(f) (0.36%)(f)
Portfolio Turnover Rate 37%(d) 28%(h) 143%(g)
(a) From November 1, 1999 to March 31, 2000, the Fund's current fiscal year end.
(b) From December 22, 1998, since inception of Institutional Class, to October
31, 1999.
(c) The per share information was computed based on average shares for the
period ended October 31, 1999.
(d) Based on operations for the period shown and, accordingly, is not
representative of a full year.
(e) Ratio is based on Total Expenses of the Class, which is before any expense
offset arrangements (which may include custodian fees).
(f) Annualized
(g) Portfolio Turnover is calculated at the Fund level, and therefore represents
the fiscal year ended October 31, 1999.
(h) Portfolio Turnover is calculated at the Fund level, and therefore represents
the period from November 1, 1999 to March 31, 2000.
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
TECHNOLOGY FUND -- INVESTOR CLASS
-------------------------------------------------------------------------------------------------------------
(FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
SIX MONTHS PERIOD
ENDED ENDED
SEPTEMBER 30 MARCH 31 YEAR ENDED OCTOBER 31
-------------------------------------------------------------------------------------------------------------
2000 2000(a) 1999 1998 1997 1996 1995
UNAUDITED
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value--Beginning
of Period $ 101.92 $ 58.17 $ 28.07 $ 35.97 $ 34.23 $ 34.33 $ 24.94
=============================================================================================================
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income (Loss)(b) (0.21) (0.03) (0.07) 0.00 0.13 0.07 (0.02)
Net Gains or (Losses)
on Securities (Both
Realized and Unrealized) (3.73) 47.69 30.17 (1.45) 6.23 5.76 10.20
=============================================================================================================
TOTAL FROM INVESTMENT
OPERATIONS (3.94) 47.66 30.10 (1.45) 6.36 5.83 10.18
=============================================================================================================
LESS DISTRIBUTIONS
Dividends from Net
Investment Income(c) 0.00 0.00 0.00 0.00 0.13 0.07 0.00
Distributions from
Capital Gains 0.00 3.91 0.00 3.16 4.49 5.86 0.79
In Excess of Capital Gains 0.00 0.00 0.00 3.29 0.00 0.00 0.00
=============================================================================================================
TOTAL DISTRIBUTIONS 0.00 3.91 0.00 6.45 4.62 5.93 0.79
=============================================================================================================
Net Asset Value--
End of Period $ 97.98 $ 101.92 $ 58.17 $ 28.07 $ 35.97 $ 34.23 $ 34.33
=============================================================================================================
TOTAL RETURN (3.87%)(d) 85.87%(d) 107.23% (2.47%) 20.71% 19.98% 42.19%
RATIOS
Net Assets--End of Period
($000 Omitted) $5,377,092 $5,034,087 $2,081,613 $1,008,771 $1,039,968 $789,611 $563,109
Ratio of Expenses
to Average
Net Assets(e) 0.47%(d) 0.88%(f) 1.20 1.17% 1.05% 1.08% 1.12%
Ratio of Net Investment
Income (Loss) to
Average Net Assets (0.25%)(d) (0.48%)(f) (0.79%) (0.49%) 0.41% 0.24% (0.06%)
Portfolio Turnover Rate 37%(d) 28%(d) 143% 178% 237% 168% 191%
</TABLE>
<PAGE>
(a) From November 1, 1999 to March 31, 2000, the Fund's current fiscal year end.
(b) Net Investment Income aggregated less than $0.01 on a per share basis for
the year ended October 31, 1998.
(c) Distributions in excess of net investment income for the years ended October
31, 1998 and 1996, aggregated less than $0.01 on a per share basis.
(d) Based on operations for the period shown and, accordingly, is not
representative of a full year.
(e) Ratio is based on Total Expenses of the Class, which is before any expense
offset arrangements (which may include custodian, distribution and transfer
agent fees).
(f) Annualized
<PAGE>
FINANCIAL HIGHLIGHTS
TECHNOLOGY FUND -- CLASS C
--------------------------------------------------------------------------------
(FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
SIX MONTHS PERIOD
ENDED ENDED
SEPTEMBER 30 MARCH 31
--------------------------------------------------------------------------------
2000 2000(a)
UNAUDITED
PER SHARE DATA
Net Asset Value--Beginning of Period $101.85 $ 95.51
================================================================================
INCOME FROM INVESTMENT OPERATIONS(b)
Net Investment Loss (0.35) (0.15)
Net Gains or (Losses)
on Securities (Both
Realized and Unrealized) (4.10) 6.49
================================================================================
TOTAL FROM INVESTMENT OPERATIONS (4.45) 6.34
================================================================================
Net Asset Value--End of Period $ 97.40 $101.85
================================================================================
TOTAL RETURN(c) (4.36%)(d) 6.63%(d)
RATIOS
Net Assets--End of Period ($000 Omitted) $14,685 $2,970
Ratio of Expenses to Average Net Assets(e) 0.85%(d) 1.45%(f)
Ratio of Net Investment Loss to Average Net Assets (0.61%)(d) (1.03%)(f)
Portfolio Turnover Rate 37%(d) 28%(g)
(a) From February 15, 2000, since inception of Class C, to March 31, 2000.
(b) The per share information was computed based on average shares for the
period ended March 31, 1999.
(c) The applicable CDSC fees are not included in the Total Return calculation.
(d) Based on operations for the period shown and, accordingly, is not
representative of a full year.
(e) Ratio is based on Total Expenses of the Class, which is before any expense
offset arrangements (which may include custodian fees).
(f) Annualized
(g) Portfolio Turnover is calculated at the Fund level, and therefore represents
the period from November 1, 1999 to March 31, 2000.
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
TELECOMMUNICATIONS FUND -- INVESTOR CLASS
-------------------------------------------------------------------------------------------------------------
(FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
SIX MONTHS PERIOD
ENDED ENDED
SEPTEMBER 30 MARCH 31 YEAR ENDED JULY 31
-------------------------------------------------------------------------------------------------------------
2000 2000(a) 1999 1998 1997 1996 1995(b)
UNAUDITED
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value--Beginning
of Period $ 64.42 $ 31.80 $ 19.60 $ 15.31 $ 12.43 $ 12.30 $ 10.00
=============================================================================================================
INCOME FROM INVESTMENT
OPERATIONS(c)
Net Investment Income (Loss)(d) (0.08) (0.10) 0.00 0.01 0.06 0.22 0.11
Net Gains or (Losses)
on Securities (Both
Realized and Unrealized) (8.81) 32.87 12.57 5.32 3.90 1.38 2.35
=============================================================================================================
TOTAL FROM INVESTMENT
OPERATIONS (8.89) 32.77 12.57 5.33 3.96 1.60 2.46
=============================================================================================================
LESS DISTRIBUTIONS
Dividends from Net
Investment Income(e) 0.00 0.00 0.00 0.00 0.06 0.22 0.11
Distributions from
Capital Gains 0.00 0.15 0.37 1.04 1.02 1.25 0.05
=============================================================================================================
TOTAL DISTRIBUTIONS 0.00 0.15 0.37 1.04 1.08 1.47 0.16
=============================================================================================================
Net Asset Value--
End of Period $ 55.53 $ 64.42 $ 31.80 $ 19.60 $ 15.31 $ 12.43 $ 12.30
=============================================================================================================
TOTAL RETURN (13.79%)(f) 103.25%(f) 65.52% 36.79% 33.93% 13.67% 24.83%
RATIOS
Net Assets--End of Period
($000 Omitted) $3,650,664 $4,125,890 $1,029,256 $276,577 $72,458 $50,516 $27,254
Ratio of Expenses
to Average
Net Assets 0.52%(f) 0.99%(g)(h) 1.24%(g) 1.32%(g) 1.69%(g) 1.66%(g) 1.95%
Ratio of Net Investment
Income (Loss) to
Average Net Assets (0.14%)(f) (0.32%)(h) (0.49%) (0.16%) 0.56% 1.78% 1.43%
Portfolio Turnover Rate 26%(f) 24%(f) 62% 55% 96% 157% 215%
</TABLE>
<PAGE>
(a) From August 1, 1999 to March 31, 2000, the Fund's current fiscal year end.
(b) Commencement of investment operations was August 1, 1994.
(c) The per share information was computed based on average shares for the
period ended March 31, 2000.
(d) Net Investment Income (Loss) aggregated less than $0.01 on a per share basis
for the year ended July 31, 1999.
(e) Distributions in excess of net investment income for the period ended March
31, 2000, aggregated less than $0.01 on a per share basis.
(f) Based on operations for the period shown and, accordingly, is not
representative of a full year.
(g) Ratio is based on Total Expenses of the Class, which is before any expense
offset arrangements (which may include custodian, distribution and transfer
agent fees).
(h) Annualized
<PAGE>
FINANCIAL HIGHLIGHTS
TELECOMMUNICATIONS FUND -- CLASS C
--------------------------------------------------------------------------------
(FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
SIX MONTHS PERIOD
ENDED ENDED
SEPTEMBER 30 MARCH 31
--------------------------------------------------------------------------------
2000 2000(a)
UNAUDITED
PER SHARE DATA
Net Asset Value--Beginning of Period $ 64.37 $ 59.28
================================================================================
INCOME FROM INVESTMENT OPERATIONS(b)
Net Investment Loss (0.21) (0.06)
Net Gains or (Losses) on Securities
(Both Realized and Unrealized) (8.88) 5.15
================================================================================
TOTAL FROM INVESTMENT OPERATIONS (9.09) 5.09
================================================================================
Net Asset Value--End of Period $ 55.28 $ 64.37
================================================================================
TOTAL RETURN(c) (14.12%)(d) 8.59%(d)
RATIOS
Net Assets--End of Period ($000 Omitted) $13,131 $ 2,530
Ratio of Expenses to Average Net Assets(e) 0.96%(d) 1.49%(f)
Ratio of Net Investment Loss to Average Net Assets (0.57%)(d) (0.86%)(f)
Portfolio Turnover Rate 26%(d) 24%(g)
(a) From February 15, 2000, since inception of Class C, to March 31, 2000.
(b) The per share information was computed based on average shares for the
period ended March 31, 2000.
(c) The applicable CDSC fees are not included in the Total Return calculation.
(d) Based on operations for the period shown and, accordingly, is not
representative of a full year.
(e) Ratio is based on Total Expenses of the Class, which is before any expense
offset arrangements (which may include custodian fees).
(f) Annualized
(g) Portfolio Turnover is calculated at the Fund level, and therefore represents
the period ended August 1, 1999 to March 31, 2000.
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
UTILITIES FUND -- INVESTOR CLASS
-------------------------------------------------------------------------------------------------------------
(FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
SIX MONTHS PERIOD
ENDED ENDED
SEPTEMBER 30 MARCH 31 YEAR ENDED OCTOBER 31
-------------------------------------------------------------------------------------------------------------
2000 2000(a) 1999 1998 1997 1996 1995(b)
UNAUDITED
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value--Beginning
of Period $ 20.42 $ 17.68 $ 14.73 $ 12.42 $ 12.04 $ 10.61 $ 9.76
=============================================================================================================
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income 0.07 0.04 0.17 0.30 0.32 0.37 0.44
Net Gains or (Losses)
on Securities (Both
Realized and Unrealized) (0.81) 3.95 3.20 2.56 1.25 1.43 0.84
=============================================================================================================
TOTAL FROM INVESTMENT
OPERATIONS (0.74) 3.99 3.37 2.86 1.57 1.80 1.28
=============================================================================================================
LESS DISTRIBUTIONS
Dividends from Net
Investment Income(b) (0.07) 0.04 0.21 0.26 0.32 0.37 0.43
Distributions from
Capital Gains 0.00 1.21 0.21 0.29 0.87 0.00 0.00
=============================================================================================================
TOTAL DISTRIBUTIONS (0.07) 1.25 0.42 0.55 1.19 0.37 0.43
=============================================================================================================
Net Asset Value--
End of Period $ 19.61 $ 20.42 $ 17.68 $ 14.73 $ 12.42 $ 12.04 $ 10.61
=============================================================================================================
TOTAL RETURN (3.63%)(c) 23.99%(c) 23.22% 23.44% 14.37% 17.18% 13.48%
RATIOS
Net Assets--End of Period
($000 Omitted) $275,887 $260,554 $223,334 $177,309 $132,423 $153,082 $134,468
Ratio of Expenses
to Average
Net Assets(d)(e) 0.65%(c) 1.24%(f) 1.26% 1.29% 1.22% 1.17% 1.18%
Ratio of Net Investment
Income to
Average Net Assets(d) 0.36%(c) 0.50%(f) 1.02% 1.82% 2.74% 3.28% 4.47%
Portfolio Turnover Rate 16%(c) 18%(c) 32% 47% 55% 141% 185%
</TABLE>
<PAGE>
(a) From November 1, 1999 to March 31, 2000, the Fund's current fiscal year end.
(b) Distributions in excess of net investment income for the year ended October
31, 1996, aggregated less than $0.01 on a per share basis.
(c) Based on operations for the period shown and, accordingly, is not
representative of a full year.
(d) Various expenses of the Class were voluntarily absorbed by IFG for the six
months ended September 30,2000, and the period ended March 31, 2000, and for
the years ended October 31, 1999, 1998, 1997, 1996, and 1995. If such
expenses had not been voluntarily absorbed, ratio of expenses to average net
assets would have been 0.70%, 1.33% (annualized), 1.43%, 1.36%, 1.27%, 1.25%
and 1.30%, respectively, and ratio of net investment income to average net
assets would have been 0.31%, 0.41% (annualized), 0.85%, 1.75%, 2.69%, 3.20%
and 4.34%, respectively.
(e) Ratio is based on Total Expenses of the Class, less Expenses Absorbed by
Investment Adviser, which is before any expense offset arrangements (which
may include custodian and transfer agent fees).
(f) Annualized
<PAGE>
FINANCIAL HIGHLIGHTS
UTILITIES FUND -- CLASS C
--------------------------------------------------------------------------------
(FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
SIX MONTHS PERIOD
ENDED ENDED
SEPTEMBER 30 MARCH 31
--------------------------------------------------------------------------------
2000 2000(a)
UNAUDITED
PER SHARE DATA
Net Asset Value--Beginning of Period $ 20.40 $ 19.91
================================================================================
INCOME FROM INVESTMENT OPERATIONS(b)
Net Investment Loss(c) (0.00) (0.01)
Net Gains or (Losses) on Securities
(Both Realized and Unrealized) (0.81) 0.52
================================================================================
TOTAL FROM INVESTMENT OPERATIONS (0.81) 0.51
================================================================================
LESS DISTRIBUTIONS
DIVIDENDS FROM NET INVESTMENT INCOME 0.04 0.02
================================================================================
Net Asset Value--End of Period $ 19.55 $ 20.40
================================================================================
TOTAL RETURN(d) (3.95%)(e) 2.58%(e)
RATIOS
Net Assets--End of Period ($000 Omitted) $ 1,082 $ 248
Ratio of Expenses to Average Net Assets(f)(g) 1.01%(e) 1.83%(h)
Ratio of Net Investment Loss to
Average Net Assets(g) (0.03%)(e) (0.32%)(h)
Portfolio Turnover Rate 16%(e) 18%(i)
(a) From February 15, 2000, since inception of Class C, to March 31, 2000.
(b) The per share information was computed based on average shares for the six
months ended September 30, 2000.
(c) Net Investment Loss aggregated less that $0.01 on a per share basis for the
six months ended September 30, 2000.
(d) The applicable CDSC fees are not included in the Total Return calculation.
(e) Based on operations for the period shown and, accordingly, is not
representative of a full year.
(f) Ratio is based on Total Expenses of the Class, less Expenses Absorbed by
Investment Adviser, which is before any expense offset arrangements (which
may include custodian fees).
(g) Various expenses of the Fund were voluntarily absorbed by IFG for the six
months ended September 30 and the period ended March 31, 2000. If such
expenses had not been voluntarily absorbed, ratio of expenses to average net
assets would have been 1.01% and 1.83%, (annualized), respectively, and
ratio of net investment income to average net assets would have been (0.03%)
and (0.32%), (annualized), respectively.
(h) Annualized
(i) Portfolio Turnover is calculated at the Fund level, and therefore represents
the period from November 1, 1999 to March 31, 2000.
<PAGE>
We're easy to stay in touch with:
Investor Services: 1-800-525-8085
Personal Account Line: 1-800-424-8085
On the World Wide Web: invescofunds.com
INVESCO Distributors, Inc., (SM) Distributor
Post Office Box 173706
Denver, Colorado 80217-3706
This information must be preceded or accompanied
by a current prospectus
SSEC 9038 10/00
