INVESCO ADVISOR FUNDS, INC.
SUPPLEMENT TO PROSPECTUS DATED MAY 1, 1995
(as previously supplemented October 1, 1995, October 25, 1995,
December 11, 1995 and January 15, 1996)
Effective March 1, 1996
This supplement supersedes applicable sections of previous
supplements to the Prospectus dated May 1, 1995.
The "REDEMPTIONS" section in the Summary on page 3 of the
Prospectus is deleted in its entirety and replaced with the
following:
REDEMPTIONS:
A CDSC is applicable to shares purchased by new investors on or
after May 1, 1995, and redeemed within the first year after
purchase. The CDSC for the Income Portfolio is 0.60% and for all
other Portfolios is 1.00%. There is no CDSC applicable to
additional purchases of shares in any of the Portfolios by
shareholders of record on April 30, 1995. Shareholders whose
broker/dealers maintain a single omnibus account with the Funds'
transfer agent on behalf of those shareholders and perform sub-
accounting functions with respect to those shareholders and are
unable to segregate shareholders of record prior to April 30,
1995 from shareholders whose accounts were opened after that
date, will be subject to a CDSC on all purchases made after March
1, 1996. Redemptions of shares of the Cash Management Portfolio
are generally not subject to a CDSC; however, a CDSC may be
applicable to redemptions of shares of the Cash Management
Portfolio if the redeemed shares were exchanged from another
Portfolio. The CDSC is assessed on an amount equal to the lesser
of the original purchase price or the redemption price of the
shares redeemed. The amount paid upon redemption will be the net
asset value per share next determined after the redemption
request is received in proper form, less the amount of any
applicable CDSC. Payment will be made no later than three days
after receipt of a redemption request in good order. Shares may
be redeemed by writing or calling Fund/Plan Services, Inc. (the
"Transfer Agent"). Redemptions may also be effected through the
shareholder's securities dealer of record.
Each Portfolio has the right to redeem shareholder accounts which
fall below a minimum level as a result of redemptions of shares
($1,000 or less for the Cash Management Portfolio and $10,000 or
less for the other Portfolios. See "INVESCO Advisor Funds, Inc.
Shareholder Services Guide - How to Redeem Shares").
The section entitled "THE DISTRIBUTOR" on page 30 of the
Prospectus is deleted in its entirety and replaced with the
following:
ISI, the Fund's distributor (the "Distributor"), a Georgia
corporation, is the principal underwriter of the Fund under a
Distribution Agreement (the "Distribution Agreement"). All of
the Distributor's outstanding voting shares are owned by ICM.
The Distributor is also the principal underwriter for other
investment companies. The Distributor acts as agent upon the
receipt of orders from investors. The Distributor's principal
office is located at 1355 Peachtree Street, N.E., Atlanta,
Georgia 30309.
The Distributor will be reimbursed for distribution-related
expenses by the Equity, Income, Flex, MultiFlex, Real Estate and
International Value Portfolios pursuant to the plan of
distribution promulgated pursuant to Rule 12b-1 under the 1940
Act, as described under "Plan of Distribution" herein and in the
Statement of Additional Information under "Distribution of
Shares." The Cash Management Portfolio does not have a plan of
distribution under Rule 12b-1. Shares purchased on or after May
1, 1995, by new investors of the Equity, Flex, MultiFlex, Real
Estate and International Value Portfolios are subject to a 1%
CDSC on redemptions made within one year of purchase. Shares
purchased on or after May 1, 1995, by new investors of the Income
Portfolio are subject to a CDSC of a set percentage on
redemptions made within one year of purchase. The set percentage
for the Income Portfolio is 0.60% (for the period May 1, 1995,
through September 30, 1995, the rate was 1.0%). Shares purchased
on or after March 1, 1996 through a broker/dealer who performs a
sub-accounting function on behalf of the transfer agent in an
omnibus account, and is unable to segregate shareholders by date
of opening of accounts, will be subject to the appropriate CDSC.
The proceeds of the CDSC are paid to the Distributor to defray
its expenses in providing certain distribution-related services
to the Fund, including the payment of a sales commission to
broker-dealers who sell shares of the Fund, as described below.
The section entitled "PLAN OF DISTRIBUTION" on page 30 of the
Prospectus is deleted in its entirety and replaced with the
following:
PLAN OF DISTRIBUTION
Rule 12b-1 under the 1940 Act ("Rule 12b-1") permits investment
companies to use their assets to bear expenses of distributing
their shares if they comply with various conditions. Pursuant to
Rule 12b-1, the Equity, Income, Flex, MultiFlex, Real Estate and
International Value Portfolios, but not the Cash Management
Portfolio, have adopted a plan of distribution (the "Plan") which
provides that each Portfolio may incur certain distribution and
maintenance fees which may not exceed a maximum amount equal to
0.60% per annum of the average net assets of the Income
Portfolio, and 1.0% of the average annual net assets for the
other Portfolios. This expense includes the payment of 0.25% of
average annual net assets to broker-dealers as a "service fee"
for providing account maintenance or personal service to existing
shareholders.
The Plan provides for payments by each Portfolio (except the Cash
Management Portfolio) to ISI at the rates indicated above,
subject to the authority of the directors to reduce the amount of
payments or to suspend the Plan for such periods as they may
determine.
Although shares are sold without an initial sales charge, ISI may
pay a sales commission to dealers who sell shares of the relevant
Portfolios. These sales commissions may equal 0.60% on sales of
Income Portfolio and 1.0% on sales of the other Portfolios.
These commissions are not paid on sales to investors exempt from
the CDSC, including shareholders of record on April 30, 1995, who
purchase additional shares in any of the Portfolios on or after
May 1, 1995, and in circumstances where ISI grants an exemption
on particular transactions. Shares purchased on or after March
1, 1996 through a broker/dealer who performs a sub-accounting
function on behalf of the transfer agent in an omnibus account,
and is unable to segregate shareholders by date of opening of
accounts, will be subject to the appropriate CDSC. In addition,
in order to further compensate dealers (including, for this
purpose, certain other financial institutions) for services
provided in connection with sales of shares and the maintenance
of shareholder accounts, ISI makes quarterly payments to
qualifying dealers based on the average net asset value of shares
which are attributable to shareholders for whom the dealers are
designated as the dealer of record. ISI makes such payments up
to a maximum annual rate of 1.0% (0.60% for the Income Portfolio)
of the average net asset value of shares sold by broker-dealers,
which are outstanding on the books of such Portfolios for each
month, subject to the annual limitations described above. When a
sales commission has been paid to the selling broker-dealer,
additional quarterly payments will not be made until after the
first full year. ISI may suspend or modify the payments made to
dealers described above, and such payments are subject to the
continuation of the Plan, the terms of selling or shareholder
servicing agreements between dealers and ISI, and any applicable
limits imposed by the NASD.
For additional information concerning the Fund's plan of
distribution, see the Statement of Additional Information under
"Distribution of Shares."
The section entitled "INVESCO ADVISOR FUNDS, INC., SHAREHOLDER
SERVICES GUIDE - Contingent Deferred Sales Charges" on page 33 of
the Prospectus is deleted in its entirety and replaced with the
following:
Contingent Deferred Sales Charges
Shares of each Portfolio, except the Cash Management Portfolio,
that are purchased by new investors on or after May 1, 1995, and
redeemed within one year from the date of purchase are subject to
a CDSC. The CDSC is 0.60% for the Income Portfolio (for the
period May 1, 1995, through September 30, 1995, the rate was
1.0%) and 1.0% for all other Portfolios (except the Cash
Management Portfolio). The CDSC is applied to the lesser of the
net asset value of the shares at redemption or the initial
purchase price of the shares being redeemed. There is no CDSC
applicable to additional purchases of shares in any of the
Portfolios by shareholders of record on April 30, 1995. Shares
purchased on or after March 1, 1996 through a broker/dealer who
performs a sub-accounting function on behalf of the transfer
agent in an omnibus account, and is unable to segregate
shareholders by date of opening of accounts, will be subject to
the appropriate CDSC. Redemptions of shares of the Cash
Management Portfolio are generally not subject to a CDSC;
however, a CDSC may be applicable to redemptions of shares of the
Cash Management Portfolio if the redeemed shares were exchanged
from another Portfolio. See "How to Exchange Shares." Proceeds
from the CDSC are paid to, and are used in whole or in part by,
the Distributor to defray its expenses related to providing
distribution-related services to the Fund, such as the payment of
a commission to the selling dealer or agent at the time of share
purchase. The combination of the CDSC and the distribution fee
facilitates the ability of the Fund to sell shares without a
sales charge at the time of purchase.
Prior to May 1, 1995, shares originally purchased prior to
January 1, 1992, were subject to a maximum CDSC of 5% of the
lesser of the original purchase price or market value at
redemption of those shares. Imposition of the CDSC on "old"
shares has been discontinued.
