File No. 33-3429
As filed on ^ December 23, 1997
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
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Pre-Effective Amendment No.
Post-Effective Amendment No. ^ 22 X
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REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
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Amendment No. ^ 22 X
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INVESCO VALUE TRUST
(Exact Name of Registrant as Specified in Charter)
7800 E. Union Avenue, Denver, Colorado 80237
(Address of Principal Executive Offices)
P.O. Box 173706, Denver, Colorado 80217-3706
(Mailing Address)
Registrant's Telephone Number, including Area Code: (303) 930-6300
Glen A. Payne, Esq.
7800 E. Union Avenue
Denver, Colorado 80237
(Name and Address of Agent for Service)
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Copies to:
Ronald M. Feinman
Gordon Altman Butowsky
Weitzen Shalov & Wein
114 W. 47th St.
New York, New York 10036
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Approximate Date of Proposed Public Offering: As soon as practicable after this
post-effective amendment becomes effective.
It is proposed that this filing will become effective (check appropriate box)
___ immediately upon filing pursuant to paragraph (b)
X on ^ January 1, 1998, pursuant to paragraph (b)
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___ 60 days after filing pursuant to paragraph (a)(1)
___ ^ on _______________, pursuant to paragraph (a)(1)
___ 75 days after filing pursuant to paragraph (a)(2)
___ on (date) pursuant to paragraph (a)(2) of rule 485
If appropriate, check the following box:
___ This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Registrant has previously elected to register an indefinite number of shares of
its common stock pursuant to Rule 24f-2 under the Investment Company Act.
Registrant's Rule 24f-2 Notice for the fiscal year ended August 31, 1997, was
filed on or about October 24, 1997.
Page 1 of 203
Exhibit index is located at page 132
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INVESCO VALUE TRUST
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CROSS-REFERENCE SHEET
Form N-1A
Item Caption
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Part A Prospectus
1....................... Cover Page
2....................... Annual Fund Expenses
3....................... Financial Highlights; Performance
Data
4....................... Investment Objectives and Policies;
The Trust and Its Management
5....................... The Trust and Its Management;
Additional Information
5A...................... Not Applicable
6....................... Services Provided by the Trust;
Taxes, Dividends and Other
Distributions; Additional
Information
7....................... How Shares Can Be Purchased;
Services Provided by the Trust
8....................... Services Provided by the Trust; How
to Redeem Shares
9....................... Not Applicable
Part B Statement of Additional Information
10....................... Cover Page
11....................... Table of Contents
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<PAGE>
Form N-1A
Item Caption
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12....................... The Trust and Its Management
13....................... Investment Practices; Investment
Policies and Restrictions
14....................... The Trust and Its Management
15....................... The Trust and Its Management
16....................... The Trust and Its Management
17....................... Investment Practices; Investment
Policies and Restrictions
18....................... Additional Information
19....................... How Shares Can Be Purchased; How
Shares Are Valued; Services
Provided by the Trust; Tax-Deferred
Retirement Plans; How to Redeem
Shares
20....................... Dividends, Other Distributions, and
Taxes
21....................... How Shares Can Be Purchased
22....................... Performance Data
23....................... Additional Information
Part C Other Information
Information required to be included in Part C is set forth under the
appropriate Item, so numbered, in Part C to this Registration Statement.
-ii-
<PAGE>
PROSPECTUS
January 1, 1998
INVESCO VALUE TRUST
INVESCO Intermediate Government Bond Fund
INVESCO Intermediate Government Bond Fund (the "Fund") seeks to achieve a
high total return on investments through capital appreciation and current income
by investing primarily in obligations of the U.S. government and its agencies
and instrumentalities maturing in three to five years.
The Fund is a series of INVESCO Value Trust (the "Trust"), an open-end
management investment company consisting of three separate portfolios of
investments. This Prospectus relates to shares of INVESCO Intermediate
Government Bond Fund. Separate prospectuses are available upon request from
INVESCO Distributors, Inc. for the Trust's other two funds, INVESCO Value Equity
Fund and INVESCO Total Return Fund. Investors may purchase shares of any or all
funds. Additional funds may be offered in the future.
This Prospectus provides you with the basic information you should know
before investing in the Fund. You should read it and keep it for future
reference. A Statement of Additional Information containing further information
about the Fund, dated January 1, 1998, has been filed with the Securities and
Exchange Commission and is incorporated by reference into this Prospectus. To
obtain a free copy, write to INVESCO Distributors, Inc., P.O. Box 173706,
Denver, Colorado 80217-3706; call 1-800-525-8085; or visit our web site at
http://www.invesco.com.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE. SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, ANY BANK OR OTHER FINANCIAL INSTITUTION. THE SHARES
OF THE FUND ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY.
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<PAGE>
TABLE OF CONTENTS
Page
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ANNUAL FUND EXPENSES......................................................6
FINANCIAL HIGHLIGHTS......................................................8
PERFORMANCE DATA.........................................................10
INVESTMENT OBJECTIVE AND POLICIES........................................11
RISK FACTORS.............................................................12
THE TRUST AND ITS MANAGEMENT.............................................14
HOW SHARES CAN BE PURCHASED..............................................17
SERVICES PROVIDED BY THE TRUST...........................................20
HOW TO REDEEM SHARES.....................................................23
TAXES, DIVIDENDS AND OTHER DISTRIBUTIONS.................................25
ADDITIONAL INFORMATION...................................................26
<PAGE>
ANNUAL FUND EXPENSES
The Fund is ^ no-load; there are no fees to purchase, exchange or redeem
shares. The Fund, however, is authorized to pay a Rule 12b-1 distribution fee of
up to one quarter of one percent of the Fund's average net assets each year. The
12b-1 fee is assessed ^ against all shares, but only with respect to new sales
of shares, exchanges into the Fund and reinvestments of dividends and capital
gain distributions ("New Assets") occurring on or after November 1, 1997. Lower
expenses benefit Fund shareholders by increasing the Fund's total return.
Shareholder Transaction Expenses
Sales load "charge" on purchases None
Sales load "charge" on reinvested dividends None
Redemption fees None
Exchange fees None
Annual Fund Operating Expenses
(as a percentage of average net assets)
Management Fee 0.60%
12b-1 Fees^(1) 0.25%^
Other Expenses (after absorbed expenses)(2) ^ 0.17%^
Transfer Agency Fee(3) ^ 0.56%^
General Services, Administrative
Services, Registration, Postage (after
voluntary expense limitation)(2)(4)^ ^-0.39%^
Total Fund Operating Expenses
(after absorbed ^ expenses)(1)(2)(5) 1.02%
^(1) 12b-1 fees for the period ending August 31, 1998 may be less than
0.25% of average net New Assets.
(2) Certain Fund expenses are being voluntarily absorbed by INVESCO Funds
Group, Inc. ("IFG") to ensure that the Fund's annualized total operating
expenses do not exceed 1.00% of the Fund's average net assets. Ratio reflects
total expenses less absorbed expenses by IFG, before any expense offset
arrangements. In the absence of such voluntary expense limitation, the Fund's
"Other Expenses" and "Total Fund Operating Expenses" would have been 0.77% and
1.62%, respectively, based on the Fund's actual expenses for the fiscal year
ended August 31, 1997.
(3) Consists of the transfer agency fee described under "Additional
Information - Transfer and Dividend Disbursing Agent."
(4) Includes, but is not limited to, fees and expenses of trustees,
custodian bank, legal counsel and independent accountants, securities pricing
services, costs of administrative services furnished under an Administrative
Services Agreement, costs of registration of Fund shares under applicable laws,
and costs of printing and distributing reports to shareholders.
<PAGE>
(5) It should be noted that the Fund's actual total operating expenses
were lower than the figures shown because the Fund's custodian fees were reduced
under an expense offset arrangement. However, as a result of an SEC requirement
for mutual funds to state their total operating expenses without crediting any
such expense offset arrangement, the figures shown above do not reflect these
reductions. In comparing expenses for different years, please note that the
ratios of Expenses to Average Net Assets shown under "Financial Highlights" do
reflect reductions for periods prior to the fiscal year ended August 31, 1996.
(See "The Trust ^ and Its ^ Management.")
Example
A shareholder would pay the following expenses on a $1,000 investment for
the periods shown, assuming (1) a 5% annual return and (2) redemption at the end
of each time period:
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
$10 $33 $57 $125
The purpose of the foregoing table is to assist investors in understanding
the various costs and expenses that an investor in the Fund will bear directly
or indirectly. Such expenses are paid from the Fund's assets. (See "The Trust ^
and Its Management.") The above figures for INVESCO Intermediate Government Bond
Fund are based on fiscal year-end information. The Fund charges no sales load,
redemption fee or exchange fee. THE EXAMPLE SHOULD NOT BE CONSIDERED A
REPRESENTATION OF PAST OR FUTURE EXPENSES, AND ACTUAL EXPENSES MAY BE GREATER OR
LESS THAN THOSE SHOWN. The assumed 5% annual return is hypothetical and should
not be considered a representation of past or future annual returns, which may
be greater or less than the assumed amount.
Because the Fund pays a distribution fee, investors who own Fund shares
for a long period of time may pay more than the economic equivalent of the
maximum front-end sales charge permitted for mutual funds by the National
Association of Securities Dealers, Inc.
<PAGE>
FINANCIAL HIGHLIGHTS
(For a Fund Share Outstanding Throughout Each Period)
The following information for each of the four years ended August 31,
1997, the eight-month fiscal period ended August 31, 1993, and each of the ^
four years ended December 31, 1992, has been audited by Price Waterhouse LLP,
independent accountants. Prior years' information was audited by another
independent accounting firm. This information should be read in conjunction with
the audited financial statements and the report of independent accountants
thereon appearing in the Trust's 1997 Annual Report to Shareholders which is
incorporated by reference into the Statement of Additional Information. Both are
available without charge by contacting INVESCO Distributors, Inc., at the
address or telephone number on the cover of this Prospectus. All per share data
has been adjusted to reflect an 80 to 1 stock split which was effected on
January 2, 1991.
<TABLE>
<CAPTION>
Period
Ended
Year Ended August 31 August 31 Year Ended December 31
---------------------------------- --------- ---------------------------------------------------
1997 1996 1995 1994 1993^ 1992 1991 1990 1989 1988 1987
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value -
Beginning of Period $12.30 $12.64 $12.16 $13.25 $12.68 $12.89 $12.13 $12.07 $11.90 $12.19 $12.88
---------------------------------- -------- ---------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income 0.66 0.73 0.73 0.70 0.48 0.90 0.89 1.00 1.03 0.81 0.66
Net Gains or (Losses)
on Securities (Both
Realized and
Unrealized) 0.14 (0.34) 0.48 (0.75) 0.57 (0.16) 0.77 0.05 0.17 (0.28) (0.52)
---------------------------------- -------- ---------------------------------------------------
Total from Investment
Operations 0.80 0.39 1.21 (0.05) 1.05 0.74 1.66 1.05 1.20 0.53 0.14
---------------------------------- -------- ---------------------------------------------------
LESS DISTRIBUTIONS
Dividends from Net
Investment Income+ 0.66 0.73 0.73 0.70 0.48 0.90 0.90 0.99 1.03 0.82 0.83
Distributions from
Capital Gains 0.00 0.00 0.00 0.34 0.00 0.05 0.00 0.00 0.00 0.00 0.00
---------------------------------- -------- ---------------------------------------------------
Total Distributions 0.66 0.73 0.73 1.04 0.48 0.95 0.90 0.99 1.03 0.82 0.83
---------------------------------- -------- ---------------------------------------------------
Net Asset Value -
End of Period $12.44 $12.30 $12.64 $12.16 $13.25 $12.68 $12.89 $12.13 $12.07 $11.90 $12.19
================================== ======== ===================================================
<PAGE>
TOTAL RETURN 6.64% 3.12% 10.36% (0.37%) 8.38%* 6.03% 14.16% 9.08% 10.52% 5.48% 1.20%
RATIOS
Net Assets - End
of Period
($000 Omitted) $44,441 $39,949 $37,339 $31,861 $39,384 $29,649 $24,385 $18,380 $19,805 $18,042 $15,049
Ratio of Expenses
to Average
Net Assets# 1.02%@ 1.15%@ 1.20% 1.07% 0.96%~ 0.97% 0.93% 0.85% 0.85% 0.85% 0.94%
Ratio of Net
Investment Income
to Average
Net Assets# 5.32% 5.81% 6.04% 5.58% 5.48%~ 6.38% 7.28% 8.16% 8.45% 7.92% 7.31%
Portfolio Turnover
Rate 37% 63% 92% 49% 34%* 93% 51% 31% 52% 6% 28%
</TABLE>
^ From January 1, 1993 to August 31, 1993.
+ Distributions in excess of net investment income for the year ended August 31,
1994^ aggregated less than $0.01 on a per share basis.
* Based on operations for the period shown and, accordingly, are not
representative of a full year.
# Various expenses of the Fund were voluntarily absorbed by IFG for the years
ended August 31, 1997 and 1996, and the years ended December 31, 1990, 1989,
1988 and 1987. If such expenses had not been voluntarily absorbed, ratio of
expenses to average net assets would have been 1.37%, 1.24%, 0.96%, 1.00%, 1.08%
and 1.30%, respectively, and ratio of net investment income to average net
assets would have been 4.97%, 5.72%, 8.05%, 8.30%, 7.69% and 6.95%,
respectively.
@ Ratio is based on Total Expenses of the Fund, less Expenses Absorbed by
Investment Adviser, which is before any expense offset arrangements.
~ Annualized
Further information about the performance of the Fund is contained in the
Trust's Annual Report to Shareholders, which may be obtained without charge by
writing INVESCO Distributors, Inc., P.O. Box 173706, Denver, Colorado
80217-3706; or by calling 1-800-525-8085.
<PAGE>
PERFORMANCE DATA
From time to time, the Fund advertises its total return performance. These
figures are based upon historical investment results and are not intended to
indicate future performance. Total return is computed by calculating the
percentage change in value of an investment, assuming reinvestment of all income
dividends and capital gain distributions, to the end of a specified period.
Cumulative total return reflects actual performance over a stated period of
time. Average annual total return is a hypothetical rate of return that, if
achieved annually, would have produced the same cumulative total return if
performance had been constant over the entire period. Thus, a given report of
total return performance should not be considered as representative of future
performance. The Fund charges no sales load, redemption fee or exchange fee
which would affect total return computations.
The yield of the Fund is calculated by utilizing the Fund's calculated
income, expenses and average outstanding shares for the most recent 30-day or
one-month period, dividing it by the month-end net asset value and annualizing
the resulting number. Unlike "total return" quotations, quotations of "yield" do
not include the effect of capital changes. The Fund charges no sales load,
redemption fee or exchange fee. Accordingly, both purchase price and redemption
price equal net asset value per share, and no adjustments are made in either
yield or total return performance calculations to reflect nonrecurring charges.
In conjunction with performance reports and/or analyses of shareholder
service for the Fund, comparative data between the Fund's performance or yield
for a given period and the performance of recognized bond indices and indices of
investment results for the same period and/or assessments of the quality of
shareholder service may be provided to shareholders. Such indices include
indices provided by Dow Jones & Company, Standard & Poor's ^, a division of The
McGraw-Hill Companies, Inc., Lipper Analytical Services, Inc., Lehman Brothers,
National Association of Securities Dealers Automated Quotations, Frank Russell
Company, Value Line Investment Survey, the American Stock Exchange, Morgan
Stanley Capital International, Wilshire Associates, the Financial Times Stock
Exchange, the New York Stock Exchange, the Nikkei Stock Average and the Deutcher
Aktienindex, all of which are unmanaged market indicators. In addition,
rankings, ratings and comparisons of investment performance and/or assessments
of the quality of shareholder service appearing in publications such as Money,
Forbes, Kiplinger's Personal Finance, Morningstar and similar sources which
utilize information compiled (i) internally; (ii) by Lipper Analytical Services,
Inc.; or (iii) by other recognized analytical services, may be used in
advertising. The Lipper Analytical Services, Inc. mutual fund rankings and
comparisons, which may be used by the Fund in performance reports, will be drawn
from the "Intermediate U.S. Government Funds" Lipper mutual fund groupings, in
addition to the broad-based Lipper general fund grouping.
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
The Trust consists of three separate portfolios of investments (referred
to as the "Funds"), each represented by a different series of the Trust's
shares. This Prospectus relates to INVESCO Intermediate Government Bond Fund;
separate prospectuses for INVESCO Value Equity Fund and INVESCO Total Return
Fund are available. The investment objective of the Fund is to seek a high total
return on investment through capital appreciation and current income. Funds
having an investment objective of seeking a high total return may be limited in
their ability to obtain their objective by the limitations on the types of
securities in which they may invest. ^ No assurance can be given that the Fund
will be able to achieve its investment objective.
The Fund invests primarily in obligations of the U.S. government and its
agencies and instrumentalities maturing in three to five years. Under normal
circumstances, at least 65% of the Fund's total assets will be invested in
government obligations consisting of direct obligations of the U.S. government
(U.S. Treasury Bills, Notes and Bonds), obligations guaranteed by the U.S.
government, such as Government National Mortgage Association obligations, and
obligations of U.S. government authorities, agencies and instrumentalities,
which are supported only by the assets of the issuer, such as Fannie Mae
(formerly, Federal National Mortgage Association), Federal Home Loan Banks,
Federal Financing Bank and Federal Farm Credit Bank. The remaining 35% of the
Fund's total assets may be invested under normal circumstances in corporate debt
obligations which are rated by Moody's Investors Service, Inc. ("Moody's") in
its four highest ratings of corporate obligations (Aaa, Aa, A and Baa) or by
Standard & Poor's ^, a division of The McGraw-Hill Companies, Inc. ("S&P") in
its four highest ratings of corporate obligations (AAA, AA, A and BBB) or, if
not rated, ^ in the opinion of the Fund's investment adviser or sub-adviser
(collectively, "Fund Management") have investment characteristics similar to
those described in such ratings. A bond rating of Baa by Moody's indicates that
the bond issue is of "medium grade," neither highly protected nor poorly
secured. Interest payments and principal security appear adequate for the
present, but certain protective elements may be lacking or may be
characteristically unreliable over any great length of time. Such bonds lack
outstanding investment characteristics and have speculative characteristics as
well. A bond rating of BBB by S&P indicates that the bond issue is in the lowest
"investment grade" security rating. Bonds rated BBB are regarded as having an
adequate capacity to pay principal and interest. Whereas they normally exhibit
adequate protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay principal
and interest for bonds in this category than for bonds in the A category, and
they may have speculative characteristics. (See Appendix A to the Statement of
Additional Information for specific descriptions of these corporate bond rating
categories.) The dollar weighted average maturity of the Fund's investments will
normally be from three to ten years.^
<PAGE>
Obligations of certain U.S. government agencies and instrumentalities may
not be supported by the full faith and credit of the United States. Some are
backed by the right of the issuer to borrow from the U.S. Treasury; others, such
as the obligations of Fannie Mae (formerly, Federal National Mortgage
Association), by discretionary authority of the U.S. government to purchase the
agencies' obligations; while still others, such as obligations of the Student
Loan Marketing Association, are supported only by the credit of the
instrumentality. In the case of securities not backed by the full faith and
credit of the United States, the Fund must look principally to the agency
issuing or guaranteeing the obligation for ultimate repayment and may not be
able to assert a claim against the United States itself in the event the agency
or instrumentality does not meet its commitments. The Fund will invest in
securities of such instrumentalities only when Fund Management is satisfied that
the credit risk with respect to any such instrumentality is minimal.
The investment objective of the Fund and its investment policies, where
indicated, are deemed to be fundamental policies and thus may not be changed
without prior approval by the holders of a majority of its outstanding voting
securities of the Fund, as defined in the Investment Company Act of 1940 (the
"1940 Act"). In addition, the Trust and this Fund are subject to certain
investment restrictions which are set forth in the Statement of Additional
Information and which also may not be altered without approval of the Fund's
shareholders. One of those restrictions limits the Fund's borrowing of money to
borrowings from banks for temporary or emergency purposes (but not for
leveraging or investment) in an amount not exceeding 33 1/3% of the value of the
Fund's total assets.
RISK FACTORS
Investors should consider the special factors associated with the policies
discussed below in determining the appropriateness of an investment in the
INVESCO Intermediate Government Bond Fund. The Fund's policies regarding
investments in foreign securities and foreign currencies are not fundamental and
may be changed by vote of the Trust's board of trustees.
Interest Rate Risk. The obligations in which the Fund invests are subject
to interest rate risk, which means that their values and, therefore, the net
asset value of the Fund, can be expected to fall when interest rates rise. The
Fund attempts to reduce this risk through diversification, credit analysis and
attention to interest rate trends and other factors.
Foreign Securities. The Fund may invest up to 25% of its total assets in
foreign securities, although it currently does not intend to invest more than 5%
of its total assets in foreign securities. Investments in securities of foreign
companies and in foreign debt or equity markets involve certain additional risks
not associated with investments in domestic companies and markets, including the
risks of fluctuations in foreign currency exchange rates and of political or
economic instability, the difficulty of predicting international trade patterns,
and the possibility of imposition of exchange controls or currency blockage. In
addition, there may be less information publicly available about a foreign
<PAGE>
company than about a domestic company, and there is generally less government
regulation of stock exchanges, brokers and listed companies abroad than in the
United States. Moreover, with respect to certain foreign countries, there may be
a possibility of expropriation or confiscatory taxation. Further, economies of
particular countries or areas of the world may differ favorably or unfavorably
from the economy of the United States. As one way of managing exchange rate
risk, the Fund may enter into forward foreign currency exchange contracts (i.e.,
purchasing or selling foreign currencies at a future date). For additional
information regarding forward foreign currency exchange contracts, see the
Trust's Statement of Additional Information.
Repurchase Agreements. The Fund may engage in repurchase agreements with
banks, registered broker-dealers and registered government securities dealers,
which are deemed creditworthy by Fund Management under guidelines established by
the board of trustees. A repurchase agreement is a transaction in which the Fund
purchases a security and simultaneously commits to sell the security to the
seller at an agreed upon price and date (usually not more than seven days) after
the date of purchase. The resale price reflects the purchase price plus an
agreed upon market rate of interest which is unrelated to the coupon rate or
maturity of the purchased security. The Fund's risk is limited to the ability of
the seller to pay the agreed upon amount on the delivery date. However, in the
event the seller should default, the underlying security constitutes collateral
for the seller's obligations to pay. This collateral will be held by the
custodian for the Fund's assets. ^ In the event of the insolvency of a
counterparty to a repurchase agreement, the Fund could experience delays and
incur costs in realizing on the collateral. To the extent that the proceeds from
a sale upon a default in the obligation to repurchase are less than the
repurchase price, the Fund would suffer a loss. Although the Fund has not
adopted any limit on the amount of its total assets that may be invested in
repurchase agreements, the Fund intends that at no time will the market value of
the Fund's securities subject to repurchase agreements exceed 20% of the total
assets of the Fund.
Illiquid Securities. The Fund may invest from time to time in securities
subject to restrictions on disposition under the Securities Act of 1933
("restricted securities"), securities without readily available market
quotations or illiquid securities (those which cannot be sold in the ordinary
course of business within seven days at approximately the valuation given to
them by the Fund). However, on the date of purchase, no such investment may
increase the Fund's holdings of restricted securities to more than 2% of the
value of the Fund's total assets or its holdings of illiquid securities or those
without readily available market quotations to more than 5% of the value of the
Fund's total assets. The Fund is not required to receive registration rights in
connection with the purchase of restricted securities and, in the absence of
such rights, marketability and value can be adversely affected because the Fund
may be unable to dispose of such securities at the time desired or at a
reasonable price. In addition, in order to resell a restricted security, the
Fund might have to bear the expense and incur the delays associated with
effecting registrations.
^
<PAGE>
Securities Lending. The Fund may make loans of its portfolio securities
(not to exceed 10% of the Fund's total assets) to broker-dealers or other
institutional investors under contracts requiring such loans to be callable at
any time and to be secured continuously by collateral in cash, cash equivalents,
high quality short-term government securities or irrevocable letters of credit
maintained on a current basis at an amount at least equal to the market value of
the securities loaned, including accrued interest and dividends. The Fund will
continue to collect the equivalent of the interest or dividends paid by the
issuer on the securities loaned and will also receive either interest (through
investment of cash collateral) or a fee (if the collateral is government
securities). The Fund may pay finder's and other fees in connection with
securities loans.
Portfolio Turnover. There are no fixed limitations regarding portfolio
turnover for the Fund. Although the Fund does not trade for short-term profits,
securities may be sold without regard to the time they have been held in the
Fund when, in the opinion of Fund Management, market considerations warrant such
action. As a result, while it is anticipated that the Fund's annual portfolio
turnover rate generally will not exceed 100%, under certain market conditions
the portfolio turnover rate for the Fund may exceed 100%. Increased portfolio
turnover would cause the Fund to incur greater brokerage costs than would
otherwise be the case. The Fund's portfolio turnover rates are set forth under
"Financial Highlights" and, along with the Trust's brokerage allocation
policies, are discussed in the Statement of Additional Information.
THE TRUST AND ITS MANAGEMENT
The Trust is a no-load mutual fund, registered with the Securities and
Exchange Commission as an open-end, diversified management investment company.
The Trust was organized on July 15, 1987, under the laws of the Commonwealth of
Massachusetts as "Financial Series Trust." On July 1, 1993, the Trust changed
its name to "INVESCO Value Trust." The overall supervision of the ^ Fund is the
responsibility of ^ the Trust's board of trustees.
INVESCO Funds Group, Inc. ("IFG"), 7800 E. Union Avenue, Denver, Colorado,
serves as the Trust's investment adviser pursuant to an investment advisory
agreement. Under this agreement, IFG provides the Fund with various management
services and supervises the Fund's daily business affairs. Specifically, IFG
performs all administrative, clerical, statistical, secretarial and all other
services necessary or incidental to the administration of the affairs of the
Trust, excluding, however, those services that are the subject of a separate
agreement between the Trust and IFG or any affiliate thereof. Services provided
pursuant to separate agreement include the distribution and sale of Trust shares
and provision of transfer agency, dividend disbursing agency and registrar
services, and services furnished under an Administrative Services Agreement with
IFG dated as of February 28, 1997. ^
IFG has contracted with INVESCO Capital Management, Inc. ("ICM"), the
Trust's investment adviser prior to 1991, for investment sub-advisory and
research services on behalf of the Fund. ICM currently manages in excess of ^
$40 billion of assets on behalf of tax-exempt accounts (such as pension and
<PAGE>
profit-sharing funds for corporations and state and local governments) and
investment companies. ICM, subject to the supervision of IFG, is primarily
responsible for selecting and managing the Fund's investments. Although the
Trust is not a party to the sub-advisory agreement, the agreement has been
approved by the shareholders of the Trust. Services provided by IFG and ICM are
subject to review by the Trust's board of trustees.
Pursuant to an agreement with the Trust, effective September 30, 1997,
INVESCO Distributors, Inc. ("IDI") became the Fund's distributor. IDI,
established in 1997, is a registered broker-dealer that acts as distributor for
all retail mutual funds advised by IFG. Prior to September 30, 1997, IFG served
as the Fund's distributor.
IFG, ICM and IDI are indirect wholly-owned subsidiaries of AMVESCAP PLC.
AMVESCAP PLC is a publicly-traded holding company that, through its
subsidiaries, engages in the business of investment management on an
international basis. INVESCO PLC changed its name to AMVESCO PLC on March 3,
1997 and to AMVESCAP PLC on May 8, 1997, as part of a merger between a direct
subsidiary of INVESCO PLC and A I M Management Group Inc., that created one of
the largest independent investment management businesses in the world. IFG and
ICM ^ continue to operate under their existing names. Together, IFG and ICM
constitute "Fund Management." AMVESCAP PLC has approximately $177.5 billion in
assets under management. IFG was established in 1932 and, as of August 31, 1997,
managed 14 mutual funds, consisting of ^ 45 separate portfolios, with combined
assets of approximately $15.9 billion on behalf of over 854,448 shareholders. ^
The following individuals serve as portfolio managers for the Fund and are
primarily responsible for the day-to-day management of the Fund's portfolio of
securities:
James O. Baker Portfolio manager of the Fund since 1993;
portfolio manager of the INVESCO Total Return Fund
since 1997; portfolio manager of INVESCO Capital
Management, Inc. (1992 to present); portfolio
manager, Willis Investment Counsel (1990 to 1992);
broker, Morgan Keegan (1989 to 1990); broker,
Drexel Burnham Lambert (1985 to 1990); began
investment career in 1977; B.A., Mercer
University; Chartered Financial Analyst.
Ralph H. Jenkins, Jr. Assistant portfolio manager of the Fund since
1993; vice president (1991 to present) and
portfolio manager (1988 to present) of INVESCO
Capital Management, Inc.; began investment career
in 1969; B.B.C., Auburn University; M.A.,
University of Alabama; Chartered Financial
Analyst; Chartered Investment Counselor.
<PAGE>
Under the investment advisory agreement, the Fund pays IFG a monthly fee
at the following annual rates, based on the average net assets of the Fund:
0.60% on the first $500 million of the Fund's average net assets; 0.50% on the
next $500 million of the Fund's average net assets; and 0.40% on the average net
assets of the Fund in excess of $1 billion. For the fiscal year ended August 31,
1997, the advisory fees paid to IFG amounted to 0.60% of the average net assets
of the Fund.
Out of its advisory fee which it receives from the Fund, IFG pays ICM, as
the Fund's sub-adviser, a monthly fee, which is computed at the following annual
rates: prior to January 1, 1998, 0.16% on the first $500 million of the Fund's
average net assets, 0.13% on the next $500 million of the Fund's average net
assets and 0.11% on the Fund's average net assets in excess of $1 billion and
effective January 1, 1998, 0.20% on the first $500 million of the Fund's average
net assets, 0.1667% on the next $500 million of the Fund's average net assets,
and 0.1333% on the Fund's average net assets in excess of $1 billion. No fee is
paid by the Fund to ICM.
The Fund bears those Trust expenses which are accrued daily that are
incurred on its behalf and, in addition, bears a portion of general Trust
expenses, allocated based upon the relative net assets of the three Funds of the
Trust. Such expenses are generally deducted from the Fund's total income before
dividends are paid. Total expenses of the Fund for the fiscal year ended August
31, 1997, including investment advisory fees (but excluding brokerage
commissions), amounted to 1.02% (prior to expense offset arrangements) of the
Fund's average net assets. Certain Fund expenses are being absorbed voluntarily
by IFG pursuant to a commitment to the Fund in order to ensure that the Fund's
total expenses do not exceed 1.00% of the Fund's average net assets. This
commitment may be changed following consultation with the Trust's board of
trustees.
The Trust also has entered into an Administrative Services Agreement (the
"Administrative Agreement") with IFG. Pursuant to the Administrative Agreement,
IFG performs certain administrative and internal accounting services, including,
without limitation, maintaining general ledger and capital stock accounts,
preparing a daily trial balance, calculating net asset value daily and providing
selected general ledger reports and providing sub- accounting and recordkeeping
services for the shareholder accounts maintained by certain retirement and
employee benefit plans for the benefit of participants in such plans. For such
services, the Fund pays IFG a fee consisting of a base fee of $10,000 per year,
plus an additional incremental fee computed at an annual rate not to exceed a
maximum of 0.015% per annum of the average net assets of the ^ Fund.
The Declaration of Trust pursuant to which the Trust is organized contains
an express disclaimer of shareholder liability for acts or obligations of the
Trust and requires that notice of such disclaimer be given in each instrument
entered into or executed by the Trust. The Declaration of Trust also provides
for indemnification out of the Trust's property for any shareholder held
personally liable for any Trust obligation. Thus, the risk of a shareholder
being personally liable for obligations of the Trust is limited to the unlikely
circumstance in which the Trust itself would be unable to meet its obligations.
<PAGE>
Fund Management places orders for the purchase and sale of portfolio
securities with brokers and dealers based upon their evaluation of such broker-^
dealers' financial responsibility coupled with the broker-^ dealers' ability to
effect transactions at the best available prices. The Trust may place orders for
portfolio transactions with qualified broker-dealers that recommend the various
funds of the Trust to clients, or act as agent in the purchase of fund shares
for clients, if Fund Management believes that the quality of the execution of
the transaction and level of commission are comparable to those available from
other qualified brokerage firms. For further information, see "Investment
Practices -- Placement of Portfolio Brokerage" in the Statement of Additional
Information.
Fund Management permits investment and other personnel to purchase and
sell securities for their own accounts, subject to a compliance policy governing
personal investing. This policy requires Fund Management's personnel to conduct
their personal investment activities in a manner that Fund Management believes
is not detrimental to the Fund or Fund Management's other advisory clients. See
the Statement of Additional Information for more detailed information.
HOW SHARES CAN BE PURCHASED
Shares of the Fund are sold on a continuous basis by IDI, as the Fund's
distributor, at the net asset value per share next calculated after receipt of a
purchase order in good form. No sales charge is imposed upon the sale of shares
of the Fund. To purchase shares of the Fund, send a check made payable to
INVESCO Funds Group, Inc., together with a completed application form, to:
INVESCO FUNDS GROUP, INC.
Post Office Box 173706
Denver, Colorado 80217-3706
PURCHASE ORDERS MUST SPECIFY THE FUND IN WHICH THE INVESTMENT IS TO BE
MADE.
The minimum initial purchase must be at least $1,000, with subsequent
investments of not less than $50, except that: (1) those shareholders
establishing an EasiVest or direct payroll purchase account, as described below
in the section entitled "Services Provided by the Trust," may open an account
without making any initial investment if they agree to make regular, minimum
purchases of at least $50; (2) those shareholders investing in an Individual
Retirement Account ("IRA"), or through omnibus accounts where individual
shareholder recordkeeping and sub-accounting are not required, may make initial
minimum purchases of $250; (3) Fund Management may permit a lesser amount to be
invested in the Fund under a federal income tax-deferred retirement plan (other
than an IRA), or under a group investment plan qualifying as a sophisticated
investor; and (4) Fund Management reserves the right to increase, reduce or
waive the minimum purchase requirements in its sole discretion where it
determines such action is in the best interests of the Fund. The minimum initial
purchase requirement of $1,000, as described above, does not apply to
shareholder account(s) in any of the INVESCO funds opened prior to January 1,
1993, and thus is not a minimum balance requirement for those existing accounts.
<PAGE>
However, for shareholders already having accounts in any of the INVESCO funds,
all initial share purchases in a new fund account, including those made using
the exchange privilege, must meet the fund's applicable minimum investment
requirement.
The purchase of shares in the Fund can be expedited by placing bank wire,
overnight courier or telephone orders. For further information, the purchaser
may call the Trust's office by using the telephone number on the cover of this
Prospectus. Orders sent by overnight courier, including Express Mail, should be
sent to the street address, not Post Office Box, of INVESCO Funds Group, Inc.,
7800 E. Union Avenue, Denver, Colorado 80237.
Orders to purchase Fund shares can be placed by telephone. Shares of the
Fund will be issued at the net asset value next determined after receipt of
telephone instructions. Generally, payments for telephone orders must be
received by the Trust within three business days or the transaction may be
cancelled. In the event of such cancellation, the purchaser will be held
responsible for any loss resulting from a decline in the value of the shares. In
order to avoid such losses, purchasers should send payments for telephone
purchases by overnight courier or bank wire. IFG has agreed to indemnify the
Trust for any losses resulting from the cancellation of telephone purchases.
If your check does not clear, or if a telephone purchase must be cancelled
due to nonpayment, you will be responsible for any related loss the Fund or IFG
incurs. If you are already a shareholder in the INVESCO funds, the Fund has the
option to redeem shares from any identically registered account in the Fund or
any other INVESCO fund as reimbursement for any loss incurred. You also may be
prohibited or restricted from making future purchases in any of the INVESCO
funds.
^ The Fund shares you order will not begin earning dividends or other
distributions until your payment can be converted into available federal funds
under regular banking procedures or, if you are acquiring shares in an exchange
from another INVESCO fund, the Fund receives the proceeds of the exchange.
Checks normally are converted into federal funds (moneys held on deposit within
the Federal Reserve System) within two or three business days after they have
been received by IFG, although this period may be longer for checks drawn on
banks that are not members of the Federal Reserve System.
Persons who invest in the Fund through a securities broker may be charged
a commission or transaction fee by the broker for the handling of the
transaction if the broker so elects. Any investor may deal directly with the
Fund in any transaction. In that event, there is no such charge. IFG or IDI may
from time to time make payments from its revenues to securities dealers and
other financial institutions that provide distribution-related and/or
administrative services for the Fund.
The Fund reserves the right in its sole discretion to reject any order for
purchase of its shares (including purchases by exchange) when, in the judgment
of Fund Management, such rejection is in the best interest of the Fund.
<PAGE>
Net asset value per share is computed once each day that the New York Stock
Exchange is open as of the close of regular trading on that Exchange (generally
4:00 p.m., New York time) and also may be computed on other days under certain
circumstances. Net asset value per share for the Fund is calculated by dividing
the market value of the Fund's securities plus the value of its other assets
(including dividends and interest accrued but not collected), less all
liabilities (including accrued expenses), by the number of outstanding shares of
the Fund. If market quotations are not readily available, a security will be
valued at fair value as determined in good faith by the board of trustees. Debt
securities with remaining maturities of 60 days or less at the time of purchase
will be valued at amortized cost, absent unusual circumstances, so long as the
Trust's board of trustees believes that such value represents fair value.
Under certain circumstances, the Fund may offer its shares, in lieu of
cash payment, for securities to be purchased by the Fund. Such a transaction can
benefit the Fund by allowing it to acquire securities for its portfolio without
paying brokerage commissions. For the same reason, the transaction also may be
beneficial to the party exchanging the securities. The Fund shall not enter into
such transactions, however, unless the securities to be exchanged for Fund
shares are readily marketable and not restricted as to transfer either by law or
liquidity of the market, comply with the investment policies and objectives of
the Fund, are of the type and quality which would normally be purchased for the
Fund's portfolio, are acquired for investment and not for resale, have a value
which is readily ascertainable as evidenced by a listing on the American Stock
Exchange, the New York Stock Exchange or NASDAQ, and are securities which the
Fund would otherwise purchase on the open market. The value of Fund shares used
to purchase portfolio securities as stated herein will be the net asset value as
of the effective time and date of the exchange. The securities to be received by
the Fund will be valued in accordance with the same procedure used in valuing
the Fund's portfolio securities. Any investor wishing to acquire shares of the
Fund in exchange for securities should contact either the president or the
secretary of the Trust at the address or telephone number shown on the cover
page of this Prospectus.
Distribution Expenses. The Fund is authorized under a Plan and Agreement of
Distribution pursuant to Rule 12b-1 under the Investment Company Act of 1940
(the "Plan") to use its assets to finance certain activities relating to the
distribution of its shares to investors. The Plan applies to New Assets (new
sales of shares, exchanges into the Fund and reinvestments of dividends and
capital gain distributions) of the Fund after November 1, 1997. Under the Plan,
monthly payments may be made by the Fund to IDI to permit IDI, at its
discretion, to engage in certain activities, and provide certain services
approved by the board of trustees in connection with the distribution of the
Fund's shares to investors. These activities and services may include the
payment of compensation (including incentive compensation and/or continuing
compensation based on the amount of customer assets maintained in the Fund) to
securities dealers and other financial institutions and organizations, which may
include IDI-affiliated companies, to obtain various distribution-related and/or
administrative services for the Fund. Such services may include, among other
things, processing new shareholder account applications, preparing and
<PAGE>
transmitting to the Fund's transfer agent computer-processable tapes of all
transactions by customers, and serving as the primary source of information to
customers in answering questions concerning the Fund and their transactions with
the Fund.
In addition, other permissible activities and services include
advertising, the preparation, printing and distribution of sales literature,
printing and distribution of prospectuses to prospective investors, and such
other services and promotional activities for the Fund as may from time to time
be agreed upon by the Trust and the board of trustees, including public
relations efforts and marketing programs to communicate with investors and
prospective investors. These services and activities may be conducted by the
staff of IDI or its affiliates or by third parties.
Under the Plan, the Trust's payments to IDI on behalf of the Fund are
limited to an amount computed at an annual rate of 0.25% of the Fund's ^ average
net New Assets. IDI is not entitled to payment for overhead expenses under the
Plan, but may be paid for all or a portion of the compensation paid for salaries
and other employee benefits for the personnel of IFG or IDI whose primary
responsibilities involve marketing shares of the INVESCO Mutual Funds, including
the Fund. Payment amounts by the Fund under the Plan, for any month, may be made
to compensate IDI for permissible activities engaged in and services provided by
IDI during the rolling 12-month period in which that month falls. Therefore, any
obligations incurred by IDI in excess of the limitations described above will
not be paid by the Fund under the Plan, and will be borne by IDI. In addition,
IDI and its affiliates may from time to time make additional payments from its
revenues to securities dealers and other financial institutions that provide
distribution-related and/or administrative services for the Fund. No further
payments will be made by the Fund under the Plan in the event of its
termination. Also, any payments made by the Fund may not be used to finance
directly the distribution of shares of any other Fund of the Trust or other
mutual fund advised by IFG. Payments made by the Fund under the Plan for
compensation of marketing personnel, as noted above, are based on an allocation
formula designed to ensure that all such payments are appropriate. IDI will bear
any distribution- and service-related expenses in excess of the amounts which
are compensated pursuant to the Plan. The Plan also authorizes any financing of
distribution which may result from IDI's use of its own resources, including
profits from investment advisory fees received from the Fund, provided that such
fees are legitimate and not excessive. For more information see see "How Shares
Can Be Purchased" in the Statement of Additional Information.
SERVICES PROVIDED BY THE TRUST
Shareholder Accounts. IFG maintains a share account that reflects the
current holdings of each shareholder. A separate account will be maintained for
a shareholder for each fund in which the shareholder invests. As a business
trust, the Trust does not issue share certificates. Each shareholder is sent a
detailed confirmation of each transaction in shares of the Trust. Shareholders
<PAGE>
whose only transactions are through the EasiVest, direct payroll purchase,
automatic monthly exchange or periodic withdrawal programs, or are reinvestments
of dividends or capital gains in the same or another fund, will receive
confirmations of those transactions on their quarterly statements. These
programs are discussed below. For information regarding a shareholder's account
and transactions, the shareholder may call IFG by using the telephone number on
the cover of this Prospectus.
Reinvestment of Distributions. Dividends and other distributions are
automatically reinvested in additional shares of the Fund at the net asset value
per share of the Fund in effect on the ex-dividend or ex-distribution date. A
shareholder may, however, elect to reinvest dividends and other distributions in
certain of the other no-load mutual funds advised by IFG and distributed by IDI,
or to receive payment of all dividends and other distributions in excess of
$10.00 by check by giving written notice to IFG at least two weeks prior to the
record date on which the change is to take effect. Further information
concerning these options can be obtained by contacting IFG.
Periodic Withdrawal Plan. A Periodic Withdrawal Plan is available to
shareholders who own or purchase shares of any mutual funds advised by IFG
having a total value of $10,000 or more; provided, however, that at the time the
Plan is established, the shareholder owns shares having a value of at least
$5,000 in the fund from which the withdrawals will be made. Under the Periodic
Withdrawal Plan, IFG, as agent, will make specified monthly or quarterly
payments of any amount selected (minimum payment of $100) to the party
designated by the shareholder. Notice of all changes concerning the Periodic
Withdrawal Plan must be received by IFG at least two weeks prior to the next
scheduled check. Further information regarding the Periodic Withdrawal Plan and
its requirements and tax consequences can be obtained by contacting IFG.
Exchange Policy. Shares of the Fund may be exchanged for shares of any
other fund of the Trust, as well as for shares of any of the following other
no-load mutual funds, which are also advised by IFG, on the basis of their
respective net asset values at the time of the exchange: INVESCO Capital
Appreciation Funds, Inc. (formerly, INVESCO Dynamics Fund, Inc.), INVESCO
Diversified Funds, Inc., INVESCO Emerging Opportunity Funds, Inc., INVESCO
Growth Fund, Inc., INVESCO Income Funds, Inc., INVESCO Industrial Income Fund,
Inc., INVESCO International Funds, Inc., INVESCO Money Market Funds, Inc.,
INVESCO Multiple Asset Funds, Inc., INVESCO Specialty Funds, Inc., INVESCO
Strategic Portfolios, Inc. and INVESCO Tax-Free Income Funds, Inc.
An exchange involves the redemption of shares in the Fund and investment
of the redemption proceeds in shares of another fund of the Trust or in shares
of one of the funds listed above. Exchanges will be made at the net asset value
per share next determined after receipt of an exchange request in proper order.
Any gain or loss realized on such an exchange is recognizable for federal income
tax purposes by the shareholder. Exchange requests may be made either by
telephone or by written request to IFG, using the telephone number or address on
the cover of this Prospectus. Exchanges made by telephone must be in the amount
<PAGE>
of at least $250, if the exchange is being made into an existing account of one
of the INVESCO funds. All exchanges that establish a new account must meet the
fund's applicable minimum initial investment requirements. Written exchange
requests into an existing account have no minimum requirements other than the
fund's applicable minimum subsequent investment requirements.
The option to exchange Fund shares by telephone is available to
shareholders automatically unless expressly declined. By signing the new account
Application or a Telephone Transaction Authorization Form or otherwise utilizing
the telephone exchange option, the investor has agreed that the Fund will not be
liable for following instructions communicated by telephone that it reasonably
believes to be genuine. The Fund employs procedures, which it believes are
reasonable, designed to confirm that exchange transactions are genuine. These
may include recording telephone instructions and providing written confirmations
of exchange transactions. As a result of this policy, the investor may bear the
risk of any loss due to unauthorized or fraudulent instructions; provided,
however, that if the Fund fails to follow these or other reasonable procedures,
the Fund may be liable.
In order to prevent abuse of this policy to the disadvantage of other
shareholders, the Fund reserves the right to terminate the exchange option of
any shareholder who requests more than four exchanges in a year. The Fund will
determine whether to do so based on a consideration of both the number of
exchanges any particular shareholder or group of shareholders has requested and
the time period over which those exchange requests have been made, together with
the level of expense to the Fund which will result from effecting additional
exchange requests. The exchange policy also may be modified or terminated at any
time. Except for those limited instances where redemptions of the exchanged
security are suspended under Section 22(e) of the 1940 Act, or where sales of
the fund into which the shareholder is exchanging are temporarily stopped,
notice of all such modifications or termination of the exchange policy will be
given at least 60 days prior to the date of termination or the effective date of
the modification.
Before making an exchange, the shareholder should review the prospectuses
of the funds involved and consider their differences. Shareholders interested in
exercising the exchange option may contact IFG for information concerning their
particular exchanges.
Automatic Monthly Exchange. Shareholders who have accounts in any one or
more of the mutual funds distributed by IDI may arrange for a fixed dollar
amount of their fund shares to be automatically exchanged for shares of any
other INVESCO mutual fund listed under "Exchange Policy" on a monthly basis,
subject to the Fund's minimum initial investment or subsequent investment
requirements. This automatic exchange program can be changed by the shareholder
at any time by notifying IFG at least two weeks prior to the date the change is
to be made. Further information regarding this service can be obtained by
contacting IFG.
<PAGE>
EasiVest. For shareholders who want to maintain a schedule of monthly
investments, EasiVest uses various methods to draw a preauthorized amount from
the shareholder's bank account to purchase Fund shares. This automatic
investment program can be changed by the shareholder at any time by notifying
IFG at least two weeks prior to the date the change is to be made. Further
information regarding this service can be obtained by contacting IFG.
Direct Payroll Purchase. Shareholders may elect to have their employers
make automatic purchases of Fund shares for them by deducting a specified amount
from their regular paychecks. This automatic investment program can be modified
or terminated at any time by the shareholder by notifying the employer. Further
information regarding this service can be obtained by contacting IFG.
Tax-Deferred Retirement Plans. Shares of the Fund may be purchased for
self-employed individual retirement plans, various IRAs, ^ simplified employee
pension plans and corporate retirement plans. In addition, shares can be used to
fund tax qualified plans established under Section 403(b) of the Internal
Revenue Code by educational institutions, including public school systems and
private schools, and certain kinds of non-profit organizations, which provide
deferred compensation arrangements for their employees.
Prototype forms for the establishment of these various plans, including,
where applicable, disclosure statements required by the Internal Revenue
Service, are available from IFG. INVESCO Trust Company, a subsidiary of IFG, is
qualified to serve as trustee or custodian under these plans and provides the
required services at competitive rates. Retirement plans (other than IRAs)
receive monthly statements reflecting all transactions in their Fund accounts.
IRAs receive the confirmations and quarterly statements described under
"Shareholder Accounts." For complete information, including prototype forms and
service charges, call ^ IFG at the telephone number listed on the cover of this
^ Prospectus or send a written request to: Retirement Services, INVESCO Funds
Group, Inc., Post Office Box 173706, Denver, Colorado 80217-3706.
HOW TO REDEEM SHARES
Shares of the Fund may be redeemed at any time at their current net asset
value next determined after a request in proper form is received at the Trust's
office. (See "How Shares Can Be Purchased.") Net asset value per share of the
Fund at the time of the redemption may be more or less than the price originally
paid to purchase shares.
In order to redeem shares, a written redemption request signed by each
registered owner of the account may be submitted to IFG at the address noted
above. Redemption requests sent by overnight courier, including Express Mail,
should be sent to the street address, not Post Office Box, of INVESCO Funds
Group, Inc. at 7800 E. Union Avenue, Denver, CO 80237. If shares are held in the
name of a corporation, additional documentation may be necessary. Call or write
<PAGE>
for ^ specific information. If payment for the redeemed shares is to be made to
someone other than the registered owner(s), the signature(s) must be guaranteed
by a financial institution which qualifies as an eligible guarantor institution.
Redemption procedures with respect to accounts registered in the names of
broker-dealers may differ from those applicable to other shareholders.
Be careful to specify the account from which the redemption is to be made.
Shareholders have a separate account for each fund in which they invest.
Payment of redemption proceeds will be mailed within seven days following
receipt of the required documents. However, payment may be postponed under
unusual circumstances, such as when normal trading is not taking place on the
New York Stock Exchange or when an emergency as defined by the Securities and
Exchange Commission exists. If the shares to be redeemed were purchased by check
and that check has not yet cleared, payment will be made promptly upon clearance
of the purchase check (which will take up to 15 days).
If a shareholder participates in EasiVest, the Fund's automatic monthly
investment program, and redeems all of the shares in a Fund account, IFG will
terminate any further EasiVest purchases unless otherwise instructed by the
shareholder.
Because of the high relative costs of handling small accounts, should the
value of any shareholder's account fall below $250 as a result of shareholder
action, the Trust reserves the right to effect the involuntary redemption of all
shares in such account, in which case the account would be liquidated and the
proceeds forwarded to the shareholder. Prior to any such redemption, a
shareholder will be notified and given 60 days to increase the value of the
account to $250 or more.
Fund shareholders (other than shareholders holding Fund shares in accounts
of IRA plans) may request expedited redemption of shares having a minimum value
of $250 (or redemption of all shares if their value is less than $250), held in
accounts maintained in their name by telephoning redemption instructions to IFG,
using the telephone number on the cover of this Prospectus. For INVESCO Trust
Company-sponsored federal income tax-deferred retirement plans, the term
"shareholders" is defined to mean plan trustees that file a written request to
be able to redeem Fund shares by telephone. Unless Fund Management permits a
larger redemption request to be placed by telephone, a shareholder may not place
a redemption request by telephone in excess of $25,000. The redemption proceeds,
at the shareholder's option, either will be mailed to the address listed for the
shareholder on its Fund account, or wired (minimum $1,000) or mailed to the bank
which the shareholder has designated to receive the proceeds of telephone
redemptions. The Fund charges no fee for effecting such telephone redemptions.
The telephone redemption policy may be modified or terminated in the future at
the discretion of Fund Management. Shareholders should understand that while the
Fund will attempt to process all telephone redemption requests on an expedited
basis, there may be times, particularly in periods of severe economic or market
disruption, when (a) they may encounter difficulty in placing a telephone
redemption request, and (b) processing telephone redemptions will require up to
seven days following receipt of the redemption request, or additional time
because of the unusual circumstances set forth above.
<PAGE>
The ^ option to redeem Fund shares by telephone is available to
shareholders automatically unless expressly declined. By signing a new account
Application or a Telephone Transaction Authorization Form or otherwise utilizing
the telephone redemption ^ option, the shareholder has agreed that the Fund will
not be liable for following instructions communicated by telephone that it
reasonably believes to be genuine. The Fund employs procedures, which it
believes are reasonable, designed to confirm that telephone instructions are
genuine. These may include recording telephone instructions and providing
written confirmation of transactions initiated by telephone. As a result of this
policy, the investor may bear the risk of any loss due to unauthorized or
fraudulent instructions; provided, however, that if the Fund fails to follow its
established procedures, the Fund may be liable.
TAXES, DIVIDENDS AND OTHER DISTRIBUTIONS
Taxes. The Fund intends to distribute to shareholders all of its net
investment income, net capital gains and net gains from foreign currency
transactions, if any, in order to continue to qualify for tax treatment as a
regulated investment company. Thus, the Fund does not expect to pay any federal
income or excise taxes.
Unless shareholders are exempt from income taxes, they must include all
dividends and other distributions in taxable income for federal, state and local
income tax purposes. Dividends and other distributions are taxable whether they
are received in cash or automatically reinvested in shares of the Fund or
another fund in the INVESCO group.
Net realized capital gains of the Fund are classified as short-term and
long-term gains depending upon how long the Fund held the security that gave
rise to the gains. Short-term capital gains are included in income from
dividends and interest as ordinary income and are taxed at the taxpayer's
marginal tax rate. The Taxpayer Relief Act of 1997 (the "Tax Act"), enacted in
August 1997, changed the taxation of long-term capital gains by applying
different capital gains rates depending on the taxpayer's holding period and
marginal rate of federal income tax. Long-term gains realized on the sale of
securities held for more than one year but not for more than 18 months are
taxable at a rate of 28%. This category of long-term gains is often referred to
as "mid-term" gains but is technically termed "28% rate gains". Long-term gains
realized on the sale of securities held for more than 18 months are taxable at a
rate of 20%.^ At the end of each year, information regarding the tax status of
dividends and other distributions is provided to shareholders. Shareholders
should consult their tax advisers as to the effect of the Tax Act on
distributions by the Fund of net capital gain.
Shareholders also may realize capital gains or losses when they sell their
Fund shares at more or less than the price originally paid. Capital gain on
shares held for more than one year will be long-term capital gain, in which
event it will be subject to federal income tax at the rates indicated above.
The Fund may be subject to withholding of foreign taxes on dividends or
interest received on foreign securities. Foreign taxes withheld will be treated
as an expense of the Fund.
<PAGE>
Individuals and certain other non-corporate shareholders may be subject to
backup withholding of 31% on dividends, capital gain and other distributions and
redemption proceeds. Unless you are subject to backup withholding for other
reasons, you can avoid backup withholding on your Fund account by ensuring that
we have a correct, certified tax identification number.
We encourage you to consult a tax adviser with respect to these matters.
For further information see "Dividends, Other Distributions and Taxes" in the
Statement of Additional Information.
Dividends and Other Distributions. The Fund earns ordinary or net
investment income in the form of interest on its investments. Dividends paid by
the Fund will be based solely on the income earned by it. The Fund's policy is
to distribute substantially all of this income, less Fund expenses, to
shareholders. Dividends from net investment income are declared daily and paid
monthly at the discretion of the Trust's Board of Trustees. Dividends are
automatically reinvested in additional shares of the Fund at the net asset value
on the ^ payable date unless otherwise requested.
In addition, the Fund realizes capital gains and losses when it sells
securities for more or less than it paid. If total gains on sales exceed total
losses (including losses carried forward from previous years), the Fund has a
net realized capital gain. Net realized capital gains, if any, together with
gains, if any, realized on foreign currency transactions, are distributed to
shareholders at least annually, usually in December. Capital gain distributions
are automatically reinvested in additional shares of the Fund at the net asset
value on the ^ payable date unless otherwise requested.
Dividends and other distributions are paid to holders of shares on the
record date of distribution regardless of how long the Fund shares have been
held by the shareholder. The Fund's share price will then drop by the amount of
the distribution on the ex- dividend or ex-distribution date. If a shareholder
purchases shares immediately prior to the distribution, the shareholder will, in
effect, have "bought" the distribution by paying the full purchase price, a
portion of which is then returned in the form of a taxable distribution.
ADDITIONAL INFORMATION
Voting Rights. All shares of the Trust's funds have equal voting rights.
When shareholders are entitled to vote upon a matter, each shareholder is
entitled to one vote for each share owned and a corresponding fractional vote
for each fractional share owned. Voting with respect to certain matters, such as
ratification of independent accountants and the election of trustees, will be by
all funds of the Trust voting together. In other cases, such as voting upon the
investment advisory contract for the individual funds, voting is on a
fund-by-fund basis. To the extent permitted by law, when not all funds are
affected by a matter to be voted upon, only shareholders of the fund or funds
affected by the matter will be entitled to vote thereon. The Trust is not
generally required, and does not expect, to hold regular annual meetings of
<PAGE>
shareholders. However, the board of trustees will call such special meetings of
shareholders for the purpose, among other reasons, of voting the question of
removal of a trustee or trustees when requested to do so in writing by the
holders of 10% or more of the outstanding shares of the Trust or as may be
required by applicable law or the Trust's Declaration of Trust, and the Trust
will assist shareholders in communicating with other shareholders as required by
the 1940 Act. Trustees may be removed by action of the holders of two-thirds of
the outstanding shares of the Trust.
Shareholder Inquiries. All inquiries regarding the Fund should be directed
to the Trust at the telephone number or mailing address set forth on the cover
page of this ^ Prospectus.
Transfer and Dividend Disbursing Agent. INVESCO Funds Group, Inc., 7800 E.
Union Avenue, Denver, Colorado 80237, acts as registrar, transfer agent and
dividend disbursing agent for the Fund pursuant to a Transfer Agency Agreement
which provides that the Fund will pay an annual fee of $26.00 per shareholder
account or where applicable, per participant in an omnibus account. The transfer
agency fee is not charged to each shareholder's or participant's account but is
an expense of the Fund to be paid from the Fund's assets. Registered
broker-dealers, third party administrators of tax-qualified retirement plans and
other entities, including affiliates of IFG, may provide sub-transfer agency
services to the Fund which reduce or eliminate the need for identical services
to be provided on behalf of the Fund by IFG. In such cases, IFG may pay the
third party an annual sub-transfer agency or recordkeeping fee out of the
transfer agency fee which is paid to IFG by the Fund.
^
<PAGE>
PROSPECTUS
January 1, 1998
INVESCO Intermediate Government Bond
Fund
INVESCO Distributors, Inc.,
Distributor
Post Office Box 173706
Denver, Colorado 80217-3706
1-800-525-8085
PAL(R): 1-800-424-8085
http://www.invesco.com
In Denver, visit one of our
convenient Investor Centers:
Cherry Creek
155-B Fillmore Street
Denver Tech Center
7800 East Union Avenue
Lobby Level
In addition, all documents
filed by the Trust with the
Securities and Exchange Commission
can be located on a web site
maintained by the Commission at
http://www.sec.gov.
<PAGE>
PROSPECTUS
January 1, 1998
INVESCO VALUE TRUST
INVESCO Value Equity Fund
INVESCO Value Equity Fund (the "Fund") seeks to achieve a high total
return on investment through capital appreciation and current income by
investing substantially all of its assets in common stocks and, to a lesser
degree, securities convertible into common stock. Such securities generally will
be issued by companies that are listed on a national securities exchange and
which usually pay regular dividends. This Fund's investments may consist in part
of securities which may be deemed to be speculative. (See "Investment Objective
and Policies.")
The Fund is a series of INVESCO Value Trust (the "Trust"), an open-end
management investment company consisting of three separate portfolios of
investments. This Prospectus relates to shares of INVESCO Value Equity Fund.
Separate prospectuses are available upon request from INVESCO Distributors, Inc.
for the Trust's other two funds, INVESCO Intermediate Government Bond Fund and
INVESCO Total Return Fund. Investors may purchase shares of any or all funds.
Additional funds may be offered in the future.
This Prospectus provides you with the basic information you should know
before investing in the Fund. You should read it and keep it for future
reference. A Statement of Additional Information containing further information
about the Fund, dated January 1, 1998, has been filed with the Securities and
Exchange Commission and is incorporated by reference into this Prospectus. To
obtain a free copy, write to INVESCO Distributors, Inc., P.O. Box 173706,
Denver, Colorado 80217-3706; call 1-800-525-8085; or visit our web site at
http://www.invesco.com.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE. SHARES OF THE FUND ARE NOT DEPOSITS OR
OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY, ANY BANK OR OTHER FINANCIAL
INSTITUTION. THE SHARES OF THE FUND ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY.
----------
<PAGE>
TABLE OF CONTENTS
Page
----
ANNUAL FUND EXPENSES 31
FINANCIAL HIGHLIGHTS 33
PERFORMANCE DATA 35
INVESTMENT OBJECTIVE AND POLICIES 35
RISK FACTORS 36
THE TRUST AND ITS MANAGEMENT 40
HOW SHARES CAN BE PURCHASED 42
SERVICES PROVIDED BY THE TRUST 46
HOW TO REDEEM SHARES 48
TAXES, DIVIDENDS AND OTHER DISTRIBUTIONS 50
ADDITIONAL INFORMATION 51
<PAGE>
ANNUAL FUND EXPENSES
The Fund is 100% no-load; there are no fees to purchase, exchange or
redeem shares. The Fund, however, is authorized to pay a Rule 12b-1 distribution
fee of up to one quarter of one percent of the Fund's average net assets each
year. The 12b-1 fee is assessed ^ against all shares, but only with respect to
new sales of shares, exchanges into the Fund and reinvestments of dividends and
capital gain distributions ^ occurring on or after November 1, 1997 ("New
Assets"). Lower expenses benefit Fund shareholders by increasing the Fund's
total return.
Shareholder Transaction Expenses
Sales load "charge" on purchases None
Sales load "charge" on reinvested dividends None
Redemption fees None
Exchange fees None
Annual Fund Operating Expenses
(as a percentage of average net assets)
Management Fee 0.75%
12b-1 Fees^(1) 0.25%^
Other Expenses ^ 0.29%^
Transfer Agency Fee(2) ^ 0.20%^
General Services, Administrative
Services, Registration, Postage(3) ^ 0.09%^
Total Fund Operating ^ Expenses(1)(4) 1.29%
^(1) 12b-1 fees for the period ending August 31, 1998 may be less than
0.25% of average net New Assets.
(2) Consists of the transfer agency fee described under "Additional
Information - Transfer and Dividend Disbursing Agent."
(3) Includes, but is not limited to, fees and expenses of trustees,
custodian bank, legal counsel and independent accountants, securities pricing
services, costs of administrative services furnished under an Administrative
Services Agreement, costs of registration of Fund shares under applicable laws,
and costs of printing and distributing reports to shareholders.
(4) It should be noted that the Fund's actual total operating expenses
were lower than the figures shown because the Fund's custodian fees and transfer
agent fees were reduced under expense offset arrangements. However, as a result
of an SEC requirement for mutual funds to state their total operating expenses
without crediting any such expense offset arrangement, the figures shown above
do not reflect these reductions. In comparing expenses for different years,
please note that the ratios of Expenses to Average Net Assets shown under
<PAGE>
"Financial Highlights" do reflect reductions for periods prior to the
fiscal year ended August 31, 1996. (See "The Trust ^ and Its ^ Management.")
Example
A shareholder would pay the following expenses on a $1,000 investment for
the periods shown, assuming (1) a 5% annual return and (2) redemption at the end
of each time period:
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
$11 $33 $58 $128
The purpose of the foregoing table is to assist investors in understanding
the various costs and expenses that an investor in the Fund will bear directly
or indirectly. Such expenses are paid from the Fund's assets. (See "The Trust
and Its Management.") The above figures for INVESCO Value Equity Fund are based
on fiscal year-end information. The Fund charges no sales load, redemption fee
or exchange fee. THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST
OR FUTURE EXPENSES, AND ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
The assumed 5% annual return is hypothetical and should not be considered a
representation of past or future annual returns, which may be greater or less
than the assumed amount.
Because the Fund pays a distribution fee, investors who own Fund shares
for a long period of time may pay more than the economic equivalent of the
maximum front-end sales charge permitted for mutual funds by the National
Association of Securities Dealers, Inc.
<PAGE>
FINANCIAL HIGHLIGHTS
(For a Fund Share Outstanding Throughout Each Period)
The following information for each of the four years ended August 31,
1997, the eight-month fiscal period ended August 31, 1993, and each of the ^
four years ended December 31, 1992, has been audited by Price Waterhouse LLP,
independent accountants. Prior years' information was audited by another
independent accounting firm. This information should be read in conjunction with
the audited financial statements and the report of independent accountants
thereon appearing in the Trust's 1997 Annual Report to Shareholders which is
incorporated by reference into the Statement of Additional Information. Both are
available without charge by contacting INVESCO Distributors, Inc., at the
address or telephone number on the cover of this Prospectus. All per share data
has been adjusted to reflect an 80 to 1 stock split which was effected on
January 2, 1991.
<TABLE>
<CAPTION>
Period
Ended
Year Ended August 31 August 31 Year Ended December 31
--------------------------------- -------- ---------------------------------------------------
1997 1996 1995 1994 1993^ 1992 1991 1990 1989 1988 1987
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value -
Beginning of Period $22.24 $19.53 $18.12 $17.79 $16.91 $16.57 $13.88 $15.30 $13.72 $12.40 $12.75
--------------------------------- -------- ---------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income 0.35 0.35 0.39 0.36 0.24 0.36 0.40 0.44 0.48 0.37 0.40
Net Gains (or Losses)
on Securities
(Both Realized
and Unrealized) 6.62 3.09 2.58 1.20 0.88 0.45 4.54 (1.33) 2.42 1.62 0.39
--------------------------------- -------- ---------------------------------------------------
Total from Investment
Operations 6.97 3.44 2.97 1.56 1.12 0.81 4.94 (0.89) 2.90 1.99 0.79
--------------------------------- -------- ---------------------------------------------------
LESS DISTRIBUTIONS
Dividends from Net
Investment Income 0.35 0.35 0.39 0.31 0.24 0.34 0.40 0.47 0.49 0.36 0.50
In Excess of Net
Investment Income 0.00 0.00 0.00 0.04 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Distributions from
Capital Gains 0.56 0.38 1.17 0.88 0.00 0.13 1.85 0.06 0.83 0.31 0.64
--------------------------------- -------- ---------------------------------------------------
Total Distributions 0.91 0.73 1.56 1.23 0.24 0.47 2.25 0.53 1.32 0.67 1.14
--------------------------------- -------- ---------------------------------------------------
Net Asset Value -
End of Period $28.30 $22.24 $19.53 $18.12 $17.79 $16.91 $16.57 $13.88 $15.30 $13.72 $12.40
================================= ======== ===================================================
TOTAL RETURN 32.04% 17.77% 17.84% 9.09% 6.65%* 4.98% 35.84% (5.80%) 21.34% 16.89% 5.98%
<PAGE>
RATIOS
Net Assets - End of
Period
($000 Omitted) $369,766 $200,046 $153,171 $111,850 $81,914 $78,609 $39,741 $29,825 $36,592 $27,434 $14,933
Ratio of Expenses
to Average
Net Assets# 1.04%@ 1.01%@ 0.97% 1.01% 1.00%~ 0.91% 0.98% 1.00% 1.00% 1.00% 1.00%
Ratio of Net
Investment Income
to Average
Net Assets# 1.35% 1.64% 2.17% 1.80% 2.07%~ 2.19% 2.39% 3.00% 3.29% 3.48% 2.95%
Portfolio Turnover
Rate 37% 27% 34% 53% 35%* 37% 64% 23% 30% 16% 20%
Average Commission
Rate Paid^^ $0.0538 $0.0589 - - - - - - - -
</TABLE>
^ From January 1, 1993 to August 31, 1993.
* Based on operations for the period shown and, accordingly, are not
representative of a full year.
# Various expenses of the Fund were voluntarily absorbed by IFG for the years
ended December 31, 1990, 1989, 1988 and 1987. If such expenses had not been
voluntarily absorbed, ratio of expenses to average net assets would have been
1.04%, 1.09%, 1.19% and 1.42% respectively, and ratio of net investment income
to average net assets would have been 2.96%, 3.20%, 3.29% and 2.53%,
respectively.
@ Ratio is based on Total Expenses of the Fund, which is before any expense
offset arrangements.
~ Annualized
^^ The average commission rate paid is the total brokerage commissions paid on
applicable purchases and sales of securities for the period divided by the total
number of related shares purchased or sold which is required to be disclosed
effective for fiscal years beginning September 1, 1995 and thereafter.
Further information about the performance of the Fund is contained in the
Trust's Annual Report to Shareholders, which may be obtained without charge by
writing INVESCO Distributors, Inc., P.O. Box 173706, Denver, Colorado
80217-3706; or by calling 1-800- 525-8085.
<PAGE>
PERFORMANCE DATA
From time to time, the Fund advertises its total return performance. These
figures are based upon historical investment results and are not intended to
indicate future performance. Total return is computed by calculating the
percentage change in value of an investment, assuming reinvestment of all income
dividends and capital gain distributions, to the end of a specified period.
Cumulative total return reflects actual performance over a stated period of
time. Average annual total return is a hypothetical rate of return that, if
achieved annually, would have produced the same cumulative total return if
performance had been constant over the entire period. Thus, a given report of
total return performance should not be considered as representative of future
performance. The Fund charges no sales load, redemption fee or exchange fee
which would affect total return computations.
In conjunction with performance reports and/or analyses of shareholder
service for the Fund, comparative data between the Fund's performance for a
given period and the performance of recognized bond indices and indices of
investment results for the same period and/or assessments of the quality of
shareholder service may be provided to shareholders. Such indices include
indices provided by Dow Jones & Company, Standard & Poor's ^, a division of The
McGraw-Hill Companies, Inc. ("S&P"), Lipper Analytical Services, Inc., Lehman
Brothers, National Association of Securities Dealers Automated Quotations, Frank
Russell Company, Value Line Investment Survey, the American Stock Exchange,
Morgan Stanley Capital International, Wilshire Associates, the Financial Times
Stock Exchange, the New York Stock Exchange, the Nikkei Stock Average and the
Deutcher Aktienindex, all of which are unmanaged market indicators. In addition,
rankings, ratings and comparisons of investment performance and/or assessments
of the quality of shareholder service appearing in publications such as Money,
Forbes, Kiplinger's Personal Finance, Morningstar and similar sources which
utilize information compiled (i) internally; (ii) by Lipper Analytical Services,
Inc.; or (iii) by other recognized analytical services, may be used in
advertising. The Lipper Analytical Services, Inc. mutual fund rankings and
comparisons, which may be used by the Fund in performance reports, will be drawn
from the "Growth and Income Funds" Lipper mutual fund groupings, in addition to
the broad-based Lipper general fund grouping.
INVESTMENT OBJECTIVE AND POLICIES
The Trust consists of three separate portfolios of investments (referred to
as the "Funds"), each represented by a different series of the Trust's shares.
This Prospectus relates to INVESCO Value Equity Fund; separate prospectuses for
INVESCO Intermediate Government Bond Fund and INVESCO Total Return Fund are
available. The investment objective of the Fund is to seek a high total return
on investment through capital appreciation and current income. Funds having an
investment objective of seeking a high total return may be limited in their
ability to obtain their objective by the limitations on the types of securities
in which they may invest. ^ No assurance can be given that the Fund will be able
to achieve its investment objective.
<PAGE>
Substantially all of the Fund's assets will be invested in common stocks
and, to a lesser extent, securities convertible into common stocks
(collectively, "equity securities"). Such securities generally will be issued by
companies which are listed on a national securities exchange, such as the New
York Stock Exchange, and which usually pay regular dividends, although the Fund
also may invest in securities traded on regional stock exchanges or on the
over-the-counter market. During normal market conditions, at least 65% of the
Fund's investments will consist of equity securities. The Trust has not
established any minimum investment standards such as an issuer's asset level,
earnings history, type of industry, dividend payment history, etc. with respect
to the Fund's investments in common stocks, although in selecting common stocks
for the Fund, the investment adviser and sub-adviser (collectively, "Fund
Management") generally apply an investment discipline which seeks to achieve a
yield higher than the overall equity market. Therefore, because smaller
companies may be subject to more significant losses as well as have the
potential for more substantial growth than larger, more established companies,
investors in the Fund should consider that the Fund's investments may consist in
part of securities which may be deemed to be speculative. When market or
economic conditions indicate, in the judgment of Fund Management, that a
defensive investment stance should be assumed, all or part of the assets of the
Fund may be invested temporarily in other securities consisting of high quality
(rated AA or above by ^ S&P or Aa by Moody's Investors Service, Inc.) corporate
preferred stocks, bonds, debentures or other evidences of indebtedness, and in
obligations issued or guaranteed by the United States or any instrumentality
thereof, or held in cash.
The investment objective of the Fund and its investment policies, where
indicated, are fundamental policies and thus may not be changed without prior
approval by the holders of a majority of the outstanding voting securities of
the Fund, as defined in the Investment Company Act of 1940 (the "1940 Act"). In
addition, the Trust and this Fund are subject to certain investment restrictions
which are set forth in the Statement of Additional Information and which also
may not be altered without approval of the Fund's shareholders. One of those
restrictions limits the Fund's borrowing of money to borrowings from banks for
temporary or emergency purposes (but not for leveraging or investment) in an
amount not exceeding 33 1/3% of the value of the Fund's total assets.
RISK FACTORS
Investors should consider the special factors associated with the policies
discussed below in determining the appropriateness of an investment in the
INVESCO Value Equity Fund. The Fund's policies regarding investments in foreign
securities and foreign currencies are not fundamental and may be changed by vote
of the Trust's board of trustees.
Foreign Securities. The Fund may invest up to 25% of its total assets in
foreign equity or debt securities. Investments in securities of foreign
companies and in foreign markets involve certain additional risks not associated
with investments in domestic companies and markets, including the risks of
fluctuations in foreign currency exchange rates and of political or economic
instability, the difficulty of predicting international trade patterns and the
<PAGE>
possibility of imposition of exchange controls or currency blockage. In
addition, there may be less information publicly available about a foreign
company than about a domestic company, and there is generally less government
regulation of stock exchanges, brokers and listed companies abroad than in the
United States. Moreover, with respect to certain foreign countries, there may be
a possibility of expropriation or confiscatory taxation. Further, economies of
particular countries or areas of the world may differ favorably or unfavorably
from the economy of the United States.
Forward Foreign Currency Contracts. The Fund may enter into contracts to
purchase or sell foreign currencies at a future date ("forward contracts") as a
hedge against fluctuations in foreign exchange rates pending the settlement of
transactions in foreign securities or during the time the Fund holds foreign
securities. A forward contract is an agreement between contracting parties to
exchange an amount of currency at some future time at an agreed upon rate.
Although the Fund has not adopted any limitations on its ability to use forward
contracts as a hedge against fluctuations in foreign exchange rates, it does not
attempt to hedge all of its foreign investment positions and will enter into
forward contracts only to the extent, if any, deemed appropriate by Fund
Management. The Fund will not enter into a forward contract for a term of more
than one year or for purposes of speculation. Investors should be aware that
hedging against a decline in the value of a currency in the foregoing manner
does not eliminate fluctuations in the prices of portfolio securities or prevent
losses if the prices of such securities decline. Furthermore, such hedging
transactions may preclude the opportunity for gain if the value of the hedged
currency should rise. No predictions can be made with respect to whether the
total of such transactions will result in a better or a worse position than had
the Fund not entered into any forward contracts. Forward contracts may from time
to time be considered illiquid, in which case they would be subject to the
Fund's limitation on investing in illiquid securities, discussed below. For
additional information regarding forward foreign currency contracts, see the
Trust's Statement of Additional Information.
Repurchase Agreements. The Fund may engage in repurchase agreements with
banks, registered broker-dealers and registered government securities dealers
which are deemed creditworthy by Fund Management, under guidelines established
by the board of trustees. A repurchase agreement is a transaction in which the
Fund purchases a security and simultaneously commits to sell the security to the
seller at an agreed upon price and date (usually not more than seven days) after
the date of purchase. The resale price reflects the purchase price plus an
agreed upon market rate of interest which is unrelated to the coupon rate or
maturity of the purchased security. The Fund's risk is limited to the ability of
the seller to pay the agreed upon amount on the delivery date. However, in the
event the seller should default, the underlying security constitutes collateral
for the seller's obligations to pay. This collateral will be held by the
custodian for the Fund's assets. ^ In the event of the insolvency of a
counterparty to a repurchase agreement, the Fund could experience delays and
incur costs in realizing on the collateral. To the extent that the proceeds from
<PAGE>
a sale upon a default in the obligation to repurchase are less than the
repurchase price, the Fund would suffer a loss. Although the Fund has not
adopted any limit on the amount of its total assets that may be invested in
repurchase agreements, the Fund intends that at no time will the market value of
its securities subject to repurchase agreements exceed 20% of the total assets
of the Fund.
Illiquid Securities. The Fund may invest from time to time in securities
subject to restrictions on disposition under the Securities Act of 1933
("restricted securities"), securities without readily available market
quotations or illiquid securities (those which cannot be sold in the ordinary
course of business within seven days at approximately the valuation given to
them by the Fund). However, on the date of purchase, no such investment may
increase the Fund's holdings of restricted securities to more than 2% of the
value of the Fund's total assets or its holdings of illiquid securities or those
without readily available market quotations to more than 5% of the Fund's total
assets. The Fund is not required to receive registration rights in connection
with the purchase of restricted securities and, in the absence of such rights,
marketability and value can be adversely affected because the Fund may be unable
to dispose of such securities at the time desired or at a reasonable price. In
addition, in order to resell a restricted security, the Fund might have to bear
the expense and incur the delays associated with effecting registration.
Futures and Options. A futures contract is an agreement to buy or sell a
specific amount of a financial instrument or commodity at a particular price on
a particular date. The Fund will use futures contracts only to hedge against
price changes in the value of its current or intended investments in securities.
In the event that an anticipated decrease in the value of portfolio securities
occurs as a result of a general decrease in prices, the adverse effects of such
changes may be offset, at least in part, by gains on the sale of futures
contracts. Conversely, the increased cost of portfolio securities to be
acquired, caused by a general increase in prices, may be offset, at least in
part, by gains on futures contracts purchased by the Fund. Brokerage fees are
paid to trade futures contracts, and the Fund is required to maintain margin
deposits.
Put and call options on futures contracts or securities may be traded by
the Fund in order to protect against declines in the value of portfolio
securities or against increases in the cost of securities to be acquired. The
purchaser of an option purchases the right to effect a transaction in the
underlying future or security at a specified price (the "strike price") before a
specified date (the "expiration date"). In exchange for the right, the purchaser
pays a "premium" to the seller, which represents the price of the right to buy
or to sell the underlying instrument. In exchange for the premium, the seller of
the option becomes obligated to effect a transaction in the underlying future or
security, at the strike price, at any time prior to the expiration date, should
the buyer choose to exercise the option. A call option contract grants the
purchaser the right to buy the underlying future or security, at the strike
<PAGE>
price, before the expiration date. A put option contract grants the purchaser
the right to sell the underlying future or security, at the strike price, before
the expiration date. Purchases of options on futures contracts may present less
dollar risk in hedging the Fund's portfolio than the purchase and sale of the
underlying futures contracts, since the potential loss is limited to the amount
of the premium plus related transaction costs. The premium paid for such a put
or call option plus any transaction costs will reduce the benefit, if any,
realized by the Fund upon exercise or liquidation of the option, and, unless the
price of the underlying futures contract or security changes sufficiently, the
option may expire without value to the Fund.
Although the Fund will enter into futures contracts and options on futures
contracts and securities solely for hedging or other nonspeculative purposes,
their use does involve certain risks. For example, a lack of correlation between
the value of an instrument underlying an option or futures contract and the
assets being hedged, or unexpected adverse price movements, could render a
Fund's hedging strategy unsuccessful and could result in losses. In addition,
there can be no assurance that a liquid secondary market will exist for any
contract purchased or sold, and the Fund may be required to maintain a position
until exercise or expiration, which could result in losses. Transactions in
futures contracts and options are subject to other risks as well, which are set
forth in greater detail in the Statement of Additional Information and Appendix
B therein.
Securities Lending. The Fund may make loans of its portfolio securities
(not to exceed 10% of the Fund's total assets) to broker-dealers or other
institutional investors under contracts requiring such loans to be callable at
any time and to be secured continuously by collateral in cash, cash equivalents,
high quality short-term government securities or irrevocable letters of credit
maintained on a current basis at an amount at least equal to the market value of
the securities loaned, including accrued interest and dividends. The Fund will
continue to collect the equivalent of the interest or dividends paid by the
issuer on the securities loaned and will also receive either interest (through
investment of cash collateral) or a fee (if the collateral is government
securities). The Fund may pay finder's and other fees in connection with
securities loans.
Portfolio Turnover. There are no fixed limitations regarding portfolio
turnover for the Fund. Although the Fund does not trade for short-term profits,
securities may be sold without regard to the time they have been held in the
Fund when, in the opinion of Fund Management, market considerations warrant such
action. As a result, while it is anticipated that the Fund's annual portfolio
turnover rate generally will not exceed 100%, under certain market conditions
the portfolio turnover rate for the Fund may exceed 100%. Increased portfolio
turnover would cause the Fund to incur greater brokerage costs than would
otherwise be the case. The Fund's portfolio turnover rates are set forth under
"Financial Highlights" and, along with the Trust's brokerage allocation
policies, are discussed in the Statement of Additional Information.
<PAGE>
THE TRUST AND ITS MANAGEMENT
The Trust is a no-load mutual fund, registered with the Securities and
Exchange Commission as an open-end, diversified management investment company.
The Trust was organized on July 15, 1987, under the laws of the Commonwealth of
Massachusetts as "Financial Series Trust." On July 1, 1993, the Trust changed
its name to "INVESCO Value Trust." The overall supervision of the ^ Fund is the
responsibility of ^ the Trust's board of trustees.
INVESCO Funds Group, Inc. ("IFG"), 7800 E. Union Avenue, Denver, Colorado,
serves as the Trust's investment adviser pursuant to an investment advisory
agreement. Under this agreement, IFG provides the Fund with various management
services and supervises the Fund's daily business affairs. Specifically, IFG
performs all administrative, clerical, statistical, secretarial and all other
services necessary or incidental to the administration of the affairs of the
Trust excluding, however, those services that are the subject of a separate
agreement between the Trust and IFG or any affiliate thereof. Services provided
pursuant to separate agreement include the distribution and sale of Trust shares
and provision of transfer agency, dividend disbursing agency and registrar
services, and services furnished under an Administrative Services Agreement with
IFG dated as of February 28, 1997. ^
IFG has contracted with INVESCO Capital Management, Inc. ("ICM"), the
Trust's investment adviser prior to 1991, for investment sub-advisory and
research services on behalf of the Fund. ICM currently manages in excess of ^
$40 billion of assets on behalf of tax-exempt accounts (such as pension and
profit-sharing funds for corporations and state and local governments) and
investment companies. ICM, subject to the supervision of IFG, is primarily
responsible for selecting and managing the Fund's investments. Although the
Trust is not a party to the sub-advisory agreement, the agreement has been
approved by the shareholders of the Trust. Services provided by IFG and ICM are
subject to review by the Trust's board of trustees.
Pursuant to an agreement with the Trust, effective September 30, 1997,
INVESCO Distributors, Inc. ("IDI") became the Fund's distributor. IDI,
established in 1997, is a registered broker-dealer that acts as distributor for
all retail mutual funds advised by IFG. Prior to September 30, 1997, IFG served
as the Fund's distributor.
IFG, ICM and IDI are indirect wholly-owned subsidiaries of AMVESCAP PLC.
AMVESCAP PLC is a publicly-traded holding company that, through its
subsidiaries, engages in the business of investment management on an
international basis. INVESCO PLC changed its name to AMVESCO PLC on March 3,
1997 and to AMVESCAP PLC on May 8, 1997, as part of a merger between a direct
subsidiary of INVESCO PLC and A I M Management Group Inc., that created one of
the largest independent investment management businesses in the world. IFG and
ICM ^ continue to operate under their existing names. Together, IFG and ICM
constitute "Fund Management." AMVESCAP PLC has approximately $177.5 billion in
assets under management. IFG was established in 1932 and, as of August 31, 1997,
managed 14 mutual funds, consisting of ^ 45 separate portfolios, with combined
assets of approximately $15.9 billion on behalf of over 854,448 shareholders. ^
<PAGE>
The following individuals serve as portfolio managers for the Fund and are
primarily responsible for the day-to-day management of the Fund's portfolio of
securities:
Michael C. Harhai Portfolio manager of the Fund since 1993;
portfolio manager for INVESCO Capital Management,
Inc. (1993 to present); senior vice president and
manager, Sovran Capital Management Corp. (1992 to
1993); senior vice president and portfolio
manager, C&S/Sovran Capital Management (1991 to
1992); senior vice president and portfolio
manager, Citizens & Southern Investment Advisors,
Inc. (1984 to 1991); began investment career in
1972; B.A., University of South Florida; M.B.A.,
University of Central Florida; Chartered Financial
Analyst; trustee, Atlanta Society of Financial
Analysts.
Terrence Irrgang Assistant portfolio manager of the Fund since
1993; portfolio manager for INVESCO Capital
Management, Inc. (1992 to present); consultant,
Towers, Perrin & Forster & Crosby (1988 to 1992);
began investment career in 1981; B.A., Gettysburg
College; M.B.A., Temple University; Chartered
Financial Analyst.
Under the investment advisory agreement, the Fund pays IFG a monthly fee
at the following annual rates based on the average net assets of the Fund: 0.75%
on the first $500 million of the Fund's average net assets; 0.65% on the next
$500 million of the Fund's average net assets; and 0.50% on the average net
assets of the Fund in excess of $1 billion. For the fiscal year ended August 31,
1997, the advisory fees paid to IFG amounted to 0.75% of the average net assets
of the Fund.
Out of its advisory fee which it receives from the Fund, IFG pays ICM, as
the Fund's sub-adviser, a monthly fee which is computed at the following annual
rates: prior to January 1, 1998, 0.20% on the first $500 million of the Fund's
average net assets, 0.17% on the next $500 million of the Fund's average net
assets and 0.13% on the Fund's average net assets in excess of $1 billion and
effective January 1, 1998, 0.25% on the first $500 million of the Fund's average
net assets, 0.2167% on the next $500 million of the Fund's average net assets
and 0.1667% on the Fund's average net assets in excess of $1 billion. No fee is
paid by the Fund to ICM.
The Fund bears those Trust expenses which are accrued daily that are
incurred on its behalf and, in addition, bears a portion of general Trust
expenses allocated based upon the relative net assets of the three Funds of the
Trust. Such expenses are generally deducted from the Fund's total income before
dividends are paid. Total expenses of the Fund, including investment advisory
fees (but excluding brokerage commissions), as a percentage of its average net
assets for the fiscal year ended August 31, 1997, were 1.04% (1.00%, after
expense offset arrangements).
<PAGE>
The Trust also has entered into an Administrative Services Agreement (the
"Administrative Agreement") with IFG. Pursuant to the Administrative Agreement,
IFG performs certain administrative and internal accounting services, including
without limitation, maintaining general ledger and capital stock accounts,
preparing a daily trial balance, calculating net asset value daily and providing
selected general ledger reports and providing sub- accounting and recordkeeping
services for shareholder accounts maintained by certain retirement and employee
benefit plans for the benefit of participants in such plans. For such services,
the Fund pays IFG a fee consisting of a base fee of $10,000 per year, plus an
additional incremental fee computed at an annual rate not to exceed a maximum of
0.015% per annum of the average net assets of the Fund.
The Declaration of Trust pursuant to which the Trust is organized contains
an express disclaimer of shareholder liability for acts or obligations of the
Trust and requires that notice of such disclaimer be given in each instrument
entered into or executed by the Trust. The Declaration of Trust also provides
for indemnification out of the Trust's property for any shareholder held
personally liable for any Trust obligation. Thus, the risk of a shareholder
being personally liable for obligations of the Trust is limited to the unlikely
circumstance in which the Trust itself would be unable to meet its obligations.
Fund Management places orders for the purchase and sale of portfolio
securities with brokers and dealers based upon Fund Management's evaluation of
the broker-^ dealers' financial responsibility coupled with such broker-^
dealers' ability to effect transactions at the best available prices. The Trust
may place orders for portfolio transactions with qualified broker-dealers that
recommend the various funds of the Trust to clients, or act as agent in the
purchase of fund shares for clients, if Fund Management believes that the
quality of the execution of the transaction and level of commission are
comparable to those available from other qualified brokerage firms. For further
information, see "Investment Practices -- Placement of Portfolio Brokerage" in
the Statement of Additional Information.
Fund Management permits investment and other personnel to purchase and
sell securities for their own accounts, subject to a compliance policy governing
personal investing. This policy requires Fund Management's personnel to conduct
their personal investment activities in a manner that Fund Management believes
is not detrimental to the Fund or Fund Management's other advisory clients. See
the Statement of Additional Information for more detailed information.
HOW SHARES CAN BE PURCHASED
Shares of the Fund are sold on a continuous basis by IDI, as the Fund's
distributor, at the net asset value per share next calculated after receipt of a
purchase order in good form. No sales charge is imposed upon the sale of shares
of the Fund. To purchase shares of the Fund, send a check made payable to
INVESCO Funds Group, Inc., together with a completed application form, to:
<PAGE>
INVESCO FUNDS GROUP, INC.
Post Office Box 173706
Denver, Colorado 80217-3706
PURCHASE ORDERS MUST SPECIFY THE FUND IN WHICH THE INVESTMENT IS TO BE
MADE.
The minimum initial purchase must be at least $1,000, with subsequent
investments of not less than $50, except that: (1) those shareholders
establishing an EasiVest or direct payroll purchase account, as described below
in the section entitled "Services Provided by the Trust," may open an account
without making any initial investment if they agree to make regular, minimum
purchases of at least $50; (2) those shareholders investing in an Individual
Retirement Account ("IRA"), or through omnibus accounts where individual
shareholder recordkeeping and sub-accounting are not required, may make initial
minimum purchases of $250; (3) Fund Management may permit a lesser amount to be
invested in the Fund under a federal income tax-deferred retirement plan (other
than an IRA), or under a group investment plan qualifying as a sophisticated
investor; and (4) Fund Management reserves the right to increase, reduce or
waive the minimum purchase requirements in its sole discretion where it
determines such action is in the best interests of the Fund. The minimum initial
purchase requirement of $1,000, as described above, does not apply to
shareholder account(s) in any of the INVESCO funds opened prior to January 1,
1993, and thus is not a minimum balance requirement for those existing accounts.
However, for shareholders already having accounts in any of the INVESCO funds,
all initial share purchases in a new fund account, including those made using
the exchange privilege, must meet the fund's applicable minimum investment
requirement.
The purchase of shares in the Fund can be expedited by placing bank wire,
overnight courier or telephone orders. For further information, the purchaser
may call the Trust's office by using the telephone number on the cover of this
Prospectus. Orders sent by overnight courier, including Express Mail, should be
sent to the street address, not Post Office Box, of INVESCO Funds Group, Inc.,
7800 E. Union Avenue, Denver, Colorado 80237.
Orders to purchase Fund shares can be placed by telephone. Shares of the
Fund will be issued at the net asset value next determined after receipt of
telephone instructions. Generally, payments for telephone orders must be
received by the Trust within three business days or the transaction may be
cancelled. In the event of such cancellation, the purchaser will be held
responsible for any loss resulting from a decline in the value of the shares. In
order to avoid such losses, purchasers should send payments for telephone
purchases by overnight courier or bank wire. IFG has agreed to indemnify the
Trust for any losses resulting from the cancellation of telephone purchases.
If your check does not clear, or if a telephone purchase must be cancelled
due to nonpayment, you will be responsible for any related loss the Fund or IFG
incurs. If you are already a shareholder in the INVESCO funds, the Fund has the
option to redeem shares from any identically registered account in the Fund or
any other INVESCO fund as reimbursement for any loss incurred. You also may be
prohibited or restricted from making future purchases in any of the INVESCO
funds.
<PAGE>
Persons who invest in the Fund through a securities broker may be charged a
commission or transaction fee by the broker for the handling of the transaction
if the broker so elects. Any investor may deal directly with the Fund in any
transaction. In that event, there is no such charge. IFG or IDI may from time to
time make payments from its revenues to securities dealers and other financial
institutions that provide distribution-related and/or administrative services
for the Fund.
The Fund reserves the right in its sole discretion to reject any order for
purchase of its shares (including purchases by exchange) when, in the judgment
of Fund Management, such rejection is in the best interest of the Fund.
Net asset value per share is computed once each day that the New York
Stock Exchange is open as of the close of regular trading on that Exchange
(generally 4:00 p.m., New York time) and also may be computed on other days
under certain circumstances. Net asset value per share for the Fund is
calculated by dividing the market value of the Fund's securities plus the value
of its other assets (including dividends and interest accrued but not
collected), less all liabilities (including accrued expenses), by the number of
outstanding shares of the Fund. If market quotations are not readily available,
a security will be valued at fair value as determined in good faith by the board
of trustees. Debt securities with remaining maturities of 60 days or less at the
time of purchase will be valued at amortized cost, absent unusual circumstances,
so long as the Trust's board of trustees believes that such value represents
fair value.
Under certain circumstances, the Fund may offer its shares, in lieu of
cash payment, for securities to be purchased by the Fund. Such a transaction can
benefit the Fund by allowing it to acquire securities for its portfolio without
paying brokerage commissions. For the same reason, the transaction also may be
beneficial to the party exchanging the securities. The Fund shall not enter into
such transactions, however, unless the securities to be exchanged for Fund
shares are readily marketable and not restricted as to transfer either by law or
liquidity of the market, comply with the investment policies and objectives of
the Fund, are of the type and quality which would normally be purchased for the
Fund's portfolio, are acquired for investment and not for resale, have a value
which is readily ascertainable as evidenced by a listing on the American Stock
Exchange, the New York Stock Exchange or NASDAQ, and are securities which the
Fund would otherwise purchase on the open market. The value of Fund shares used
to purchase portfolio securities as stated herein will be the net asset value as
of the effective time and date of the exchange. The securities to be received by
the Fund will be valued in accordance with the same procedure used in valuing
the Fund's portfolio securities. Any investor wishing to acquire shares of the
Fund in exchange for securities should contact either the president or the
secretary of the Trust at the address or telephone number shown on the cover
page of this Prospectus.
Distribution Expenses. The Fund is authorized under a Plan and Agreement of
Distribution pursuant to Rule 12b-1 under the Investment Company Act of 1940
(the "Plan") to use its assets to finance certain activities relating to the
distribution of its shares to investors. The Plan applies to New Assets (new
<PAGE>
sales of shares, exchanges into the Fund and reinvestments of dividends and
capital gain distributions) of the Fund after November 1, 1997. Under the Plan,
monthly payments may be made by the Fund to IDI to permit IDI, at its
discretion, to engage in certain activities, and provide certain services
approved by the board of trustees in connection with the distribution of the
Fund's shares to investors. These activities and services may include the
payment of compensation (including incentive compensation and/or continuing
compensation based on the amount of customer assets maintained in the Fund) to
securities dealers and other financial institutions and organizations, which may
include IDI-affiliated companies, to obtain various distribution-related and/or
administrative services for the Fund. Such services may include, among other
things, processing new shareholder account applications, preparing and
transmitting to the Fund's transfer agent computer-processable tapes of all
transactions by customers, and serving as the primary source of information to
customers in answering questions concerning the Fund and their transactions with
the Fund.
In addition, other permissible activities and services include
advertising, the preparation, printing and distribution of sales literature,
printing and distribution of prospectuses to prospective investors, and such
other services and promotional activities for the Fund as may from time to time
be agreed upon by the Trust and the board of trustees, including public
relations efforts and marketing programs to communicate with investors and
prospective investors. These services and activities may be conducted by the
staff of ^ IDI or its affiliates or by third parties.
Under the Plan, the Trust's payments to IDI on behalf of the Fund are
limited to an amount computed at an annual rate of 0.25% of the Fund's ^ average
net New Assets. IDI is not entitled to payment for overhead expenses under the
Plan, but may be paid for all or a portion of the compensation paid for salaries
and other employee benefits for the personnel of IFG or IDI whose primary
responsibilities involve marketing shares of the INVESCO Mutual Funds, including
the Fund. Payment amounts by the Fund under the Plan, for any month, may be made
to compensate IDI for permissible activities engaged in and services provided by
IDI during the rolling 12-month period in which that month falls. Therefore, any
obligations incurred by IDI in excess of the limitations described above will
not be paid by the Fund under the Plan, and will be borne by IDI. In addition,
IDI and its affiliates may from time to time make additional payments from its
revenues to securities dealers, financial advisers and financial institutions
that provide distribution-related and/or administrative services for the Fund.
No further payments will be made by the Fund under the Plan in the event of its
termination. Also, any payments made by the Fund may not be used to finance
directly the distribution of shares of any other Fund of the Trust or other
mutual fund advised by IFG. Payments made by the Fund under the Plan for
compensation of marketing personnel, as noted above, are based on an allocation
formula designed to ensure that all such payments are appropriate. IDI will bear
any distribution- and service-related expenses in excess of the amounts which
are compensated pursuant to the Plan. The Plan also authorizes any financing of
distribution which may result from IDI's use of its own resources, including
profits from investment advisory fees received from the Fund, provided that such
fees are legitimate and not excessive. For more information see see "How Shares
Can Be Purchased" in the Statement of Additional information.
<PAGE>
SERVICES PROVIDED BY THE TRUST
Shareholder Accounts. IFG maintains a share account that reflects the
current holdings of each shareholder. A separate account will be maintained for
a shareholder for each fund in which the shareholder invests. As a business
trust, the Trust does not issue share certificates. Each shareholder is sent a
detailed confirmation of each transaction in shares of the Trust. Shareholders
whose only transactions are through the EasiVest, direct payroll purchase,
automatic monthly exchange or periodic withdrawal programs, or are reinvestments
of dividends or capital gains in the same or another fund, will receive
confirmations of those transactions on their quarterly statements. These
programs are discussed below. For information regarding a shareholder's account
and transactions, the shareholder may call IFG by using the telephone number on
the cover of this Prospectus.
Reinvestment of Distributions. Dividends and other distributions are
automatically reinvested in additional shares of the Fund at the net asset value
per share of the Fund in effect on the ex-dividend or ex-distribution date. A
shareholder may, however, elect to reinvest dividends and other distributions in
certain of the other no-load mutual funds advised by IFG and distributed by IDI,
or to receive payment of all dividends and other distributions in excess of
$10.00 by check by giving written notice to IFG at least two weeks prior to the
record date on which the change is to take effect. Further information
concerning these options can be obtained by contacting IFG.
Periodic Withdrawal Plan. A Periodic Withdrawal Plan is available to
shareholders who own or purchase shares of any mutual funds advised by IFG
having a total value of $10,000 or more; provided, however, that at the time the
Plan is established, the shareholder owns shares having a value of at least
$5,000 in the fund from which the withdrawals will be made. Under the Periodic
Withdrawal Plan, IFG, as agent, will make specified monthly or quarterly
payments of any amount selected (minimum payment of $100) to the party
designated by the shareholder. Notice of all changes concerning the Periodic
Withdrawal Plan must be received by IFG at least two weeks prior to the next
scheduled check. Further information regarding the Periodic Withdrawal Plan and
its requirements and tax consequences can be obtained by contacting IFG.
Exchange Policy. Shares of the Fund may be exchanged for shares of any
other fund of the Trust, as well as for shares of any of the following other
no-load mutual funds, which are also advised by IFG, on the basis of their
respective net asset values at the time of the exchange: INVESCO Capital
Appreciation Funds, Inc. (formerly, INVESCO Dynamics Fund, Inc.), INVESCO
Diversified Funds, Inc., INVESCO Emerging Opportunity Funds, Inc., INVESCO
Growth Fund, Inc., INVESCO Income Funds, Inc., INVESCO Industrial Income Fund,
Inc., INVESCO International Funds, Inc., INVESCO Money Market Funds, Inc.,
INVESCO Multiple Asset Funds, Inc., INVESCO Specialty Funds, Inc., INVESCO
Strategic Portfolios, Inc. and INVESCO Tax-Free Income Funds, Inc.
<PAGE>
An exchange involves the redemption of shares in the Fund and investment
of the redemption proceeds in shares of another fund of the Trust or in shares
of one of the funds listed above. Exchanges will be made at the net asset value
per share next determined after receipt of an exchange request in proper order.
Any gain or loss realized on such an exchange is recognizable for federal income
tax purposes by the shareholder. Exchange requests may be made either by
telephone or by written request to IFG, using the telephone number or address on
the cover of this Prospectus. Exchanges made by telephone must be in the amount
of at least $250, if the exchange is being made into an existing account of one
of the INVESCO funds. All exchanges that establish a new account must meet the
fund's applicable minimum initial investment requirements. Written exchange
requests into an existing account have no minimum requirements other than the
fund's applicable minimum subsequent investment requirements.
The option to exchange Fund shares by telephone is available to
shareholders automatically unless expressly declined. By signing the new account
Application or a Telephone Transaction Authorization Form or otherwise utilizing
the telephone exchange option, the investor has agreed that the Fund will not be
liable for following instructions communicated by telephone that it reasonably
believes to be genuine. The Fund employs procedures, which it believes are
reasonable, designed to confirm that exchange transactions are genuine. These
may include recording telephone instructions and providing written confirmations
of exchange transactions. As a result of this policy, the investor may bear the
risk of any loss due to unauthorized or fraudulent instructions; provided,
however, that if the Fund fails to follow these or other reasonable procedures,
the Fund may be liable.
In order to prevent abuse of this policy to the disadvantage of other
shareholders, the Fund reserves the right to terminate the exchange option of
any shareholder who requests more than four exchanges in a year. The Fund will
determine whether to do so based on a consideration of both the number of
exchanges any particular shareholder or group of shareholders has requested and
the time period over which those exchange requests have been made, together with
the level of expense to the Fund which will result from effecting additional
exchange requests. The exchange policy also may be modified or terminated at any
time. Except for those limited instances where redemptions of the exchanged
security are suspended under Section 22(e) of the 1940 Act, or where sales of
the fund into which the shareholder is exchanging are temporarily stopped,
notice of all such modifications or termination of the exchange policy will be
given at least 60 days prior to the date of termination or the effective date of
the modification.
Before making an exchange, the shareholder should review the prospectuses
of the funds involved and consider their differences. Shareholders interested in
exercising the exchange option may contact IFG for information concerning their
particular exchanges.
Automatic Monthly Exchange. Shareholders who have accounts in any one or
more of the mutual funds distributed by IDI may arrange for a fixed dollar
amount of their fund shares to be automatically exchanged for shares of any
other INVESCO mutual fund listed under "Exchange Policy" on a monthly basis,
<PAGE>
subject to the Fund's minimum initial investment or subsequent investment
requirements. This automatic exchange program can be changed by the shareholder
at any time by notifying IFG at least two weeks prior to the date the change is
to be made. Further information regarding this service can be obtained by
contacting IFG.
EasiVest. For shareholders who want to maintain a schedule of monthly
investments, EasiVest uses various methods to draw a preauthorized amount from
the shareholder's bank account to purchase Fund shares. This automatic
investment program can be changed by the shareholder at any time by notifying
IFG at least two weeks prior to the date the change is to be made. Further
information regarding this service can be obtained by contacting IFG.
Direct Payroll Purchase. Shareholders may elect to have their employers
make automatic purchases of Fund shares for them by deducting a specified amount
from their regular paychecks. This automatic investment program can be modified
or terminated at any time by the shareholder by notifying the employer. Further
information regarding this service can be obtained by contacting IFG.
Tax-Deferred Retirement Plans. Shares of the Fund may be purchased for
self-employed individual retirement plans, ^ various IRAs, simplified employee
pension plans and corporate retirement plans. In addition, shares can be used to
fund tax qualified plans established under Section 403(b) of the Internal
Revenue Code by educational institutions, including public school systems and
private schools, and certain kinds of non-profit organizations, which provide
deferred compensation arrangements for their employees.
Prototype forms for the establishment of these various plans, including,
where applicable, disclosure statements required by the Internal Revenue
Service, are available from IFG. INVESCO Trust Company, a subsidiary of IFG, is
qualified to serve as trustee or custodian under these plans and provides the
required services at competitive rates. Retirement plans (other than IRAs)
receive monthly statements reflecting all transactions in their Fund accounts.
IRAs receive the confirmations and quarterly statements described under
"Shareholder Accounts." For complete information, including prototype forms and
service charges, call ^ IFG at the telephone number listed on the cover of this
Prospectus or send a written request to: Retirement Services, INVESCO Funds
Group, Inc., Post Office Box 173706, Denver, Colorado 80217-3706.
HOW TO REDEEM SHARES
Shares of the Fund may be redeemed at any time at their current net asset
value next determined after a request in proper form is received at the Trust's
office. (See "How Shares Can Be Purchased.") Net asset value per share of the
Fund at the time of the redemption may be more or less than the price originally
paid to purchase shares.
In order to redeem shares, a written redemption request signed by each
registered owner of the account may be submitted to IFG at the address noted
above. Redemption requests sent by overnight courier, including Express Mail,
<PAGE>
should be sent to the street address, not Post Office Box, of INVESCO Funds
Group, Inc. at 7800 E. Union Avenue, Denver, CO 80237. If shares are held in the
name of a corporation, additional documentation may be necessary. Call or write
for ^ specific information. If payment for the redeemed shares is to be made to
someone other than the registered owner(s), the signature(s) must be guaranteed
by a financial institution which qualifies as an eligible guarantor institution.
Redemption procedures with respect to accounts registered in the names of
broker-dealers may differ from those applicable to other shareholders.
Be careful to specify the account from which the redemption is to be made.
Shareholders have a separate account for each fund in which they invest.
Payment of redemption proceeds will be mailed within seven days following
receipt of the required documents. However, payment may be postponed under
unusual circumstances, such as when normal trading is not taking place on the
New York Stock Exchange or when an emergency as defined by the Securities and
Exchange Commission exists. If the shares to be redeemed were purchased by check
and that check has not yet cleared, payment will be made promptly upon clearance
of the purchase check (which will take up to 15 days).
If a shareholder participates in EasiVest, the Fund's automatic monthly
investment program, and redeems all of the shares in a Fund account, IFG will
terminate any further EasiVest purchases unless otherwise instructed by the
shareholder.
Because of the high relative costs of handling small accounts, should the
value of any shareholder's account fall below $250 as a result of shareholder
action, the Trust reserves the right to effect the involuntary redemption of all
shares in such account, in which case the account would be liquidated and the
proceeds forwarded to the shareholder. Prior to any such redemption, a
shareholder will be notified and given 60 days to increase the value of the
account to $250 or more.
Fund shareholders (other than shareholders holding Fund shares in accounts
of IRA plans) may request expedited redemption of shares having a minimum value
of $250 (or redemption of all shares if their value is less than $250) held in
accounts maintained in their name by telephoning redemption instructions to IFG,
using the telephone number on the cover of this Prospectus. For INVESCO Trust
Company sponsored federal income tax-deferred retirement plans, the term
"shareholders" is defined to mean plan trustees that file a written request to
be able to redeem Fund shares by telephone. Unless Fund Management permits a
larger redemption request to be placed by telephone, a shareholder may not place
a redemption request by telephone in excess of $25,000. The redemption proceeds,
at the shareholder's option, either will be mailed to the address listed for the
shareholder on its Fund account, or wired (minimum $1,000) or mailed to the bank
which the shareholder has designated to receive the proceeds of telephone
redemptions. The Fund charges no fee for effecting such telephone redemptions.
The telephone redemption policy may be modified or terminated in the future at
the discretion of Fund Management. Shareholders should understand that while the
Fund will attempt to process all telephone redemption requests on an expedited
basis, there may be times, particularly in periods of severe economic or market
<PAGE>
disruption, when (a) they may encounter difficulty in placing a telephone
redemption request, and (b) processing telephone redemptions will require up to
seven days following receipt of the redemption request, or additional time
because of the unusual circumstances set forth above.
The ^ option to redeem Fund shares by telephone is available to
shareholders automatically unless expressly declined. By signing a new account
Application or a Telephone Transaction Authorization Form or otherwise utilizing
the telephone redemption ^ option, the shareholder has agreed that the Fund will
not be liable for following instructions communicated by telephone that it
reasonably believes to be genuine. The Fund employs procedures, which it
believes are reasonable, designed to confirm that telephone instructions are
genuine. These may include recording telephone instructions and providing
written confirmation of transactions inititated by telephone. As a result of
this policy, the investor may bear the risk of any loss due to unauthorized or
fraudulent instructions; provided, however, that if the Fund fails to follow
these or other reasonable procedures, the Fund may be liable.
TAXES, DIVIDENDS AND OTHER DISTRIBUTIONS
Taxes. The Fund intends to distribute to shareholders all of its net
investment income, net capital gains and net gains from foreign currency
transactions, if any, in order to continue to qualify for tax treatment as a
regulated investment company. Thus, the Fund does not expect to pay any federal
income or excise taxes.
Unless shareholders are exempt from income taxes, they must include all
dividends and other distributions in taxable income for federal, state and local
income tax purposes. Dividends and other distributions are taxable whether they
are received in cash or automatically reinvested in shares of the Fund or
another fund in the INVESCO group.
Net realized capital gains of the Fund are classified as short-term and
long-term gains depending upon how long the Fund held the security that gave
rise to the gains. Short-term capital gains are included in income from
dividends and interest as ordinary income and are taxed at the taxpayer's
marginal tax rate. The Taxpayer Relief Act of 1997 (the "Tax Act"), enacted in
August 1997, changed the taxation of long-term capital gains by applying
different capital gains rates depending on the taxpayer's holding period and
marginal rate of federal income tax. Long-term gains realized on the sale of
securities held for more than one year but not for more than 18 months are
taxable at a rate of 28%. This category of long-term gains is often referred to
as "mid-term" gains but is technically termed "28% rate gains". Long-term gains
realized on the sale of securities held for more than 18 months are taxable at a
rate of 20%.^ At the end of each year, information regarding the tax status of
dividends and other distributions is provided to shareholders. Shareholders
should consult their tax advisers as to the effect of the Tax Act on
distributions by the Fund of net capital gain.
<PAGE>
Shareholders also may realize capital gains or losses when they sell their
Fund shares at more or less than the price originally paid. Capital gain on
shares held for more than one year will be long-term capital gain, in which
event it will be subject to federal income tax at the rates indicated above.
The Fund may be subject to withholding of foreign taxes on dividends or
interest received on foreign securities. Foreign taxes withheld will be treated
as an expense of the Fund.
Individuals and certain other non-corporate shareholders may be subject to
backup withholding of 31% on dividends, capital gain and other distributions and
redemption proceeds. Unless you are subject to backup withholding for other
reasons, you can avoid backup withholding on your Fund account by ensuring that
we have a correct, certified tax identification number.
We encourage you to consult a tax adviser with respect to these matters.
For further information see "Dividends, Other Distributions and Taxes" in the
Statement of Additional Information.
Dividends and Other Distributions. The Fund earns ordinary or net
investment income in the form of dividends and interest on its investments.
Dividends paid by the Fund will be based solely on the income earned by it. The
Fund's policy is to distribute substantially all of this income, less Fund
expenses, to shareholders. Dividends from net investment income are paid on a
quarterly basis, at the end of November, February, May and August, at the
discretion of the Trust's Board of Trustees. Dividends are automatically
reinvested in additional shares of the Fund at the net asset value on the ^
payable date unless otherwise requested.
In addition, the Fund realizes capital gains and losses when it sells
securities for more or less than it paid. If total gains on sales exceed total
losses (including losses carried forward from previous years), the Fund has a
net realized capital gain. Net realized capital gains, if any, together with
gains, if any, realized on foreign currency transactions, are distributed to
shareholders at least annually, usually in December. Capital gain distributions
are automatically reinvested in additional shares of the Fund at the net asset
value on the ^ payable date unless otherwise requested.
Dividends and other distributions are paid to holders of shares on the
record date of distribution regardless of how long the Fund shares have been
held by the shareholder. The Fund's share price will then drop by the amount of
the distribution on the ex- dividend ^ or ex-distribution date. If a shareholder
purchases shares immediately prior to the distribution, the shareholder will, in
effect, have "bought" the distribution by paying the full purchase price, a
portion of which is then returned in the form of a taxable distribution.
ADDITIONAL INFORMATION
Voting Rights. All shares of the Trust's funds have equal voting rights.
When shareholders are entitled to vote upon a matter, each shareholder is
entitled to one vote for each share owned and a corresponding fractional vote
<PAGE>
for each fractional share owned. Voting with respect to certain matters,
such as ratification of independent accountants and the election of trustees,
will be by all funds of the Trust voting together. In other cases, such as
voting upon the investment advisory contract for the individual funds, voting is
on a fund-by-fund basis. To the extent permitted by law, when not all funds are
affected by a matter to be voted upon, only shareholders of the fund or funds
affected by the matter will be entitled to vote thereon. The Trust is not
generally required, and does not expect, to hold regular annual meetings of
shareholders. However, the board of trustees will call such special meetings of
shareholders for the purpose, among other reasons, of voting the question of
removal of a trustee or trustees when requested to do so in writing by the
holders of 10% or more of the outstanding shares of the Trust or as may be
required by applicable law or the Trust's Declaration of Trust. The Trust will
assist shareholders in communicating with other shareholders as required by the
1940 Act. Trustees may be removed by action of the holders of two-thirds of the
outstanding shares of the Trust.
Shareholder Inquiries. All inquiries regarding the Fund should be directed
to the Trust at the telephone number or mailing address set forth on the cover
page of this ^ Prospectus.
Transfer and Dividend Disbursing Agent. INVESCO Funds Group, Inc., 7800 E.
Union Avenue, Denver, Colorado 80237, acts as registrar, transfer agent and
dividend disbursing agent for the Fund pursuant to a Transfer Agency Agreement
which provides that the Fund will pay an annual fee of $20.00 per shareholder
account or, where applicable, per participant in an omnibus account. The
transfer agency fee is not charged to each shareholder's or participant's
account but is an expense of the Fund to be paid from the Fund's assets.
Registered broker-dealers, third party administrators of tax-qualified
retirement plans and other entities, including affiliates of IFG, may provide
sub-transfer agency services to the Fund which reduce or eliminate the need for
identical services to be provided on behalf of the Fund by IFG. In such cases,
IFG may pay the third party an annual sub-transfer agency or recordkeeping fee
out of the transfer agency fee which is paid to IFG by the Fund.
<PAGE>
^ PROSPECTUS
January 1, 1998
INVESCO Value Equity Fund
INVESCO Distributors, Inc.,
Distributor
Post Office Box 173706
Denver, Colorado 80217-3706
1-800-525-8085
PAL(R): 1-800-424-8085
http://www.invesco.com
In Denver, visit one of our
convenient Investor Centers:
Cherry Creek
155-B Fillmore Street
Denver Tech Center
7800 East Union Avenue
Lobby Level
In addition, all documents
filed by the Trust with the
Securities and Exchange Commission
can be located on a web site
maintained by the Commission at
http://www.sec.gov.
<PAGE>
PROSPECTUS
January 1, 1998
INVESCO VALUE TRUST
INVESCO Total Return Fund
INVESCO Total Return Fund (the "Fund") seeks to achieve a high total
return on investment through capital appreciation and current income by
investing in a combination of equity securities (consisting of common stocks
and, to a lesser degree, securities convertible into common stock) and fixed
income securities. The equity securities purchased by the Fund generally will be
issued by companies which are listed on a national securities exchange and which
usually pay regular dividends. This Fund seeks reasonably consistent total
returns over a variety of market cycles.
The Fund is a series of INVESCO Value Trust (the "Trust"), an open-end
management investment company consisting of three separate portfolios of
investments. This Prospectus relates to shares of INVESCO Total Return Fund.
Separate prospectuses are available upon request from INVESCO Distributors, Inc.
for the Trust's other two funds, INVESCO Value Equity Fund and INVESCO
Intermediate Government Bond Fund. Investors may purchase shares of any or all
funds. Additional funds may be offered in the future.
This Prospectus provides you with the basic information you should know
before investing in the Fund. You should read it and keep it for future
reference. A Statement of Additional Information containing further information
about the Fund, dated January 1, ^ 1998, has been filed with the Securities and
Exchange Commission and is incorporated by reference into this ^ Prospectus. To
obtain a free copy, write to INVESCO Distributors, Inc., P.O. Box 173706,
Denver, Colorado 80217-3706; ^ call 1-800-525-8085; or visit our web site at:
http://www.invesco.com.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE. SHARES OF THE FUND ARE NOT DEPOSITS OR
OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY, ANY BANK OR OTHER FINANCIAL
INSTITUTION. THE SHARES OF THE FUND ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY.
----------
<PAGE>
TABLE OF CONTENTS
Page
----
ANNUAL FUND EXPENSES 56
FINANCIAL HIGHLIGHTS 58
PERFORMANCE DATA 62
INVESTMENT OBJECTIVE AND POLICIES 62
RISK FACTORS 63
THE TRUST AND ITS MANAGEMENT 67
HOW SHARES CAN BE PURCHASED 70
SERVICES PROVIDED BY THE TRUST 72
HOW TO REDEEM SHARES 75
TAXES, DIVIDENDS AND OTHER DISTRIBUTIONS 76
ADDITIONAL INFORMATION 78
<PAGE>
ANNUAL FUND EXPENSES
The Fund is 100% no-load; there are no fees to purchase, exchange or
redeem shares, nor any ongoing marketing ("12b-1") expenses. Lower expenses
benefit Fund shareholders by increasing the Fund's total return.
Shareholder Transaction Expenses
Sales load "charge" on purchases None
Sales load "charge" on reinvested dividends None
Redemption fees None
Exchange fees None
Annual Fund Operating Expenses
(as a percentage of average net assets)
Management Fee 0.64%
12b-1 Fees None
Other Expenses 0.22%
Transfer Agency Fee(1) 0.16%
General Services, Administrative
Services, Registration, Postage(2) 0.06%
Total Fund Operating Expenses(3) 0.86%
(1) Consists of the transfer agency fee described under "Additional
Information - Transfer and Dividend Disbursing Agent."
(2) Includes, but is not limited to, fees and expenses of trustees,
custodian bank, legal counsel and independent accountants, ^ securities pricing
^ services, costs of administrative services furnished under an Administrative
Services Agreement, costs of registration of Fund shares under applicable laws,
and costs of printing and distributing reports to shareholders.
(3) It should be noted that the Fund's actual total operating expenses
were lower than the figures shown because the Fund's custodian ^ and transfer
agent fees were reduced under expense offset arrangements. However, as a result
of an SEC requirement for mutual funds to state their total operating expenses
without crediting any such expense offset arrangement, the figures shown above
do not reflect these reductions. In comparing expenses for different years,
please note that the ratios of Expenses to Average Net Assets shown under
"Financial Highlights" do reflect reductions for periods prior to the fiscal
year ended August 31, 1996. (See "The Trust ^ and Its ^ Management.")
Example
A shareholder would pay the following expenses on a $1,000 investment for
the periods shown, assuming (1) a 5% annual return and (2) redemption at the end
of each time period:
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
$9 $28 $48 $106
<PAGE>
The purpose of the foregoing table is to assist investors in understanding
the various costs and expenses that an investor in the Fund will bear directly
or indirectly. Such expenses are paid from the Fund's assets. (See "The Trust ^
and Its Management.") The above figures for INVESCO Total Return Fund are based
on fiscal year-end information. The Fund charges no sales load, redemption fee
or exchange fee and bears no distribution expenses. THE EXAMPLE SHOULD NOT BE
CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES, AND ACTUAL EXPENSES MAY
BE GREATER OR LESS THAN THOSE SHOWN. The assumed 5% annual return is
hypothetical and should not be considered a representation of past or future
annual returns, which may be greater or less than the assumed amount.
<PAGE>
FINANCIAL HIGHLIGHTS
(For a Fund Share Outstanding Throughout Each Period)
The following information for each of the four years ended August 31,
1997, the eight-month fiscal period ended August 31, 1993, each of the ^ four
years ended December 31, 1992, and the period ended December 31, 1987, has been
audited by Price Waterhouse LLP, independent accountants. Prior years'
information was audited by another independent accounting firm. This information
should be read in conjunction with the audited financial statements and the
report of independent accountants thereon appearing in the Trust's 1997 Annual
Report to Shareholders which is incorporated by reference into the Statement of
Additional Information. Both are available without charge by contacting INVESCO
Distributors, Inc., at the address or telephone number on the cover of this
Prospectus. All per share data has been adjusted to reflect an 80 to 1 stock
split which was effected on January 2, 1991.
<TABLE>
<CAPTION>
Period
Period Ended
Ended Decem-
Year Ended August 31 August 31 Year Ended December 31 ber 31
----------------------------------- -------- ------------------------------------------- --------
1997 1996 1995 1994 1993^ 1992 1991 1990 1989 1988 1987>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value -
Beginning of
Period $22.60 $20.95 $18.54 $18.27 $17.18 $16.43 $14.21 $15.08 $13.46 $12.56 $12.50
----------------------------------- -------- ----------------------------------------------------
INCOME FROM
INVESTMENT OPERATIONS
Net Investment
Income 0.77 0.73 0.72 0.69 0.40 0.66 0.71 0.74 0.79 0.39 0.22
Net Gains or
(Losses) on
Securities (Both
Realized and
Unrealized) 5.26 1.78 2.46 0.60 1.09 0.93 2.78 (0.80) 1.74 0.93 0.00
----------------------------------- -------- ----------------------------------------------------
Total from
Investment
Operations 6.03 2.51 3.18 1.29 1.49 1.59 3.49 (0.06) 2.53 1.32 0.22
----------------------------------- -------- ----------------------------------------------------
<PAGE>
LESS DISTRIBUTIONS
Dividends from Net
Investment
Income 0.77 0.73 0.72 0.60 0.40 0.65 0.72 0.75 0.78 0.40 0.16
In Excess of Net
Investment
Income+ 0.00 0.00 0.00 0.09 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Distributions from
Capital Gains 0.09 0.13 0.05 0.17 0.00 0.19 0.55 0.06 0.13 0.02 0.00
In Excess of
Capital Gains 0.00 0.00 0.00 0.16 0.00 0.00 0.00 0.00 0.00 0.00 0.00
----------------------------------- -------- ---------------------------------------------------
Total
Distributions 0.86 0.86 0.77 1.02 0.40 0.84 1.27 0.81 0.91 0.42 0.16
----------------------------------- -------- ---------------------------------------------------
Net Asset Value -
End of Period $27.77 $22.60 $20.95 $18.54 $18.27 $17.18 $16.43 $14.21 $15.08 $13.46 $12.56
=================================== ======== ===================================================
TOTAL RETURN 27.01% 12.06% 17.54% 7.22% 8.72%* 9.84% 24.96% (0.35%) 19.13% 11.53% 1.72%*
RATIOS
Net Assets - End
of Period
($000 Omitted) $1,845,594 $1,032,151 $563,468 $292,765 $220,224 $137,196 $82,219 $54,874 $44,957 $28,432 $219
Ratio of Expenses
to Average Net
Assets# 0.86%@ 0.89%@ 0.95% 0.96% 0.93%~ 0.88% 0.92% 1.00% 1.00% 1.00% 0.81%~
Ratio of Net
Investment Income
to Average
Net Assets# 3.11% 3.44% 3.97% 3.31% 3.51%~ 4.06% 4.62% 5.22% 5.46% 5.56% 6.44%~
Portfolio Turnover
Rate 4% 10% 30% 12% 19%* 13% 49% 24% 28% 13% 0%*
Average Comission
Rate Paid^^ $0.0520 $0.0539 - - - - - - - - -
</TABLE>
^ From January 1, 1993 to August 31, 1993.
> From September 22, 1987, commencement of investment operations, to December
31, 1987.
+ Distributions in excess of net investment income for the year ended August
31,1995, aggregated less than $0.01 on a per share basis.
* Based on operations for the period shown and, accordingly, are not
representative of a full year.
# Various expenses of the Fund were voluntarily absorbed by IFG for the years
ended December 31, 1989, 1988 and the period ended December 31, 1987. If such
expenses had not been voluntarily absorbed, ratio of expenses to average net
assets would have been 1.05%, 1.21% and 2.00%, respectively, and ratio of net
investment income to average net assets would have been 5.41%, 5.35% and 5.25%,
respectively.
<PAGE>
@ Ratio is based on Total Expenses of the Fund, which is before any expense
offset arrangements.
~ Annualized
^^ The average commission rate paid is the total brokerage commissions paid on
applicable purchases and sales of securities for the period divided by the total
number of related shares purchased or sold which is required to be disclosed for
fiscal years beginning September 1, 1995 and thereafter.
Further information about the performance of the Fund is contained in the
Trust's Annual Report to Shareholders, which may be obtained without charge by
writing INVESCO Distributors, Inc., P.O. Box 173706, Denver, Colorado
80217-3706; or by calling 1-800- 525-8085.
<PAGE>
PERFORMANCE DATA
From time to time, the Fund advertises its total return performance. These
figures are based upon historical investment results and are not intended to
indicate future performance. Total return is computed by calculating the
percentage change in value of an investment, assuming reinvestment of all income
dividends and capital gain distributions, to the end of a specified period.
Cumulative total return reflects actual performance over a stated period of
time. Average annual total return is a hypothetical rate of return that, if
achieved annually, would have produced the same cumulative total return if
performance had been constant over the entire period.
Thus, a given report of total return performance should not be considered
as representative of future performance. The Fund charges no sales load,
redemption fee or exchange fee which would affect total return computations.
In conjunction with performance reports and/or analyses of shareholder
service for the Fund, comparative data between the Fund's performance for a
given period and the performance of recognized bond indices and indices of
investment results for the same period and/or assessments of the quality of
shareholder service may be provided to shareholders. Such indices include
indices provided by Dow Jones & Company, Standard & Poor's ^, a division of The
McGraw-Hill Companies, Inc. ("S&P"), Lipper Analytical Services, Inc., Lehman
Brothers, National Association of Securities Dealers Automated Quotations, Frank
Russell Company, Value Line Investment Survey, the American Stock Exchange,
Morgan Stanley Capital International, Wilshire Associates, the Financial Times
Stock Exchange, the New York Stock Exchange, the Nikkei Stock Average and the
Deutcher Aktienindex, all of which are unmanaged market indicators. In addition,
rankings, ratings and comparisons of investment performance and/or assessments
of the quality of shareholder service appearing in publications such as Money,
Forbes, Kiplinger's Personal Finance, Morningstar and similar sources which
utilize information compiled (i) internally; (ii) by Lipper Analytical Services,
Inc.; or (iii) by other recognized analytical services, may be used in
advertising. The Lipper Analytical Services, Inc. mutual fund rankings and
comparisons, which may be used by the Fund in performance reports, will be drawn
from the "Flexible Portfolio Funds" Lipper mutual fund groupings, in addition to
the broad-based Lipper general fund grouping.
INVESTMENT OBJECTIVE AND POLICIES
The Trust consists of three separate portfolios of investments (referred to
as the "Funds"), each represented by a different class of the Trust's shares.
This Prospectus relates to INVESCO Total Return Fund; separate prospectuses for
INVESCO Value Equity Fund and INVESCO Intermediate Government Bond Fund are
available. The investment objective of the Fund is to seek a high total return
on investment through capital appreciation and current income. Funds having an
investment objective of seeking a high total return may be limited in their
ability to attain their objective by the limitations on the types of securities
in which they may invest. ^ No assurance can be given that the Fund will be able
to achieve its investment objective.
<PAGE>
The Fund intends to accomplish its objective by investing in a combination
of equity securities and fixed income securities. The equity securities to be
acquired by the Fund will consist of common stocks and, to a lesser extent,
securities convertible into common stocks. Such securities generally will be
issued by companies which are listed on a national securities exchange, such as
the New York Stock Exchange, and which usually pay regular dividends, although
the Fund also may invest in securities traded on regional stock exchanges or on
the over-the-counter market. The Trust has not established any minimum
investment standards, such as an issuer's asset level, earnings history, type of
industry, dividend payment history, etc. with respect to the Fund's investments
in common stocks, although in selecting common stocks for the Fund, the
investment adviser and sub-adviser (collectively, "Fund Management") generally
apply an investment discipline which seeks to achieve a yield higher than the
overall equity market. Therefore, because smaller companies may be subject to
more significant losses, as well as have the potential for more substantial
growth, than larger, more established companies, investors in the Fund should
consider that the Fund's investments may consist in part of securities which may
be deemed to be speculative.
The income securities to be acquired by the Fund primarily will include
obligations of the U.S. government and its agencies. These U.S. government
obligations consist of direct obligations of the U.S. government (U.S. Treasury
Bills, Notes and Bonds), obligations guaranteed by the U.S. government, such as
Government National Mortgage Association obligations, and obligations of U.S.
government authorities, agencies and instrumentalities, which are supported only
by the assets of the issuer, such as ^ Fannie Mae (formerly, Federal National
Mortgage Association), Federal Home Loan ^ Banks, Federal Financing Bank and
Federal Farm Credit Bank. The Fund also may invest in corporate debt obligations
which are rated by Moody's Investors Service, Inc. ("Moody's") in its four
highest ratings of corporate obligations (Aaa, Aa, A and Baa) or by S&P in its
four highest ratings of corporate obligations (AAA, AA, A and BBB) or, if not
rated, ^ in Fund Management's opinion have investment characteristics similar to
those described in such ratings. A bond rating of Baa by Moody's indicates that
the bond issue is of "medium grade," neither highly protected nor poorly
secured. Interest payments and principal security appear adequate for the
present, but certain protective elements may be lacking or may be
characteristically unreliable over any great length of time. Such bonds lack
outstanding investment characteristics and have speculative characteristics as
well. A bond rating of BBB by S&P indicates that the bond issue is in the lowest
"investment grade" security rating. Bonds rated BBB are regarded as having an
adequate capacity to pay principal and interest. Whereas they normally exhibit
adequate protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay principal
and interest for bonds in this category than for bonds in the A category, and
they may have speculative characteristics. (See Appendix A to the Statement of
Additional Information for specific descriptions of these corporate bond rating
categories.) Although there is no limitation on the maturity of the Fund's
investment in income securities, the dollar weighted average maturity of such
investments normally will be from 3 to 15 years.
Obligations of certain U.S. government agencies and instrumentalities may
not be supported by the full faith and credit of the United States. Some are
backed by the right of the issuer to borrow from the U.S. Treasury; others, such
<PAGE>
as the Federal National Mortgage Association, by discretionary authority of the
U.S. government to purchase the agencies' obligations; while still others, such
as the Student Loan Marketing Association, are supported only by the credit of
the instrumentality. In the case of securities not backed by the full faith and
credit of the United States, the Fund must look principally to the agency
issuing or guaranteeing the obligation for ultimate repayment, and may not be
able to assert a claim against the United States itself in the event the agency
or instrumentality does not meet its commitments. The Fund will invest in
securities of such instrumentalities only when Fund Management is satisfied that
the credit risk with respect to any such instrumentality is minimal.
Typically, the Fund will maintain a minimum investment in equities of 30%
of total assets, and a ^ minimum of 30% of total assets will be invested in
fixed and variable income securities. The remaining 40% of the portfolio will
vary in asset allocation according to Fund Management's assessment of business,
economic and market conditions. The analytical process associated with making
allocation decisions is based upon a combination of demonstrated historic
financial results, current prices for stocks and the current yield to maturity
available in the market for bonds. The premium return available from one
category relative to the other determines the actual asset deployment. Fund
Management's asset allocation process is systematic and is based on current
information rather than forecasted change. The Fund seeks reasonably consistent
returns over a variety of market cycles. (See "Risk Factors" section of this
Prospectus for an analysis of the risks presented by this Fund's ability to
enter into ^ futures contracts, and its ability to use options to purchase or
sell ^ futures contracts or ^ securities.)
The investment objective of the Fund and its investment policies, ^ where
indicated ^, are fundamental policies and thus may not be changed without prior
approval by the holders of a majority of the outstanding voting securities of
the Fund, as defined in the 1940 Act. In addition, the Trust and this Fund are
also subject to certain investment restrictions which also are set forth in the
Statement of Additional Information and which may not be altered without
approval of the Fund's shareholders. One of those restrictions limits the Fund's
borrowing of money to borrowings from banks for temporary or emergency purposes
(but not for leveraging or investment) in an amount not exceeding 33 1/3% of the
value of the Fund's total assets.
RISK FACTORS
Investors should consider the special factors associated with the policies
discussed below in determining the appropriateness of an investment in the
INVESCO Total Return Fund. The Fund's policies regarding investments in foreign
securities and foreign currencies are not fundamental and may be changed by vote
of the Trust's board of trustees.
Foreign Securities. The Fund may invest up to 25% of its total assets in
foreign equity or debt securities. Investments in securities of foreign
companies and in foreign markets involve certain additional risks not associated
with investments in domestic companies and markets, including the risks of
fluctuations in foreign currency exchange rates and of political or economic
<PAGE>
instability, the difficulty of predicting international trade patterns, and the
possibility of imposition of exchange controls or currency blockage. In
addition, there may be less information publicly available about a foreign
company than about a domestic company, and there is generally less government
regulation of stock exchanges, brokers and listed companies abroad than in the
United States. Moreover, with respect to certain foreign countries, there may be
a possibility of expropriation or confiscatory taxation. Further, economies of
particular countries or areas of the world may differ favorably or unfavorably
from the economy of the United States.
Forward Foreign Currency Contracts. The Fund may enter into contracts to
purchase or sell foreign currencies at a future date ("forward contracts") as a
hedge against fluctuations in foreign exchange rates pending the settlement of
transactions in foreign securities or during the time the Fund holds foreign
securities. A forward contract is an agreement between contracting parties to
exchange an amount of currency at some future time at an agreed upon rate.
Although the Fund has not adopted any limitations on its ability to use forward
contracts as a hedge against fluctuations in foreign exchange rates, it does not
attempt to hedge all of its foreign investment positions and will enter into
forward contracts only to the extent, if any, deemed appropriate by Fund
Management. The Fund will not enter into a forward contract for a term of more
than one year or for purposes of speculation. Investors should be aware that
hedging against a decline in the value of a currency in the foregoing manner
does not eliminate fluctuations in the prices of portfolio securities or prevent
losses if the prices of such securities decline. Furthermore, such hedging
transactions may preclude the opportunity for gain if the value of the hedged
currency should rise. No predictions can be made with respect to whether the
total of such transactions will result in a better or a worse position than had
the Fund not entered into any forward contracts. Forward contracts may, from
time to time, be considered illiquid, in which case they would be subject to the
Fund's limitation on investing in illiquid securities, discussed below. For
additional information regarding foreign securities, see the Trust's Statement
of Additional Information.
Repurchase Agreements. The Fund may engage in repurchase agreements with
banks, registered broker-dealers, and registered government securities dealers
which are deemed creditworthy by Fund Management under guidelines established by
the board of trustees. A repurchase agreement is a transaction in which the Fund
purchases a security and simultaneously commits to sell the security to the
seller at an agreed upon price and date (usually not more than seven days) after
the date of purchase. The resale price reflects the purchase price plus an
agreed upon market rate of interest which is unrelated to the coupon rate or
maturity of the purchased security. The Fund's risk is limited to the ability of
the seller to pay the agreed upon amount on the delivery date. However, in the
event the seller should default, the underlying security constitutes collateral
for the seller's obligations to pay. This collateral will be held by the
custodian for the Fund's assets. ^ In the event of insolvency of a counterparty
to a repurchase agreement, the Fund could experience delays and incur costs in
realizing on the collateral. To the extent that the proceeds from a sale upon a
default in the obligation to repurchase are less than the repurchase price, the
<PAGE>
Fund would suffer a loss. Although the Fund has not adopted any limit on the
amount of its total assets that may be invested in repurchase agreements, the
Fund intends that at no time will the market value of its securities subject to
repurchase agreements exceed 20% of the total assets of the Fund.
Illiquid Securities. The Fund may invest from time to time in securities
subject to restrictions on disposition under the Securities Act of 1933
("restricted securities"), securities without readily available market
quotations or illiquid securities (those which cannot be sold in the ordinary
course of business within seven days at approximately the valuation given to
them by the Fund). However, on the date of purchase, no such investment may
increase the Fund's holdings of restricted securities to more than 2% of the
value of the Fund's total assets or its holdings of illiquid securities or those
without readily available market quotations to more than 5% of the value of the
Fund's total assets. The Fund is not required to receive registration rights in
connection with the purchase of restricted securities and, in the absence of
such rights, marketability and value can be adversely affected because the Fund
may be unable to dispose of such securities at the time desired or at a
reasonable price. In addition, in order to resell a restricted security, the
Fund might have to bear the expense and incur the delays associated with
effecting registrations.
Futures and Options. A futures contract is an agreement to buy or sell a
specific amount of a financial instrument or commodity at a particular price on
a particular date. The Fund will use futures contracts only to hedge against
price changes in the value of its current or intended investments in securities.
In the event that an anticipated decrease in the value of portfolio securities
occurs as a result of a general decrease in prices, the adverse effects of such
changes may be offset, at least in part, by gains on the sale of futures
contracts. Conversely, the increased cost of portfolio securities to be
acquired, caused by a general increase in prices, may be offset, at least in
part, by gains on futures contracts purchased by the Fund. Brokerage fees are
paid to trade futures contracts, and the Fund is required to maintain margin
deposits.
Put and call options on futures contracts or securities may be traded by
the Fund in order to protect against declines in the value of portfolio
securities or against increases in the cost of securities to be acquired. The
purchaser of an option purchases the right to effect a transaction in the
underlying future or security at a specified price (the "strike price") before a
specified date (the "expiration date"). In exchange for the right, the purchaser
pays a "premium" to the seller, which represents the price of the right to buy
or to sell the underlying instrument. In exchange for the premium, the seller of
the option becomes obligated to effect a transaction in the underlying future or
security, at the strike price, at any time prior to the expiration date, should
the buyer choose to exercise the option. A call option contract grants the
purchaser the right to buy the underlying future or security, at the strike
price, before the expiration date. A put option contract grants the purchaser
the right to sell the underlying future or security, at the strike price, before
the expiration date. Purchases of options on futures contracts may present less
dollar risk in hedging the Fund's portfolio than the purchase and sale of the
<PAGE>
underlying futures contracts, since the potential loss is limited to the amount
of the premium plus related transaction costs. The premium paid for such a put
or call option plus any transaction costs will reduce the benefit, if any,
realized by the Fund upon exercise or liquidation of the option, and, unless the
price of the underlying futures contract or security changes sufficiently, the
option may expire without value to the Fund.
Although the Fund will enter into futures contracts and options on futures
contracts and securities solely for hedging or other nonspeculative purposes,
within the meaning and intent of applicable rules of the CFTC, their use does
involve certain risks. For example, a lack of correlation between the value of
an instrument underlying an option or futures contract and the assets being
hedged, or unexpected adverse price movements, could render the Fund's hedging
strategy unsuccessful and could result in losses. In addition, there can be no
assurance that a liquid secondary market will exist for any contract purchased
or sold, and the Fund may be required to maintain a position until exercise or
expiration, which could result in losses. Transactions in futures contracts and
options are subject to other risks as well, which are set forth in greater
detail in the Statement of Additional Information and Appendix B therein.
Securities Lending. The Fund may make loans of its portfolio securities
(not to exceed 10% of the Fund's total assets) to broker-dealers or other
institutional investors under contracts requiring such loans to be callable at
any time and to be secured continuously by collateral in cash, cash equivalents,
high quality short-term government securities or irrevocable letters of credit
maintained on a current basis at an amount at least equal to the market value of
the securities loaned, including accrued interest and dividends. The Fund will
continue to collect the equivalent of the interest or dividends paid by the
issuer on the securities loaned and will also receive either interest (through
investment of cash collateral) or a fee (if the collateral is government
securities). The Fund may pay finder's and other fees in connection with
securities loans.
Portfolio Turnover. There are no fixed limitations regarding portfolio
turnover for the Fund. Although the Fund does not trade for short-term profits,
securities may be sold without regard to the time they have been held in the
Fund when, in the opinion of Fund Management, market considerations warrant such
action. As a result, while it is anticipated that the Fund's annual portfolio
turnover rate generally will not exceed 100%, under certain market conditions
the portfolio turnover rate for the Fund may exceed 100%. Increased portfolio
turnover would cause the Fund to incur greater brokerage costs than would
otherwise be the case. The Fund's portfolio turnover rates are set forth under
"Financial Highlights" and, along with the Trust's brokerage allocation
policies, are discussed in the Statement of Additional Information.
<PAGE>
THE TRUST AND ITS MANAGEMENT
The Trust is a no-load mutual fund, registered with the Securities and
Exchange Commission as an open-end, diversified management investment company.
The Trust was organized on July 15, 1987, under the laws of the Commonwealth of
Massachusetts as "Financial Series Trust." On July 1, 1993, the Trust changed
its name to "INVESCO Value Trust." The overall supervision of the ^ Fund is the
responsibility of ^ the Trust's board of trustees.
INVESCO Funds Group, Inc. ("IFG"), 7800 E. Union Avenue, Denver, Colorado,
serves as the Trust's investment adviser pursuant to an investment advisory
agreement. Under this agreement, IFG provides the Fund with various management
services and supervises the Fund's daily business affairs. Specifically, IFG
performs all administrative, clerical, statistical, secretarial and all other
services necessary or incidental to the administration of the affairs of the
Trust, excluding, however, those services that are the subject of a separate
agreement between the Trust and IFG or any affiliate thereof. Services provided
pursuant to separate agreement include the distribution and sale of Trust shares
and provision of transfer agency, dividend disbursing agency and registrar
services, and services furnished under an Administrative Services Agreement with
IFG dated as of February 28, 1997. ^
IFG has contracted with INVESCO Capital Management, Inc. ("ICM"), the
Trust's investment adviser prior to 1991, for investment sub-advisory and
research services on behalf of the Fund. ICM currently manages in excess of ^
$40 billion of assets on behalf of tax-exempt accounts (such as pension and
profit-sharing funds for corporations and state and local governments) and
investment companies. ICM, subject to the supervision of IFG, is primarily
responsible for selecting and managing the Fund's investments. Although the
Trust is not a party to the sub-advisory agreement, the agreement has been
approved by the shareholders of the Trust. Services provided by IFG and ICM are
subject to review by the Trust's board of trustees.
Pursuant to an agreement with the Trust, INVESCO Distributors, Inc.
("IDI") became the Fund's distributor. IDI, established in 1997, is a registered
broker-dealer that acts as distributor for all retail mutual funds advised by
IFG. Prior to September 30, 1997, IFG served as the Fund's distributor.
IFG, ICM and IDI are indirect wholly-owned subsidiaries of AMVESCAP PLC.
AMVESCAP PLC is a publicly-traded holding company that, through its
subsidiaries, engages in the business of investment management on an
international basis. INVESCO PLC changed its name to AMVESCO PLC on March 3,
1997 and to AMVESCAP PLC on May 8, 1997, as part of a merger between a direct
subsidiary of INVESCO PLC and A I M Management, Inc. that created one of the
largest independent investment management businesses in the world. IFG and ICM ^
continue to operate under their existing names. Together, IFG and ICM constitute
"Fund Management." AMVESCAP PLC has approximately $177.5 billion in assets under
management. IFG was established in 1932 and, as of August 31, 1997, managed 14
mutual funds, consisting of ^ 45 separate portfolios, with combined assets of
approximately 15.9 billion on behalf of more than 854,448 shareholders. ^
<PAGE>
The following individuals serve as portfolio managers for the Fund and are
primarily responsible for the day-to-day management of the Fund's portfolio of
securities:
Edward C. Mitchell, Jr., C.F.A. Portfolio manager of the Fund since
1987; ^ Chairman (1997 to present),
president (1992 to 1997), vice
president (1979 to 1991) and director
(1979 to present) of INVESCO Capital
Management, Inc.; began investment
career in 1969; B.A., University of
Virginia; M.B.A., University of
Colorado; Chartered Financial Analyst;
Chartered Investment Counselor.
James O. Baker Portfolio manager of the Fund since
1997; portfolio manager of the INVESCO
Intermediate Government Bond Fund
since 1993; portfolio manager of
INVESCO Capital Management, Inc. (1992
to present); portfolio manager, Willis
Investment Counsel (1990 to 1992);
broker, Morgan Keegan (1989 to 1990);
broker, Drexel Burnham Lambert (1985
to 1990); began investment career in
1977; B.A., Mercer University;
Chartered Financial Analyst.
Margaret W. Durkes Assistant portfolio manager of the
Fund since 1997; assistant portfolio
manager of AIM Advisor Flex Fund since
1997; assistant portfolio manager for
INVESCO Capital Management, Inc. (1993
to present); vice president and
portfolio manager for Sovran Capital
Management (1991 to 1993); B.A., The
Colorado College; Chartered Financial
Analyst.
David S. Griffin Assistant portfolio manager of the
Fund since 1993; portfolio manager for
INVESCO Capital Management, Inc. (1991
to present); mutual fund sales
representative, INVESCO Services, Inc.
(1986 to 1991); began investment
career in 1982; B.A., Ohio Wesleyan
University; M.B.A., William and Mary;
Chartered Financial Analyst.
<PAGE>
Under the investment advisory agreement, the Fund pays IFG a monthly fee
at the following annual rates, based on the average net assets of the Fund:
0.75% on the first $500 million of the Fund's average net assets; 0.65% on the
next $500 million of the Fund's average net assets; and 0.50% on the average net
assets of the Fund in excess of $1 billion. For the fiscal year ended August 31,
1997, the advisory fees paid to IFG amounted to 0.64% of the average net assets
of the Fund.
Out of its advisory fee which it receives from the Fund, IFG pays ICM, as
the Fund's sub-adviser, a monthly fee, which is computed at the following annual
rates: prior to January 1, 1998, 0.20% on the first $500 million of the Fund's
average net assets, 0.17% on the next $500 million of the Fund's average net
assets and 0.13% on the Fund's average net assets in excess of $1 billion and
effective January 1, 1998, 0.25% on the first $500 million of the Fund's average
net assets, 0.2167% on the second $500 million of the Fund's average net assets
and 0.1667% on the Fund's average net assets in excess of $1 billion. No fee is
paid by the Fund to ICM.
The Fund bears those Trust expenses which are accrued daily that are
incurred on its behalf and, in addition, bears a portion of general Trust
expenses, allocated based upon the relative net assets of the three Funds of the
Trust. Such expenses are generally deducted from the Fund's total income before
dividends are paid. Total expenses of the Fund, including investment advisory
fees (but excluding brokerage commissions), as a percentage of its average net
assets for the fiscal year ended August 31, 1997, were 0.86%.
The Trust also has entered into an Administrative Services Agreement (the
"Administrative Agreement") with IFG. Pursuant to the Administrative Agreement,
INVESCO performs certain administrative and internal accounting services,
including without limitation, maintaining general ledger and capital stock
accounts, preparing a daily trial balance, calculating net asset value daily and
providing selected general ledger reports and providing sub- accounting and
recordkeeping services for shareholder accounts maintained by certain retirement
and employee benefit plans for the benefit of participants in such plans. For
such services, the Fund pays INVESCO a fee consisting of a base fee of $10,000
per year, plus an additional incremental fee computed at an annual rate not to
exceed a maximum of 0.015% per annum of the average net assets of the Fund.
The Declaration of Trust pursuant to which the Trust is organized contains
an express disclaimer of shareholder liability for acts or obligations of the
Trust and requires that notice of such disclaimer be given in each instrument
entered into or executed by the Trust. The Declaration of Trust also provides
for indemnification out of the Trust's property for any shareholder held
personally liable for any Trust obligation. Thus, the risk of a shareholder
being personally liable for obligations of the Trust is limited to the unlikely
circumstance in which the Trust itself would be unable to meet its obligations.
Fund Management places orders for the purchase and sale of portfolio
securities with brokers and dealers based upon Fund Management's evaluation of
the broker-^ dealers' financial responsibility coupled with such broker-^
dealers' ability to effect transactions at the best available prices. The Fund
may place orders for portfolio transactions with qualified broker-dealers that
<PAGE>
recommend the Fund or sell shares of the Fund to clients, or act as agent
in the purchase of fund shares for clients, if Fund Management believes that the
quality of the execution of the transaction and level of commission are
comparable to those available from other qualified brokerage firms. For further
information, see "Investment Practices -- Placement of Portfolio Brokerage" in
the Statement of Additional Information.
Fund Management permits investment and other personnel to purchase and
sell securities for their own accounts, subject to a compliance policy governing
personal investing. This policy requires Fund Management's personnel to conduct
their personal investment activities in a manner that Fund Management believes
is not detrimental to the Fund or Fund Management's other advisory clients. See
the Statement of Additional Information for more detailed information.
HOW SHARES CAN BE PURCHASED
Shares of the Fund are sold on a continuous basis by ^ IDI, as the Fund's
distributor, at the net asset value per share next calculated after receipt of a
purchase order in good form. No sales charge is imposed upon the sale of shares
of the Fund. To purchase shares of the Fund, send a check made payable to
INVESCO Funds Group, Inc., together with a completed application form, to:
INVESCO FUNDS GROUP, INC.
Post Office Box 173706
Denver, Colorado 80217-3706
PURCHASE ORDERS MUST SPECIFY THE FUND IN WHICH THE INVESTMENT IS TO BE
MADE.
The minimum initial purchase must be at least $1,000, with subsequent
investments of not less than $50, except that: (1) those shareholders
establishing an EasiVest or direct payroll purchase account, as described below
in the section entitled "Services Provided by the Fund," may open an account
without making any initial investment if they agree to make regular, minimum
purchases of at least $50; (2) those shareholders investing in an Individual
Retirement Account ("IRA"), or through omnibus accounts where individual
shareholder recordkeeping and sub-accounting are not required, may make initial
minimum purchases of $250; (3) Fund Management may permit a lesser amount to be
invested in the Fund under a federal income tax-deferred retirement plan (other
than an IRA), or under a group investment plan qualifying as a sophisticated
investor; and (4) Fund Management reserves the right to increase, reduce or
waive the minimum purchase requirements in its sole discretion where it
determines such action is in the best interests of the Fund. The minimum initial
purchase requirement of $1,000, as described above, does not apply to
shareholder account(s) in any of the INVESCO funds opened prior to January 1,
1993, and thus is not a minimum balance requirement for those existing accounts.
However, for shareholders already having accounts in any of the INVESCO funds,
all initial share purchases in a new fund account, including those made using
the exchange privilege, must meet the fund's applicable minimum investment
requirement.
<PAGE>
The purchase of shares in the Fund can be expedited by placing bank wire,
overnight courier or telephone orders. For further information, the purchaser
may call the Trust's office by using the telephone number on the cover of this
Prospectus. Orders sent by overnight courier, including Express Mail, should be
sent to the street address, not Post Office Box, of INVESCO Funds Group, Inc.,
7800 E. Union Avenue, Denver, Colorado 80237.
Orders to purchase Fund shares can be placed by telephone. Shares of the
Fund will be issued at the net asset value next determined after receipt of
telephone instructions. Generally, payments for telephone orders must be
received by the Trust within three business days or the transaction may be
cancelled. In the event of such cancellation, the purchaser will be held
responsible for any loss resulting from a decline in the value of the shares. In
order to avoid such losses, purchasers should send payments for telephone
purchases by overnight courier or bank wire. IFG has agreed to indemnify the
Trust for any losses resulting from the cancellation of telephone purchases.
If your check does not clear, or if a telephone purchase must be cancelled
due to nonpayment, you will be responsible for any related loss the Fund or IFG
incurs. If you are already a shareholder in the INVESCO funds, the Fund has the
option to redeem shares from any identically registered account in the Fund or
any other INVESCO fund as reimbursement for any loss incurred. You also may be
prohibited or restricted from making future purchases in any of the INVESCO
funds.
Persons who invest in the Fund through a securities broker may be charged
a commission or transaction fee by the broker for the handling of the
transaction if the broker so elects. Any investor may deal directly with the
Fund in any transaction. In that event, there is no such charge. IFG or IDI may
from time to time make payments from its revenues to securities dealers and
other financial institutions that provide distribution-related and/or
administrative services for the Fund.
The Fund reserves the right in its sole discretion to reject any order for
purchase of its shares (including purchases by exchange) when, in the judgment
of Fund Management, such rejection is in the best interest of the Fund.
Net asset value per share is computed once each day that the New York Stock
Exchange is open as of the close of regular trading on that Exchange (generally
4:00 p.m., New York time) and also may be computed on other days under certain
circumstances. Net asset value per share for the Fund is calculated by dividing
the market value of the Fund's securities plus the value of its other assets
(including dividends and interest accrued but not collected), less all
liabilities (including accrued expenses), by the number of outstanding shares of
the Fund. If market quotations are not readily available, a security will be
valued at fair value as determined in good faith by the board of trustees. Debt
securities with remaining maturities of 60 days or less at the time of purchase
will be valued at amortized cost, absent unusual circumstances, so long as the
Trust's board of trustees believes that such value represents fair value.
Under certain circumstances, the Fund may offer its shares, in lieu of
cash payment, for securities to be purchased by the Fund. Such a transaction can
benefit the Fund by allowing it to acquire securities for its portfolio without
<PAGE>
paying brokerage commissions. For the same reason, the transaction also may be
beneficial to the party exchanging the securities. The Fund shall not enter into
such transactions, however, unless the securities to be exchanged for Fund
shares are readily marketable and not restricted as to transfer either by law or
liquidity of the market, comply with the investment policies and objectives of
the Fund, are of the type and quality which would normally be purchased for the
Fund's portfolio, are acquired for investment and not for resale, have a value
which is readily ascertainable as evidenced by a listing on the American Stock
Exchange, the New York Stock Exchange or NASDAQ, and are securities which the
Fund would otherwise purchase on the open market. The value of Fund shares used
to purchase portfolio securities as stated herein will be the net asset value as
of the effective time and date of the exchange. The securities to be received by
the Fund will be valued in accordance with the same procedure used in valuing
the Fund's portfolio securities. Any investor wishing to acquire shares of the
Fund in exchange for securities should contact either the president or the
secretary of the Trust at the address or telephone number shown on the cover
page of this Prospectus.
SERVICES PROVIDED BY THE TRUST
Shareholder Accounts. IFG maintains a share account that reflects the
current holdings of each shareholder. A separate account will be maintained for
a shareholder for each Fund in which the shareholder invests. As a business
trust, the Trust does not issue share certificates. Each shareholder is sent a
detailed confirmation of each transaction in shares of the Trust. Shareholders
whose only transactions are through the EasiVest, direct payroll purchase,
automatic monthly exchange or periodic withdrawal programs, or are reinvestments
of dividends or capital gains in the same or another fund, will receive
confirmations of those transactions on their quarterly statements. These
programs are discussed below. For information regarding a shareholder's account
and transactions, the shareholder may call IFG by using the telephone number on
the cover of this Prospectus.
Reinvestment of Distributions. Dividends and other distributions are
automatically reinvested in additional shares of the Fund at the net asset value
per share of the Fund in effect on the ex-dividend or ex-distribution date. A
shareholder may, however, elect to reinvest dividends and other distributions in
certain of the other no-load mutual funds advised by IFG and distributed by IDI,
or to receive payment of all dividends and other distributions in excess of
$10.00 by check by giving written notice to IFG at least two weeks prior to the
record date on which the change is to take effect. Further information
concerning these options can be obtained by contacting IFG.
Periodic Withdrawal Plan. A Periodic Withdrawal Plan is available to
shareholders who own or purchase shares of any mutual funds advised by IFG
having a total value of $10,000 or more; provided, however, that at the time the
Plan is established, the shareholder owns shares having a value of at least
$5,000 in the fund from which the withdrawals will be made. Under the Periodic
Withdrawal Plan, IFG, as agent, will make specified monthly or quarterly
payments of any amount selected (minimum payment of $100) to the party
designated by the shareholder. Notice of all changes concerning the Periodic
Withdrawal Plan must be received by IFG at least two weeks prior to the next
scheduled check. Further information regarding the Periodic Withdrawal Plan and
its requirements and tax consequences can be obtained by contacting IFG.
<PAGE>
Exchange Policy. Shares of the Fund may be exchanged for shares of any
other fund of the Trust, as well as for shares of any of the following other
no-load mutual funds, which are also advised and distributed by INVESCO, on the
basis of their respective net asset values at the time of the exchange: INVESCO
Capital Appreciation Funds, Inc. (formerly, INVESCO Dynamics Fund, Inc., INVESCO
Diversified Funds, Inc., INVESCO Emerging Opportunity Funds, Inc., INVESCO
Growth Fund, Inc., INVESCO Income Funds, Inc., INVESCO Industrial Income Fund,
Inc., INVESCO International Funds, Inc., INVESCO Money Market Funds, Inc.,
INVESCO Multiple Asset Funds, Inc., INVESCO Specialty Funds, Inc., INVESCO
Strategic Portfolios, Inc. and INVESCO Tax-Free Income Funds, Inc.
An exchange involves the redemption of shares in the Fund and investment
of the redemption proceeds in shares of another fund of the Trust or in shares
of one of the funds listed above. Exchanges will be made at the net asset value
per share next determined after receipt of an exchange request in proper order.
Any gain or loss realized on such an exchange is recognizable for federal income
tax purposes by the shareholder. Exchange requests may be made either by
telephone or by written request to IFG, using the telephone number or address on
the cover of this Prospectus. Exchanges made by telephone must be in the amount
of at least $250 if the exchange is being made into an existing account of one
of the INVESCO funds. All exchanges that establish a new account must meet the
fund's applicable minimum initial investment requirements. Written exchange
requests into an existing account have no minimum requirements other than the
fund's applicable minimum subsequent investment requirements.
The option to exchange Fund shares by telephone is available to
shareholders automatically unless expressly declined. By signing the new account
Application or a Telephone Transaction Authorization Form or otherwise utilizing
the telephone exchange, the investor has agreed that the Fund will not be liable
for following instructions communicated by telephone that it reasonably believes
to be genuine. The Fund employs procedures, which it believes are reasonable,
designed to confirm that exchange transactions are genuine. These may include
recording telephone instructions and providing written confirmations of exchange
transactions. As a result of this policy, the investor may bear the risk of any
loss due to unauthorized or fraudulent instructions; provided, however, that if
the Fund fails to follow these or other reasonable procedures, the Fund may be
liable.
In order to prevent abuse of this policy to the disadvantage of other
shareholders, the Fund reserves the right to terminate the exchange option of
any shareholder who requests more than four exchanges in a year. The Fund will
determine whether to do so based on a consideration of both the number of
exchanges any particular shareholder or group of shareholders has requested and
the time period over which those exchange requests have been made, together with
the level of expense to the Fund which will result from effecting additional
exchange requests. The exchange policy also may be modified or terminated at any
time. Except for those limited instances where redemptions of the exchanged
security are suspended under Section 22(e) of the 1940 Act, or where sales of
the fund into which the shareholder is exchanging are temporarily stopped,
notice of all such modifications or termination of the exchange privilege will
be given at least 60 days prior to the date of termination or the effective date
of the modification.
<PAGE>
Before making an exchange, the shareholder should review the prospectuses
of the funds involved and consider their differences. Shareholders interested in
exercising the exchange option may contact IFG for information concerning their
particular exchanges.
Automatic Monthly Exchange. Shareholders who have accounts in any one or
more of the mutual funds distributed by IDI may arrange for a fixed dollar
amount of their fund shares to be automatically exchanged for shares of any
other INVESCO mutual fund listed under "Exchange Policy" on a monthly basis,
subject to the Fund's minimum initial investment or subsequent investment
requirements. This automatic exchange program can be changed by the shareholder
at any time by notifying IFG at least two weeks prior to the date the change is
to be made. Further information regarding this service can be obtained by
contacting IFG.
EasiVest. For shareholders who want to maintain a schedule of monthly
investments, EasiVest uses various methods to draw a preauthorized amount from
the shareholder's bank account to purchase Fund shares. This automatic
investment program can be changed by the shareholder at any time by notifying
IFG at least two weeks prior to the date the change is to be made. Further
information regarding this service can be obtained by contacting IFG.
Direct Payroll Purchase. Shareholders may elect to have their employers
make automatic purchases of Fund shares for them by deducting a specified amount
from their regular paychecks. This automatic investment program can be modified
or terminated at any time by the shareholder by notifying the employer. Further
information regarding this service can be obtained by contacting IFG.
Tax-Deferred Retirement Plans. Shares of the Fund may be purchased for
self-employed individual retirement plans, ^ various IRAs, simplified employee
pension plans and corporate retirement plans. In addition, shares can be used to
fund tax qualified plans established under Section 403(b) of the Internal
Revenue Code by educational institutions, including public school systems and
private schools, and certain kinds of non-profit organizations, which provide
deferred compensation arrangements for their employees.
Prototype forms for the establishment of these various plans including,
where applicable, disclosure statements required by the Internal Revenue
Service, are available from IFG. INVESCO Trust Company, a subsidiary of IFG, is
qualified to serve as trustee or custodian under these plans and provides the
required services at competitive rates. Retirement plans (other than IRAs)
receive monthly statements reflecting all transactions in their Fund accounts.
IRAs receive the confirmations and quarterly statements described under
"Shareholder Accounts." For complete information, including prototype forms and
service charges, call IDI at the telephone number listed on the cover of this ^
Prospectus or send a written request to: Retirement Services, INVESCO Funds
Group, Inc., Post Office Box 173706, Denver, Colorado 80217-3706.
<PAGE>
HOW TO REDEEM SHARES
Shares of the Fund may be redeemed at any time at their current net asset
value next determined after a request in proper form is received at the Trust's
office. Redemption requests sent by overnight courier, including Express Mail,
should be sent to the street address, not Post Office Box, of INVESCO Funds
Group, Inc. at 7800 E. Union Avenue, Denver, CO 80237. (See "How Shares Can Be
Purchased.") Net asset value per share of the Fund at the time of the redemption
may be more or less than the price originally paid to purchase shares.
In order to redeem shares, a written redemption request signed by each
registered owner of the account may be submitted to IFG at the address noted
above. If shares are held in the name of a corporation, additional documentation
may be necessary. Call or write for specific information. If payment for the
redeemed shares is to be made to someone other than the registered owner(s), the
signature(s) must be guaranteed by a financial institution which qualifies as an
eligible guarantor institution. Redemption procedures with respect to accounts
registered in the names of broker-dealers may differ from those applicable to
other shareholders.
BE CAREFUL TO SPECIFY THE ACCOUNT FROM WHICH THE REDEMPTION IS TO BE MADE.
SHAREHOLDERS HAVE A SEPARATE ACCOUNT FOR EACH FUND IN WHICH THEY INVEST.
Payment of redemption proceeds will be mailed within seven days following
receipt of the required documents. However, payment may be postponed under
unusual circumstances, such as when normal trading is not taking place on the
New York Stock Exchange or when an emergency as defined by the Securities and
Exchange Commission exists. If the shares to be redeemed were purchased by check
and that check has not yet cleared, payment will be made promptly upon clearance
of the purchase check (which will take up to 15 days).
If a shareholder participates in EasiVest, the Fund's automatic monthly
investment program, and redeems all of the shares in a Fund account, IFG will
terminate any EasiVest purchases unless otherwise instructed by the shareholder.
Because of the high relative costs of handling small accounts, should the
value of any shareholder's account fall below $250 as a result of shareholder
action, the Trust reserves the right to effect the involuntary redemption of all
shares in such account, in which case the account would be liquidated and the
proceeds forwarded to the shareholder. Prior to any such redemption, a
shareholder will be notified and given 60 days to increase the value of the
account to $250 or more.
Fund shareholders (other than shareholders holding Fund shares in accounts
of IRA plans) may request expedited redemption of shares having a minimum value
of $250 (or redemption of all shares if their value is less than $250) held in
accounts maintained in their name by telephoning redemption instructions to IFG,
using the telephone number on the cover of this Prospectus. For INVESCO Trust
Company sponsored federal income tax-deferred retirement plans, the term
"shareholders" is defined to mean plan trustees that file a written request to
be able to redeem Fund shares by telephone. Unless IFG permits a larger
redemption request to be placed by telephone, a shareholder may not place a
<PAGE>
redemption request by telephone in excess of $25,000. The redemption
proceeds, at the shareholder's option, either will be mailed to the address
listed for the shareholder on its Fund account, or wired (minimum $1,000) or
mailed to the bank which the shareholder has designated to receive the proceeds
of telephone redemptions. The Fund charges no fee for effecting such telephone
redemptions. The telephone redemption policy may be modified or terminated in
the future at the discretion of Fund Management. Shareholders should understand
that while the Fund will attempt to process all telephone redemption requests on
an expedited basis, there may be times, particularly in periods of severe
economic or market disruption, when (a) they may encounter difficulty in placing
a telephone redemption request, and (b) processing telephone redemptions will
require up to seven days following receipt of the redemption request, or
additional time because of the unusual circumstances set forth above.
The ^ option to redeem Fund shares by telephone is available to
shareholders automatically unless expressly declined. By signing a new account
Application or a Telephone Transaction Authorization Form or otherwise utilizing
the telephone redemption ^ option, the shareholder has agreed that the Fund will
not be liable for following instructions communicated by telephone that it
reasonably believes to be genuine. The Fund employs procedures, which it
believes are reasonable, designed to confirm that telephone instructions are
genuine. These may include recording telephone instructions and providing
written confirmations of transactions initiated by telephone. As a result of
this policy, the investor may bear the risk of any loss due to unauthorized or
fraudulent instructions; provided, however, that if the Fund fails to follow
these or other reasonable procedures, the Fund may be liable.
TAXES, DIVIDENDS AND OTHER DISTRIBUTIONS
Taxes. The Fund intends to distribute to shareholders all of its net
investment income, net capital gains and net gains from foreign currency
transactions, if any, in order to continue to qualify for tax treatment as a
regulated investment company. Thus, the Fund does not expect to pay any federal
income or excise taxes.
Unless shareholders are exempt from income taxes, they must include all
dividends and other distributions in taxable income for federal, state and local
income tax purposes. Dividends and other distributions are taxable whether they
are received in cash or automatically reinvested in shares of the Fund or
another fund in the INVESCO group.
Net realized capital gains of the Fund are classified as short-term and
long-term gains depending upon how long the Fund held the security that gave
rise to the gains. Short-term capital gains are included in income from
dividends and interest as ordinary income and are taxed at the taxpayer's
marginal tax rate. The Taxpayer Relief Act of 1997 (the "Tax Act"), enacted in
<PAGE>
August 1997, changed the taxation of long-term capital gains by applying
different capital gains rates depending on the taxpayer's holding period and
marginal rate of federal income tax. Long-term gains realized on the sale of
securities held for more than one year but not for more than 18 months are
taxable at a rate of 28%. This category of long-term gains is often referred to
as "mid-term" gains but is technically termed "28% rate gains". Long-term gains
realized on the sale of securities held for more than 18 months are taxable at a
rate of 20%.^ At the end of each year, information regarding the tax status of
dividends and other distributions is provided to shareholders. Shareholders
should consult their tax advisers as to the effect of the Tax Act on
distributions by the Fund of net capital gain.
Shareholders also may realize capital gains or losses when they sell their
Fund shares at more or less than the price originally paid. Capital gain on
shares held for more than one year will be long-term capital gain, in which
event it will be subject to federal income tax at the rates indicated above.
The Fund may be subject to withholding of foreign taxes on dividends or
interest received on foreign securities. Foreign taxes withheld will be treated
as an expense of the Fund.
Individuals and certain other non-corporate shareholders may be subject to
backup withholding of 31% on dividends, capital gain and other distributions and
redemption proceeds. Unless you are subject to backup withholding for other
reasons, you can avoid backup withholding on your Fund account by ensuring that
we have a correct, certified tax identification number.
We encourage you to consult a tax adviser with respect to these matters.
For further information see "Dividends, Other Distributions and Taxes" in the
Statement of Additional Information.
Dividends and Other Distributions. The Fund earns ordinary or net
investment income in the form of dividends and interest on its investments.
Dividends paid by the Fund will be based solely on the income earned by it. The
Fund's policy is to distribute substantially all of this income, less Fund
expenses, to shareholders. Dividends from net investment income are paid on a
quarterly basis, at the end of November, February, May and August, at the
discretion of the Trust's Board of Trustees. Dividends are automatically
reinvested in additional shares of the Fund at the net asset value on the ^
payable date unless otherwise requested.
In addition, the Fund realizes capital gains and losses when it sells
securities for more or less than it paid. If total gains on sales exceed total
losses (including losses carried forward from previous years), the Fund has a
net realized capital gain. Net realized capital gains, if any, together with
gains, if any, realized on foreign currency transactions, are distributed to
shareholders at least annually, usually in December. Capital gain distributions
are automatically reinvested in additional shares of the Fund at the net asset
value on the ^ payable date unless otherwise requested.
<PAGE>
Dividends and other distributions are paid to holders of shares on the
record date of distribution regardless of how long the Fund shares have been
held by the shareholder. The Fund's share price will then drop by the amount of
the distribution on the ex-dividend ^ or ex-distribution date . If a shareholder
purchases shares immediately prior to the distribution, the shareholder will, in
effect, have "bought" the distribution by paying the full purchase price, a
portion of which is then returned in the form of a taxable distribution.
ADDITIONAL INFORMATION
Voting Rights. All shares of the Trust's funds have equal voting rights.
When shareholders are entitled to vote upon a matter, each shareholder is
entitled to one vote for each share owned and a corresponding fractional vote
for each fractional share owned. Voting with respect to certain matters, such as
ratification of independent accountants and the election of trustees, will be by
all funds of the Trust voting together. In other cases, such as voting upon the
investment advisory contract for the individual funds, voting is on a
fund-by-fund basis. To the extent permitted by law, when not all funds are
affected by a matter to be voted upon, only shareholders of the fund or funds
affected by the matter will be entitled to vote thereon. The Trust is not
generally required and does not expect, to hold regular annual meetings of
shareholders. However, the board of trustees will call such special meetings of
shareholders for the purpose, among other reasons, of voting the question of
removal of a trustee or trustees when requested to do so in writing by the
holders of 10% or more of the outstanding shares of the Trust or as may be
required by applicable law or the Trust's Declaration of Trust. The Trust will
assist shareholders in communicating with other shareholders as required by the
1940 Act. Trustees may be removed by action of the holders of two-thirds of the
outstanding shares of the Trust.
Shareholder Inquiries. All inquiries regarding the Fund should be directed
to the Trust at the telephone number or mailing address set forth on the cover
page of this Prospectus.
Transfer and Dividend Disbursing Agent. INVESCO Funds Group, Inc., 7800 E.
Union Avenue, Denver, Colorado 80237, acts as registrar, transfer agent and
dividend disbursing agent for the Fund pursuant to a Transfer Agency Agreement
which provides that the Fund will pay an annual fee of $20.00 per shareholder
account or, where applicable, per participant in an omnibus account. The
transfer agency fee is not charged to each shareholder's or participant's
account but is an expense of the Fund to be paid from the Fund's assets.
Registered broker-dealers, third party administrators of tax-qualified
retirement plans and other entities, including affiliates of IFG, may provide
sub-transfer agency services to the Fund which reduce or eliminate the need for
identical services to be provided on behalf of the Fund by IFG. In such cases,
IFG may pay the third party an annual sub-transfer agency or recordkeeping fee
out of the transfer agency fee which is paid to IFG by the Fund.
<PAGE>
^ PROSPECTUS
January 1, 1998
INVESCO Total Return Fund
INVESCO Distributors, Inc.,
Distributor
Post Office Box 173706
Denver, Colorado 80217-3706
1-800-525-8085
PAL(R): 1-800-424-8085
http://www.invesco.com
In Denver, visit one of our
convenient Investor Centers:
Cherry Creek
155-B Fillmore Street
Denver Tech Center
7800 East Union Avenue
Lobby Level
In addition, all documents
filed by the Trust with the
Securities and Exchange Commission
can be located on a web site
maintained by the Commission at
http://www.sec.gov.
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
January 1, 1998
INVESCO VALUE TRUST
Address: Mailing Address:
7800 E. Union Avenue Post Office Box 173706
Denver, Colorado 80237 Denver, Colorado 80217-3706
Telephone:
In continental U.S., 1-800/525-8085
INVESCO VALUE TRUST (the "Trust"), is an open-end management investment
company organized in series form in which all of the Funds seek to provide
investors with a high total return on investment through capital appreciation
and current income. Each of the Trust's three individual funds (collectively,
the "Funds") has separate investment policies. Investors may purchase shares of
any or all Funds. The following Funds are available:
INVESCO VALUE EQUITY Fund (the "Value Equity Fund")
INVESCO INTERMEDIATE GOVERNMENT BOND Fund (the "Intermediate
Government Bond Fund")
INVESCO TOTAL RETURN Fund (the "Total Return Fund")
Additional Funds may be offered in the future.
Prospectuses for the Funds dated January 1, 1998, which provide the basic
information you should know before investing in a Fund, may be obtained without
charge from INVESCO Distributors, Inc., Post Office Box 173706, Denver, Colorado
80217-3706. This Statement of Additional Information is not a prospectus but
contains information in addition to and more detailed than that set forth in
each Prospectus. It is intended to provide additional information regarding the
activities and operations of the Trust and should be read in conjunction with
the Prospectus.
Investment Adviser: INVESCO FUNDS GROUP, INC.
Distributor: INVESCO DISTRIBUTORS, INC.
<PAGE>
TABLE OF CONTENTS
Page
----
INVESTMENT POLICIES AND RESTRICTIONS 82
THE TRUST AND ITS MANAGEMENT 91
HOW SHARES CAN BE PURCHASED 103
HOW SHARES ARE VALUED 106
TRUST PERFORMANCE 107
SERVICES PROVIDED BY THE TRUST 109
TAX-DEFERRED RETIREMENT PLANS 109
HOW TO REDEEM SHARES 110
DIVIDENDS, OTHER DISTRIBUTIONS AND TAXES 110
INVESTMENT PRACTICES 112
ADDITIONAL INFORMATION 115
APPENDIX A 119
APPENDIX B 120
<PAGE>
INVESTMENT POLICIES AND RESTRICTIONS
Reference is made to the section entitled "Investment Objectives And
Policies" in the Prospectuses for a discussion of the investment objectives and
policies of the Funds. In addition, set forth below is further information
relating to the INVESCO Value Equity, Intermediate Government Bond and Total
Return Funds.
Loans of Portfolio Securities. As described in the section entitled "Risk
Factors" in the Prospectuses, all of the Funds may lend their portfolio
securities to brokers, dealers, and other financial institutions, provided that
such loans are callable at any time by the Funds and are at all times secured by
collateral held by the Funds' custodian consisting of cash or securities issued
or guaranteed by the United States Government or its agencies, or any
combination thereof, equal to at least the market value, determined daily, of
the loaned securities. The advantage of such loans is that such a Fund continues
to earn income on the loaned securities, while at the same time receiving
interest from the borrower of the securities. Loans will be made only to firms
deemed by the adviser or sub-adviser (collectively, "Fund Management"), under
procedures established by the Trust's Board of Trustees, to be creditworthy and
when the amount of interest to be received justifies the inherent risks. A loan
may be terminated by the borrower on one business day's notice, or by such Fund
at any time. If at any time the borrower fails to maintain the required amount
of collateral (at least 100% of the market value of the borrowed securities),
the Fund will require the deposit of additional collateral not later than the
business day following the day on which a collateral deficiency occurs or the
collateral appears inadequate. If the deficiency is not remedied by the end of
that period, such Fund will use the collateral to replace the securities while
holding the borrower liable for any excess of replacement cost over collateral.
Upon termination of the loan, the borrower is required to return the securities
to such Fund. Any gain or loss during the loan period would inure to such Fund.
Futures and Options on Futures. As described in the Value Equity and Total
Return Funds' Prospectuses, ^ the Value Equity and Total Return Funds may enter
into futures contracts, and purchase and sell ("write") options to buy or sell
futures contracts. The Funds will comply with and adhere to all limitations in
the manner and extent to which it effects transactions in futures and options on
such futures currently imposed by the rules and policy guidelines of the
Commodity Futures Trading Commission ("CFTC") as conditions for exemption of a
mutual fund, or investment advisers thereto, from registration as a commodity
pool operator. No Fund will, as to any positions, whether long, short or a
combination thereof, enter into futures and options thereon for which the
aggregate initial margins and premiums exceed 5% of the fair market value of its
assets after taking into account unrealized profits and losses on options it has
entered into. In the case of an option that is "in-the-money," as defined in the
Commodity Exchange Act (the "CEA"), the in-the-money amount may be excluded in
computing such 5%. (In general a call option on a future is "in-the-money" if
the value of the future exceeds the exercise ("strike") price of the call; a put
option on a future is "in-the-money" if the value of the future which is the
subject of the put is exceeded by the strike price of the put.) Each Fund may
use futures and options thereon solely for bona fide hedging or for other
non-speculative purposes within the meaning and intent of the applicable
provisions of the CEA.
<PAGE>
Unlike when a Fund purchases or sells a security, no price is paid or
received by a Fund upon the purchase or sale of a futures contract. Instead, the
Fund will be required to deposit in its segregated asset account an amount of
cash or qualifying securities (currently U.S. Treasury bills), currently in a
minimum amount of $15,000. This is called "initial margin." Such initial margin
is in the nature of a performance bond or good faith deposit on the contract.
However, since losses on open contracts are required to be reflected in cash in
the form of variation margin payments, a Fund may be required to make additional
payments during the term of the contracts to its broker. Such payments would be
required, for example, where, during the term of an interest rate futures
contract purchased by a Fund, there was a general increase in interest rates,
thereby making such Fund's portfolio securities less valuable. In all instances
involving the purchase of futures contracts by a Fund, an amount of cash
together with such other securities as permitted by applicable regulatory
authorities to be utilized for such purpose, at least equal to the market value
of the futures contracts, will be deposited in a segregated account with such
Fund's custodian to collateralize the position. At any time prior to the
expiration of a futures contract, a Fund may elect to close its position by
taking an opposite position which will operate to terminate its position in the
futures contract. For a more complete discussion of the risks involved in
futures and options on futures and other securities, refer to Appendix B
("Description of Futures, Options and Forward Contracts").
Where futures are purchased to hedge against a possible increase in the
price of a security before a Fund is able in an orderly fashion to invest in the
security, it is possible that the market may decline instead. If the Fund, as a
result, concluded not to make the planned investment at that time because of
concern as to possible further market decline or for other reasons, the Fund
would realize a loss on the futures contract that is not offset by a reduction
in the price of securities purchased.
In addition to the possibility that there may be an imperfect correlation
or no correlation at all between movements in the futures contracts and the
portion of the portfolio being hedged, the price of futures may not correlate
perfectly with movements in the prices due to certain market distortions. All
participants in the futures market are subject to margin deposit and maintenance
requirements. Rather than meeting additional margin deposit requirements,
investors may close futures contracts through offsetting transactions which
could distort the normal relationship between underlying instruments and the
value of the futures contract. Moreover, the deposit requirements in the futures
market are less onerous than margin requirements in the securities market and
may therefore cause increased participation by speculators in the futures
market. Such increased participation may also cause temporary price distortions.
Due to the possibility of price distortion in the futures market and because of
the imperfect correlation between movements in the underlying instrument and
movements in the prices of futures contracts, the value of futures contracts as
a hedging device may be reduced.
In addition, if a Fund has insufficient available cash, it may at times
have to sell securities to meet variation margin requirements. Such sales may
have to be effected at a time when it may be disadvantageous to do so.
<PAGE>
Forward Foreign Currency Contracts. The Value Equity and Total Return
Funds may enter into forward currency contracts to purchase or sell foreign
currencies (i.e., non-U.S. currencies) ("forward contracts") as a hedge against
possible variations in foreign exchange rates. A forward foreign currency
exchange contract is an agreement between the contracting parties to exchange an
amount of currency at some future time at an agreed upon rate. The rate can be
higher or lower than the spot rate between the currencies that are the subject
of the contract. A forward contract generally has no deposit requirement, and
such transactions do not involve commissions. By entering into a forward
contract for the purchase or sale of the amount of foreign currency invested in
a foreign security transaction, a Fund can hedge against possible variations in
the value of the dollar versus the subject currency either between the date the
foreign security is purchased or sold and the date on which payment is made or
received or during the time the Fund holds the foreign security. Hedging against
a decline in the value of a currency in the foregoing manner does not eliminate
fluctuations in the prices of portfolio securities or prevent losses if the
prices of such securities decline. Furthermore, such hedging transactions
preclude the opportunity for gain if the value of the hedged currency should
rise. The Funds will not speculate in forward contracts. The Funds will not
attempt to hedge all of their non-U.S. portfolio positions and will enter into
such transactions only to the extent, if any, deemed appropriate by their
investment adviser. The Funds will not enter into forward contracts for a term
of more than one year. Forward contracts may, from time to time, be considered
illiquid, in which case they would be subject to the Fund's limitation on
investing in illiquid securities, discussed in the Prospectus.
Real Estate Investment Trusts. Although they are not permitted to invest
in real estate directly, the Funds may invest in real estate investment trusts
("REITs"). A REIT is a trust which sells shares to investors and uses the
proceeds to invest in real estate or interests in real estate.
The Total Return and Value Equity Funds have adopted a policy which
permits each Fund to write, purchase or sell put and call options on individual
securities, securities indexes and currencies, or financial futures or options
on financial futures, or undertake forward currency contracts. The following
subsections entitled "Put and Call Options," "Futures and Options on Futures"
and "Options on Futures Contracts" apply only to the Total Return and Value
Equity Funds.
Put and Call Options. An option on a security provides the purchaser, or
"holder," with the right, but not the obligation, to purchase in the case of a
"call" option or sell in the case of a "put" option, the security or securities
underlying the option, for a fixed exercise price up to a stated expiration
date. The holder pays a non-refundable purchase price for the option, known as
the "premium." The maximum amount of risk the purchaser of the option assumes is
equal to the premium plus related transaction costs, although the entire amount
may be lost. The risk of the seller, or "writer," however, is potentially
unlimited, unless the option is "covered," which is generally accomplished
through the writer's ownership of the underlying security in the case of a call
option, or the writer's segregation of an amount of cash or securities equal to
the exercise price in the case of a put option. If the writer's obligation is
not so covered, it is subject to the risk of the full change in value of the
underlying security from the time the option is written until exercise.
<PAGE>
Upon exercise of the option, the holder is required to pay the purchase
price of the underlying security in the case of a call option or to deliver the
security in return for the purchase price in the case of a put option.
Conversely, the writer is required to deliver the security in the case of a call
option or to purchase the security in the case of a put option. Options on
securities which have been purchased or written may be closed out prior to
exercise or expiration by entering into an offsetting transaction on the
exchange on which the initial position was established, subject to the
availability of a liquid secondary market.
Options on securities are traded on national securities exchanges, such as
the Chicago Board of Options Exchange and the New York Stock Exchange, which are
regulated by the Securities and Exchange Commission. The Options Clearing
Corporation guarantees the performance of each party to an exchange-traded
option, by in effect taking the opposite side of each such option. A holder or
writer may engage in transactions in exchange-traded options on securities and
options on indices of securities only through a registered broker/dealer which
is a member of the exchange on which the option is traded.
An option position in an exchange-traded option may be closed out only on
an exchange which provides a secondary market for an option of the same series.
Although a Fund will generally purchase or write only those options for which
there appears to be an active secondary market, there is no assurance that a
liquid secondary market on an exchange will exist for any particular option at
any particular time. In such event it might not be possible to effect closing
transactions in a particular option with the result that a Fund would have to
exercise the option in order to realize any profit. This would result in a
Fund's incurring brokerage commissions upon the disposition of underlying
securities acquired through the exercise of a call option or upon the purchase
of underlying securities upon the exercise of a put option. If a Fund as covered
call option writer is unable to effect a closing purchase transaction in a
secondary market, unless a Fund is required to deliver the securities pursuant
to the assignment of an exercise notice, it will not be able to sell the
underlying security until the option expires.
Reasons for the potential absence of a liquid secondary market on an
exchange include the following: (i) there may be insufficient trading interest
in certain options; (ii) restrictions may be imposed by an exchange on opening
transactions or closing transactions or both; (iii) trading halts, suspensions
or other restrictions may be imposed with respect to particular classes or
series of options or underlying securities; (iv) unusual or unforeseen
circumstances may interrupt normal operations on an exchange; (v) the facilities
of an exchange or a clearing corporation may not at all times be adequate to
handle current trading volume; or (vi) one or more exchanges could, for economic
or other reasons, decide or be compelled at some future date to discontinue the
trading of options (or particular class or series of options) in which event the
secondary market on that exchange (or in the class or series of options) would
cease to exist, although outstanding options on that exchange which had been
issued by a clearing corporation as a result of trades on that exchange would
continue to be exercisable in accordance with their terms. There is no assurance
that higher than anticipated trading activity or other unforeseen events might
not, at a particular time, render certain of the facilities of any of the
<PAGE>
clearing corporations inadequate and thereby result in the institution by an
exchange of special procedures which may interfere with the timely execution of
customers' orders. However, the Options Clearing Corporation, based on forecasts
provided by the U.S. exchanges, believes that its facilities are adequate to
handle the volume of reasonably anticipated options transactions, and such
exchanges have advised such clearing corporation that they believe their
facilities will also be adequate to handle reasonably anticipated volume. For a
more complete discussion of the risks involved in futures and options on futures
and other securities, refer to Appendix B ("Description of Futures, Options and
Forward Contracts").
Futures and Options on Futures. As described in the Funds' Prospectuses,
each Fund may enter into futures contracts and purchase and sell ("write")
options to buy or sell futures contracts. Each Fund will comply with and adhere
to all limitations in the manner and extent to which it effects transactions in
futures and options on such futures currently imposed by the rules and policy
guidelines of the Commodity Futures Trading Commission ("CFTC") as conditions
for exemption of a mutual fund, or investment advisers thereto, from
registration as a commodity pool operator. No Fund will, as to any positions,
whether long, short or a combination thereof, enter into futures and options
thereon for which the aggregate initial margins and premiums exceed 5% of the
fair market value of its assets after taking into account unrealized profits and
losses on options it has entered into. In the case of an option that is
"in-the-money," as defined in the commodity Exchange Act (the "CEA"), the
in-the-money amount may be excluded in computing such 5%. (In general a call
option on a future is "in-the-money" if the value of the future exceeds the
exercise ("strike") price of the call; a put option on a future is
"in-the-money" if the value of the future which is the subject of the put is
exceeded by the strike price of the put.) Each Fund may use futures and options
thereon solely for bona fide hedging or for other non-speculative purposes
within the meaning and intent of the applicable provisions of the CEA.
Unlike when a Fund purchases or sells a security, no price is paid or
received by a Fund upon the purchase or sale of a futures contract. Instead, a
Fund will be required to deposit in its segregated asset account an amount of
cash or qualifying securities (currently U.S. Treasury bills). This is called
"initial margin." Such initial margin is in the nature of a performance bond or
good faith deposit on the contract. However, since losses on open contracts are
required to be reflected in cash in the form of variation margin payments, a
Fund may be required to make additional payments during the term of the
contracts to its broker. Such payments would be required, for example, where,
during the term of an interest rate futures contract purchased by a Fund, there
was a general increase in interest rates, thereby making such Fund's portfolio
securities less valuable. In all instances involving the purchase of futures
contracts by a Fund, an amount of cash together with such other securities as
permitted by applicable regulatory authorities to be utilized for such purpose,
at least equal to the market value of the futures contracts, will be deposited
in a segregated account with such Fund's custodian to collateralize the
position. At any time prior to the expiration of a futures contract, a Fund may
elect to close its position by taking an opposite position which will operate to
terminate its position in the futures contract.
<PAGE>
Where futures are purchased to hedge against a possible increase in the
price of a security before a fund is able in an orderly fashion to invest in the
security, it is possible that the market may decline instead. If the Fund, as a
result, concluded not to make the planned investment at that time because of
concern as to possible further market decline or for other reasons, the Fund
would realize a loss on the futures contract that is not offset by a reduction
in the price of securities purchased.
In addition to the possibility that there may be an imperfect correlation
or no correlation at all between movements in the futures contracts and the
portion of the portfolio being hedged, the price of futures may not correlate
perfectly with movements in the prices due to certain market distortions. All
participants in the futures market are subject to margin deposit and maintenance
requirements. Rather than meeting additional margin deposit requirements,
investors may close futures contracts through offsetting transactions which
could distort the normal relationship between underlying instruments and the
value of the futures contract. Moreover, the deposit requirements in the futures
market are less onerous than margin requirements in the securities market and
may therefore cause increased participation by speculators in the futures
market. Such increased participation may also cause temporary price distortions.
Due to the possibility of price distortion in the futures market and because of
the imperfect correlation between movements in the underlying instrument and
movements in the prices of futures contracts, the value of futures contracts as
a hedging device may be reduced.
In addition, if a Fund has insufficient available cash, it may at times
have to sell securities to meet variation margin requirements. Such sales may
have to be effected at a time when it may be disadvantageous to do so.
Options on Futures Contracts. ^ The Value Equity and Total Return Funds
may buy and write options on futures contracts for hedging purposes. The
purchase of a call option on a futures contract is similar in some respects to
the purchase of a call option on an individual security. Depending on the
pricing of the option compared to either the price of the futures contract upon
which it is based or the price of the underlying instrument, ownership of the
option may or may not be less risky than ownership of the futures contract or
the underlying instrument. As with the purchase of futures contracts, when a
Fund is not fully invested it may buy a call option on a futures contract to
hedge against a market advance.
The writing of a call option on a futures contract constitutes a partial
hedge against declining prices of the security or foreign currency which is
deliverable under, or of the index comprising, the futures contract. If the
futures price at the expiration of the option is below the exercise price, a
Fund will retain the full amount of the option premium which provides a partial
hedge against any decline that may have occurred in such ^ Fund's portfolio
holdings. The writing of a put option on a futures contract constitutes a
partial hedge against increasing prices of the security or foreign currency
which is deliverable under, or of the index comprising, the futures contract. If
the futures price at expiration of the option is higher than the exercise price,
a Fund will retain the full amount of the option premium which provides a
partial hedge against any increase in the price of securities which the Fund is
considering buying. If a call or put option which a Fund has written is
exercised, such Fund will incur a loss which will be reduced by the amount of
the premium it received. Depending on the degree of correlation between changes
in the value of its portfolio securities and changes in the value of the futures
<PAGE>
positions, a ^ Fund's losses from existing options on futures may to some extent
be reduced or increased by changes in the value of portfolio securities.
The purchase of a put option on a futures contract is similar in some
respects to the purchase of protective put ^ option on portfolio securities. For
example, a Fund may buy a put option on a futures contract to hedge its
portfolio against the risk of falling prices.
The amount of risk a Fund assumes when it buys an option on a futures
contract is the premium paid for the option plus related transaction costs. In
addition to the correlation risks discussed above, the purchase of an option
also entails the risk that changes in the value of the underlying futures
contract will not be reflected fully in the value of the options bought.
^ For a more complete discussion of the risks involved in futures and
options on futures and other securities, refer to Appendix B ("Description of
Futures, Options and Forward
Contracts").
Investment Restrictions. As described in each Fund's Prospectus, ^ the
Funds are subject to certain investment restrictions. The following restrictions
are fundamental and may not be changed with respect to a particular Fund without
the prior approval of the holders of a majority, as defined in the Investment
Company Act of 1940 (the "1940 Act"), of the outstanding voting securities of
that Fund. For purposes of the following ^ investment restrictions, all
percentage limitations apply immediately after a purchase or initial investment.
Any subsequent change in a particular percentage resulting from fluctuations in
value does not require elimination of any security from the Fund.
^ Each Fund, unless otherwise indicated, may not:
(1) Other than investments by the Funds, including the INVESCO
Intermediate Government Bond Fund, in obligations issued or
guaranteed by the U.S. Government, its agencies or
instrumentalities, invest in the securities of issuers conducting
their principal business activities in the same industry
(investments in obligations issued by a foreign government,
including the agencies or instrumentalities of a foreign
government, are considered to be investments in a single industry),
if immediately after such investment the value of a Fund's
investments in such industry would exceed 25% of the value of such
Fund's total assets;
(2) Invest in the securities of any one issuer, other than the United
States Government, if immediately after such investment more than 5%
of the value of a Fund's total assets, taken at market value, would
be invested in such issuer or more than 10% of such issuer's
outstanding voting securities would be owned by such Fund.
<PAGE>
(3) Underwrite securities of other issuers, except insofar as it may
technically be deemed an "underwriter" under the Securities Act of
1933, as amended, in connection with the disposition of a Fund's
portfolio securities.
(4) Invest in companies for the purpose of exercising control
or management.
(5) Issue any class of senior securities or borrow money, except
borrowings from banks for temporary or emergency purposes (not for
leveraging or investment) in an amount not exceeding 33 1/3% of the
value of a Fund's total assets at the time the borrowing is made.
(6) Mortgage, pledge, hypothecate or in any manner transfer as security
for indebtedness any securities owned or held except to an extent
not greater than 5% of the value of a Fund's total assets.
(7) Sell short, except the Value Equity and Total Return Funds may
purchase or sell options or futures, or write, purchase or sell puts
and calls.
(8) Buy on margin, except the Value Equity and Total Return Funds may
purchase or sell options or futures, or write, purchase or sell puts
and calls.
(9) Purchase or sell real estate or interests in real estate^ (except
for the Total Return and Value Equity Funds). Each of the Funds may
invest in securities secured by real estate or interests therein or
issued by companies, including real estate investment trusts, which
invest in real estate or interests therein.
(10) Buy or sell commodities contracts (however the Value Equity and
Total Return Funds may purchase securities of companies which invest
in the foregoing). This restriction shall not prevent the Value
Equity and Total Return Funds from purchasing or selling options on
individual securities, security indexes, and currencies or financial
futures or options on financial futures, or undertaking forward
currency contracts. The Intermediate Government Bond Fund may enter
into interest rate futures contracts if immediately after such a
commitment the sum of the then aggregate futures market prices of
financial instruments required to be delivered under open futures
contract sales and the aggregate purchase prices under futures
contract purchases would not exceed 30% of the Intermediate
Government Bond Fund's total assets.
(11) Make loans to other persons, provided that a Fund may purchase debt
obligations consistent with its investment objectives and policies
and the INVESCO Value Equity, Intermediate Government Bond, and
Total Return Funds may lend limited amounts (not to exceed 10% of
their total assets) of their portfolio securities to broker-dealers
or other institutional investors.
<PAGE>
(12) Purchase securities of other investment companies except (i) in
connection with a merger, consolidation, acquisition or
reorganization, or (ii) by purchase in the open market of securities
of other investment companies involving only customary brokers'
commissions and only if immediately thereafter (i) no more than 3%
of the voting securities of any one investment company are owned by
such a Fund, (ii) no more than 5% of the value of the total assets
of such a Fund would be invested in any one investment company, and
(iii) no more than 10% of the value of the total assets of such a
Fund would be invested in the securities of such investment
companies. The Trust may invest from time to time a portion of the
INVESCO Value Equity, Intermediate Government Bond, and Total Return
Funds' cash in investment companies to which the Adviser serves as
investment adviser; provided that no management or distribution fee
will be charged by the Adviser with respect to any such assets so
invested and provided further that at no time will more than 3% of
such a Fund's assets be so invested. Should such a Fund purchase
securities of other investment companies, shareholders may incur
additional management and distribution fees.
(13) Invest in securities for which there are legal or contractual
restrictions on resale, except that each of the Funds may invest no
more than 2% of the value of its total assets in such securities; or
invest in securities for which there is no readily available market,
except that each of the Funds may invest no more than 5% of the
value its total assets in such securities.
In applying the industry concentration investment restriction (no. 1
above), the Funds use a modified S&P industry code classification schema which
uses various sources to classify securities.
In applying restriction (13) above, each Fund also includes illiquid
securities (those which cannot be sold in the ordinary course of business within
seven days at approximately the valuation given to them by the Fund) among the
securities subject to the 5% of total assets limit.
Additional investment restrictions adopted by the Trust on behalf of the
Funds and which may be changed by the Trustees at their discretion provide that
the ^ Funds may not:
(1) (a) enter into any futures contracts, options on futures, puts and
calls if immediately thereafter the aggregate margin deposits on all
outstanding derivative positions held by each Fund and premiums paid
on outstanding positions, after taking into account unrealized
profits and losses, would exceed 5% of the market value of the total
assets of the Fund, or (b) enter into any derivative positions if
the aggregate net amount of the Fund's commitments under outstanding
derivative positions of the Fund would exceed the market value of
the total assets of the Fund. The INVESCO Intermediate Government
Bond Fund may not enter into future contracts, options on futures,
puts or calls.
<PAGE>
(2) Purchase or sell interests in oil, gas or other mineral leases or
exploration or development programs. All of the Funds, however, may
purchase or sell securities issued by entities which invest in such
interests.
(3) Invest more than 5% of a Fund's total assets in securities of
companies having a record, together with predecessors, of less than
three years of continuous operation.
(4) Purchase or retain the securities of any issuer if any individual
officers and trustees/directors of the Trust, the Adviser, or any
subsidiary thereof owns individually more than 0.5% of the
securities of that issuer and all such officers and
trustees/directors together own more than 5% of the securities of
that issuer.
(5) Engage in arbitrage transactions.
(6) To the extent a Fund invests in warrants, such a Fund's investment
in warrants, valued at the lower of cost or market, may not exceed
5% of the value of such Fund's net assets. Included within that
amount, but not to exceed 2% of the value of each Fund's net assets
may be warrants which are not listed on the New York or American
Stock Exchanges. Warrants acquired by such a Fund as part of a unit
or attached to securities may be deemed to be without value.
(7) Invest more than 25% of the value of such a Fund's total assets in
securities of foreign issuers. Investing in securities issued by
companies whose principal business activities are outside the United
States may involve significant risks not present in domestic
investments.
THE TRUST AND ITS MANAGEMENT
The Trust. The Trust was organized under the laws of Massachusetts on July
15, 1987 as "Financial Series Trust." On July 1, 1993, the Trust changed its
name to "INVESCO Value Trust." In addition, the names INVESCO Intermediate
Government Bond Fund, INVESCO Value Equity Fund and INVESCO Total Return Fund
were adopted as the names of the Intermediate Government Bond Fund, Equity Fund
and Flex Fund series of the Trust, respectively, effective July 1, 1993.
The Investment Adviser. INVESCO Funds Group, Inc., a Delaware corporation
("IFG"), is employed as the Trust's investment adviser. IFG was established in
1932 and also serves as an investment adviser to INVESCO Capital Appreciation
Funds, Inc. (formerly, INVESCO Dynamics Fund, Inc.), INVESCO Diversified Funds,
Inc., INVESCO Emerging Opportunity Funds, Inc., INVESCO Growth Fund, Inc.,
INVESCO Income Funds, Inc., INVESCO Industrial Income Fund, Inc., INVESCO
International Funds, Inc., INVESCO Money Market Funds, Inc., INVESCO Multiple
Asset Funds, Inc., INVESCO Specialty Funds, Inc., INVESCO Strategic Portfolios,
Inc., INVESCO Tax-Free Income Funds, Inc., and INVESCO Variable Investment
Funds, Inc.
<PAGE>
The Sub-Adviser. IFG, as investment adviser, has contracted with INVESCO
Capital Management, Inc. ("ICM") to provide investment advisory and research
services to the Trust. ICM, the Trust's investment adviser from inception of the
Trust through 1990, has the primary responsibility for providing portfolio
investment management services to the Funds.
The Distributor. Effective September 30, 1997, INVESCO Distributors, Inc.
("IDI") became the Funds' distributor. IDI, established in 1997, is a registered
broker-dealer that acts as distributor for all retail mutual funds advised by
IFG. Prior to September 30, 1997, IFG served as the Funds' distributor.
IFG, ICM and IDI are indirect wholly-owned subsidiaries of AMVESCAP PLC, a
publicly-traded holding company that, through its subsidiaries, engages in the
business of investment management on an international basis. INVESCO PLC changed
its name to AMVESCO PLC on March 3, 1997, and to AMVESCAP PLC on May 8, 1997 as
part of a merger between a direct subsidiary of INVESCO PLC and A I M Management
Group, Inc., that created one of the largest independent investment management
businesses in the world with approximately $177.5 billion in assets under
management. IFG was established in 1932 and, as of August 31, 1997 managed 14
mutual funds, consisting of ^ 45 separate portfolios, on behalf of over 854,448
shareholders. AMVESCAP PLC's other North American subsidiaries include the
following:
--INVESCO Capital Management, Inc. of Atlanta, Georgia manages
institutional investment portfolios, consisting primarily of discretionary
employee benefit plans for corporations and state and local governments, and
endowment funds. INVESCO Capital Management, Inc. is the sole shareholder of
INVESCO Services, Inc., a registered broker-dealer ^.
--INVESCO Management & Research, Inc. of Boston, Massachusetts primarily
manages pension and endowment accounts.
--PRIMCO Capital Management, Inc. of Louisville, Kentucky specializes in
managing stable return investments, principally on behalf of Section 401(k)
retirement plans.
--INVESCO Realty Advisors, Inc. of Dallas, Texas is responsible for
providing advisory services in the U.S. real estate markets for AMVESCAP PLC's
clients worldwide. Clients include corporate plans, public pension funds, and
endowment and foundation accounts.
--A I M Advisors, Inc. of Houston, Texas provides investment advisory and
administrative services for retail and institutional mutual funds.
--A I M Capital Management, Inc. of Houston, Texas provides investment
advisory services to individuals, corporations, pension plans and other private
investment advisory accounts and also serves as a sub-adviser to certain retail
and institutional mutual funds, one Canadian mutual fund and one portfolio of an
open-end registered investment company that is offered to separate accounts of
variable insurance companies.
<PAGE>
--A I M Distributors, Inc. and Fund Management Company of Houston, Texas
are registered broker-dealers that act as the principal underwriters for retail
and institutional mutual funds.
The corporate headquarters of AMVESCAP PLC are located at 11 Devonshire
Square, London, EC2M 4YR, England.
As indicated in the Funds' Prospectuses, IFG and ICM permit investment and
other personnel to purchase and sell securities for their own accounts in
accordance with a compliance policy governing personal investing by directors,
officers and employees of IFG, ICM and their North American affiliates. The
policy requires officers, inside directors, investment and other personnel of
IFG, ICM and their North American affiliates to pre-clear all transactions in
securities not otherwise exempt under the policy. Requests for trading authority
will be denied when, among other reasons, the proposed personal transaction
would be contrary to the provisions of the policy or would be deemed to
adversely affect any transaction then known to be under consideration for or to
have been effected on behalf of any client account, including the Funds.
In addition to the pre-clearance requirement described above, the policy
subjects officers, inside directors, investment and other personnel of IFG, ICM
and their North American affiliates to various trading restrictions and
reporting obligations. All reportable transactions are reviewed for compliance
with the policy. The provisions of this policy are adminstered by and subject to
exceptions authorized by IFG or ICM.
Investment Advisory Agreement. IFG serves as investment adviser pursuant to
an investment advisory agreement dated February 28, 1997 with the Trust (the
"Agreement") which was approved by the board of trustees on November 6, 1996 by
a vote cast in person by a majority of the trustees of the Trust, including a
majority of the trustees who are not "interested persons" of the Trust or
INVESCO at a meeting called for such purpose. Shareholders of the Funds approved
the Agreement on Janaury 31, 1997 for an initial term expiring February 28,
1999. Thereafter, the Agreement may be continued from year to year as to each
Fund as long as such continuance is specifically approved at least annually by
the board of trustees of the Trust, or by a vote of the holders of a majority,
as defined in the 1940 Act, of the outstanding shares of the Fund. Any such
continuance also must be approved by a majority of the Trust's trustees who are
not parties to the Agreement or interested persons (as defined in the 1940 Act)
of any such party, cast in person at a meeting called for the purpose of voting
on such continuance. The Agreement may be terminated at any time without penalty
by either party upon sixty (60) days' written notice and terminates
automatically in the event of an assignment to the extent required by the 1940
Act and the rules thereunder.
The Agreement provides that IFG shall manage the investment portfolios of
the Funds in conformity with the Funds' investment policies (either directly or
by delegation to a sub-adviser, which may be a party affiliated with IFG).
Further, IFG shall perform all administrative, internal accounting (including
computation of net asset value), clerical, statistical, secretarial and all
other services necessary or incidental to the administration of the affairs of
<PAGE>
the Funds, excluding, however, those services that are the subject of separate
agreement between the Trust and IFG or any affiliate thereof, including
distribution and sale of Trust shares and provision of transfer agency, dividend
disbursing agency, and registrar services, and services furnished under an
Administrative Services Agreement with IFG discussed below. ^ IFG will pay the
fee of any sub-adviser. Services provided include, but are not limited to:
supplying the Trust with officers, clerical staff and other employees, if any,
who are necessary in connection with the Funds' operations; furnishing office
space, facilities, equipment and supplies; providing personnel and facilities
required to respond to inquiries related to shareholder accounts; conducting
periodic compliance reviews of the Funds' operations; preparation and review of
required documents, reports and filings by ^ IFG's in-house legal and accounting
staff (including the prospectus, statement of additional information, proxy
statements, shareholder reports, tax returns, reports to the SEC, and other
corporate documents of the Funds), except insofar as the assistance of
independent accountants or attorneys is necessary or desirable; supplying basic
telephone service and other utilities; and preparing and maintaining certain of
the books and records required to be prepared and maintained by the Funds under
the 1940 Act. Expenses not assumed by ^ IFG are borne by the Funds. The
responsibility for making decisions to buy, sell, or hold a particular security
rests with IFG, as well as ICM as the Sub-Adviser, subject to review by the
board of trustees. Expenses not assumed by IFG are borne by the Trust.
As full compensation for its advisory services to the Trust, IFG receives
a monthly fee. The fee is based upon a percentage of each Fund's average net
assets, determined daily. With respect to the INVESCO Value Equity and Total
Return Funds, the fee is calculated at the annual rate of: 0.75% on the first
$500 million of the average net assets of each Fund; 0.65% on the next $500
million of average net assets of each Fund; and 0.50% on average net assets in
excess of $1 billion. With respect to the INVESCO Intermediate Government Bond
Fund, the fee is calculated at the annual rate of: 0.60% on the first $500
million of the average net assets of the Fund; 0.50% on the next $500 million of
the average net assets of the Fund; and 0.40% on average net assets in excess of
$1 billion.
Sub-Advisory Agreement. ICM serves as sub-adviser to the INVESCO Value
Equity, Intermediate Government Bond and Total Return Funds pursuant to a
sub-advisory agreement dated February 28, 1997 (the "Sub-Agreement") with IFG
which was approved by the board of trustees of the Trust on November 6, 1996,
including a majority of the trustees who are not "interested persons" of the
Trust, IFG or ICM at a meeting called for such purpose. Shareholders of each of
the Funds approved the Sub-Agreement on January 31, 1997 for an initial term
expiring February 28, 1999. The Agreement and Sub-Agreement may be continued
from year to year as to each Fund as long as each such continuance is
specifically approved by the board of trustees of the Trust, or by a vote of the
holders of a majority, as defined in the 1940 Act, of the outstanding shares of
each of the Funds. Each such continuance also must be approved by a majority of
the trustees who are not parties to the Agreement or Sub-Agreements or
interested persons (as defined in the 1940 Act) of any such party, cast in
person at a meeting called for the purpose of voting on such continuance. The
Agreement or Sub-Agreement may be terminated as to any Fund at any time without
penalty by either party or the Trust upon sixty (60) days' written notice and
terminates automatically in the event of an assignment to the extent required by
the 1940 Act and the rules thereunder.
<PAGE>
The Sub-Agreement provides that ICM, subject to the supervision of IFG,
shall manage the investment portfolios of the respective Funds in conformity
with each Fund's investment policies. These management services include: (a)
managing the investment and reinvestment of all the assets, now or hereafter
acquired, of the Funds, and executing all purchases and sales of portfolio
securities; (b) maintaining a continuous investment program for the Funds,
consistent with (i) each Fund's investment policies as set forth in the
Company's Articles of Incorporation, Bylaws, and Registration Statement, as from
time to time amended, under the 1940 Act, and in any prospectus and/or statement
of additional information of the Company, as from time to time amended and in
use under the 1933 Act, and (ii) the Trust's status as a regulated investment
company under the Internal Revenue Code of 1986, as amended; (c) determining
what securities are to be purchased or sold for each of the Funds, unless
otherwise directed by the ^ trustees of the ^ Trust or IFG, and executing
transactions accordingly; (d) providing the Funds the benefit of all of the
investment analysis and research, the reviews of current economic conditions and
trends, and the consideration of long-range investment policy now or hereafter
generally available to investment advisory customers of the Sub-Advisers; (e)
determining what portion of each of the Funds should be invested in the various
types of securities authorized for purchase by each Fund; and (f) making
recommendations as to the manner in which voting rights, rights to consent to
Trust action and any other rights pertaining to the portfolio securities of each
Fund shall be exercised.
The Sub-Agreement provides that as compensation for its services, ICM
shall receive from IFG, at the end of each month, a fee based on the average
daily value of each Fund's net assets at the following annual rates: prior to
January 1, 1998, 0.20% on the INVESCO Value Equity Fund's and INVESCO Total
Return Fund's, and 0.16% on the INVESCO Intermediate Government Bond Fund's,
average net assets on the first $500 million; 0.17% on the INVESCO Value Equity
Fund's and INVESCO Total Return Fund's, and 0.13% on the INVESCO Intermediate
Government Bond Fund's, average net assets on the next $500 million; and 0.13%
on the INVESCO Value Equity Fund's and INVESCO Total Return Fund's, and 0.11% on
the INVESCO Intermediate Government Bond Fund's, average net asset value in
excess of $1 billion. Effective January 1, 1998, ICM shall receive a fee based
on the following annual rates: 0.25% on the INVESCO Value Equity Fund's and
INVESCO Total Return Fund's, and 0.20% on the INVESCO Intermediate Government
Bond Fund's, average net assets on the first $500 million; 0.2167% on the
INVESCO Value Equity Fund's and INVESCO Total Return Fund's, and 0.1667% on the
INVESCO Intermediate Government Bond Fund's, average net assets on the next $500
million; and 0.1667% on the INVESCO Value Equity Fund's and INVESCO Total Return
Fund's, and 0.1333% on the INVESCO Intermediate Government Bond Fund's, average
net assets in excess of $1 billion. The Sub-Advisory fees are paid by IFG, not
the Funds.
Administrative Services Agreement. IFG, either directly or through
affiliated companies, provides certain administrative, sub-accounting, and
recordkeeping services to the Trust pursuant to an Administrative Services
Agreement dated February 28, 1997 (the "Administrative Agreement"). The
Administrative Agreement was approved by the board of trustees on November 6,
1996 by a vote cast in person by all of the trustees of the Trust, including all
<PAGE>
of the trustees who are not "interested persons" of the Trust or IFG at a
meeting called for such purpose. The Administrative Agreement was for an initial
term expiring February 28, 1998, and has been continued by action of the board
of trustees until May 15, 1998. The Administrative Agreement may be continued
from year to year thereafter as long as each such continuance is specifically
approved by the board of trustees of the Trust, including a majority of the
trustees who are not parties to the Administrative Agreement or interested
persons (as defined in the 1940 Act) of any such party, cast in person at a
meeting called for the purpose of voting on such continuance. The Administrative
Agreement may be terminated at any time without penalty by IFG on sixty (60)
days' written notice, or by the Trust upon thirty (30) days' written notice, and
terminates automatically in the event of an assignment unless the board of
trustees approves such assignment.
The Administrative Agreement provides that IFG shall provide the following
services to the Funds: required administrative and internal accounting services,
including without limitation, maintaining general ledger and capital stock
accounts, preparing a daily trial balance, calculating net asset value daily,
and providing selected general ledger reports.
As full compensation for services provided under the Administrative
Agreement, the Trust pays a monthly fee to IFG consisting of ^ an incremental
fee computed daily and paid monthly at an annual rate of 0.015% per year of the
average net assets of each Fund of the Trust. For providing such services, IFG
received administrative services fees in the amount of $295,965 for the fiscal
year ended August 31, 1997.
Transfer Agency Agreement. IFG performs transfer agent, dividend
disbursing agent, and registrar services for the Trust pursuant to a Transfer
Agency Agreement dated February 28, 1997, which was approved November 6, 1996 by
the board of trustees of the Trust, including a majority of the Trust's trustees
who are not parties to the Transfer Agency Agreement or "interested persons" of
any such party. The Transfer Agency Agreement was for an initial term expiring
February 28, 1998 and has been extended by the board of trustees until May 15,
1998. Thereafter, the Transfer Agency Agreement may be continued from year to
year as to each Fund as long as such continuance is specifically approved at
least annually by the board of trustees of the Trust, or by a vote of the
holders of a majority of the outstanding shares of each Fund of the Trust. Any
such continuance also must be approved by a majority of the Trust's trustees who
are not parties to the Transfer Agency Agreement or interested persons (as
defined by the 1940 Act) of any such party, cast in person at a meeting called
for the purpose of voting on such continuance. The Transfer Agency Agreement may
be terminated at any time without penalty by either party upon sixty (60) days'
written notice.
The Transfer Agency Agreement provides that the Trust shall pay to IFG an
annual fee of $20.00 per shareholder account or, where applicable, per
participant in an omnibus account with respect to the INVESCO Value Equity and
Total Return Funds, and $26.00 per shareholder account or omnibus account with
<PAGE>
respect to INVESCO Intermediate Government Bond Fund. These fees are paid
monthly at the rate of 1/12 of the annual fee and are based upon the number of
shareholder accounts or, where applicable, per participant in an omnibus
account. For the year ended August 31, 1997, the Trust paid IFG transfer agency
fees of $3,193,607.
Set forth below is a table showing the advisory fees, transfer agency fees
and administrative fees paid by each of the Funds for the fiscal years ended
August 31, 1997, 1996 and 1995.
<TABLE>
<CAPTION>
Fiscal year Fiscal year Fiscal year
ended August 31, 1997 ended August 31, 1996 ended August 31, 1995
--------------------- --------------------- ---------------------
Transfer Adminis- Transfer Adminis- Transfer Adminis-
Advisory Agency trative Advisory Agency trative Advisory Agency trative
Portfolio Fees Fees Fees Fees Fees Fees Fees Fees Fees
- --------- -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INVESCO Intermediate
Government Bond $ 268,593 $ 251,070 $ 16,115 $ 235,160 $156,123 $ 15,879 $ 214,128 $130,781 $15,353
INVESCO Value Equity $2,250,039 $ 610,115 $ 55,001 $1,382,049 $282,255 $ 37,641 $ 974,578 $168,354 $29,713
INVESCO Total Return $9,140,227 $2,332,422 $224,249 $6,025,905 $953,383 $137,623 $2,824,847 $477,373 $66,616
</TABLE>
Officers and Trustees of the Trust. The overall direction and supervision
of the Trust is the responsibility of the board of trustees, which has the
primary duty of seeing that the ^ general investment policies and programs of
the Trust are carried out and that the Trust's Funds are properly administered.
The officers of the Trust, all of whom are officers and employees of, and are
paid by, IFG, are responsible for the day-to-day administration of the Trust.
IFG, along with ICM, has the primary responsibility for making investment
decisions on behalf of each of the Funds of the Trust. These investment
decisions are reviewed by the investment committee of IFG.
All of the officers and trustees of the Trust hold comparable positions
with INVESCO Capital Appreciation Funds, Inc. (formerly, INVESCO Dynamics Fund,
Inc.), INVESCO Diversified Funds, Inc., INVESCO Emerging Opportunity Funds,
Inc., INVESCO Growth Fund, Inc., INVESCO Income Funds, Inc., INVESCO Industrial
Income Fund, Inc., INVESCO International Funds, Inc., INVESCO Money Market
Funds, Inc., INVESCO Multiple Asset Funds, Inc., INVESCO Specialty Funds, Inc.,
INVESCO Strategic Portfolios, Inc., INVESCO Tax-Free Income Funds, Inc., and
INVESCO Variable Investment Funds, Inc. In addition, all of the trustees of the
Trust, with the exception of Mr. Hesser, are also trustees of INVESCO
Treasurer's Series Trust. Set forth below is information with respect to each of
the Trust's officers and trustees. Unless otherwise indicated, the address of
the trustees and officers is Post Office Box 173706, Denver, Colorado
80217-3706. Their affiliations represent their principal occupations during the
past five years.
<PAGE>
CHARLES W. BRADY,*+ ^ Chairman of the Board. Chief Executive Officer and
Director of AMVESCAP PLC, London, England, and of various subsidiaries thereof.
Chairman of the Board of INVESCO Treasurer's Series Trust. Address: 1315
Peachtree Street, NE, Atlanta, Georgia. Born: May 11, 1935.
FRED A. DEERING,+# Vice Chairman of the Board. Vice Chairman of INVESCO
Treasurer's Series Trust. Trustee of INVESCO Global Health Sciences Fund.
Formerly, Chairman of the Executive Committee and Chairman of the Board of
Security Life of Denver Insurance Company, Denver, Colorado; Director of ING
America Life Insurance Company, Urbaine Life Insurance Company and Midwestern
United Life Insurance Company. Address: Security Life Center, 1290 Broadway,
Denver, Colorado. Born: January 12, 1928.
VICTOR L. ANDREWS,** Trustee. Professor Emeritus, Chairman Emeritus and
Chairman of the CFO Roundtable of the Department of Finance at Georgia State
University, Atlanta, Georgia; President, Andrews Financial Associates, Inc.
(consulting firm); since October 1984, Director of the Center for the Study of
Regulated Industry at Georgia State University; formerly, member of the
faculties of the Harvard Business School and the Sloan School of Management of
MIT. Dr. Andrews is also a Director of the Southeastern Thrift and Bank Fund,
Inc. and The Sheffield Funds, Inc. Address: 4625 Jettridge Drive, Atlanta,
Georgia. Born: June 23, 1930.
BOB R. BAKER,+** Trustee. President and Chief Executive Officer of AMC
Cancer Research Center, Denver, Colorado, since January 1989; until mid-December
1988, Vice Chairman of the Board of First Columbia Financial Corporation (a
financial institution), Englewood, Colorado. Formerly, Chairman of the Board and
Chief Executive Officer of First Columbia Financial Corporation. Address: 1775
Sherman Street, #1000, Denver, Colorado. Born: August 7, 1936.
LAWRENCE H. BUDNER,# Trustee. Trust Consultant; prior to June 30, 1987,
Senior Vice President and Senior Trust Officer of InterFirst Bank, Dallas,
Texas. Address: 7608 Glen Albens Circle, Dallas, Texas. Born: July 25, 1930.
DANIEL D. CHABRIS,+# Trustee. Financial Consultant; Assistant Treasurer of
Colt Industries Inc., New York, New York, from 1966 to 1988. Address: 19
Kingsbridge Way, Madison, Connecticut. Born: August 1, 1923.
WENDY L. GRAMM, Ph.D.,** Trustee. Self-employed (since 1993); Professor of
Economics and Public Administration, University of Texas at Arlington. Formerly,
Chairman, Commodity Futures Trading Commission from 1988 to 1993, administrator
for Information and Regulatory Affairs at the Office of Management and Budget
from 1985 to 1988, Executive Director of the Presidential Task Force on
Regulatory Relief and Director of the Federal Trade Commission's Bureau of
Economics. Dr. Gramm is also a director of the Chicago Mercantile Exchange,
Enron Corporation, IBP, Inc., State Farm Insurance Company, State Farm Life
Insurance Company, ^ Independant Women's Forum, International Republic
Institute, and the Republican Women's Federal Forum. Dr. Gramm is also a member
of the Board of Visitors, College of Business Administration, University of
Iowa, and a member of the Board of Visitors, Center for Study of Public Choice,
George Mason University. Address: 4201 Yuma Street, N.W., Washington, D.C. Born:
January 10, 1945.
<PAGE>
HUBERT L. HARRIS, JR.,* Trustee. Chairman (since 1996) and President
(January 1990 to May 1996) of INVESCO Services, Inc.; Chief Executive Officer of
INVESCO Individual Services Group. Chief Executive Officer, Chairman and Trustee
of INVESCO Global Health Sciences Fund. Member of the Executive Committee of the
Alumni Board of Trustees of Georgia Institute of Technology. Address: 1315
Peachtree Street, NE, Atlanta, Georgia. Born: July 15, 1943.
KENNETH T. KING,# Trustee. Formerly, Chairman of the Board of The Capitol
Life Insurance Company, Providence Washington Insurance Company, and Director of
numerous subsidiaries thereof in the U.S. Formerly, Chairman of the Board of The
Providence Capitol Companies in the United Kingdom and Guernsey. Chairman of the
Board of the Symbion Corporation (a high technology company) until 1987.
Address: 4080 North Circulo Manzanillo, Tucson, Arizona. Born: November 16,
1925.
JOHN W. MCINTYRE,# Trustee. Retired. Formerly, Vice Chairman of the Board
of Directors of the Citizens and Southern Corporation and Chairman of the Board
and Chief Executive Officer of the Citizens and Southern Georgia Corporation and
Citizens and Southern National Bank. Director of Golden Poultry Co., Inc.
Trustee of INVESCO Global Health Sciences Fund and Gables Residential Trust.
Address: 7 Piedmont Center, Suite 100, Atlanta, Georgia. Born: September 14,
1930.
LARRY SOLL, Ph.D.,** Trustee. Formerly, Chairman of the Board (1987 to
1994), Chief Executive Officer (1982 to 1989 and 1993 to 1994) and President
(1982 to 1989) of Synergen Corp. Director of Synergen since incorporation in
1982. Director of ISD Pharmaceuticals, Inc., Trustee of INVESCO Global Health
Sciences Fund. Address: 345 Poorman Road, Boulder, Colorado. Born: April 26,
1942.
GLEN A. PAYNE, Secretary. Senior Vice President (since 1995), General
Counsel and Secretary of INVESCO Funds Group, Inc. and INVESCO Trust Company
(since 1989) and INVESCO Distributors, Inc. (since 1997); Vice President (May
1989 to April 1995)^ of INVESCO Funds Group, Inc.; formerly, employee of a U.S.
regulatory agency, Washington, D.C., (June 1973 through May 1989). Born:
September 25, 1947.
RONALD L. GROOMS, Treasurer. Senior Vice President and Treasurer of INVESCO
Funds Group, Inc. and INVESCO Trust Company (since 1988). Senior Vice President
and Treasurer of INVESCO Distributors, Inc. (since 1997). Born: October 1, 1946.
WILLIAM J. GALVIN, JR., Assistant Secretary. Senior Vice President of
INVESCO Funds Group, Inc. (since 1995) and of INVESCO Distributors, Inc. (since
1997) and Trust Officer of INVESCO Trust Company (since July 1995) and formerly
(August 1992 to July 1995), Vice President of INVESCO Funds Group, Inc. ^
Formerly, Vice President of 440 Financial Group from June 1990 to August 1992;
Assistant Vice President of Putnam Companies from November 1986 to June 1990.
Born: August 21, 1956.
<PAGE>
ALAN I. WATSON, Assistant Secretary. Vice President of INVESCO Funds Group,
Inc. (since 1984) and Trust Officer of INVESCO Trust Company. Born: September
14, 1941.
JUDY P. WIESE, Assistant Treasurer. Vice President of INVESCO Funds Group,
Inc. (since 1984) and of INVESCO Distributors, Inc. (since 1997) and Trust
Officer of INVESCO Trust Company. Born: February 3, 1948.
#Member of the audit committee of the Trust.
+Member of the executive committee of the Trust. On occasion, the
executive committee acts upon the current and ordinary business of the Trust
between meetings of the board of trustees. Except for certain powers which,
under applicable law, may only be exercised by the full board of trustees, the
executive committee may exercise all powers and authority of the board of
trustees in the management of the business of the Trust. All decisions are
subsequently submitted for ratification by the board of trustees.
*These trustees are "interested persons" of the Trust as defined in the ^
1940 Act.
**Member of the management liaison committee of the ^ Trust.
As of ^ December 19, 1997, officers and trustees of the Trust, as a group,
beneficially owned less than 1% of the Trust's outstanding shares and less than
1% of any Fund's outstanding shares.
Director Compensation
The following table sets forth, for the fiscal year ended August 31,
1997^, the compensation paid by the Trust to its independent trustees for
services rendered in their capacities as trustees of the Trust; the benefits
accrued as Trust expenses with respect to the Defined Benefit Deferred
Compensation Plan discussed below; and the estimated annual benefits to be
received by these trustees upon retirement as a result of their service to the
Trust. In addition, the table sets forth the total compensation paid by all of
the mutual funds distributed by INVESCO Distributors, Inc. (including the
Funds), INVESCO Advisor Funds, Inc., INVESCO Treasurer's Series Trust and
INVESCO Global Health Sciences Fund (collectively, the "INVESCO Complex") to
these trustees for services rendered in their capacities as directors or
trustees during the year ended December 31, 1996. As of December 31, 1996, there
were 49 funds in the INVESCO Complex. Dr. Soll became an independent trustee of
the Trust effective May 15, 1997. Dr. Gramm became an independent trustee of the
Trust effective July 29, 1997.
<PAGE>
Total
Compensa-
Benefits Estimated tion From
Aggregate Accrued As Annual INVESCO
Compensa- Part of Benefits Complex
tion From Trust Upon Paid To
Trust(1) Expenses(2) Retirement(3) Trustees(1)
Fred A.Deering, $7,694 $2,611 $2,542 $98,850
Vice Chairman of
the Board
Victor L. Andrews 7,662 2,467 2,943 84,350
Bob R. Baker 7,894 2,203 3,944 84,850
Lawrence H. Budner 7,394 2,467 2,943 80,350
Daniel D. Chabris 7,569 2,816 2,092 84,850
A. D. Frazier, Jr.(4) 1,404 0 0 81,500
Wendy L. Gramm 1,617 0 0 0
Kenneth T. King 6,629 2,711 2,306 71,350
John W. McIntyre 7,060 0 0 90,350
Larry Soll 3,045 0 0 17,500
------- ------- ------- --------
Total $57,968 $15,275 $16,770 $693,950
% of Net Assets 0.0026%(5) 0.0007%(5) 0.0045%(6)
(1)The vice chairman of the board, the chairmen of the audit, management
liaison and compensation committees, ^ the members of the executive and
valuation committees, and the members of specially ^ appointed task forces of
the board of trustees each receive compensation for serving in such capacities
in addition to the compensation paid to all independent trustees.
(2)Represents benefits accrued with respect to the Defined Benefit Deferred
Compensation Plan discussed below, and not compensation deferred at the election
of the trustees.
(3)These figures represent the Trust's share of the estimated annual
benefits payable by the INVESCO Complex (excluding INVESCO Global Health
Sciences Fund which does not participate in any retirement plan) upon the
trustees' retirement, calculated using the current method of allocating trustee
compensation among the funds in the INVESCO Complex. These estimated benefits
assume retirement at age 72 and that the basic retainer payable to the trustees
<PAGE>
will be adjusted periodically for inflation, for increases in the number of
funds in the INVESCO Complex and for other reasons during the period in which
retirement benefits are accrued on behalf of the respective trustees. This
results in lower estimated benefits for trustees who are closer to retirement
and higher estimated benefits for trustees who are further from retirement. With
the exception of Messrs. Frazier and McIntyre and Drs. Soll and Gramm, each of
these trustees has served as a director/trustee of one or more of the funds in
the INVESCO Complex for the minimum five-year period required to be eligible to
participate in the Defined Benefit Deferred Compensation Plan.
(4)Effective February 28, 1997, Mr. Frazier resigned as a trustee of the
Trust. Effective November 1, 1996, Mr. Frazier was employed by INVESCO PLC (the
predecessor to AMVESCAP PLC), a company affiliated with IFG and did not receive
any director's fees or other compensation from the Trust or other funds in the
INVESCO Complex for his service as a director/trustee.
(5)Total as a percentage of the Trust's net assets as of August 31, 1997.
(6)Total as a percentage of the net assets of the INVESCO Complex as of
December 31, 1996.
Messrs. Brady and Harris, as "interested persons" of the Trust and of the
other funds in the INVESCO Complex, receive compensation as officers or
employees of IFG or its affiliated companies and do not receive any trustee's
fees or other compensation from the Trust or other funds in the INVESCO Complex
for their services as trustees.
The boards of directors/trustees of the mutual funds managed by IFG and
INVESCO Treasurer's Series Trust have adopted a Defined Benefit Deferred
Compensation Plan for the non-interested directors and trustees of the funds.
Under this plan, each director or trustee who is not an interested person of the
funds (as defined in the 1940 Act) and who has served for at least five years (a
"qualified director") is entitled to receive, upon retiring from the boards at
the retirement age of 72 (or the retirement age of 73 to 74, if the retirement
date is extended by the boards for one or two years, but less than three years)
continuation of payment for one year (the "first year retirement benefit") of
the annual basic retainer payable by the funds to the qualified trustee at the
time of his or her retirement (the "basic retainer"). Commencing with any such
trustee's second year of retirement, and commencing with the first year of
retirement of a trustee whose retirement has been extended by the board for
three years, a qualified trustee shall receive quarterly payments at an annual
rate equal to 40% of the basic retainer. These payments will continue for the
remainder of the qualified trustee's life or ten years, whichever is longer (the
"reduced retainer payments"). If a qualified trustee dies or becomes disabled
after age 72 and before age 74 while still a trustee of the funds, the first
year retirement benefit and the reduced retainer payments will be made to him or
her or to his or her beneficiary or estate. If a qualified trustee becomes
disabled or dies either prior to age 72 or during ^ his or her 74th year while
still a trustee of the funds, the trustee will not be entitled to receive the
first year retirement benefit; however, the reduced retainer payments will be
<PAGE>
made to his or her beneficiary or estate. The plan is administered by a
committee of three trustees who are also participants in the plan and one
trustee who is not a plan participant. The cost of the plan will be allocated
among the INVESCO and Treasurer's Series Trust funds in a manner determined to
be fair and equitable by the committee. The Trust is not making any payments to
trustees under the plan as of the date of this Statement of Additional
Information. The Trust has no stock options or other pension or retirement plans
for management or other personnel and pays no salary or compensation to any of
its officers.
The Trust has an audit committee that is comprised of five of the trustees
who are not interested persons of the Trust. The committee meets periodically
with the Trust's independent accountants and officers to review accounting
principles used by the Trust, the adequacy of internal controls, the
responsibilities and fees of the independent accountants, and other matters.
The Trust also has a management liaison committee which meets quarterly
with various management personnel of IFG in order (a) to facilitate better
understanding of management and operations of the Trust, and (b) to review legal
and operational matters which have been assigned to the committee by the board
of trustees, in furtherance of the board of trustees' overall duty of
supervision.
HOW SHARES CAN BE PURCHASED
The shares of each Fund are sold on a continuous basis at the net asset
value per share of the Fund next calculated after receipt of a purchase order in
good form. The net asset value per share of each Fund is computed once each day
that the New York Stock Exchange is open as of the close of regular trading on
that Exchange, but may also be computed at other times. See "How Shares Are
Valued." IDI acts as the Trust's distributor under a distribution agreement with
the Trust under which it receives no compensation and bears all expenses,
including the costs of printing and distribution of prospectuses incident to
direct sales and distribution of Trust shares on a no-load basis.
Distribution Plan. The Value Equity and Intermediate Government Bond Funds
have adopted a Plan and Agreement of Distribution (the "Plan") pursuant to Rule
12b-1 under the 1940 Act, which was implemented on November 1, 1997. The Plan
was approved on May 16, 1997, at a meeting called for such purpose by a majority
of the trustees of the Trust, including a majority of the trustees who neither
are "interested persons" of the Trust nor have any financial interest in the
operation of the Plan ("12b-1 trustees"). The Plan was approved by the
shareholders of each of the Funds on October 28, 1997. The following disclosures
relate only to the Value Equity and Intermediate Government Bond Funds and do
not concern the Total Return Fund.
The Plan provides that these Funds may make monthly payments to IDI of
amounts computed at an annual rate no greater than 0.25% of each Fund's average
net new sales of shares, exchanges into the Fund and reinvestments of dividends
and capital gain distributions added after November 1, 1997 to permit ^
compensation for expenses incurred by it in connection with the distribution of
<PAGE>
a Fund's shares to investors. Payment amounts by a Fund under the Plan, for
any month, may only be made to compensate or pay expenditures incurred during
the rolling 12-month period in which that month falls. For the fiscal year ended
August 31, 1997, the Funds had made no payments to IFG (the predecesor of IDI as
distributor of shares of the Funds) under the 12b-1 plan. As noted in the
Prospectuses, one type of expenditure permitted by the Plan is the payment of
compensation to securities companies, and other financial institutions and
organizations, which may include IDI- affiliated companies, in order to obtain
various distribution-related and/or administrative services for the Funds. Each
Fund is authorized by the Plan to use its assets to finance the payments made to
obtain those services. Payments will be made by IDI to broker-dealers who sell
shares of a Fund and may be made to banks, savings and loan associations and
other depository institutions. Although the Glass-Steagall Act limits the
ability of certain banks to act as underwriters of mutual fund shares, the Funds
do not believe that these limitations would affect the ability of such banks to
enter into arrangements with IDI, but can give no assurance in this regard.
However, to the extent it is determined otherwise in the future, arrangements
with banks might have to be modified or terminated, and, in that case, the size
of one or more of the Funds possibly could decrease to the extent that the banks
would no longer invest customer assets in a particular Fund. Neither the Trust
nor its investment adviser will give any preference to banks or other depository
institutions which enter into such arrangements when selecting investments to be
made by each Fund.
The Plan was not implemented until November 1, 1997. Therefore, for the
fiscal year ended August 31, 1997 no 12b-1 amounts were paid by the Value Equity
Fund or Intermediate Government Bond Fund.
The nature and scope of services which are provided by securities dealers
and other organizations may vary by dealer but include, among other things,
processing new stockholder account applications, preparing and transmitting to
the Trust's Transfer Agent computer-processable tapes of each Fund's
transactions by customers, serving as the primary source of information to
customers in answering questions concerning each Fund, and assisting in other
customer transactions with each Fund.
The Plan provides that it shall continue in effect with respect to each
Fund for so long as such continuance is approved at least annually by the vote
of the board of trustees cast in person at a meeting called for the purpose of
voting on such continuance. The Plan can also be terminated at any time with
respect to any Fund, without penalty, if a majority of the 12b-1 trustees, or
shareholders of such Fund, vote to terminate the Plan. The Trust may, in its
absolute discretion, suspend, discontinue or limit the offering of its shares of
any Fund at any time. In determining whether any such action should be taken,
the board of trustees intends to consider all relevant factors including,
without limitation, the size of a particular Fund, the investment climate for
any particular Fund, general market conditions, and the volume of sales and
redemptions of a Fund's shares. The Plan may continue in effect and payments may
be made under the Plan following any such temporary suspension or limitation of
the offering of a Fund's shares; however, neither Fund is contractually
obligated to continue the Plan for any particular period of time. Suspension of
the offering of a Fund's shares would not, of course, affect a shareholder's
<PAGE>
ability to redeem his shares. So long as the Plan is in effect, the
selection and nomination of persons to serve as independent trustees of the
Trust shall be committed to the independent trustees then in office at the time
of such selection or nomination. The Plan may not be amended to increase
materially the amount of any Fund's payments thereunder without approval of the
shareholders of that Fund, and all material amendments to the Plan must be
approved by the board of trustees, including a majority of the 12b-1 trustees.
Under the agreement implementing the Plan, IDI or the Funds, the latter by vote
of a majority of the 12b-1 trustees, or of the holders of a majority of a Fund's
outstanding voting securities, may terminate such agreement as to that Fund
without penalty upon 30 days' written notice to the other party. No further
payments will be made by a Fund under the Plan in the event of its termination
as to that Fund.
To the extent that the Plan constitutes a plan of distribution adopted
pursuant to Rule 12b-1 under the 1940 Act, it shall remain in effect as such, so
as to authorize the use of each Fund's assets in the amounts and for the
purposes set forth therein, notwithstanding the occurrence of an assignment, as
defined by the 1940 Act, and rules thereunder. To the extent it constitutes an
agreement pursuant to a plan, each Fund's obligation to make payments to IDI
shall terminate automatically, in the event of such "assignment," in which case
the Funds may continue to make payments pursuant to the Plan to IDI or another
organization only upon the approval of new arrangements, which may or may not be
with IDI, regarding the use of the amounts authorized to be paid by it under the
Plan, by the trustees, including a majority of the 12b-1 trustees, by a vote
cast in person at a meeting called for such purpose.
Information regarding the services rendered under the Plan and the amounts
paid therefor by the Funds are provided to, and reviewed by, the trustees on a
quarterly basis. On an annual basis, the trustees consider the continued
appropriateness of the Plan and the level of compensation provided therein.
The only trustees or interested persons, as that term is defined in
Section 2(a)(19) of the 1940 Act, of the Trust who have a direct or indirect
financial interest in the operation of the Plan are the officers and trustees of
the Trust listed herein under the section entitled "The Fund And Its
Management--Officers and Trustees of the Trust" who are also officers either of
IDI or companies affiliated with IDI. The benefits which the Trust believes will
be reasonably likely to flow to it and its shareholders under the Plan include
the following:
(1) Enhanced marketing efforts, if successful, should result in an
increase in net assets through the sale of additional shares and
afford greater resources with which to pursue the investment
objectives of the Funds;
(2) The sale of additional shares reduces the likelihood that redemption
of shares will require the liquidation of securities of the Funds in
amounts and at times that are disadvantageous for investment
purposes;
<PAGE>
(3) The positive effect which increased Fund assets will have on its
revenues could allow IFG and its affiliated companies:
(a) To have greater resources to make the financial commitments
necessary to improve the quality and level of each Fund's
shareholder services (in both systems and personnel),
(b) To increase the number and type of mutual funds available to
investors from IFG and its affiliated companies (and support
them in their infancy), and thereby expand the investment
choices available to all shareholders, and
(c) To acquire and retain talented employees who desire to be
associated with a growing organization; and
(4) Increased Fund assets may result in reducing each investor's share
of certain expenses through economies of scale (e.g. exceeding
established breakpoints in the advisory fee schedule and allocating
fixed expenses over a larger asset base), thereby partially
offsetting the costs of the Plan.
HOW SHARES ARE VALUED
As described in the section of each Fund's Prospectus entitled "How Shares
Can Be Purchased," the net asset value of shares of each Fund of the Trust is
computed once each day that the New York Stock Exchange is open as of the close
of regular trading on that Exchange (generally 4:00 p.m., New York time) and
applies to purchase and redemption orders received prior to that time. Net asset
value per share is also computed on any other day on which there is a sufficient
degree of trading in the securities held by a Fund that the current net asset
value per share might be materially affected by changes in the value of the
securities held, but only if on such day the Trust receives a request to
purchase or redeem shares of that Fund. Net asset value per share is not
calculated on days the New York Stock Exchange is closed, such as federal
holidays including New Year's Day, Martin Luther King, Jr. Day, Presidents' Day,
Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and
Christmas. The net asset value per share of each Fund is calculated by dividing
the value of all securities held by that Fund and its other assets (including
dividends and interest accrued but not collected), less the Fund's liabilities
(including accrued expenses), by the number of outstanding shares of that Fund.
Securities traded on national securities exchanges, the NASDAQ National
Market System, the NASDAQ Small Cap market and foreign markets are valued at
their last sale prices on the exchanges or markets where such securities are
primarily traded. Securities traded in the over-the-counter market for which
last sale prices are not available, and listed securities for which no sales
were reported on a particular date, are valued at their highest closing bid
prices (or, for debt securities, yield equivalents thereof) obtained from one or
more dealers making markets for such securities. If market quotations are not
readily available, securities will be valued at their fair values as determined
in good faith by the Trust's board of trustees or pursuant to procedures adopted
by the board of trustees. The above procedures may include the use of valuations
furnished by a pricing service which employs a matrix to determine valuations
for normal institutional-size trading units of debt securities. Prior to
<PAGE>
utilizing a pricing service, the Trust's board of trustees reviews the methods
used by such service to assure itself that securities will be valued at their
fair values. The Trust's board of trustees also periodically monitors the
methods used by such pricing services. Debt securities with remaining maturities
of 60 days or less at the time of purchase are normally valued at amortized
cost.
The value of securities held by each Fund, and other assets used in
computing net asset value, generally is determined as of the time regular
trading in such securities or assets is completed each day. Since regular
trading in most foreign securities markets is completed simultaneously with, or
prior to, the close of regular trading on the New York Stock Exchange, closing
prices for foreign securities usually are available for purposes of computing
the Funds' net asset value. However, in the event that the closing price of a
foreign security is not available in time to calculate a Fund's net asset value
on a particular day, the Trust's board of trustees has authorized the use of the
market price for the security obtained from an approved pricing service at an
established time during the day which may be prior to the close of regular
trading in the security. The value of all assets and liabilities initially
expressed in foreign currencies will be converted into U.S. dollars at the spot
rate of such currencies against U.S. dollars provided by an approved pricing
service.
TRUST PERFORMANCE
As discussed in the section of each Fund's Prospectus entitled
"Performance Data," all of the Funds advertise their total return performance.
In addition, the INVESCO Intermediate Government Bond Fund advertises its yield.
The average annual total return as of August 31, 1997 for shares of each of the
following Funds for the periods listed below were as follows:
^
Portfolio 1 Year 5 Years ^ 10 Years
- --------- ------ ------- --------
INVESCO Intermediate
Government Bond Fund 6.64% 5.65% 7.54%^
INVESCO Value Equity Fund 32.04% 17.60% 12.74%^
INVESCO Total Return Fund 27.01% 15.38% 13.68%^
Average annual total return performance for each Fund reflects the
deduction of a proportional share of Trust expenses allocated to the Fund for
the periods indicated. In each case, average annual total return was computed by
finding the average annual compounded rates of return that would equate the
initial amount invested to the ending redeemable value, according to the
following formula:
P(1 + T)exponent n = ERV
where: P = initial payment of $1000
T = average annual total return
n = number of years
ERV = ending redeemable value of initial payment
<PAGE>
The average annual total return performance figures shown above were
determined by solving the above formula for "T" for each time period and Fund
indicated.
The yield of the INVESCO Intermediate Government Bond Fund for the 30 days
ended August 31, 1997, was 4.86%. This yield was computed by dividing the net
investment income per share earned during the period as calculated according to
a prescribed formula by the net asset value per share on August 31, 1997.
In conjunction with performance reports, comparative data between a Fund's
performance for a given period and other types of investment vehicles, including
certificates of deposit, may be provided to prospective investors and
shareholders.
From time to time, evaluations of performance made by independent sources
may also be used in advertisements, sales literature or shareholder reports,
including reprints of, or selections from, editorials or articles about the
Funds. Sources for Fund performance information and articles about the Funds
include, but are not limited to, the following:
American Association of Individual Investors' Journal
Banxquote
Barron's
Business Week
CDA Investment Technologies
CNBC
CNN
Consumer Digest
Financial Times
Financial World
Forbes
Fortune
Ibbotson Associates, Inc.
Institutional Investor
Investment Company Data, Inc.
Investor's Business Daily
Kiplinger's Personal Finance
Lipper Analytical Services, Inc.'s Mutual Fund Performance
Analysis
Money
Morningstar
Mutual Fund Forecaster
No-Load Analyst
No-Load Fund X
Personal Investor
Smart Money
The New York Times
The No-Load Fund Investor
U.S. News and World Report
United Mutual Fund Selector
USA Today
Wall Street Journal
Wiesenberger Investment Companies Services
Working Woman
Worth
<PAGE>
SERVICES PROVIDED BY THE TRUST
Periodic Withdrawal Plan. As described in the section of each Fund's
Prospectus entitled "Services Provided by the Trust," the Trust offers a
Periodic Withdrawal Plan. All dividends and distributions on shares owned by
shareholders participating in this Plan are reinvested in additional shares.
Since withdrawal payments represent the proceeds from sales of shares, the
amount of shareholders' investments in the Trust will be reduced to the extent
that withdrawal payments exceed dividends and other distributions paid and
reinvested. Any gain or loss on such redemptions must be reported for tax
purposes. In each case, shares will be redeemed at the close of business on or
about the 20th day of each month preceding payment and payments will be mailed
within five business days thereafter.
The Periodic Withdrawal Plan involves the use of principal and is not a
guaranteed annuity. Payments under such a Plan do not represent income or a
return on investment.
Participation in the Periodic Withdrawal Plan may be terminated at any
time by sending a written request to IFG. Upon termination, all future dividends
and capital gain distributions will be reinvested in additional shares unless a
shareholder requests otherwise.
Exchange Policy. As discussed in the section of each Fund's Prospectus
entitled "Services Provided by the Trust," the Trust offers shareholders the
ability to exchange shares of any Fund of the Trust for shares of certain other
mutual funds advised by IFG. Exchange requests may be made either by telephone
or by written request to IFG using the telephone number or address on the cover
of this Statement of Additional Information. Exchanges made by telephone must be
in an amount of at least $250, if the exchange is being made into an existing
account of one of the INVESCO funds. All exchanges that establish a new account
must meet the fund's applicable initial minimum investment requirements. Written
exchange requests into an existing account have no minimum requirements other
than the fund's applicable minimum subsequent investment requirements. Any gain
or loss realized on such an exchange is recognized for federal income tax
purposes. This privilege is not an option or right to purchase securities, but
is a revocable privilege permitted under the present policies of each of the
funds and is not available in any state or other jurisdiction where the shares
of the mutual fund into which transfer is to be made are not qualified for sale,
or when the net asset value of the shares presented for exchange is less than
the minimum dollar purchase required by the appropriate prospectus.
TAX-DEFERRED RETIREMENT PLANS
As described in the section of each Fund's Prospectus entitled "Services
Provided by the Trust," shares of the Trust may be purchased as the investment
medium for various tax-deferred retirement plans. Persons who request
information regarding these plans from IFG will be provided with prototype
documents and other supporting information regarding the type of plan requested.
Each of these plans involves a long-term commitment of assets and is subject to
possible regulatory penalties for excess contributions, premature distributions
or for insufficient distributions after age 70-1/2. The legal and tax
implications may vary according to the circumstances of the individual investor.
Therefore, the investor is urged to consult with an attorney or tax adviser
prior to the establishment of such a plan.
<PAGE>
HOW TO REDEEM SHARES
Normally, payments for shares redeemed will be mailed within seven (7)
days following receipt of the required documents as described in the section of
each Fund's Prospectus entitled "How To Redeem Shares." The right of redemption
may be suspended and payment postponed when: (a) the New York Stock Exchange is
closed for other than customary weekends and holidays; (b) trading on that
exchange is restricted; (c) an emergency exists as a result of which disposal by
the Trust of securities owned by it is not reasonably practicable, or it is not
reasonably practicable for the Trust fairly to determine the value of its net
assets; or (d) the Securities and Exchange Commission ("SEC") by order so
permits.
It is possible that in the future conditions may exist which would, in the
opinion of the Trust's investment adviser, make it undesirable for a Fund to pay
for redeemed shares in cash. In such cases, the Trust's investment adviser may
authorize payment to be made in portfolio securities or other property of the
Fund. However, the Trust is obligated under the 1940 Act to redeem for cash all
shares of a Fund presented for redemption by any one shareholder having a value
up to $250,000 (or 1% of the applicable Fund's net assets if that is less) in
any 90-day period. Securities delivered in payment of redemptions are selected
entirely by the Trust's investment adviser based on what is in the best
interests of the Trust and its shareholders, and are valued at the value
assigned to them in computing the Fund's net asset value per share. Shareholders
receiving such securities are likely to incur brokerage costs on their
subsequent sales of the securities.
DIVIDENDS, OTHER DISTRIBUTIONS AND TAXES
Each Fund intends to continue to conduct its business and satisfy the
applicable diversification of assets and source of income requirements to
qualify as a regulated investment company under Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Code"). Each Fund so qualified for the
taxable year ended August 31, 1997, and intends to continue to qualify during
its current taxable year. As a result, because each Fund intends to distribute
all of its income and recognized gains, it is anticipated that the Funds will
pay no federal income or excise taxes and will be accorded conduit or "pass
through" treatment for federal income tax purposes.
Dividends paid by the Funds from net investment income as well as
distributions of net realized short-term capital gains and net realized gains
from certain foreign currency transactions are, for federal income tax purposes,
taxable as ordinary income to shareholders. After the end of each calendar year,
each Fund sends shareholders information regarding the amount and character of
dividends paid in the year.
Distributions by the Funds of net capital gain (the excess of net long-term
capital gain over net short-term capital loss) are, for federal income tax
purposes, taxable to the shareholder as long-term capital gains regardless how
long a shareholder has held shares of a Fund. The Taxpayer Relief Act of 1997
(the "Tax Act"), enacted in August 1997, changed the taxation of long-term
<PAGE>
capital gains by applying different capital gains rates depending on the
taxpayer's holding period and marginal rate of federal income tax. Long-term
gains realized on the sale of securities held for more than one year but not for
more than 18 months are taxable at a rate of 28%. This category of long-term
gains is often referred to as "mid-term" gains but is technically termed "28%
rate gains". Long- term gains realized on the sale of securities held for more
than 18 months are taxable at a rate of 20%. ^ At the end of each year,
information regarding the tax status of dividends and other distributions is
provided to shareholders. Shareholders should consult their tax advisers as to
the effect of the Tax Act on distributions by the Funds of net capital ^ gains.
All dividends and other distributions are regarded as taxable to the
investor, regardless of whether such dividends and distributions are reinvested
in additional shares of a Fund or another Fund in the INVESCO group. The net
asset value of Fund shares reflects accrued net investment income and
undistributed realized capital and foreign currency gains; therefore, when a
distribution is made, the net asset value is reduced by the amount of the
distribution. If the net asset value of Fund shares were reduced below a
shareholder's cost as a result of a distribution, such distribution would be
taxable to the shareholder although a portion would be, in effect, a return of
invested capital. However, the net asset value per share will be reduced by the
amount of the distribution, which would reduce any ^ gains or increase any ^
losses for tax purposes on any subsequent redemption of shares by the
shareholder.
IFG may provide ^ shareholders of the Funds with information concerning
the average cost basis of their shares in order to help them prepare their tax
returns. This information is intended as a convenience to shareholders and will
not be reported to the Internal Revenue Service (the "IRS"). The IRS permits the
use of several methods to determine the cost basis of mutual fund shares. The
cost basis information provided by IFG will be computed using the
single-category average cost method, although neither IFG nor the Fund
recommends any particular method of determining cost basis. Other methods may
result in different tax consequences. If a shareholder has reported gains or
losses with respect to shares of the Fund in past years, the shareholder must
continue to use the cost basis method previously used unless the shareholder
applies to the IRS for permission to change the method.
If Fund shares are sold at a loss after being held for six months or less,
the loss will be treated as a long-term, instead of short-term, capital loss to
the extent of any capital gain distributions received on those shares.
Each Fund will be subject to a non-deductible 4% excise tax to the extent
it fails to distribute by the end of any calendar year substantially all of it
ordinary income for that year and net capital gains for the one-year period
ending on October 31 of that year, plus certain other amounts.
Dividends and interest received by each Fund may be subject to income,
withholding or other taxes imposed by foreign countries and U.S. possessions
that would reduce the yield on its securities. Tax conventions between certain
countries and the United States may reduce or eliminate these foreign taxes,
however, and many foreign countries do not imposes taxes on capital gains in
respect of investments by foreign investors. Foreign taxes withheld will be
treated as an expense of the Fund.
<PAGE>
Each Fund may invest in the stock of "passive foreign investment
companies" ^("PFICs"). A PFIC is a foreign corporation (other than a controlled
foreign corporation) that, in general, meets either of the following tests: (1)
at least 75% of its gross income is passive or (2) an average of at least 50% of
its assets produce, or are held for the production of, passive income. Under
certain circumstances, a Fund will be subject to federal income tax on a portion
of any "excess distribution" received on the stock of a PFIC or of any gain on
disposition of the stock (collectively "PFIC income"), plus interest thereon,
even if the Fund distributes the PFIC income as a taxable dividend to its
shareholders. The balance of the PFIC income will be included in the Fund's
investment company taxable income and, accordingly, will not be taxable to the
Fund to the extent that income is distributed to its shareholders.
Each Fund may elect to "mark-to-market" its stock in any PFIC.
Marking-to-market, in this context, means including in ordinary income for each
taxable year the excess, if any, of the fair market value of the PFIC stock over
the Fund's adjusted tax basis therein as of the end of that year. Once the
election has been made, a Fund also will be allowed to deduct from ordinary
income the excess, if any, of its adjusted basis in PFIC stock over the fair
market value thereof as of the end of the year, but only to the extent of any
net mark-to-market gains with respect to that PFIC stock included by the Fund
for prior taxable years. The Fund's adjusted tax basis in each PFIC's stock with
respect to which it makes this election will be adjusted to reflect the amounts
of income included and deductions taken under the election.
Gains or losses (1) from the disposition of foreign currencies, (2) from
the disposition of debt securities denominated in foreign currency that are
attributable to fluctuations in the value of the foreign currency between the
date of acquisition of each security and the date of disposition, and (3) that
are attributable to fluctuations in exchange rates that occur between the time
the Fund accrues interest, dividends or other receivables or accrues expenses or
other liabilities denominated in a foreign currency and the time the Fund
actually collects the receivables or pays the liabilities, generally will be
treated as ordinary income or loss. These gains or losses may increase or
decrease the amount of the Fund's investment company taxable income to be
distributed to its shareholders.
Shareholders should consult their own tax advisers regarding specific
questions as to federal, state and local taxes. Dividends and other
distributions generally will be subject to applicable state and local taxes.
Qualification as a regulated investment company under the Code for federal
income tax purposes does not entail government supervision of management or
investment policies.
INVESTMENT PRACTICES
Portfolio Turnover. There are no fixed limitations regarding portfolio
turnover for any of the Trust's Funds. Brokerage costs to the Trust are
commensurate with the rate of portfolio activity. Portfolio turnover rates for
the fiscal years ended August 31, 1997, 1996 and 1995, were as follows:
<PAGE>
Fund 1997 1996 1995
- ---- ---- ---- ----
INVESCO Intermediate
Government Bond 37% 63% 92%
INVESCO Value Equity 37% 27% 34%
INVESCO Total Return 4% 10% 30%
In computing the portfolio turnover rate, all investments with maturities
or expiration dates at the time of acquisition of one year or less are excluded.
Subject to this exclusion, the turnover rate is calculated by dividing (A) the
lesser of purchases or sales of portfolio securities for the fiscal year by (B)
the monthly average of the value of portfolio securities owned by the Fund
during the fiscal year.
Placement of Portfolio Brokerage. IFG, as the Funds' investment adviser,
and ICM, as sub-adviser of the Funds under the direct supervision of IFG, place
orders for the purchase and sale of securities with brokers and dealers based
upon IFG's or ICM's evaluation of ^ such broker-dealers' financial
responsibility subject to ^ their ability to effect transactions at the best
available prices. IFG or ICM evaluates the overall reasonableness of brokerage
commissions paid by reviewing the quality of executions obtained on the Trust's
portfolio transactions, viewed in terms of the size of transactions, prevailing
market conditions in the security purchased or sold, and general economic and
market conditions. In seeking to ensure that the commissions charged the Trust
are consistent with prevailing and reasonable commissions, IFG or ICM also
endeavors to monitor brokerage industry practices with regard to the commissions
charged by ^ broker-dealers on transactions effected for other comparable
institutional investors. While IFG or ICM seeks reasonably competitive rates,
the Trust does not necessarily pay the lowest commission or spread available.
Consistent with the standard of seeking to obtain the best execution on
portfolio transactions, IFG or ICM may select brokers that provide research
services to effect such transactions. Research services consist of statistical
and analytical reports relating to issuers, industries, securities and economic
factors and trends, which may be of assistance or value to Fund Management in
making informed investment decisions. Research services prepared and furnished
by brokers through which the Funds effect securities transactions may be used by
IFG or ICM in servicing all of their respective accounts and not all such
services may be used by IFG or ICM in connection with the Funds.
In recognition of the value of the above-described brokerage and research
services provided by certain brokers, IFG or ICM, consistent with the standard
of seeking to obtain the best execution on portfolio transactions, may place
orders with such brokers for the execution of Trust transactions on which the
commissions are in excess of those which other brokers might have charged for
effecting the same transactions.
Fund transactions may be effected through qualified broker-dealers who
recommend the Trust to their clients, or who act as agent in the purchase of the
Trust's shares for their clients. When a number of brokers and dealers can
provide comparable best price and execution on a particular transaction, the
Trust's adviser or sub-adviser may consider the sale of Trust shares by a broker
or dealer in selecting among qualified broker-dealers.
<PAGE>
Certain financial institutions (including brokers who may sell shares of
the Funds, or affiliates of such brokers) are paid a fee (the "Services Fee")
for recordkeeping, shareholder communications and other services provided by the
brokers to investors purchasing shares of the Funds through no transaction fee
programs ("NTF Programs") offered by the financial institution or its affiliate
broker (an "NTF Program Sponsor"). The Services Fee is based on the average
daily value of the investments in each Fund made in the name of such NTF Program
Sponsor and held in omnibus accounts maintained on behalf of investors
participating in the NTF Program. With respect to certain NTF Programs, the
trustees of the Trust have authorized the Intermediate Government Bond and Value
Equity Funds to apply dollars generated from the Trust's Plan and Agreement of
Distribution pursuant to Rule 12b-1 under the 1940 Act (the "Plan") to pay the
entire Services Fee, subject to the maximum Rule 12b-1 fee permitted by the
Plan. With respect to other NTF Programs, the Trust's trustees have authorized
all Funds to pay transfer agency fees to IFG based on the number of investors
who have beneficial interests in the NTF Program Sponsor's omnibus accounts in
the Funds. IFG, in turn, pays these transfer agency fees to the NTF Program
Sponsor as a sub-transfer agency or recordkeeping fee in payment of all or a
portion of the Services Fee. In the event that the sub-transfer agency or
recordkeeping fee is insufficient to pay all of the Services Fee with respect to
these NTF Programs, the trustees of the Trust have authorized the Trust to apply
dollars generated from the Plan to pay the remainder of the Services Fee,
subject to the maximum Rule 12b-1 fee permitted by the Plan. IDI itself pays the
portion of each Fund's Services Fee, if any, that exceeds the sum of the
sub-transfer agency or recordkeeping fee and Rule 12b-1 fee. The Trust's
trustees have further authorized IFG to place a portion of each Fund's brokerage
transactions with certain NTF Program Sponsors or their affiliated brokers, if
IFG reasonably believes that, in effecting the Fund's transactions in portfolio
securities, the broker is able to provide the best execution of orders at the
most favorable prices. A portion of the commissions earned by such a broker from
executing portfolio transactions on behalf of the Funds may be credited by the
NTF Program Sponsor against its Services Fee. Such credit shall be applied first
against any sub-transfer agency or recordkeeping fee payable with respect to the
Funds, and second against any Rule 12b-1 fees used to pay a portion of the
Services Fee, on a basis which has resulted from negotiations between IFG or IDI
and the NTF Program Sponsor. Thus, the Funds pay sub-transfer agency or
recordkeeping fees to the NTF Program Sponsor in payment of the Services Fee
only to the extent that such fees are not offset by a Fund's credits. In the
event that the transfer agency fee paid by the Funds to IFG with respect to
investors who have beneficial interests in a particular NTF Program Sponsor's
omnibus accounts in a Fund exceeds the Services Fee applicable to the Fund,
after application of credits, IFG may carry forward the excess and apply it to
future Services Fees payable to that NTF Program Sponsor with respect to a Fund.
The amount of excess transfer agency fees carried forward will be reviewed for
possible adjustment by IFG prior to each fiscal year-end of the Funds. The
Trust's board of trustees has also authorized the Intermediate Government Bond
and Value Equity Funds to pay to IDI the full Rule 12b-1 fees contemplated by
the Plan to compensate IDI for expenses incurred by IDI in engaging in the
activities and providing the services on behalf of the Funds contemplated by the
Plan, subject to the maximum Rule 12b-1 fee permitted by the Plan,
notwithstanding that credits have been applied to reduce the portion of the
12b-1 fee that would have been used to compensate IDI for payments to such NTF
Program Sponsor absent such credits.
<PAGE>
The aggregate dollar amount of brokerage commissions paid by the
Intermediate Government Bond, Value Equity and Total Return Funds for the fiscal
year ended August 31, 1997 were $0, $470,619 and $484,776, respectively. For the
fiscal year ended August 31, 1997 brokers providing research services received
$0 in commissions on portfolio transactions effected for each Fund. Neither the
Trust, IFG, nor ICM paid any compensation to brokers for the sale of shares of
the Trust during the fiscal year ended August 31, 1997.
At August 31, 1997, the Funds held securities of their regular brokers or
dealers, or their parents, as follows:
Value of
Securities at
Fund Broker or Dealer August 31, 1997
- ---- ---------------- ---------------
INVESCO Value Equity Salomon Inc. $2,455,000
Fund
INVESCO Intermediate State Street Bank 1,724,000
Government Bond Fund & Trust
INVESCO Total Return State Street Bank 76,624,000
Fund & Trust
Bankamerica Corp. 4,018,000
Neither IFG nor ICM receive any brokerage commissions on portfolio
transactions effected on behalf of the Trust, and there is no affiliation
between IFG, ICM, or any person affiliated with IFG, ICM, or the Trust and any
broker or dealer that executes transactions for the Trust.
ADDITIONAL INFORMATION
Shares of Beneficial Interest. As a Massachusetts Business Trust, the
Trust has an unlimited number of authorized shares of beneficial interest. The
board of trustees has the authority to designate additional series of beneficial
shares for any new fund of the Trust without seeking the approval of
shareholders and may classify and reclassify any unissued shares.
Shares of each series represent the interests of the shareholders of such
series in a particular portfolio of investments of the Trust. Each series of the
Trust's shares is preferred over all other series in respect of the assets
specifically allocated to that series, and all income, earnings, profits and
proceeds from such assets, subject only to the rights of creditors, are
allocated to shares of that series. The assets of each series are segregated on
the books of account and are charged with the liabilities of that series and
with a share of the Trust's general liabilities. The board of trustees
determines those assets and liabilities deemed to be general assets or
liabilities of the Trust, and these items are allocated among series in
proportion to the relative net assets of each series. In the unlikely event that
a liability allocable to one series exceeds the assets belonging to the series,
all or a portion of such liability may have to be borne by the holders of shares
of the Trust's other series.
<PAGE>
All shares, regardless of series, have equal voting rights. Voting with
respect to certain matters, such as ratification of independent accountants or
election of trustees, will be by all series of the Trust. When not all series
are affected by a matter to be voted upon, such as approval of an investment
advisory contract or changes in a Fund's investment policies, only shareholders
of the series affected by the matter may be entitled to vote. Trust shares have
noncumulative voting rights, which means that the holders of a majority of the
shares voting for the election of trustees can elect 100% of the trustees if
they choose to do so. In such event, the holders of the remaining shares voting
for the election of trustees will not be able to elect any person or persons to
the board of trustees. After they have been elected by shareholders, the
trustees will continue to serve until their successors are elected and have
qualified or they are removed from office, in either case by a shareholder vote,
or until death, resignation, or retirement. Trustees may appoint their own
successors, provided that always at least a majority of the trustees have been
elected by the Trust's shareholders. As a Massachusetts Business Trust, it is
the intention of the Trust not to hold annual meetings of shareholders. The
trustees will call annual or special meetings of shareholders for action by
shareholder vote as may be required by the 1940 Act or the Trust's Declaration
of Trust, or at their discretion.
Principal Shareholders. As of ^ December 1, 1997, the following entities
held more than 5% of ^ each Fund's outstanding equity securities.
Name and Address Percent
of Beneficial Owner Number of Shares of Class
- ------------------- ---------------- --------
INVESCO Value Equity Fund
Charles Schwab & Co. Inc. 896,651.4760 7.28%
Special Custody Acct.
for the Exclusive Benefit
of Customers
Attn: Mutual Funds
101 Montgomery St.
San Francisco, CA 94104
INVESCO Trust Co. Trustee 789,332.4960 6.41%
HNTB Corporation Retirement &
Savings Plan
c/o Joan Watanabie
1201 Walnut, Suite 700
Kansas City, MO 64106
<PAGE>
First Union National Bank 619,968.2260 5.04%
of North Carolina
Attn: Rich Sapienza
1525 West W. T. Harris Blvd.
NC-1076
Charlotte, NC 28288
INVESCO Intermediate Government Bond Fund
INVESCO Trust Co. Trustee 640,996.1360 17.52%
Arch Mineral Corporation
Employee Thrift Plan 01/4/93
City Place One, Suite 300
St. Louis, MO 63141
Charles Schwab & Co. Inc. 577,421.9050 15.78%
Special Custody Acct.
for the Exclusive Benefit
of Customers
Attn: Mutual Funds
101 Montgomery St.
San Francisco, CA 94104
Northern Trust Co. Trustee 508,153.4490 13.89%
Ericsson Cap & Savings Plan
Attn: Myra Baldwin-Larkins
801 S. Canal, Flr. C-35
Chicago, IL 60607
Donaldson Lufkin & Jenrette 232,624.2530 6.36%
Securities Corp.
Mutual Funds, 5th Flr.
P.O. Box 2052
Jersey City, NJ 07303
INVESCO Total Return Fund
Charles Schwab & Co. Inc. 12,100,004.7610 16.98%
Special Custody Acct.
for the Exclusive Benefit
of Customers
Attn: Mutual Funds
101 Montgomery St.
San Francisco, CA 94104
Connecticut General Life Ins. 10,530,522.2170 14.78%
c/o Liz Pezda M-110
P.O. Box 2975
Hartford, CT 06104
<PAGE>
Independent Accountants. Price Waterhouse LLP, 950 Seventeenth Street,
Denver, Colorado, has been selected as the independent accountants of the Trust.
The independent accountants are responsible for auditing the financial
statements of the Trust.
Custodian. State Street Bank and Trust Company, P.O. Box 351, Boston,
Massachusetts, has been designated as the custodian of the cash and investment
securities of the Trust. The bank is responsible for, among other things,
receipt and delivery of the Funds' investment securities in accordance with
procedures and conditions specified in the custody agreement. Under its contract
with the Trust, the custodian is authorized to establish separate accounts in
foreign countries and to cause foreign securities owned by the Trust to be held
outside the United States in branches of U.S. banks and, to the extent permitted
by applicable regulations, in certain foreign banks and securities depositories.
Transfer Agent. IFG, 7800 E. Union Avenue, Denver, Colorado 80237, acts as
registrar, dividend disbursing agent, and transfer agent for the Trust pursuant
to the Transfer Agency Agreement described in "The Trust and Its Management."
Such services include the issuance, cancellation and transfer of shares of the
Trust, and the maintenance of records regarding the ownership of such shares.
Reports to Shareholders. The Trust's fiscal year ends on August 31. The
Trust distributes reports at least semiannually to its shareholders. Financial
statements regarding the Trust, audited by the independent accountants, are sent
to shareholders annually.
Legal Counsel. The firm of Kirkpatrick & Lockhart LLP, Washington, D.C., is
legal counsel for the Trust. The firm of Moye, Giles, O'Keefe, Vermeire &
Gorrell, Denver, Colorado, acts as special counsel to the Trust.
Financial Statements. The Trust's audited financial statements and the
notes thereto for the year ended August 31, 1997, and the report of Price
Waterhouse LLP with respect to such financial statements are incorporated herein
by reference from the Trust's Annual Report to Shareholders for the fiscal year
ended August 31, 1997.
Prospectuses. The Trust will furnish, without charge, a copy of the
Prospectus for any Fund upon request. Such requests should be made to the Trust
at the mailing address or telephone number set forth on the first page of this
Statement of Additional Information.
Registration Statement. This Statement of Additional Information and the
Prospectuses do not contain all of the information set forth in the Registration
Statement the Trust has filed with the SEC. The complete Registration Statement
may be obtained from the SEC upon payment of the fee prescribed by the rules and
regulations of the SEC.
Declaration of Trust Provisions. The Declaration of Trust establishing the
Trust dated July 9, 1987, a copy of which, together with all amendments thereto
(the "Declaration"), is on file in the office of the Secretary of the
Commonwealth of Massachusetts, provides that the name of the Trust refers to the
Trustees under the Declaration collectively as Trustees, but not as individuals
or personally; and no Trustee, shareholder, officer, employee or agent of the
Trust shall be held to any personal liability; nor shall resort be had to their
private property for the satisfaction of any obligation or claim of the Trust,
but the "Trust Property" only shall be liable.
<PAGE>
APPENDIX A
Bond Ratings. Description of Moody's and S&P's four highest bond rating
categories:
Moody's Corporate Bond Ratings:
Aaa - Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edged." Interest payments are protected by a large or by an exceptionally
stable margin, and principal is secure. While the various protective elements
are likely to change, such changes as can be visualized are most unlikely to
impair the fundamentally strong position of such issues.
Aa - Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group, they comprise what are generally known
as high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long term risk appear somewhat larger than in Aaa securities.
A - Bonds which are rated A possess many favorable investment attributes,
and are to be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate but elements may be
present which suggest a susceptibility to impairment sometime in the future.
Baa - Bonds which are rated Baa are considered as medium grade
obligations, i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.
S&P's Corporate Bond Ratings:
AAA - This is the highest rating assigned by Standard & Poor's to a debt
obligation and indicates an extremely strong capacity to pay principal and
interest.
AA - Bonds rated AA also qualify as high-quality debt obligations.
Capacity to pay principal and interest is very strong, and in the majority of
instances they differ from AAA issues only in small degree.
A - Bonds rated A have a strong capacity to pay principal and interest,
although they are somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than bonds in higher rated categories.
BBB - Bonds rated BBB are regarded as having an adequate capability to pay
principal and interest. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay principal and interest for bonds in
this category than for bonds in higher rated categories.
<PAGE>
APPENDIX B
DESCRIPTION OF FUTURES, OPTIONS AND FORWARD CONTRACTS
Options on Securities
An option on a security provides the purchaser, or "holder," with the
right, but not the obligation, to purchase, in the case of a "call" option, or
sell, in the case of a "put" option, the security or securities underlying the
option, for a fixed exercise price up to a stated expiration date. The holder
pays a non-refundable purchase price for the option, known as the "premium." The
maximum amount of risk the purchaser of the option assumes is equal to the
premium plus related transaction costs, although the entire amount may be lost.
The risk of the seller, or "writer," however, is potentially unlimited, unless
the option is "covered," which is generally accomplished through the writer's
ownership of the underlying security, in the case of a call option, or the
writer's segregation of an amount of cash or securities equal to the exercise
price, in the case of a put option. If the writer's obligation is not so
covered, it is subject to the risk of the full change in value of the underlying
security from the time the option is written until exercise.
Upon exercise of the option, the holder is required to pay the purchase
price of the underlying security, in the case of a call option, or to deliver
the security in return for the purchase price, in the case of a put option.
Conversely, the writer is required to deliver the security, in the case of a
call option, or to purchase the security, in the case of a put option. Options
on securities which have been purchased or written may be closed out prior to
exercise or expiration by entering into an offsetting transaction on the
exchange on which the initial position was established, subject to the
availability of a liquid secondary market.
Options on securities are traded on national securities exchanges, such as
the Chicago Board of Options Exchange and the New York Stock Exchange, which are
regulated by the Securities and Exchange Commission. The Options Clearing
Corporation guarantees the performance of each party to an exchange-traded
option, by in effect taking the opposite side of each such option. A holder or
writer may engage in transactions in exchange-traded options on securities and
options on indices of securities only through a registered broker/dealer which
is a member of the exchange on which the option is traded.
An option position in an exchange-traded option may be closed out only on
an exchange which provides a secondary market for an option of the same series.
Although the Fund will generally purchase or write only those options for which
there appears to be an active secondary market, there is no assurance that a
liquid secondary market on an exchange will exist for any particular option at
any particular time. In such event it might not be possible to effect closing
transactions in a particular option with the result that the Fund would have to
exercise the option in order to realize any profit. This would result in the
Fund's incurring brokerage commissions upon the disposition of underlying
securities acquired through the exercise of a call option or upon the purchase
of underlying securities upon the exercise of a put option. If the Fund as
covered call option writer is unable to effect a closing purchase transaction in
<PAGE>
a secondary market, unless the Fund is required to deliver the securities
pursuant to the assignment of an exercise notice, it will not be able to sell
the underlying security until the option expires.
Reasons for the potential absence of a liquid secondary market on an
exchange include the following: (i) there may be insufficient trading interest
in certain options; (ii) restrictions may be imposed by an exchange on opening
transactions or closing transactions or both; (iii) trading halts, suspensions
or other restrictions may be imposed with respect to particular classes or
series of options or underlying securities; (iv) unusual or unforeseen
circumstances may interrupt normal operations on an exchange; (v) the facilities
of an exchange or a clearing corporation may not at all times be adequate to
handle current trading volume; or (vi) one or more exchanges could, for economic
or other reasons, decide or be compelled at some future date to discontinue the
trading of options (or particular class or series of options) in which event the
secondary market on that exchange (or in the class or series of options) would
cease to exist, although outstanding options on that exchange which had been
issued by a clearing corporation as a result of trades on that exchange would
continue to be exercisable in accordance with their terms. There is no assurance
that higher than anticipated trading activity or other unforeseen events might
not, at a particular time, render certain of the facilities of any of the
clearing corporations inadequate and thereby result in the institution by an
exchange of special procedures which may interfere with the timely execution of
customers' orders. However, the Options Clearing Corporation, based on forecasts
provided by the U.S. exchanges, believes that its facilities are adequate to
handle the volume of reasonably anticipated options transactions, and such
exchanges have advised such clearing corporation that they believe their
facilities will also be adequate to handle reasonably anticipated volume.
In addition, options on securities may be traded over-the-counter through
financial institutions dealing in such options as well as the underlying
instruments. OTC options are purchased from or sold (written) to dealers or
financial institutions which have entered into direct agreements with a Fund.
With OTC options, such variables as expiration date, exercise price and premium
will be agreed upon between a Fund and the transacting dealer, without the
intermediation of a third party such as the OCC. If the transacting dealer fails
to make or take delivery of the securities underlying an option it has written,
in accordance with the terms of that option as written, the Fund would lose the
premium paid for the option as well as any anticipated benefit of the
transaction. A Fund will engage in OTC option transactions only with primary
U.S. Government securities dealers recognized by the Federal Reserve Bank of New
York.
Futures Contracts
A Futures Contract is a bilateral agreement providing for the purchase and
sale of a specified type and amount of a financial instrument or foreign
currency, or for the making and acceptance of a cash settlement, at a stated
time in the future, for a fixed price. By its terms, a Futures Contract provides
for a specified settlement date on which, in the case of the majority of
interest rate and foreign currency futures contracts, the fixed income
securities or currency underlying the contract are delivered by the seller and
paid for by the purchaser, or on which, in the case of stock index futures
<PAGE>
contracts and certain interest rate and foreign currency futures contracts, the
difference between the price at which the contract was entered into and the
contract's closing value is settled between the purchaser and seller in cash.
Futures Contracts differ from options in that they are bilateral agreements,
with both the purchaser and the seller equally obligated to complete the
transaction. In addition, Futures Contracts call for settlement only on the
expiration date, and cannot be "exercised" at any other time during their term.
The purchase or sale of a Futures Contract also differs from the purchase
or sale of a security or the purchase of an option in that no purchase price is
paid or received. Instead, an amount of cash or cash equivalent, which varies
but may be as low as 5% or less of the value of the contract, must be deposited
with the broker as "initial margin." Subsequent payments to and from the broker,
referred to as "variation margin," are made on a daily basis as the value of the
index or instrument underlying the Futures Contract fluctuates, making positions
in the Futures Contract more or less valuable, a process known as "marking to
the market."
A Futures Contract may be purchased or sold only on an exchange, known as
a "contract market," designated by the Commodity Futures Trading Commission for
the trading of such contract, and only through a registered futures commission
merchant which is a member of such contract market. A commission must be paid on
each completed purchase and sale transaction. The contract market clearing house
guarantees the performance of each party to a Futures Contract, by in effect
taking the opposite side of such Contract. At any time prior to the expiration
of a Futures Contract, a trader may elect to close out its position by taking an
opposite position on the contract market on which the position was entered into,
subject to the availability of a secondary market, which will operate to
terminate the initial position. At that time, a final determination of variation
margin is made and any loss experienced by the trader is required to be paid to
the contract market clearing house while any profit due to the trader must be
delivered to it.
Interest rate futures contracts currently are traded on a variety of fixed
income securities, including long-term U.S. Treasury Bonds, Treasury Notes,
Government National Mortgage Association modified pass-through mortgage-backed
securities, U.S. Treasury Bills, bank certificates of deposit and commercial
paper. In addition, interest rate futures contracts include contracts on indices
of municipal securities. Foreign currency futures contracts currently are traded
on the British pound, Canadian dollar, Japanese yen, Swiss franc, German mark
and on Eurodollar deposits.
Options on Futures Contracts
An Option on a Futures Contract provides the holder with the right to
enter into a "long" position in the underlying Futures Contract, in the case of
a call option, or a "short" position in the underlying Futures Contract, in the
case of a put option, at a fixed exercise price to a stated expiration date.
Upon exercise of the option by the holder, the contract market clearing house
establishes a corresponding short position for the writer of the option, in the
case of a call option, or a corresponding long position, in the case of a put
<PAGE>
option. In the event that an option is exercised, the parties will be subject to
all the risks associated with the trading of Futures Contracts, such as payment
of variation margin deposits. In addition, the writer of an Option on a Futures
Contract, unlike the holder, is subject to initial and variation margin
requirements on the option position.
A position in an Option on a Futures Contract may be terminated by the
purchaser or seller prior to expiration by effecting a closing purchase or sale
transaction, subject to the availability of a liquid secondary market, which is
the purchase or sale of an option of the same series (i.e., the same exercise
price and expiration date) as the option previously purchased or sold. The
difference between the premiums paid and received represents the trader's profit
or loss on the transaction.
An option, whether based on a Futures Contract, a stock index or a
security, becomes worthless to the holder when it expires. Upon exercise of an
option, the exchange or contract market clearing house assigns exercise notices
on a random basis to those of its members which have written options of the same
series and with the same expiration date. A brokerage firm receiving such
notices then assigns them on a random basis to those of its customers which have
written options of the same series and expiration date. A writer therefore has
no control over whether an option will be exercised against it, nor over the
time of such exercise.
<PAGE>
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements:
Page in
Prospectus
----------
(1) Financial statements and schedules
included in Prospectuses (Part A):
Financial Highlights for the four 8
years ended August 31, 1997, the 33
eight-month period ended August 31, 58
1993, and each of the six years in
the period ended December 31, 1992,
for the INVESCO Value Equity^,
Intermediate Government Bond and
Total Return Funds.
Page in
Statement
of Addi-
tional In-
formation
----------
(2) The following audited financial
statements of the INVESCO Value Equity
Fund, the INVESCO Intermediate
Government Bond Fund and the INVESCO
Total Return Fund and the notes thereto
for the fiscal year ended August 31,
1997, and the report of Price Waterhouse
LLP with respect to such financial
statements, are incorporated in the
Statement of Additional Information by
reference from the Company's Annual
Report to Shareholders for the fiscal
year ended August 31, 1997: Statement of
Investment Securities as of August 31,
1997; Statement of Assets and
Liabilities as of August 31, 1997;
Statement of Operations for the year
ended August 31, 1997; Statement of
Changes in Net Assets for each of the
two years in the period ended August 31,
1997; Financial Highlights for each of
the four years in the period ended
August 31, 1997, the eight-month fiscal
period ended August 31, 1993, and the
year ended December 31, 1992.
<PAGE>
(3) Financial statements and schedules
included in Part C:
None: Schedules have been omitted as all
information has been presented in the
financial statements.
(b) Exhibits:
(1) (a) Declaration of Trust ^ dated July 9,
1987.
(b) Amendment to Declaration of Trust
effective ^ December 31, 1990.
(c) Amendment to Declaration of Trust
effective July 1, 1993.
(2) Bylaws, as amended as of January 22, ^
1992.
(3) Not applicable.
(4) Not applicable.
(5) (a) Investment Advisory Agreement
between Registrant and INVESCO Funds
Group, Inc. dated as of February 28, ^
1997.(2)
(b) Sub-Advisory Agreement between
INVESCO Funds Group, Inc. and INVESCO
Capital Management, Inc., dated as of
February 28, ^ 1997.(2)
(6) (a) General Distribution Agreement
between Registrant and INVESCO Funds
Group, Inc., dated as of February 28,
^ 1997.(2)
(b) General Distribution Agreement
between Registrant and INVESCO
Distributors, Inc. dated September 30, ^
1997.(2)
(7) Defined Benefit Deferred Compensation
Plan for Non-Interested Directors and ^
Trustees.(2)
(8) Custody Agreement between INVESCO Value
Trust and State Street Bank and Trust ^
Company.(1)
<PAGE>
(a) Amendment to this Custodian Contract
dated October 25, ^ 1995.(1)
(b) Data Access Service Addendum dated
May 19, ^ 1997.(2)
(9) (a) Transfer Agency Agreement between
Registrant and INVESCO Funds Group, Inc.
dated as of February 28, ^ 1997.(2)
(b) Administrative Services Agreement
between Registrant and INVESCO Funds
Group, Inc. dated February 28 ^ 1997.(2)
^
(10) Opinion and consent of counsel as to the
legality of the securities being registered,
indicating whether they will, when sold,
be legally issued, fully paid and
non-assessable ^.
(11) Consent of Independent Accountants.
(12) Not applicable.
(13) Not applicable.
(14) Copies of model plans used in the
establishment of retirement plans as
follows: Non-standardized Profit
Sharing Plan; Non-standardized Money
Purchase Pension Plan; Standardized
Profit Sharing Plan Adoption Agreement;
Standardized Money Purchase Pension
Plan; Non-standardized 401(k) Plan
Adoption Agreement; Standardized 401(k)
Paired Profit Sharing Plan; Standardized
Simplified Profit Sharing Plan;
Standardized Simplified Money Purchase
Plan; Defined Contribution Master Plan &
Trust Agreement; and Financial 403(b)
Retirement ^ Plan, previously filed with
Post-Effective Amendment No. 18 to this
Registration Statement on October 18,
1994 and incorporated by reference
herein.
(15) Plan and Agreement of Distribution
adopted pursuant to 12b-1 under the
Investment Company Act of 1940 dated
October 28, ^ 1997.(2)
<PAGE>
(16) (a) Schedule for computation of
performance ^ data for INVESCO
Intermediate Government Bond Fund.
(b) Schedule for computation of
performance date for INVESCO Value
Equity Fund.
(c) Schedule for computation of
performance data for INVESCO Total
Return Fund.
(17) (a) Financial Data Schedule for the
period ended August 31, 1997 for
INVESCO Value Equity Fund.
(b) Financial Data Schedule for the
period ended August 31, 1997 for
INVESCO Intermediate Government
Bond Fund.
(c) Financial Data Schedule for the
period ended August 31, 1997 for
INVESCO Total Return Fund.
(18) Not Applicable.
(1)Previously filed on EDGAR with Post-Effective Amendment No. ^ 19 to this
Registration Statement on ^ December 15, 1995 and incorporated by reference
herein.
(2)Previously^ filed on EDGAR with Post-Effective Amendment No. ^ 21 to this
Registration Statement on ^ October 30, 1997 and incorporated by reference
herein.
Item 25. Persons Controlled by or Under Common Control with
Registrant
No person is presently controlled by or under common control with
Registrant.
<PAGE>
Item 26. Number of Holders of Securities
Number of Record
Holders as of
Title of Class ^ November 30, 1997
-------------- -------------------
Beneficial Interest
INVESCO Value Equity Fund ^ 10,963
INVESCO Intermediate Government
Bond Fund ^ 1,799
INVESCO Total Return Fund ^ 17,600
Item 27. Indemnification
Indemnification provisions for officers and directors of Registrant
are set forth in Article Seven of the Bylaws and Article V of the Articles of
Restatement of the Declaration of Trust, and are hereby incorporated by
reference. See Item 24(b)(1) and (2) above. Under these Articles, officers and
trustees will be indemnified to the fullest extent permitted by law, subject
only to such limitations as may be required by the Investment Company Act of
1940, as amended, and the rules thereunder. Under the Investment Company Act of
1940, the trustees and officers of the Trust cannot be protected against
liability to the Trust or its shareholders to which they would be subject
because of willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties of their office. The Trust also maintains liability
insurance policies covering its trustees and officers.
Item 28. Business and Other Connections of Investment Adviser
See "The Trust and Its Management" in the Prospectuses and Statement
of Additional Information for information regarding the business of the
investment adviser and sub-adviser. For information as to the business,
profession, vocation or employment of a substantial nature of each of the
officers and directors of INVESCO Funds Group, Inc., and INVESCO Capital
Management, Inc., reference is made to the Schedule Ds to the Form ADVs filed
under the Investment Advisers Act of 1940 by these companies, which schedules
are herein incorporated by reference.
Item 29. Principal Underwriters
(a) INVESCO Capital Appreciation Funds, Inc.
INVESCO Diversified Funds, Inc.
INVESCO Emerging Opportunity Funds, Inc.
INVESCO Growth Fund, Inc.
INVESCO Income Funds, Inc.
INVESCO Industrial Income Fund, Inc.
INVESCO International Funds, Inc.
INVESCO Money Market Funds, Inc.
INVESCO Multiple Asset Funds, Inc.
<PAGE>
INVESCO Specialty Funds, Inc.
INVESCO Strategic Portfolios, Inc.
INVESCO Tax-Free Income Funds, Inc.
INVESCO Variable Investment Funds, Inc.
(b)
Positions and Positions and
Name and Principal Offices with Offices with
Business Address Underwriter Registrant
- ------------------ ------------- -------------
William J. Galvin, Jr. Senior Vice Assistant
7800 E. Union Avenue President Secretary
Denver, CO 80237
Ronald L. Grooms Senior Vice Treasurer,
7800 E. Union Avenue President & Chief Fin'l
Denver, CO 80237 Treasurer Officer, and
Chief Acctg.
Off.
Dan J. Hesser Chairman of President,
7800 E. Union Avenue the Board, CEO & Dir.
Denver, CO 80237 President ,
Chief Executive
Officer, &
Director
Gregory E. Hyde Vice President
7800 E. Union Avenue
Denver, CO 80237
Charles P. Mayer Director
7800 E. Union Avenue
Denver, CO 80237
Glen A. Payne Senior Vice Secretary
7800 E. Union Avenue President,
Denver, CO 80237 Secretary &
General Counsel
Judy P. Wiese Vice President Asst. Treas.
7800 E. Union Avenue
Denver, CO 80237
(c) Not applicable.
Item 30. Location of Accounts and Records
Dan J. Hesser
7800 E. Union Avenue
Denver, CO 80237
<PAGE>
Item 31. Management Services
Not applicable.
Item 32. Undertakings
(a) The Registrant hereby undertakes that the board of trustees
will call such meetings of shareholders of all the Funds, for
action by shareholder vote, including acting on the question
of removal of a trustee or trustees, as may be requested in
writing by the holders of at least 10% of the outstanding
shares of a Fund or as may be required by applicable law or
the Trust's Declaration of Trust, and to assist in
communicating with other shareholders as required by Section
16(c) of the Investment Company Act of 1940.
(b) The Registrant shall furnish each person to whom a prospectus
is delivered with a copy of the Registrant's latest annual
report to shareholders, upon request and without charge.
<PAGE>
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the registrant certifies that it meets all of
the requirements for effectiveness of this Registration Statement pursuant to
Rule 485(b) under the Securities Act of 1933 and has duly caused this
post-effective amendment to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Denver, County of Denver, and State of
Colorado, on the ^23rd day of ^ December, 1997.
Attest: INVESCO Value Trust
/s/ Glen A. Payne /s/ Dan J. Hesser
- ------------------------------------ ------------------------------------
Glen A. Payne, Secretary Dan J. Hesser, President
Pursuant to the requirements of the Securities Act of 1933, this
post-effective amendment to Registrant's Registration Statement has been signed
by the following persons in the capacities indicated on this ^23rd day of ^
December, 1997.
/s/ Dan J. Hesser /s/ Lawrence H. Budner
- ------------------------------------ ------------------------------------
Dan J. Hesser, President & Lawrence H. Budner, Trustee
Trustee (Chief Executive Officer)
/s/ Ronald L. Grooms /s/ Daniel D. Chabris
- ------------------------------------ ------------------------------------
Ronald L. Grooms, Treasurer Daniel D. Chabris, Trustee
(Chief Financial and Accounting
Officer)
/s/ Victor L. Andrews /s/ Fred A. Deering
- ------------------------------------ ------------------------------------
Victor L. Andrews, Trustee Fred A. Deering, Trustee
/s/ Bob R. Baker /s/ Larry Soll
- ------------------------------------ ------------------------------------
Bob R. Baker, Trustee Larry Soll, Trustee
/s/ Hubert L. Harris, Jr. /s/ Kenneth T. King
- ------------------------------------ ------------------------------------
Hubert L. Harris, Jr., Trustee Kenneth T. King, Trustee
/s/ Charles W. Brady /s/ John W. McIntyre
- ------------------------------------ ------------------------------------
Charles W. Brady, Trustee John W. McIntyre, Trustee
/s/ Wendy L. Gramm
- ------------------------------------
Wendy L. Gramm, Trustee
By* By* /s/ Glen A. Payne
--------------------------------- ---------------------------------
Edward F. O'Keefe Glen A. Payne
Attorney in Fact Attorney in Fact
* Original Powers of Attorney authorizing Edward F. O'Keefe and Glen A. Payne,
and each of them, to execute this post-effective amendment to the Registration
Statement of the Registrant on behalf of the above-named directors and officers
of the Registrant have been filed with the Securities and Exchange Commission on
April 12, 1990, May 12, 1990, May 27, 1992, October 18, 1994, December 14, 1995
^, December 24, 1996 and October 30, 1997.
^
<PAGE>
EXHIBIT INDEX
-------------
Page in
Exhibit Number Registration Statement
- -------------- ----------------------
^1(a) 133
1(b) 174
1(c) 181
2 185
10 196
11 197
16(a) 198
16(b) 199
16(c) 200
17(a) 201
17(b) 202
17(c) 203
^
DECLARATION OF TRUST
OF
INVESCO Institutional Series Trust
THE DECLARATION OF TRUST OF INVESCO Institutional Series Trust is made
the 9th day of July, 1987 by the parties signatory hereto, as trustees (such
persons, so long as they shall continue in office in accordance with the terms
of this Declaration of Trust, and all other persons who at the time in question
have been duly elected or appointed as trustees in accordance with the
provisions of this Declaration of Trust and are then in office, being
hereinafter called the "Trustees").
W I T N E S S E T H:
WHEREAS, the Trustees desire to form a trust fund under the laws of
Massachusetts for the investment and reinvestment of funds contributed thereto;
and
WHEREAS, it is proposed that the beneficial interest in the trust
assets be divided into transferable shares of beneficial interest which may, at
the discretion of the Trustees, be divided into separate series (the "Series")
as hereinafter provided;
NOW, THEREFORE, the Trustees hereby declare that they will hold in
trust, all money and property contributed to the trust fund to manage and
dispose of the same for the benefit of the holders from time to time of the
shares of beneficial interest issued hereunder and subject to the provisions
hereof, to wit:
ARTICLE I
The Trust
1.1. Name. The name of the trust created hereby (the "Trust," which
term shall be deemed to include any Series of the Trust when the context
requires) shall be INVESCO institutional Series Trust," and so far as may e
practicable the Trustees shall conduct the activities of the Trust and execute
<PAGE>
all documents under that name, which name (and the word "Trust" wherever
hereinafter used) shall refer to the trustees as Trustees, and no individually,
and shall not refer to the officers, agents, employees or Shareholders of the
Trust or any Series thereof. Each Series of the Trust which shall be established
and designated pursuant to Sections 6.2, 6.2.1, or 6.2.2 shall conduct its
activities under such name as the Trustees shall determine and set forth in the
instruments establishing such Series. Should the Trustees determine that the use
of the name of the Trust or any Series is not advisable, they may select such
other name for the Trust or such Series as they deem proper and the Trust or
Series may conduct its activities under such other name. Any name change shall
be effective upon the execution by a majority of the then Trustees of an
instrument setting forth the new name. Any such instrument shall have the status
of an amendment to this Declaration.
1.2. Definitions. As used in this Declaration, the following
terms shall have the following meaning:
The terms "Affiliated Person," "Assignment," "Commission," "Interested
Person," "Majority Shareholder Vote," (the 67% or 50% requirement of the third
sentence of Section 2(a)(42) of the 1940 Act, whichever may be applicable) and
"Principal Underwriter" shall have the meanings given them in the 1940 Act.
"Declaration" shall mean this Declaration of Trust as amended from time
to time. References in this Declaration to "Declaration," "hereof," "herein" and
"hereunder" shall be deemed to refer to the Declaration rather than the article
or section in which such words appear.
"Fundamental Policies" shall mean the investment restrictions set forth
in the Prospectus of any Series and designated as fundamental policies therein.
"Person" shall mean and include individuals, corporations,
partnerships, trusts, associations, joint ventures and other entities, whether
or not legal entities, and governments and agencies and political subdivisions
thereof.
"Prospectus" shall mean the currently effective Prospectus of any
Series of the Trust under the Securities Act of 1933, as amended or
<PAGE>
supplemented, including the Statement of Additional Information incorporated by
reference therein.
"Series" shall mean the separate series of Shares that may be
established and designated pursuant to Sections 6.2, 6.2.1, or 6.2.2.
"Shareholders" shall mean as of any particular time all holders of
record of outstanding Shares at such time.
"Shares" shall mean the equal proportionate transferable units of
interest into which the beneficial interest in any Series of the Trust shall be
divided from time to time and includes fractions of Shares as well as whole
shares. All references to Shares shall be deemed to be Shares of any or all
Series as the context may require.
"Trustees" shall mean the signatories to this Declaration of Trust, so
long as they shall continue in office in accordance with the terms hereof, and
all other persons who at the time in question have been duly elected or
appointed and have qualified as trustees in accordance with the provisions
hereof and are then in office, and reference in this Declaration of Trust to a
Trustee or Trustees shall refer to such person or persons in their capacity as
Trustees hereunder.
"Trust Property" shall mean as of any particular time any and all
property, real or personal, tangible or intangible, which at such time is owned
or held by or for the account of the Trust, any Series thereof or the Trustees.
The "1940 Act" refers to the Investment Company Act of 1940 and the
regulations promulgated thereunder, as amended from time to time.
ARTICLE II
Trustees
2.1. Number and Qualification. The number of Trustees shall be fixed
from time to time by written instrument signed by a majority of the Trustees
then in office, provided, however, that the number of Trustees shall in no event
<PAGE>
be less than three or more than fifteen. Any vacancy created by an increase in
Trustees may, to the extent permitted by the 1940 Act, be filled by the
appointment of an individual having the qualifications described in this Article
made by a written instrument signed by a majority of the Trustees then in
office. Any such appointment shall not become effective, however, until the
individual named in the written instrument of appointment shall have accepted in
writing such appointment and agreed in writing to be bound by the terms of this
Declaration. No reduction in the number of Trustees shall have the effect of
removing any Trustee from office prior to the expiration of his term. Whenever a
vacancy in the number of Trustees shall occur, until such vacancy is filled as
provided in Section 2.4 hereof, the Trustees in office, regardless of their
number, shall have all the powers granted to the Trustees and shall discharge
all the duties imposed upon the Trustees by this Declaration. A Trustee shall be
an individual at least 21 years of age who is not under legal disability.
Trustees need not own Shares.
2.2. Term of Office. Each Trustee shall (except in the event of
resignations or removals or vacancies pursuant to Section 2.3 or 2.4 hereof)
hold office until his successor has been elected and is qualified to serve as
Trustee.
2.3. Resignation and Removal. Any trustee may resign his trust (without
need for prior or subsequent accounting) by an instrument in writing signed by
him and delivered or mailed to the President or the Secretary and such
resignation shall be effective upon such delivery, or at a later date according
to the terms of the instrument. Any of the Trustees may be removed (provided the
aggregate number of Trustees after such removal shall not be less than the
number required by Section 2.1 hereof) with cause, by the action of two-thirds
of the remaining Trustees. Any Trustee may be removed, with or without cause, at
any special meeting of the Shareholders by a vote of two-thirds of the
outstanding Shares. Upon the resignation or removal of a Trustee, or his
otherwise ceasing to be a Trustee, he shall execute and deliver such documents
as the remaining Trustees shall require for the purpose of conveying to the
successor Trustee or the remaining Trustees any Trust Property held in the name
of the resigning or removed Trustee. Upon the incapacity or death of any
<PAGE>
Trustee, his legal representative shall execute the deliver on his behalf such
documents as the remaining Trustees shall require as provided in the preceding
sentence.
2.4. Vacancies. The term of office of a Trustee shall terminate and a
vacancy shall occur in the event of the death, resignation, bankruptcy,
adjudicated incompetence or other incapacity to perform the duties of the
office, or removal of such Trustee. No such vacancy shall operate to annul this
Declaration or to revoke any existing agency created pursuant to the terms of
this Declaration. In the case of a vacancy, the Shareholders, acting at any
meeting of Shareholders held in accordance with Section 11.2 hereof, or, to the
extent permitted by the 1940 Act, a majority of the Trustees continuing in
office acting by written instrument or instruments, may fill such vacancy, and
any Trustee so elected by the Trustees shall hold office as provided in this
Declaration.
2.5. Meetings. Meetings of the Trustees shall be held from time to time
upon the call of the chairman, the President, the Secretary or any two Trustees.
Regular and special meetings o the Trustees may be held without call or notice
at a time and place fixed by the By-laws or by resolution of the Trustees.
Notice of any other meeting shall be mailed or otherwise given not less than 48
hours before the meeting but may be waived in writing by any Trustee either
before or after such meeting. The attendance of a Trustee at a meeting shall
constitute a waiver of notice of such meeting except where a Trustee attends a
meeting for the express purpose of objecting to the transaction of any business
on the ground that the meeting has not been lawfully called or conveyed. The
Trustees may act with or without a meeting in accordance with the By-laws. A
quorum for all meetings of the Trustees shall be a majority of the Trustees.
Unless provided otherwise in this Declaration of Trust, any action of the
Trustees may be taken at a meeting by vote of a majority of the Trustees present
(a quorum being present) or without a meeting by written consents of a majority
of the Trustees.
Any committee of the Trustees, including an executive committee, if
any, may act with or without a meeting in accordance with the By-laws. A quorum
for all meetings of any such committee shall be a majority of the members
thereof. Unless provided otherwise in this Declaration, any action of any such
<PAGE>
committee may be taken at a meeting by vote of a majority of the members present
(a quorum being present) or without a meeting by written consent of a majority
of the members.
With respect to actions of the Trustees and any committee of the
Trustees, Trustees who are Interested Persons of the Trust within the meaning of
Section 1.2 hereof or otherwise interested in any action to be taken may be
counted for quorum purposes under this Section and shall be entitled to vote to
the extent permitted by the 1940 Act.
To the extent permitted by the 1940 Act, all or any one or more
Trustees may participate in a meeting of the Trustees or any committee thereof
by means of a conference telephone or similar communications equipment by means
of which all persons participating in the meeting can hear each other and
participation in a meeting pursuant to such communications systems shall
constitute presence in person at such meeting.
2.6. Officers. The Trustees shall annually elect a Chairman, President,
Secretary and Treasurer. The Trustees may elect or appoint or request the
Chairman or President to appoint such other officers or agents with such powers
as the Trustees may deem to be advisable. The Chairman and the President shall
be and any other officer may, but need not, be a Trustee.
2.7. By-Laws. The Trustees may adopt and from time to time amend or
repeal the By-Laws for the conduct of the business of the Trust.
ARTICLE III
Powers of Trustees
3.1. General. The Trustees shall have exclusive and absolute control
over the Trust Property and over the business of the Trust or any Series thereof
to the same extent as if the Trustees were the sole owners of the Trust Property
and business in their own right and with such powers of delegation as may be
permitted by this Declaration. The Trustees may perform such acts as they
determine from time to time, in their sole discretion, are proper for conducting
the business of the Trust or any Series thereof. The enumeration of any specific
power herein shall not be construed as limiting the aforesaid power. Such powers
of the Trustees may be exercised without order of or resort to any court.
<PAGE>
3.2. Investments. The Trustees shall have power, subject to the
Fundamental Policies, to:
(a) conduct, operate and carry on the business of an
investment company;
(b) subscribe for, invest in, reinvest in, purchase or
otherwise acquire, hold, pledge, sell, assign, transfer, exchange,
distribute or otherwise deal in or dispose of negotiable or
non-negotiable instruments, obligations, evidences of indebtedness,
certificates of deposit or indebtedness, commercial paper, repurchase
agreements, reverse repurchase agreements and other securities,
including, without limitation, those issued, guaranteed or sponsored by
any state, territory or possession of the United States and the
District of Columbia and their political sub-divisions, agencies and
instrumentalities, or by the United States Government or its agencies
or instrumentalities, or international instrumentalities, or by any
bank, savings institution, corporation or other business entity
organized under the laws of the United States and, to the extent
provided in the Prospectus and not prohibited by the Fundamental
Policies, organized under foreign laws; and to exercise any and all
rights, powers and privileges of ownership ro interest in respect of
any and all such investments of every kind and description, including,
without limitation, the right to consent and otherwise act with firms,
associations or corporations to exercise any of said instruments; and
the Trustees shall be deemed to have the foregoing powers with respect
to any additional securities in which any Series of the trust may
invest should the investment policies set forth in the Prospectus or
the Fundamental Policies be amended from time to time.
The Trustees shall not be limited to investing in obligations maturing
before the possible termination of the Trust or any Series, nor shall the
trustees be limited by any law limiting the investments which may be made by
fiduciaries.
<PAGE>
3.3. Legal Title. Legal title to all the Trust Property shall be vested
in the Trustees as joint tenants except that the Trustees shall have power to
cause legal title to any Trust Property to be held by or in the name of one or
more of the Trustees, or in the name of the Trust or any Series thereof, or in
the name of any other Person as nominee, on such terms as the Trustees may
determine, provided that the interest of the Trust or any Series thereof is
appropriately protected. Any Trustees holding title to Trust Property shall be
entitled to the benefits provided by the provisions for limitation of liability
contained in this Declaration, including without limitation the provisions of
Section 5.1 hereof.
The right, title and interest of the Trustees in the Trust Property
shall vest automatically in each person who may hereafter become a Trustee upon
his due election and qualification. Upon the resignation, removal or death of a
Trustee he shall automatically cease to have any right, title or interest in any
of the Trust Property, and the right, title and interest of such Trustee in the
Trust Property shall vest automatically in the remaining Trustees. Such vesting
and cessation of title shall be effective whether or not conveyancing documents
have been executed and delivered.
3.4. Issuance and Repurchase of Securities. The Trustees shall have the
power to issue, sell, repurchase, redeem, retire, cancel, acquire, hold, resell,
reissue, dispose of, transfer, and otherwise deal in, Shares, including shares
in fractional denominations, and, subject to the more detailed provisions set
forth in Articles VIII and IX, to apply to any such repurchase, redemption,
retirement, cancellation or acquisition of Shares, any funds or property of the
applicable Series of the Trust whether capital or surplus or otherwise, to the
full extent now or hereafter permitted by the laws of the Commonwealth of
Massachusetts governing business corporations.
3.5. Borrow Money. Subject to the Fundamental Policies, the Trustees
shall have power to borrow money or otherwise obtain credit and to secure the
same by mortgaging, pledging or otherwise subjecting as security the assets of
the Trust or any Series thereof, including the lending of portfolio securities,
<PAGE>
and to endorse, guarantee, or undertake the performance of any obligation,
contract or engagement of any other person, firm, association or corporation.
3.6. Delegation; Committees. The Trustees shall have power, consistent
with their continuing exclusive authority over the management of the Trust and
the Trust Property, to delegate from time to time to such of their number or to
officers, employees or agents of the Trust the doing of such things and the
execution of such instruments either in the name of the Trust or the names of
the Trustees or otherwise as the Trustees may deem expedient, and as may be
permitted by the 1940 Act.
3.7. Collection and Payment. The Trustees shall have power to collect
all property due to the Trust or any Series thereof; to pay all claims,
including taxes, against the Trust Property; to prosecute, defend, compromise or
abandon any claims, relating to the Trust Property; to foreclose any security
interest securing any obligations, by virtue of which any property is owed to
the Trust or any Series thereof; and to enter into releases, agreements and
other instruments.
3.8. Expenses. The Trustees shall have power to incur and pay any
expenses which in the opinion of the Trustees are necessary or incidental to
carry out any of the purposes of this Declaration of Trust, and to pay
reasonable compensation from the funds of the Trust to themselves as Trustees.
The Trustees shall fix the compensation of all officers, employees and Trustees.
The Trustees may pay themselves such compensation or special services, including
legal, underwriting, syndicating and brokerage services, as they in good faith
may deem reasonable and reimbursement for expenses reasonably incurred by
themselves on behalf of the Trust.
3.9. Miscellaneous Powers. The Trustees shall have the power, without
limitation, to: (a) employ or contract with such Persons as the Trustees may
deem desirable for the transaction of the business of the Trust or any Series
thereof; (b) enter into joint ventures, partnerships and any other combinations
or associations; (c) purchase, and pay for out of Trust Property, insurance
policies insuring the Shareholders, Trustees, officers, employees, agents,
investment adviser, distributors, selected dealers or independent contractors of
the Trust or any Series thereof against all claims arising by reason of holding
<PAGE>
any such position or by reason of any action taken or omitted by any such Person
in such capacity, whether or not constituting negligence, and whether or not the
Trust would have the power to indemnify such Person against such liability; (d)
establish pension, profit-sharing, share purchase, and other retirement,
incentive and benefit plans for any Trustees, officers, employees and agents of
the Trust; (e) make donations, irrespective of benefit to the Trust, for
charitable, religious, educational, scientific, civic or similar purposes; (f)
to the extent permitted by law, indemnify any Person with whom the Trust or any
Series thereof has dealings, including any advisor, administrator, manager,
distributor and selected dealers with respect to the Trust or any Series of the
trust, to such extent as the Trustees shall determine; (g) guarantee
indebtedness or contractual obligations of others; (h) determine and change the
fiscal year of the Trust and the method in which its accounts shall be kept; and
(i) adopt a seal for the Trust but the absence of such seal shall not impair the
validity of any instrument executed on behalf of the Trust.
3.10.Further Powers. The Trustees shall have power to conduct the
business of the Trust or any Series thereof and carry on its operations in any
and all of its branches and maintain offices both within and without the
Commonwealth of Massachusetts, in any and all states of the United States of
America, in the District of Columbia, and in any and all commonwealths,
territories, dependencies, colonies, possessions, agencies or instrumentalities
of the United States of America and of foreign governments, and to do all such
other things and execute all such instruments as they deem necessary, proper or
desirable in order to promote the interests of the Trust or any Series thereof
although such things are not herein specifically mentioned. Any determination as
to what is in the interests of the Trust or any Series thereof made by the
Trustees in good faith shall be conclusive. In construing, the provisions of
this Declaration, the presumption shall be in favor of a grant of power to the
Trustees. The Trustees will not be required to obtain any court order to deal
with the Trust Property.
<PAGE>
ARTICLE IV
Advisory, Management and Distribution Arrangements
4.1. Advisory and Management Arrangements. Subject to a Majority
Shareholder Vote of the Trust, as required by the 1940 Act, the Trustees may in
their discretion from time to time enter into advisory or management contracts
whereby the other parties to such contracts shall undertake to furnish the
Trustees advisory and management services with respect to one or more Series as
the Trustees shall from time to time consider desirable and all upon such terms
and conditions as the Trustees may in their discretion determine.
Notwithstanding any provisions of this Declaration of Trust, the Trustees may
authorize any advisor or manager to the Trustees (subject to such general or
specific instructions as the Trustees may from time to time adopt) to effect
purchases, sales, loans or exchanges of portfolio securities of any Series of
the Trust on behalf of the Trustees or may authorize any officer, employee or
Trustee to effect such purchases, sales, loans or exchanges pursuant to
recommendations of any such advisor, administrator or manager, and in each such
case such sales, loans and exchanges shall be deemed to have been authorized by
all of the Trustees.
4.2. Distribution Arrangements. The Trustees may in their discretion
from time to time enter into one or more contracts, providing for the sale of
the Shares of the Trust or any Series of the Trust whereby the Trust may either
agree to sell the Shares to the other party to the contract or appoint such
other party its sales agent for such Shares. In either case, the contract shall
be on such terms and conditions as the Trustees may in their discretion
determine not inconsistent with the provisions of this Article IV or the
By-Laws; and such contract may also provide for the repurchase or sale of Shares
by such other party as principal or as agent of the Trust and may provide that
such other party may enter into selected dealer agreements with registered
securities dealers to further the purpose of the distribution or repurchase of
the Shares.
4.3. Parties to Contract. Any contract of the character described in
Section 4.1 or 4.2 of this Article IV or in Article VII hereof may be entered
into with any corporation, firm, trust or association, although one or more of
the Trustees or officers of the Trust may be an officer, director, trustee,
shareholder, or member of such other party to the contract, and no such contract
shall be invalidated or rendered voidable by reason of the existence of any such
<PAGE>
relationship, nor shall any person holding such relationship be liable merely by
reason of such relationship for any loss or expense to the Trust under or by
reason of said contract or accountable for any profit realized directly or
indirectly therefrom, provided that the contract when entered into was
reasonable and fair and not inconsistent with the provisions of this Article IV
or the By-Laws. The same person (including a firm, corporation, trust, or
association) may be the other party to contracts entered into pursuant to
Sections 4.1 and 4.2 above or Article VII, and any individual may be financially
interested or otherwise affiliated with persons who are parties to any or all of
the contracts mentioned in this Section 4.3.
4.4. Provisions and Amendments. Any contract entered into pursuant to
Section 4.1 or 4.2 of this Article IV shall be consistent with and subject to
the requirements of Section 15 of the 1940 Act with respect to its continuance
in effect, its termination, and the method of authorization and approval of such
contract or renewal thereof, and any amendment.
ARTICLE V
Limitations of Liability of Shareholders
Trustees and Others
5.1. No Personal Liability of Shareholders, Trustees, etc. No
Shareholder shall be subject to any personal liability whatsoever to any Person
in connection with Trust Property or the acts, obligations or affairs of the
Trust or any Series thereof. No Trustee, officer, employee or agent of the Trust
shall be subject to any personal liability whatsoever to any Person, other than
the Trust or its Shareholders to the extent provided in Section 5.2, in
connection with Trust Property or the affairs of the Trust or any Series
thereof, save only that arising from his bad faith, willful misfeasance, gross
negligence or reckless disregard of his duty to such Person; and all such
Persons shall look solely to the Trust Property for satisfaction of claims of
any nature arising in connection with the affairs of the Trust or any Series
thereof. If any Shareholder, Trustee, officer, employee, or agent, as such, of
the Trust, is made a party to any suit or proceeding to enforce any such
liability, he shall not on account thereof, be held to any personal liability.
<PAGE>
The Trust shall indemnify and hold each Shareholder harmless from and against
all claims and liabilities, to which such Shareholder may become subject by
reason of a claim or liability incurred by the Trust, and shall reimburse such
Shareholder for all legal and other expenses reasonably incurred by him in
connection with any such claim or liability. The indemnification and
reimbursement required by the preceding sentence shall be made only out of the
assets of the one or more Series of which the Shareholder who is entitled to
indemnification or reimbursement was a Shareholder at the time the act or event
occurred which gave use to the claim against or liability of said Shareholder.
The rights accruing to a Shareholder under this Section 5.1 shall not exclude
any other right to which such Shareholder may be lawfully entitled, nor shall
anything herein contained restrict the right of the Trust to indemnify or
reimburse a Shareholder in any appropriate situation even though not
specifically provided herein.
5.2. Non-Liability of Trustees, etc. No Trustees, officer, employee or
agent of the Trust shall be liable to the trust, any Series, its Shareholders,
or to any Shareholder, Trustee, officer, employee, or agent thereof for any
action or failure to act (including without limitation the failure to compel in
any way any former or acting Trustee to redress any breach of trust) except for
his own bad faith, willful misfeasance, gross negligence or reckless disregard
of his duties.
5.3. Mandatory Indemnification. (a) Subject to the exceptions and
limitations contained in paragraph (b) below:
(i) every person who is, or has been, a Trustee or officer of the Trust
shall be indemnified by the Trust to the fullest extent permitted by law against
all liability and against all expenses reasonably incurred or paid by him in
connection with any claim, action, suite or proceeding in which he becomes
involved as a party or otherwise by virtue of his being or having been a Trustee
or officer and against amounts paid or incurred by him in the settlement
thereof;
(ii) the words "claim," "action," "suit," or "proceeding" shall apply
to all claims, actions, suits or proceedings (civil, criminal, administrative or
other (including arbitration and appeals), actual or threatened; and the words
"liability" and "expenses" shall include, without limitation, attorneys' fees,
<PAGE>
costs, judgments, amounts paid in settlement, fines, penalties and other
liabilities.
(b) No indemnification shall be provided hereunder to
a Trustee or officer:
(i) against any liability to the Trust, a Series
thereof, or the Shareholders by reason of a final adjudication
by a court or other body before which a proceeding was brought
that he engaged in willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the
conduct of his office;
(ii) with respect to any matter as to which he shall
have been finally adjudicated not to have acted in good faith
in the reasonable belief that his action was in the best
interest of the trust;
(iii)in the event of a settlement or other
disposition not involving a final adjudication as provided in
paragraph (b)(i) or (b)(ii) resulting in a payment by a
Trustee or officer, unless there has been a determination that
such Trustee or officer did not engage in willful misfeasance,
bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office:
(A) by the court or other body approving
the settlement or other disposition; or
(B) based upon a review of readily available
facts (as opposed to a full trial-type inquiry_ by
(1) vote of a majority of the Disinterested Trustees
acting on the matter (provided that a majority of the
Disinterested Trustees then in office act on the
matter) or (2) written opinion of independent legal
counsel.
(c) The rights of indemnification herein provided may be
insured against by policies maintained by the Trust, shall be
severable, shall not affect any other rights to which any Trustee or
<PAGE>
officer may now or hereafter be entitled, shall continue as to a
person who has ceased to be such Trustee or officer and shall inure to
the benefit of the heirs, executors, administrators and assigns of
such a person. Nothing contained herein shall affect any rights to
indemnification to which personnel of the trust other than Trustees
and officers may be entitled by contract or otherwise under law.
(d) Expenses of preparation and presentation of a defense to
any claim, action, suit or proceeding of the character described in
paragraph (a) of this Section 5.3 may be advanced by the Trust prior to
final disposition thereof upon receipt of an undertaking by or on
behalf of the recipient to repay such amount if it is ultimately
determined that he is not entitled to indemnification under this
Section 5.3 provided that either:
(i) such undertaking is secured by a surety bond or
some other appropriate security provided by the recipient, or
the Trust shall be insured against losses arising out of any
such advances; or
(ii) a majority of the Disinterested Trustees acting
on the matter (provided that a majority of the Disinterested
Trustees act on the matter) or an independent legal counsel in
a written opinion shall determine, based upon a review of
readily available facts (as opposed to a full trial-type
inquiry), that there is reason to believe that the recipient
ultimately will be found entitled to indemnification.
As used in this Section 5.3, a "Disinterested
Trustee" is one who is not (i) an "Interested Person" of the
Trust (including anyone who has been exempted from being an
"Interested Person" by any rule, regulation or order of the
Commission), or (ii) involved in the claim, action, suit or
proceeding.
5.4. No Bond Required of Trustees. No Trustee shall, as such, be
obligated to give any bond or security or other security for the performance of
any of his duties hereunder.
<PAGE>
5.5. No Duty of Investigation; Notice in Trust Instruments, etc. No
purchaser, lender, transfer agent or other Person dealing with the Trustees or
any officer, employee or agent of the Trust shall be bound to make any inquiry
concerning the validity of any transaction purporting to be made by the Trustees
or by said officer, employee or agent or be liable for the application of money
or property paid, loaned, or delivered to or on the order of the Trustees or of
said officer, employee or agent. Every obligation, contract, undertaking,
instrument, certificate, Share, other security of the Trust or any Series, and
every other act or thing whatsoever executed in connection with the Trust or any
Series shall be conclusively taken to have been executed or done by the
executors thereof only in their capacity as Trustees under this Declaration of
Trust or in their capacity as officer, employees or agents of the Trust. Every
written obligation, contract, undertaking, instrument, certificate, Share, other
security of the Trust or any Series made or issued by the Trustees or by any
officers, employees or agents of the Trust, in their capacity as such may
contain an appropriate recital to the effect that the Shareholders, Trustees,
officers, employees and agents of the Trust shall not personally be bound by or
liable thereunder, nor shall resort be had to their private property for the
satisfaction of any obligation or claim thereunder, and appropriate references
shall be made therein to the Declaration of Trust, and may contain any further
recital which they may deem appropriate, but the omission of such recital shall
not operate to impose personal liability on any of the Trustees, Shareholders,
officers, employees or agents of the Trust. The Trustees may maintain insurance
for the protection of the Trust Property, its Shareholders, Trustees, officers,
employees and agents in such amount as the Trustees shall deem adequate to cover
possible tort liability, and such other insurance as the Trustees in their sole
judgment shall deem advisable.
5.6. Reliance on Experts, etc. Each Trustee and officer or employee of
the Trust shall, in the performance of his duties, be fully and completely
justified and protected with regard to any act or any failure to act resulting
from reliance in good faith upon the books of account or other records of the
Trust, upon an opinion of counsel, or upon reports made to the Trust by any of
its officers or employees or by any advisor, administrator, manager,
distributor, selected dealer, accountant, appraiser or other expert or
<PAGE>
consultant selected with reasonable care by the Trustees, officers or employees
of the Trust, regardless of whether such counsel or expert may also be a
Trustee.
ARTICLE VI
Shares of Beneficial Interest
6.1. Beneficial Interest. The interest of the beneficiaries hereunder
shall be divided into transferable Shares of beneficial interest. The number of
such Shares of beneficial interest authorized hereunder is unlimited. All Shares
issued hereunder including, without limitation, Shares issued in connection with
a dividend in Shares or a split of Shares, shall be fully paid and
nonassessable.
6.2. Series Designation. The Trustees, in their discretion from time to
time, may authorize the division of Shares into two or more Series, each Series
relating to a separate portfolio of investments (each such portfolio being
referred to herein as a "Fund"). The different Series shall be established and
designated and the variations in the relative rights and preferences as between
the different Series shall be fixed and determined, by the Trustees; provided,
that all Shares shall be identical except that there may be variations between
different Series as to purchase price, determination of net asset value, the
price, terms and manner of redemption, special and relative rights as to
dividends and on liquidation, conversion rights, and conditions under which the
several Series shall have separate voting rights. All referenced to Shares in
this Declaration shall be deemed to be Shares of any or all Series as the
context may require.
6.2.1 Initial Series. Initially, the Trust shall be divided
into the following four Series:
(a) INVESCO Institutional Equity Series. Substantially all of the
INVESCO Institutional Equity Series (the "Equity Fund") will be invested in
common stocks and, to a lesser extent, securities convertible into common
stocks. Such securities will, generally, be issued by companies which are listed
on a national securities exchange such as the New York Stock Exchange and which
usually pay regular dividends. During normal market conditions, at least 65% of
the Equity Fund's investments will consist of equity securities. Subject to its
<PAGE>
Fundamental Policies, the investment standards of the Equity Fund will be
determined by the Trustees or any investment adviser to the Equity Fund
appointed and given such authority by the Trustees pursuant to the provisions of
Article IV hereof.
(b) INVESCO Institutional International Series. The INVESCO
Institutional International Series (the "International Fund") will have under
normal circumstances at least 65% of the value of its assets invested in foreign
securities. The term "foreign securities" refers to securities of issuers,
wherever organized, which in the judgment of the Trustees or any investment
adviser to the International Fund appointed by the Trustees, have their
principal business activities outside of the United States. Subject to its
Fundamental Policies, the International Fund's investment standards will be
determined, and all investments of the International Fund will be at the sole
discretion of the Trustees or any investment adviser to the International Fund
appointed and given such authority by the Trustees pursuant to the provisions of
Article IV hereof. Accordingly, the International Fund from time to time may be
invested in domestic securities.
(c) INVESCO Institutional Flex Fund. The INVESCO Institutional Flex
Fund (the "Flex Fund") will invest in a combination of equity securities,
similar to those which would be acquired by the Equity Fund and fixed and
variable income securities, similar to those which would be acquired by the
INVESCO Institutional Income Fund (described below). Subject to its Fundamental
Policies, the Flex Fund's investment standards will be established and all
investments of the Flex Fund will be made at the discretion of the Trustees or
any investment adviser to the Flex Fund appointed and given such authority by
the Trustees pursuant to the provisions of Article IV hereof.
(d) INVESCO Institutional Income Fund. The INVESCO Institutional Income
Fund (the "Income Fund") will invest primarily in fixed and variable income
corporate obligations. The Income Fund will invest only in those corporate
obligations which in the opinion of the Trustees, or the opinion of any
investment adviser to the Income Fund appointed by the Trustees, have the
investment characteristics described by Moody's in rating corporate obligations
within its four highest ratings of Aaa, Aa, A and Baa and by Standard & Poor's
<PAGE>
in rating corporate obligations within its four highest ratings of AAA, AA, A
and BBB. Investments in government obligations will include direct obligations
of the U.S. government, such as U.S. Treasury bills, notes and bonds, and notes,
bonds and other obligations of U.S. government authorities, agencies and
instrumentalities, such as the Federal National Mortgage Association, Federal
Home Loan Bank, Federal Financing Bank and Federal Farm Credit Bank. The Trust
does not require that the Income Fund's investments in corporate obligations
actually be rated by Moody's or Standard & Poor's, and it may acquire
obligations which have been rated lower than Baa by Moody's or lower than BBB by
Standard & Poor's if in the opinion of the Trustees or any investment adviser to
the Income fund appointed by the trustees, such obligations are of a quality at
least equal to a rating of Baa by Moody's or BBB by Standard & Poor's.
Notwithstanding anything to the contrary herein, the Income Fund may be
otherwise invested if in the discretion of the Trustees or any investment
adviser to the Income Fund appointed by the Trustees, such other investments are
prudent because of market conditions and other factors which the Trustees or
such investment adviser deem to be significant.
6.2.2 Series Operation. The following provisions shall be applicable to
each Series provided for herein and any additional Series that is added to the
Trust, as determined by the Trustees, from time to time:
(a) The number of Shares of each Series that may be issued shall be
unlimited. The Trustees may classify or reclassify any unissued Shares or any
Shares previously issued and reacquired from any Series into one or more Series
that may be established and designated from time to time. The Trustees may hold
as treasury Shares (of the same or some other Series), reissue for such
consideration and on such terms as they may determine, or cancel any Shares of
any Series reacquired by the Trust at their discretion from time to time.
(b) The power of the Trustees to invest and reinvest the Trust Property
of each Series that may be established shall be governed by Section 3.2 of this
Declaration.
(c) All consideration received by the Trust for the issue or sale of
Shares of a particular Series, together with all assets in which such
<PAGE>
consideration is invested or reinvested, all income, earnings, profits, and
proceeds thereof, including any proceeds derived from the sale, exchange or
liquidation of such assets, and any funs or payments derived from any
reinvestment of such proceeds in whatever form the same may be, shall
irrevocably belong to that Series for all purposes, subject only to the rights
of creditors, and shall be so recorded upon the books of account of the Trust.
In the event that there are any assets, income, earnings, profits, and proceeds
thereof, funds, or payments which are not readily identifiable as belonging to
any particular Series, the Trustees shall allocate them among any one or more of
the Series established and designated from time to time in such manner and on
such basis as they, in their sole discretion, deem fair and equitable. Each such
allocation by the Trustees shall be conclusive and binding upon the Shareholders
of all Series for all purposes.
(d) The assets belonging to each particular Series shall be charged
with the liabilities of the Trust in respect of that Series and all expenses,
costs, charges and reserves attributable to that Series, and any general
liabilities, expenses, costs, charges or reserves of the Trust which are not
readily identifiable as belonging to any particular Series shall be allocated
and charged by the Trustees to and among any one or more of the Series
established and designated from time to time in such manner and on such basis as
the Trustees in their sole discretion deem fair and equitable. Each allocation
of liabilities, expenses, costs, charges and reserves by the Trustees shall be
conclusive and binding upon the holders of all Series for all purposes. The
Trustees shall have full discretion, to the extent not inconsistent with the
1940 Act, to determine which items shall be treated as income and which items as
capital, and each such determination and allocation shall be conclusive and
binding upon the Shareholders. The assets of a particular Series of the Trust
shall, under no circumstances, be charged with liabilities attributable to any
other Series of the Trust. All persons extending credit to, or contracting with
or having any claim against a particular Series of the Trust shall look only to
the assets of that particular Series for payment of such credit, contract or
claim. No Shareholder or former Shareholder of any Series shall have any claim
on or right to any assets allocated or belonging to any other Series.
<PAGE>
(e) Each Share of a Series of the Trust shall represent a beneficial
interest in the net assets of such Series. Each holder of Shares of a Series
shall be entitled to receive his pro rata share of distributions of income and
capital gains made with respect to such Series. Upon redemption of his Shares or
indemnification for liabilities incurred by reason of his being or having been a
Shareholder of a Series, such shareholder shall be paid solely out of the funds
and property of such Series of the Trust. Upon liquidation or termination of a
Series of the Trust, Shareholders of such Series shall be entitled to receive a
pro rata share of the net assets of such Series. A Shareholder of a particular
Series of the Trust shall not be entitled to participate in a derivative or
class action on behalf of any other Series or the Shareholders of any other
Series of the Trust.
(f) The Power of the Trustees to pay dividends and make distributions
with respect to any one or more Series shall be governed by Article X of this
Trust. Dividends and distributions on Shares of a particular Series may be paid
with such frequency as the Trustees may determine, which may be daily or
otherwise, pursuant to a standing resolution or resolutions adopted only once or
with such frequency as the Trustees may determine from time to time, to the
holders of Shares of that Series, from such of the income and capital gains,
accrued or realized, from the assets belonging to that Series, as the Trustees
may determine, after providing for actual and accrued liabilities belonging to
that Series. All dividends and distributions on Shares of a particular Series
shall be distributed pro rata to the holders of that Series in proportion to the
number of Shares of that Series held by such holders at the date and time of
record established for the payment of such dividends or distributions.
(g) Notwithstanding any other provision hereof, on any matter submitted
to a vote of Shareholders of the Trust, Shareholders of each Series shall vote
separately as a class on any matter to the extent required by, and any matter
shall be deemed to have been effectively acted upon with respect to any Series
as provided in, Rule 18f-2, as from time to time in effect, under the 1940 Act,
or any successor rule. The establishment and designation of any Series of Shares
other than those herein designated shall be effective upon the execution by a
<PAGE>
majority of the then Trustees of an instrument setting forth the establishment
and designation of such Series. Such instrument shall also set forth any rights
and preferences of such Series which are in addition to the rights and
preferences of Shares set forth in this Declaration. At any time that there are
no Shares outstanding of any particular Series previously established and
designated, the Trustees may be an instrument executed by a majority of their
number abolish that Series and the establishment and designation thereof. Each
instrument referred to in this paragraph shall have the status of an amendment
to this Declaration.
6.3. Rights of Shareholders. Every Shareholder, by virtue of having
become a Shareholder, shall be held to have expressly assented and agreed to the
terms hereof and to have become a party hereto. The ownership of the Trust
Property of every description and the right to conduct any business hereinbefore
described are vested exclusively in the Trustees, and the Shareholders shall
have no interest therein other than the beneficial interest conferred by their
Shares with respect to a particular Series, and they shall have no right to call
for any partition or division of any property, profits, rights or interests of
the Trust nor can they be called upon to share or assume any losses of the Trust
or suffer an assessment of any kind by virtue of their ownership of Shares. The
Shares shall be personal property giving only the rights in this Declaration
specifically set forth. The Shares shall not entitle the holder to preference,
preemptive, appraisal, conversion or exchange rights (except for rights of
appraisal specified in Section 12.4).
6.4. Trust Only. It is the intention of the Trustees to create only the
relationship of Trustee and beneficiary between the Trustees and each
Shareholder from time to time. It is not the intention of the Trustees to create
a general partnership, limited partnership, joint stock association,
corporation, bailment or any form of legal relationship other than a trust.
Nothing in this Declaration of Trust shall be construed to make the
Shareholders, either by themselves or with the trustees, partners or members of
a joint stock association.
6.5. Issuance of Shares. The Trustees in their discretion may from
time to time, without vote of the Shareholders, issue Shares with respect to any
<PAGE>
Series that may have been established pursuant to Section 6.2, 6.2.1, or 6.2.2
in addition to the then issued and outstanding Shares and Shares held in the
treasury, to such party or parties and for such amount and type of
consideration, including cash or property, at such time or times (including,
without limitation, each business day in accordance with the maintenance of a
net asset value per share as set forth in Section 9.1 hereof), and on such terms
as the Trustees may deem best, and may in such manner acquire other assets
(including the acquisition of assets subject to, and in connection with the
assumption of, liabilities) and businesses. In connection with any issuance of
Shares, the Trustees may issue fractional Shares. The Trustees may from time to
time divide or combine the Shares of any Series into a greater or lesser number
without thereby changing the proportionate beneficial interest in such Series of
the Trust. Reductions in the number of outstanding Shares may be made pursuant
to the net asset value per share formula set forth in Section 9.2. Contributions
to the Trust may be accepted for, and Shares shall be redeemed as, whole shares
and/or fractions of a Share or multiples thereof.
6.6. Register of Shares. A register shall be kept by the Trust or any
transfer agent duly appointed by the Trustees under the direction of the
Trustees which shall contain the names and addresses of the Shareholders and the
number of Shares (with respect to each Series that may have been established)
held by them respectively and a record of all transfers thereof. Separate
registers shall be established and maintained for each Series of the Trust. Each
such register shall be conclusive as to who are the holders of the Shares of the
applicable Series and who shall be entitled to receive dividends or
distributions or otherwise to exercise or enjoy the rights of Shareholders. No
Shareholder shall be entitled to receive payment of any dividend or
distribution, nor to have notice given to him as herein provided, until he has
given his address to a transfer agent or such other officer or agent of the
Trustees as shall keep the register for entry thereon. It is not contemplated
that certificates will be issued for the Shares; however, the Trustees, in their
discretion, may authorize the issuance of share certificates and promulgate
appropriate rules and regulations as to their use.
6.7. Transfer Agent and Registrar. The Trustees shall have power to
employ a transfer agent or transfer agents, and a registrar or registrars, with
<PAGE>
respect to the Shares of the various Series. The transfer agent or transfer
agents may keep on the applicable register and record therein the original
issues and transfers, if any, of the said Shares of the applicable Series. Any
such transfer agent and registrars shall perform the duties usually performed by
transfer agents and registrars of certificates of stock in a corporation, except
as modified by the Trustees.
6.8. Transfer of Shares. Shares shall be transferable on the records of
the trust only by the record holder thereof or by his agent thereto duly
authorized in writing, upon delivery to the Trustees or a transfer agent of the
Trust of a duly executed instrument of transfer, together with such evidence of
the genuineness of each such execution and authorization and of other matters as
may reasonably be required. Upon such delivery the transfer shall be recorded on
the applicable register of the Trust. Until such record is made, the Shareholder
of record shall be deemed to be the holder of such Shares for all purposes
hereof and neither the Trustees nor any transfer agent or registrar nor any
officer, employee or agent of the Trust shall be affected by any notice of the
proposed transfer.
Any person becoming entitled to any Shares in consequence of the death,
bankruptcy, or incompetence of any Shareholder, or otherwise by operation of
law, shall be recorded on the applicable register of Shares as the holder of
such Shares upon production of the proper evidence thereof to the Trustees or a
transfer agent of the Trust, but until such record is made, the Shareholder of
record shall be deemed to be the holder of such Shares for all purposes hereof
and neither the Trustees nor any transfer agent or registrar nor any officer or
agent of the Trust shall be affected by any notice of such death, bankruptcy or
incompetence, or other operation of law.
6.9. Notices. Any and all notices to which any Shareholder hereunder
may be entitled and any and all communications shall be deemed duly served or
given if mailed, postage prepaid, addressed to any Shareholder of record at his
last known address as recorded on the applicable register of the Trust. Annual
reports and proxy statements need not be sent to a Shareholder if (i) an annual
report and a proxy statement for two consecutive annual meetings or (ii) all,
and at least two, checks (if sent by first class mail) in payment of dividends
<PAGE>
on interest or shares during a twelve (12) month period have been mailed to such
Shareholder's address and have been returned undelivered. However, delivery of
such annual reports and proxy statements shall resume once the Shareholder's
current address is determined.
ARTICLE VII
Custodians
7.1. Appointment and Duties. The Trustees shall at all times employ a
custodian or custodians, meeting the qualifications for custodians for portfolio
securities of investment companies contained in the 1940 Act, as custodian with
respect to each Series of the Trust. It is contemplated that separate custodians
may be employed for the different Series of the Trust. Any custodian, acting
with respect to one or more Series, shall have authority as agent of the Trust
or the Series with respect to which it is acting, but subject to such
restrictions, limitations and other requirements, if any, as may be contained in
the ByLaws of the trust and the 1940 Act:
(1) to hold the securities owned by the Trust or the
Series and deliver the same upon written order;
(2) to receive and receipt for any moneys due to the Trust or
the Series and deposit the same in its own banking department (if a
bank) or elsewhere as the Trustees may direct;
(3) to disburse such funds upon orders or vouchers;
(4) if authorized by the Trustees, to keep the books
and accounts of the Trust or the series and furnish clerical
and accounting services; and
(5) if authorized to do so by the Trustees, to compute
the net income and net aset value of the Trust or the
Series,
all upon such basis of compensation as may be agreed upon between the Trustees
and the custodian. If so directed by a Majority Shareholder Vote of the Series
<PAGE>
with respect to which the custodian is acting, the custodian shall deliver and
pay over all property of such Series held by it as specified in such vote.
The Trustees may also authorize each custodian to employ one or more
sub-custodians from time to time to perform such of the acts and services of the
custodian and upon such terms and conditions, as may be agreed upon between the
custodian and such sub-custodian and approved by the Trustees, provided that in
every case such sub-custodian shall meet the qualifications for custodians
contained in the 1940 Act.
7.2. Central Certificate System. Subject to such rules, regulations and
orders as the Commission may adopt, the Trustees may direct or permit the
custodian to deposit all or any part of the securities owned by the Trust or the
Series in a system for the central handling of securities established by a
national securities exchange or a national securities association registered
with the Commission under the Securities Exchange Act of 1934, as amended, or
such other person as may be permitted by the Commission, or otherwise in
accordance with the 1940 Act, pursuant to which system all securities of any
particular class or series of any issuer deposited within the system are treated
as fungible and may be transferred or pledged by bookkeeping entry without
physical delivery of such securities, provided that all such deposits shall be
subject to withdrawal only upon the order of the Trust.
ARTICLE VIII
Redemption
8.1. Redemptions. All outstanding Shares of any Series of the Trust may
be redeemed at the option of the holders thereof, upon and subject to the terms
and conditions provided in this Article VIII. The Trust shall, upon application
of any Shareholder or pursuant to authorization from any Shareholder of a
particular Series, redeem from such Shareholder outstanding Shares of such
Series for an amount per share determined by the application of a formula
adopted for such purpose by the Trustees with respect to such Series (which
formula shall be consistent with the 1940 Act); provided that (a) such amount
per Share shall not exceed the cash equivalent of the proportionate interest of
<PAGE>
such Share in the assets of the Series of the Trust at the time of the
redmepiton and (b) if so authorized by the Trustees, the Trust may, at any time
and from time to time, charge fees for effecting such redemption, at such rates
as the Trustees may establish, as and to the extent permitted under the 1940
Act, and may, at any time and from time to time, pursuant to such Act, suspend
such right of redemption. The procedures for effecting redemption shall be as
set forth in the Prospectus with respect to the applicable Series from time to
time.
8.2. Redemption of Shares; Disclosure of Holding. If the Trustees
shall, at any time and in good faith, be of the opinion that direct or indirect
ownership of Shares or other securities of the Trust has or may become
concentrated in any Person to an extent which would disqualify the Trust as a
regulated investment company under the Internal Revenue Code, then the Trustees
shall have the power to redeem from any such Person a number, or principal
amount, of Shares or other securities of the Trust sufficient, in the opinion of
the Trustees, to maintain or bring the direct or indirect ownership fo Shares or
other securities of the Trust into conformity with the requirements for such
qualification and (ii) to refuse to transfer or issue Shares or other securities
of the Trust to any Person whose acquisition of the Shares or other securities
of the Trust in question would in the opinion of the Trustees result in such
disqualification. The redemption shall be effected at a redemption price
determined in accordance with Section 8.1.
The holders of Shares of other securities of the Trust shall upon
demand disclose to the trustees in writing such information with respect to
direct and indirect ownership of Shares or other securities of the Trust as the
Trustees deem necessary to comply with the provisions of the Internal Revenue
Code, or to comply with the requirements of applicable securities laws, any
other authority, or any other applicable state or federal laws, rules or
regulations.
8.3. Redemptions of Accounts of Less than $10,000. Due to the
relatively high cost of maintaining investment accounts of less than $10,000,
the Trustees shall have the power to redeem shares held in any account at a
redemption price determined in accordance with Section 8.1 if at any time the
total investment in such account does not have a value of at least $10,000;
<PAGE>
provided, however, that the Trustees may not exercise such power with respect to
Shares of any Series if the Prospectus of such Series does not describe such
power. In the event the Trustees determine to exercise their power to redeem
Shares provided in this Section 8.3, shareholders shall be notified that the
value of their account is less than $10,000 and allowed 60 days to make an
additional investment before redemption is processed.
ARTICLE IX
Determination of Net Asset Value
9.1. Net Asset Value. The net asst value of each Share of each Series
shall be computed on such days, in such manner and at such time or times as
shall be determined by the Trustees from time to time, in accordance with the
1940 Act, with regard to each Series. Each day on which the net asset value of
each Share of each Series is computed is referred to as a "Valuation Date." The
net asset value per Share of each Series shall be determined by dividing the net
asset value of such Series as of such time by the number of Shares then
outstanding in such Series.
9.2. Calculation of Net Asset Value. The net asset value of each Series
of the trust shall be an amount which reflects calculations made in good faith
by or under the direction of the Trustees in accordance with Section 2(a)(41) of
the 1940 Act and applicable rules and regulations thereunder, and except to the
extent that they are in conflict with the above, in accordance with the
following provisions on each Valuation Date:
(a) A security which is reported on the NYSE Composite
Transactions list shall be valued at the last sales price reported for such
security on that list for such Valuation Date.
(b) A security not reported on the NYSE Composite Transactions
list but which is listed or admitted to trading on a natinoal stock exchange
shall be valued at the last sales price on the exchagne on which the security is
principally traded if sales are reported for the Valuation Date. If such a
security is listed on two or more national stock exchanges, one of which is
either the New York Stock Exchange or the American Stock Exchange, the prices or
quotations on the New York or the American Stock Exchange, whichever is
applicable, shall be used. If no sales are reported for such Valuation Date, the
<PAGE>
security shall be valued at the mean between the most recent bid price and asked
price available on the applicable exchange for such security on such Valuation
Date.
(c) A security which is not listed on a national stock
exchange but which is traded in the over-the-counter market shall be valued at
the mean between the most recent bid and asked prices on the valuation Date (or
on the next preceding date for which such prices are available if not available
for the Valuation Date), but a security for which a valuation is obtained from
the NASDAQ national market quotation system for securities (which may include
subsystems for particular types of securities with unique trading
characteristics) shall be valued at the last sales price indicated by said
system on the Valuation Date (or on the next preceding date for which such
prices are available if not available for the Valuation Date.)
(d) Every other asset of each Series of the Trust shall be
valued in good faith by or under the direction of the Trustees, determined
either by reference (i) to values supplied by a generally accepted pricing or
quotation service or by taking into consideration quotations furnished by one or
more reputable sources, such as pricing or quotation services, securities
dealers, brokers or investment bankers, or (ii) to values of comparable
property, appraisals or such other information or circumstances as the Trustees
shall consider relevant, unless otherwise required by law or this Declaration.
(e) An investment purchased and awaiting payment against
delivery shall be included for valuation purposes as a security held, and an
account payable shall be set up to reflect the purchase price, including
brokers' commissions and other expenses incurred in the purchase thereof but not
disbursed as of the Valuation Date.
(f) An investment sold but not delivered pending receipt of
proceeds shall not be included for valuation purposes as a security sold, and an
account receivable shall be set up to reflect the net sales price.
(g) Brokers' commissions, taxes and other expenses which may
be incurred in connection with the future purchase or sale of portfolio
<PAGE>
securities as a result of investments or redemptions of Shares of a Series
occurring as of the Valuation Date shall not be considered in valuing the assets
of such Series as of such Valuation Date.
(h) Uninvested cash shall be valued at its face amount.
(i) The value of any dividends, including stock dividends, or
rights which may have been declared on securities in the portfolio but not
received by a Series as of the Valuation Date shall be included as an asset of
such Series if the security upon which such dividends or rights were declared is
included and is valued ex-dividend or ex-rights.
(j) Interest accrued on any interest-bearing security in the
portfolio shall be included as an asset of the appropriate Series of the Trust
if such accrued interest is not otherwise included in the valuation of the
underlying security. Other accrued income shall also be included to the date of
calculation.
(k) All reserves, liabilities, expenses, taxes and other
charges due or accrued which in the discretion of the Trustees are reasonably
and properly chargeable to any Series of the Trust up to the date of calculation
shall be deducted. An estimate of the fees chargeable by any investment adviser,
custodian, distributor or others for their services as accrued to date shall be
included as expenses.
(l) Each redemption of Shares of a Series shall be reflected
no later than in the calculation of net asset value as of the first Valuation
Date following the Valuation Date as of which such redemption takes place, but
no such redemption taking place as of the Valuation Date shall be taken into
consideration in the calculation of the net asset value per share for such
Valuation Date.
ARTICLE X
Dividends and Distributions
10.1. Dividends. The Trustees may from time to time declare and pay
dividends with the amount, source and payment thereof to be within the
discretion of the Trustees.
<PAGE>
10.2. Distributions. It shall be the policy of the Trustees to
distribute each year substantially all of the net income (including the excess,
if any, of the net short-term capital gain over net long-term capital loss) of
each Series of the Trust.
10.3. Distributions of Investment Income. Distributions from net
investment income, if any, shall be made ratably among the Shareholders of any
Series at least quarterly. The record date and date of payment shall be
designated by the Trustees. If required by the law, all such distributions shall
be accompanies by a written statement which adequately discloses the source or
sources of such distribution.
10.4. Distributions of Capital Gain. Distributions of net long-term or
short-term capital gains realized from the sale of securities of any Series in
the Trust shall be made to Shareholders of such Series, ratably on their Shares,
on an annual basis; provided that the Trust shall not distribute long-term
capital gains more than once every twelve months, except as may be permitted by
the 1940 Act.
10.5. Discretionary Distributions. The Trustees shall have the power,
in their absolute discretion, to distribute for any year as ordinary dividends
and as capital gains distributions, amounts sufficient to enable each Series of
the Trust to qualify as a "regulated investment company" under the Internal
Revenue Code and to avoid any liability for each Series for federal income tax
in respect of that year.
ARTICLE XI
Shareholders
11.1. Voting Powers. The Shareholders shall have power to vote (i) for
the removal of Trustees as provided in Section 2.3, (ii) with respect to any
advisory or management contract as provided in Section 4.1, (iii) with respect
to the amendment of this Declaration as provided in Section 12.3, and (iv) with
respect to such additional matters relating to the Trust as may be required or
authorized by the 1940 Act, the laws of the Commonwealth of Massachusetts or
other applicable law or by this Declaration or by the By-Laws of the Trust. Any
matter affecting a particular Series in any manner different from any other
<PAGE>
Series, including without limitation matters affecting the advisory or
management arrangements or investment policies or restrictions of a Series shall
not be deemed to have been effectively acted upon unless approved by the
required vote of the Shareholders of such Series. Notwithstanding the foregoing,
to the extent permitted by the 1940 Act, each Series shall not be required to
vote separately on the selection of independent public accountants, the election
of Trustees and any submission with respect to a contract with a principal
underwriter or distributor.
11.2. Meetings of Shareholders. Special meetings of the Shareholders
may be called at any time by a majority of the Trustees and shall be called by
any Trustee upon written request of Shareholders of any Series holding in the
aggregate not less than 10% of the outstanding Shares of such Series having
voting rights, such request specifying the purpose or purposes for which such
meeting is to be called. Any such meeting shall be held within or without the
Commonwealth of Massachusetts on such day and at such time as the Trustees shall
designate. The holders of a majority of outstanding Shares of each Series
present in person or by proxy shall constitute a quorum for the transaction of
any business, except as may otherwise be required by the 1940 Act, or other
applicable law or by this Declaration or the By-Laws of the Trust. If a quorum
is present at a meeting of a particular Series, the affirmative vote of a
majority of the Shares of such Series represented at the meeting constitutes the
action of the Shareholders holding Shares of such Series, unless the 1940 Act,
or other applicable law, this Declaration or the By-Laws of the Trust requires a
greater number of affirmative votes.
11.3. Notice of Meetings. Notice of all meetings of the Shareholders,
stating the time, place and purposes of the meeting, shall be given by the
Trustees by mail to each Shareholder at his registered address, mailed at least
10 days and not more than 60 days before the meeting. Only the business stated
in the notice of the meeting shall be considered at such meeting. Any adjourned
meeting may be held as adjourned without further notice. Notice of any meeting
of Shareholders shall not be required to be given to any Shareholder who, in
person or by proxy either before or after such meeting, shall waive such notice.
Attendance of a Shareholder at a meeting, either in person or by proxy, shall of
<PAGE>
itself constitute waiver of notice and waiver of any and all objections to the
place of the meeting, the time of the meeting, and the manner in which it has
been called or convened, except when a Shareholder attends a meeting solely for
the purpose of stating, at the beginning of the meeting, any such objection or
objections to the transaction of business.
11.4. Record Date for Meetings. For the purpose of determining the
Shareholders who are entitled to notice of and to vote at any meeting, or to
participate in any distribution, or for the purpose of any other action, the
Trustees may from time to time close the transfer books for such period, not
exceeding 30 days, as the Trustees may determine, or without closing the
transfer books the Trustees may fix a date not more than 60 days prior to the
date of any meeting of Shareholders or other action as a record date for the
determination of the Persons to be treated as Shareholders of record for such
purposes, except for dividend payments which shall be governed by Article X
hereof.
11.5. Proxies, etc. At a meeting of Shareholders, any holder of Shares
entitled to vote may vote by proxy, provided that no proxy shall be voted at any
meeting unless it shall have been placed on file with the Secretary, or with
such other officer or agent of the Trust as the Secretary may direct, for
verification prior to the time at which such vote shall be taken. Pursuant to a
resolution of a majority of the Trustees, proxies may be solicited in the name
of one or more Trustees or one or more of the offices of the Trust. Only
Shareholders of record shall be entitled to vote. Each full Share shall be
entitled to one vote and fractional Shares shall be entitled to a vote of such
fraction. When any Share is held jointly by several persons, any one of them may
vote at any meeting in person or by proxy in respect of such Share, but if more
than one of them shall be present at such meeting in person or by proxy, and
such joint owners or their proxies so present disagree as to any vote to be
cast, no vote shall be counted in respect of their Share. A proxy purporting to
be executed by or on behalf of a Shareholder shall be deemed valid unless
challenged at or prior to its exercise, and the burden of proving invalidity
shall rest on the challenger. If the holder of any such Share is a minor or a
person of unsound mind, and subject to guardianship or to the legal control of
<PAGE>
any other person with regard to such Share, he may vote by his guardian or such
other person appointed or having such control, and such vote may be given in
person or by proxy.
11.6. Reports. The trustees shall cause to be prepared with respect to
each Series at least annually a report of operations containing a balance sheet
and statement of income and undistributed income of the applicable Series of the
Trust prepared in conformity with generally accepted accounting principles and
an opinion of an independent public accountant on such financial statements. It
is contemplated that separate reports may be prepared for the various Series.
Copies of such reports shall be mailed to all Shareholders of record of the
applicable Series within the time required by the 1940 Act.
The Trustees shall, in addition, furnish to the Shareholders such
interim reports as may be required to be furnished to Shareholders by the 1940
Act.
11.7. Inspection of Records. The records of the trust shall be open to
inspection by Shareholders to the same extent as is permitted shareholders of a
Massachusetts business corporation.
11.8. Shareholder Action by Written Consent. Any action which may be
taken by Shareholders may be taken without a meeting if a majority of
Shareholders of each Series entitled to vote on the matter (or such larger
proportion thereof as shall e required by any express provision of this
Declaration) consent to the action in writing and the written consents are filed
with the records of the meetings of Shareholders. Such consent shall be treated
for all purposes as a vote taken at a meeting of Shareholders.
ARTICLE XII
Duration; Termination of Trust
Amendment; Mergers, Etc.
12.1. Duration. The trust shall continue without limitation of time but
subject to the provisions of Section 12.2 hereof.
<PAGE>
12.2. Termination.
(a) The Trust may be terminated by the affirmative vote of the
holders of not less than two-thirds of the Shares of each Series of the Trust at
any meeting of Shareholders or by an instrument in writing, without a meeting,
signed by a majority of the Trustees and consented to be the holders of not less
than two-thirds of such Shares of each Series. Any Series may be so terminated
by vote or written consent of not less than two-thirds of the Shares of such
Series. Upon the termination of the Trust or any Series,
(i) Neither the Trust nor any terminated Series within the
Trust shall carry on any business except for the purpose of winding up
its affairs.
(ii) The Trustees shall proceed to wind up the affairs of the
Trust or such terminated Series and all of the powers of the Trustees
under this Declaration shall continue until the affairs of the Trust or
such Series shall have been wound up, including the power to fulfill or
discharge the contracts of the Trust or such Series, collet its assets,
sell, convey, assign, exchange, transfer or otherwise dispose of all or
any part of the remaining Trust Property to one or more persons at
public or private sale for consideration which may consist in whole or
in part of cash, securities or other property of any kind, discharge or
pay its liabilities, and do all other acts appropriate to liquidate its
business; provided that any sale, conveyance, assignment, exchange,
transfer or other disposition of all or substantially all the Trust
Property shall require approval of the principal terms of the
transaction and the nature and amount of the consideration by vote or
consent of the holders of a majority of the Shares entitled to vote.
(iii) After paying or adequately providing for the payment of
all liabilities, and upon receipt of such releases, indemnities and
refunding agreements, as they deem necessary for their protection, the
Trustees may distribute the remaining Trust Property of any terminated
Series, in cash or in kind or partly each, among the Shareholders of
such Series according to their respective rights.
<PAGE>
(b) After termination of the Trust or any Series and
distribution to the Shareholders as herein provided, a majority of the Trustees
shall execute and lodge among the records of the Trust an instrument in writing
setting forth the fact of such termination. Upon termination of the Trust, the
Trustees shall thereupon be discharged from all further liabilities and duties
hereunder, and the rights and interests of all Shareholders shall thereupon
cease. Upon termination of any Series, the Trustees shall thereunder by
discharged from all further liabilities and duties with respect to such Series,
and the rights and interest of all Shareholders of such Series shall thereupon
cease.
12.3. Amendment Procedure.
(a) This Declaration may be amended by the affirmative vote of
the holders of not less than a majority of the Shares at any meeting of
Shareholders or by an instrument in writing, without a meeting, signed by a
majority of the Trustees and consented to by the holders of not less than a
majority of the Shares of the Trust. The Shareholders of each Series shall have
the right to vote separately on amendments to this Declaration to the extent
provided by Section 11.1. The Trustees may also amend this Declaration without
the vote or consent of Shareholders pursuant to Sections 1.1 and 6.2.2(g) or if
they deem it necessary to conform this Declaration to the requirements of
applicable federal or state laws or regulations or the requirements of the
regulated investment company provisions of the Internal Revenue Code, but the
Trustees shall not be liable for failing to do so. Amendments shall be effective
upon the taking of action as provided in this Section 12.3(a).
(b) No amendment may be made under Section 12.3(a) above which
would change any rights with respect to any Shares of the Trust by reducing the
amount payable thereon upon liquidation of the Trust or by diminishing or
eliminating any voting rights pertaining thereto, except with the vote or
consent of the holders of two-thirds of the Shares of each Series. Nothing
contained in this Declaration shall permit the amendment of this Declaration to
impair the exemption from personal liability of the Shareholders, Trustees,
officers, employees and agents of the Trust or to permit assessments upon
Shareholders.
(c) A certification in recordable form signed by a majority of
the Trustees setting froth an amendment and reciting that it was duly adopted by
<PAGE>
the Shareholders or by the Trustees as aforesaid or a copy of the Declaration,
as amended, in recordable form, and executed by a majority of the Trustees,
shall be conclusive evidence of such amendment when lodged among the records of
the Trust.
Notwithstanding any other provision hereof, until such time as a
Registration Statement under the Securities Act of 1933, as amended, covering
the first public offering of Shares of the Trust shall have become effective,
this Declaration of Trust may be terminated or amended in any respect by the
affirmative vote of a majority of the Trustees or by an instrument signed by a
majority of the Trustees.
12.4. Merger, Consolidation and Sale of Assets. The Trust may merge or
consolidate with any other corporation, association, trust or other organization
or may sell, lease or exchange all or substantially all of the Trust Property,
including its good will, upon such terms and conditions and for such
consideration when and as authorized at any meeting of Shareholders called for
that purpose by the affirmative vote of the holders of not less than two-thirds
of the Shares of each Series, or by an instrument or instruments in writing
without a meeting, consented to by the holders of not less than two-thirds of
such Shares of each Series. Any Series may so merge, consolidate or effect a
sale or exchange of assets by the vote or written consent of not less than
two-thirds of the Shares of such Series.
12.5 Incorporation. With the approval of the holders of a majority of
the Shares, the Trustees may cause to be organized or assist in organizing a
corporation or corporations under the laws of any jurisdiction or any other
trust, partnership, association or other organization to take over all of the
Trust Property or to carry on any business in which the trust shall directly or
indirectly have any interest, and to sell, convey and transfer the Trust
Property to any such corporation, trust, association or organization in exchange
for the securities thereof or otherwise, and to lend money to, subscribe for the
securities of, and enter into any contracts with any such corporation, trust,
partnership, association or organization, or any corporation, partnership,
trust, association or organization in which the Trust holds or is about to
acquire securities or any other interest. The Trustees may also cause a merger
or consolidation between the Trust or any successor thereto and any such
<PAGE>
corporation, trust, partnership, association or other organization if and to the
extent permitted by law, as provided under the law then in effect. Nothing
contained herein shall be construed as requiring approval of Shareholders for
the Trustees to organize or assist in organizing one or more corporations,
trusts, partnerships, associations or other organizations and selling, conveying
or transferring a portion of the Trust Property to such organizations or
entities.
ARTICLE XIII
Miscellaneous
13.1. Filing. This Declaration and any amendment hereto shall be filed
in the office of the Secretary of the Commonwealth of Massachusetts and in such
other places as may be required under the laws of Massachusetts and may also be
filed or recorded in such other placed as the Trustees deem appropriate. Each
amendment so filed shall be accompanies by certificate signed and acknowledged
by a Trustee stating that such action was duly taken in a manner provided
herein. A restated Declaration, containing the original Declaration and all
amendments theretofore or therein made, may be executed from time to time by a
majority of the Trustees and shall, upon filing with the Secretary of the
Commonwealth of Massachusetts, be conclusive evidence of all amendments
contained therein and may thereafter be referred to in lieu of the original
Declaration and the various amendments thereto.
13.2. Resident Agent. The Trust shall maintain a resident agent in the
Commonwealth of Massachusetts, which agent shall initially be CT Corporation
System, 2 Oliver Street, Boston, Massachusetts 02109. The Trustees may designate
a successor resident agent, provide, however, that such appointment shall not
become effective until written notice thereof is delivered to the office of the
Secretary of the Commonwealth.
13.3. Governing Law. This Declaration is executed by the Trustees and
delivered in the Commonwealth of Massachusetts and with reference to the laws
thereof, and the rights of all parties and the validity and construction of
every provision hereof shall be subject to and construed according to the laws
of said State.
<PAGE>
13.4. Counterparts. This Declaration may be simultaneously executed in
several counterparts, each of which shall be deemed to be an original, and such
counterparts, together, shall constitute one and the same instrument, which
shall be sufficiently evidenced by any such original counterpart.
13.5. Reliance by Third Parties. Any certificate executed by an
individual who, according to the records of the Trust, or of any recording
office in which this Declaration may be recorded, appears to be a Trustee
hereunder, certifying to: (a) the number or identity of Trustees or
Shareholders, (b) the name of the Trust or any Series thereof, (c) the
establishment of any Series, (d) the due authorization of the execution of any
instrument or writing, (e) the results of any vote taken at a meeting of
Trustees or Shareholders, (f) the fact that the number of Trustees or
Shareholders present at any meeting or executing any written instrument
satisfies the requirements of this Declaration, (g) the form of any By-Laws
adopted by or the identity of any officers elected by the Trustees, or (h) the
existence of any fact or facts which in any manner relate to the affairs of the
Trust or any Series, shall be conclusive evidence as to the matters so certified
in favor of any person dealing with the Trustees and their successors.
13.6. Provisions in Conflict With Law or Regulations.
(a) The provisions of this Declaration are severable, and if
the Trustees shall determine, with the advice of counsel, that any of such
provisions is in conflict with the 1940 At, the regulated investment company
provisions of the Internal Revenue Code or with other applicable laws and
regulations, the conflicting provision shall be deemed never to have constituted
a part of this Declaration; provide, however, that such determination shall not
affect any of the remaining provisions of this Declaration or render invalid or
improper any action taken or omitted prior to such determination.
(b) If any provision of this Declaration shall be held invalid
or unenforceable in any jurisdiction, such invalidity or unenforceability shall
attach only to such provision in such jurisdiction and shall not in any manner
affect such provision in any other jurisdiction or any other provision of this
Declaration in any jurisdiction.
<PAGE>
13.7. Provisions in Conflict with By-Laws. In the event that any
provisions of this Declaration are contrary to or inconsistent with any
provisions of the By-laws of the Trust, from time to time, the provisions
contained in this Declaration shall control.
IN WITNESS WHEREOF, the undersigned have caused these presents to be
executed as of the day and year first above written.
/s/ Charles W. Brady
---------------------------------
Charles W. Brady, as Trustee and
not individually
/s/ John B. Rofrano
---------------------------------
John B. Rofrano, as Trustee and
not individually
/s/ Victor L. Andrews
---------------------------------
Victor L. Andrews, as Trustee and
not individually
/s/ Edward S. Croft
---------------------------------
Edward S. Croft, Jr., as Trustee
and not individually
/s/ Ernest B. Davis
---------------------------------
Ernest B. Davis, as Trustee and
not individually
<PAGE>
THE COMMONWEALTH OF MASSACHUSETTS
County of Suffolk July 9, 1987
Then personally appeared before the above-named John B. Rofrano,
Trustee of INVESCO Institutional Series Trust, and acknowledged the foregoing
instrument to be his free act and
deed.
Before me,
/s/ Sheldon A. Jones
---------------------------------
Notary Public
My commission expires: January 21, 1994
legal\ivt\dec-trst.87
AMENDED DECLARATION OF TRUST
OF
INVESCO INSTITUTIONAL SERIES TRUST
INVESCO INSTITUTIONAL SERIES TRUST, a Massachusetts Business Trust
(hereinafter referred to as the "Trust"), hereby certifies that:
FIRST: The name of the Trust is INVESCO INSTITUTIONAL SERIES
TRUST.
SECOND: The Declaration of Trust is hereby amended by striking in its
entirety Article I, Section 1.1 and Article VI, Section 6.2.1 and by
substituting in lieu thereof the following:
ARTICLE I
The Trust
1.1 Name. The name of the trust created hereby (the "Trust," which term
shall be deemed to include any Series of the Trust when the context requires)
shall be "Financial Series Trust," and so far as may be practicable the Trustees
shall conduct the activities of the Trust and execute all documents under that
name, which name (and the word "Trust" wherever hereinafter used) shall refer to
the Trustees as Trustees, and not individually, and shall not refer to the
officers, agents, employees or Shareholders of the Trust or any Series thereof.
Each Series of the Trust which shall be established and designated pursuant to
Sections 6.2, 6.2.1, or 6.2.2 shall conduct its activities under such name as
the Trustees shall determine and set forth in the instruments establishing such
Series. Should the Trustees determine that the use of the name of the Trust or
any Series is not advisable, they may select such other name for the Trust or
such Series as they deem proper and the Trust or Series may conduct its
activities under such other name. Any name change shall be effective upon the
execution by a majority of the then Trustees of an instrument setting forth the
new name. Any such instrument shall have the status of an amendment to this
Declaration.
<PAGE>
ARTICLE VI
Shares of Beneficial Interest
6.2.1 Series. The Trust currently shall be divided into the following four
Series:
(a) Financial Equity Series. Substantially all of the Financial Equity
Series (the "Equity Fund") will be invested in common stocks and, to a lesser
extent, securities convertible into common stocks. Such securities will,
generally, be issued by companies which are listed on a national securities
exchange such as the New York Stock Exchange and which usually pay regular
dividends. During normal market conditions, at least 65% of the Equity Fund's
investments will consist of equity securities. Subject to its Fundamental
Policies, the investment standards of the Equity Fund will be determined by the
Trustees or any investment adviser to the Equity Fund appointed and given such
authority by the Trustees pursuant to the provisions of Article IV hereof.
(b) Financial International Growth Series. The Financial International
Growth Series (the "International Fund") will have under normal circumstances at
least 65% of the value of its assets invested in foreign securities. The term
"foreign securities" refers to securities of issuers, wherever organized, which
in the judgment of the Trustees or any investment adviser to the International
Fund appointed by the Trustees, have their principal business activities outside
of the United States. Subject to its Fundamental Policies, the International
Fund's investment standards will be determined, and all investment of the
International Fund will be at the sole discretion of the Trustees or any
investment adviser to the International Fund appointed and given such authority
by the Trustees pursuant to the provisions of Article IV hereof. Accordingly,
the International Fund from time to time may be invested in domestic securities.
(c) Financial Flex Fund. The Financial Flex Fund (the "Flex Fund") will
invest in a combination of equity securities, similar to those which would be
acquired by the Equity Fund and fixed and variable income securities, similar to
those which would be acquired by the Financial Intermediate Government Bond Fund
(described below). Subject to its Fundamental Policies, the Flex Fund's
investment standards will be established and all investments of the Flex Fund
<PAGE>
will be made at the discretion of the Trustees of any investment adviser to the
Flex Fund appointed and given such authority by the Trustees pursuant to the
provisions of Article IV hereof.
(d) Financial Intermediate Government Bond Fund. The Financial Intermediate
Government Bond Fund (the "Intermediate Fund") will invest primarily in fixed
and variable income corporate obligations. The Income Fund will invest only in
those corporate obligations which in the opinion of the Trustees or the opinion
of any investment adviser to the Income Fund appointed by the Trustees, have the
investment characteristics described by Moody's in rating corporate obligations
within its highest ratings of Aaa, Aa, A and Baa and by Standard & Poor's in
rating corporate obligations within its highest ratings of AAA, AA, A and BBB.
Investments in government obligations will include direct obligations of the
U.S. government, such as U.S. Treasury bills, notes and bonds, and notes, bonds
and other obligations of U.S. government authorities, agencies and
instrumentalities, such as the Federal National Mortgage Association, Federal
Home Loan Bank, Federal Financing Bank and Federal Farm Credit Bank. The Trust
does not require that the Intermediate Fund's investments in corporate
obligations actually be rated by Moody's or Standard & Poor's, and it may
acquire obligations which have been rated lower than Baa by Moody's or lower
than BBB by Standard & Poor's if in the opinion of the Trustees or any
investment adviser to the Intermediate Fund appointed by the Trustees, such
obligations are of a quality at least equal to a rating of Baa by Moody's or BBB
by Standard & Poor's. Notwithstanding anything to the contrary herein, the
Intermediate Fund may be otherwise invested if in the discretion of the Trustees
or any investment adviser to the Intermediate Fund appointed by the Trustees,
such other investments are prudent because of market conditions and other
factors which the Trustees or such investment adviser deem to be significant.
THIRD: The amendment was adopted by resolution of the Board of Trustees of
the Trust, pursuant to and in accordance with Chapter 182 of the Massachusetts
General Laws on the 16th day of October, 1990 (see copy attached hereto).
FOURTH: The amendment is not required to be adopted by the shareholders of
the Trust pursuant to Article XII, Section 12.3 of the Declaration of Trust.
<PAGE>
IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the 28th day of December 1990, which signature shall constitute
the necessary certificate pursuant to Article XIII, Section 13.1 of the
Declaration of Trust.
/s/ John M. Butler
--------------------------------
John M. Butler, as Trustee
<PAGE>
STATE OF COLORADO )
) ss.
CITY/COUNTY OF DENVER )
The foregoing Amended Declaration of Trust was signed before me by John M.
Butler, as Trustee of INVESCO INSTITUTIONAL SERIES TRUST, who, under oath,
stated that the matters and facts set forth therein with respect to
authorization and approval are true in all material respects to the best of his
knowledge and belief.
Dated this 28th day of December, 1990.
/s/ Johanna Masters
--------------------------------
Notary Public
My Commission Expires:
My Commission Expires Dec. 19, 1991
<PAGE>
[A segment from the minutes of the quarterly meeting of the Director/Trustees of
INVESCO Institutional Series Trust, October 16, 1990]
A reorganization of certain of the Funds is required in order to package
these Funds for the 401(k) market. As part of the reorganization, Mr. Rofrano
requested that the trustees of INVESCO Institutional Series Trust consider the
following name changes: INVESCO Institutional Series Trust will change its name
to Financial Series Trust; Institutional Equity Fund will become Financial
Equity Fund; Institutional Income Fund will become Financial Intermediate
Government Bond Fund; Institutional Flex Fund will become Financial Flex Fund;
and Institutional International Fund will become Financial International Growth
Fund. Upon motion by Mr. Budner, seconded by Mr. King, the following resolutions
were unanimously approved:
RESOLVED, that the Directors hereby approve the following name changes:
INVESCO Institutional Series Trust to Financial Series Trust; Institutional
Equity Fund to Financial Equity Fund; Institutional Income Fund to
Financial Intermediate Government Bond Fund; Institutional Flex Fund to
Financial Flex Fund; and Institutional International Fund to Financial
International Growth Fund; and
<PAGE>
FURTHER RESOLVED, that the above name changes will be effective if and when
the shareholders of INVESCO Institutional Series Trust approve new
investment advisory and sub-advisory agreements with Financial Programs,
Inc., INVESCO Capital Management, Inc. And INVESCO MIM International, Ltd.;
and
FURTHER RESOLVED, that the Directors hereby authorize the filing of an
Amended Declaration of Trust in accordance with the Massachusetts General
Laws to reflect such name changes, if and when the shareholders of INVESCO
Institutional Series Trust approve new investment advisory and sub-advisory
agreements with Financial Programs, Inc., INVESCO Capital Management, Inc.
And INVESCO MIM International, Ltd.
AMENDMENT TO DECLARATION OF TRUST
OF
FINANCIAL SERIES TRUST
FINANCIAL SERIES TRUST, a Massachusetts Business Trust (hereinafter
referred to as the "Trust"), hereby certifies that:
FIRST: The name of the Trust is FINANCIAL SERIES TRUST.
SECOND: The Declaration of Trust is hereby amended by striking in its
entirety Article I, Section 1.1 and Article VI, Section 6.2.1, and by
substituting in lieu thereof the following:
ARTICLE I
The Trust
1.1 Name. The name of the trust created hereby (the "Trust,") which term
shall be deemed to include any Series of the Trust when the context requires)
shall be "INVESCO Value Trust," and so far as may be practicable the Trustees
shall conduct the activities of the Trust and execute all documents under that
name, which name (and the word "Trust" wherever hereinafter used) shall refer to
the Trustees as Trustees, and not individually, and shall not refer to the
officers, agents, employees or Shareholders of the Trust or any Series thereof.
Each Series of the Trust which shall be established and designated pursuant to
Sections 6.2, 6.2.1, or 6.2.2 shall conduct its activities under such name as
the Trustees shall determine and set forth in the instruments establishing such
Series. Should the Trustees determine that the use of the name of the Trust or
any Series is not advisable, they may select such other name for the Trust or
such Series as they deem proper and the Trust or Series may conduct its
activities under such other name. Any name change shall be effective upon the
execution by a majority of the then Trustees of an instrument setting forth the
new name. Any such instrument shall have the status of an amendment to this
Declaration.
ARTICLE VI
Shares of Beneficial Interest
6.2.1 Series. The Trust currently shall be divided into the following three
Series:
<PAGE>
(a) INVESCO Value Equity Fund. Substantially all of the INVESCO
Value Equity Fund (the "Equity Fund") will be invested in common stocks
and, to a lesser extent, securities convertible into common stocks. Such
securities will, generally, be issued by companies which are listed on a
national securities exchange such as the New York Stock Exchange and which
usually pay regular dividends. During normal market conditions, at least
65% of the Equity Fund's investments will consist of equity securities.
Subject to its Fundamental Policies, the investment standards of the Equity
Fund will be determined by the Trustees or any investment adviser to the
Equity Fund appointed and given such authority by the Trustees pursuant to the
provisions of Article IV hereof.
(b) INVESCO Total Return Fund. The INVESCO Total Return Fund (the
"Total Return Fund") will invest in a combination of equity securities,
similar to those which would be acquired by the Equity Fund, and fixed and
variable income securities, similar to those which would be acquired by the
INVESCO Intermediate Government Bond Fund (described below). Subject to its
Fundamental Policies, the Total Return Fund's investment standards will be
established and all investments of the Total Return Fund will be made at the
discretion of the Trustees or any investment adviser to the Total Return Fund
appointed and given such authority by the Trustees pursuant to the provisions of
Article IV hereof.
(c) INVESCO Intermediate Government Bond Fund. The INVESCO
Intermediate Government Bond Fund (the "Intermediate Fund") will invest
primarily in obligations of the United States Government and Government
Agencies maturing in three to five years. Investments in government obligations
will include direct obligations of the U.S. government, such as U.S. Treasury
bills, notes and bonds, and notes, bonds and other obligations of U.S.
government authorities, agencies and instrumentalities, such as the
Federal National Mortgage Association, Federal Home Loan Bank, Federal
Financing Bank and Federal Farm Credit Bank. Under normal circumstances, at
least 65 percent of the Intermediate Fund's total assets will be invested in the
above obligations. The remaining 35 percent of this Fund's total assets,
under normal circumstances, will be invested in corporate obligations which,
in the investment adviser's opinion, have the investment characteristics
described by Moody's in rating corporate obligations within its four highest
ratings of Aaa, Aa, A and Baa and by Standard & Poor's in rating corporate
<PAGE>
obligations within its four highest ratings of AAA, AA, A and BBB. The dollar
weighted average maturity of this Fund's investments will be from three to ten
years. Notwithstanding anything to the contrary herein, the Intermediate Fund
may be otherwise invested if in the discretion of the Trustees or any investment
adviser to the Intermediate Fund appointed by the Trustees, such other
investments are prudent because of market conditions and other factors which the
Trustees or such investment adviser deem to be significant.
THIRD: This amendment was adopted by resolution of the Board of Trustees of
the Trust, pursuant to and in accordance with Chapter 182 of the Massachusetts
General Laws, on the 20th day of January, 1993, to be effective on and after
July 1, 1993.
FOURTH: This amendment is not required to be adopted by the shareholders of
the Trust, pursuant to Article XII, Section 12.3 of the Declaration of Trust.
IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the 20th day of June, 1993, which signature shall constitute the
necessary certificate pursuant to Article XIII, Section 13.1 of the Declaration
of Trust.
/s/ John M. Butler
------------------------------
John M. Butler, as Trustee
<PAGE>
STATE OF COLORADO )
) ss.
CITY AND COUNTY OF DENVER )
The foregoing Amended Declaration of Trust was signed before me by John
M. Butler, as Trustee of FINANCIAL SERIES TRUST, who, under oath, stated that
the matters and facts set forth therein with respect to the authorization and
approval are true in all material respects to the best of his knowledge and
belief.
Dated this 20th day of June, 1993.
/s/ Cheryl K. Howlett
------------------------------
Notary Public
My Commission Expires:
February 22, 1995
AMENDED BY-LAWS
OF
FINANCIAL SERIES TRUST
AS OF JANUARY 22, 1992
ARTICLE ONE
DEFINITIONS
1.1 The terms "Commission," "Declaration," "Majority
Shareholder Vote," "1940 Act," "Series," "Shareholders," "Shares," "Trust,"
"Trust Property," and "Trustees" have the respective meanings given them in the
Amended and Restated Declaration of Trust of Financial Series Trust dated
December 28, 1990, as amended from time to time.
ARTICLE TWO
OFFICES
2.1 The address of the principal office of Financial Series
Trust (the "Trust") is 7800 East Union Avenue, Denver, Colorado 80237.
2.2 The Trust may have other offices at such place or places
(within or without the Commonwealth of Massachusetts) as the Trustees may from
time to time designate or the business of the Trust may require or make
desirable.
ARTICLE THREE
SHAREHOLDERS MEETINGS
3.1 All meetings of the Shareholders shall be writing or
without the Commonwealth of Massachusetts as may be determined by the Chairman
or the President.
3.2 Meetings of Shareholders of the Trust, for any purpose or
purposes, unless otherwise prescribed by statute or the Declaration, may be
called at any time by a majority of the Trustees and shall be called by any
Trustee upon written request of Shareholders of any Series holding in the
aggregate not less than 10% of the outstanding Shares of such Series having
voting rights, such request specifying the purpose of purposes for which such
meeting is to be called.
3.3 Except as otherwise required by statute or the
Declaration, written notice of each meeting of the Shareholders shall be served,
either personally or by first class mail, upon each Shareholder of record
<PAGE>
entitled to vote at such meeting, not less than ten (10) nor more than sixty
(60) days before such meeting. If mailed, such notice shall be directed to a
Shareholder at his address last shown on the stock transfer books of the Trust.
The notice of any special meting of the Shareholders shall state the purpose or
purposes for which the meeting is called. Notice of any meeting of Shareholders
shall not be required to be given to any Shareholder who, in person or by proxy,
either before or after such meeting, shall waive such notice. Attendance of a
Shareholder at a meeting, either in person or by proxy, shall of itself
constitute waiver of notice and waiver of any and all objections to the place of
the meeting, the time of the meeting, and the manner in which it has been called
or convened, except when a Shareholder attends a meeting solely for the purpose
of stating, at the beginning of the meeting, any such objection or objections to
the transaction of business. Notice of any adjourned meeting need not be given
if the time and place to which the meeting is adjourned are announced at the
meeting at which the adjournment is taken.
3.4 The holders of a majority of the Shares issued and
outstanding and entitled to vote thereat, present in person or represented by
proxy, shall be requisite and shall constitute a quorum at all meetings of the
Shareholders for the transaction of business, except as otherwise provided by
law, by the Declaration, or by these By-Laws. If, however, such a majority shall
not be present or represented at any meeting of the Shareholders, the
Shareholders entitled to vote thereat, present in person or by proxy, shall have
the power to adjourn the meeting from time to time, without notice other than
announcement at the meeting, until the requisite amount of voting Shares shall
be present. At any such adjourned meeting at which a quorum shall be present in
person or by proxy, any business may be transacted that might have been
transacted at the meeting as originally called.
3.5 At every meeting of the Shareholders, any Shareholder
having the right to vote shall be entitled to vote in person or by proxy. Each
Shareholder shall have one vote for each Share having voting power registered in
the name of such Shareholder on the books of the Trust.
3.6 Any action to be taken at a meeting of the Shareholders,
or any action that may be taken at a meeting of the Shareholders, may be taken
without a meeting if a consent in writing setting forth the action so taken
shall be signed by a majority of the Shareholders entitled to vote with respect
to the subject matter thereof and any further requirements of law pertaining to
such consents have been complied with.
<PAGE>
ARTICLE FOUR
TRUSTEES
4.1 Meetings of the Trustees. The Trustees may in their
discretion provide for regular or special meetings of the Trustees.
4.2 Telephone Meetings. Any Trustee or any member or members
of any committee designated by the Trustees, may participate in a meeting of the
Trustees, or any such committee, as the case may be, by means of a conference
telephone or similar communications equipment if all persons participating in
the meeting can hear each other at the same time. Participation in a meeting by
these means constitutes presence in person at the meeting.
4.3 Quorum, Voting and Adjournment of Meetings. At all
meetings of the Trustees, a majority of the Trustees shall be requisite to and
shall constitute a quorum for the transaction of business. If a quorum is
present, the affirmative vote of a majority of the Trustees present shall be the
act of the Trustees, unless the concurrence of a greater proportion is expressly
required for such action by law, the Declaration or these By-Laws. If there is
less than a quorum present at any meeting of the Trustees, the Trustees present
thereat may adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall have been obtained.
4.4 Action by Trustees Without Meeting. The provisions of
these By-Laws covering notices and meetings to the contrary notwithstanding, and
except as required by law, any action required or permitted to be taken at any
meeting of the Trustees may be taken without a meting if a consent in writing
setting forth the action shall be signed by a majority of the Trustees entitled
to vote upon the action and such written consent is filed with the minutes of
proceedings of the Trustees.
4.5 Expenses and Fees. Trustees shall be entitled to receive
such compensation from the Trust for their services as may from time to time be
voted by the board of trustees. All trustees shall be reimbursed for their
reasonable expenses of attendance, if any, at trustee and committee meetings.
Any trustee of the Trust may also serve the Trust in any other capacity and
receive compensation therefor.
4.6 Execution of Instruments and Documents and Signing of
Checks and Other Obligations and Transfers. All instruments, documents and other
papers shall be executed in the name or on behalf of the Trust or any Series
thereof and all checks, notes, drafts and other obligations for the payment of
money by the Trust or any Series thereof shall be signed, and all transfers of
<PAGE>
securities standing in the name of the Trust or any Series thereof shall be
executed, by the Chairman, President, any Vice President or the Treasurer or any
one or more officers or agents of the Trust as shall be designated for that
purpose by vote of the Trustees.
ARTICLE FIVE
COMMITTEES
5.1 Executive and Other Committees. The Trustees, by
resolution adopted by a majority of the Trustees, may designate an Executive
Committee and/or other committees, each committee to consist of two (2) or more
of the Trustees of the Trust and may delegate to such committees, in the
intervals between meetings of the Trustees, any or all of the powers of the
Trustees in the management of the business and affairs of the Trust. In the
absence of any member of any such committee, the members thereof present at any
meeting, whether or not they constitute a quorum, may appoint a Trustee to act
in place of such absent member. Each such committee shall keep a record of its
proceedings.
The Executive Committee and any other committee shall fix its
own rules of procedure, but the presence of at least a majority of the members
of the whole committee shall in each case be necessary to constitute a quorum of
the committee and the affirmative vote of the majority of the members of the
committee present at the meeting shall be necessary to take action.
All actions of the Executive Committee shall be reported to
the Trustees at the next meeting.
5.2 Advisory Committee. The Trustees may appoint an advisory
committee which shall be composed of persons who do not serve the Trust or any
Series thereof in any other capacity and which shall have advisory functions
with respect to the investments of the Trust or any Series thereof but which
shall have no power to determine that any security or other investment shall be
purchased, sold or otherwise disposed of by the Trust or any Series thereof. The
number of persons constituting any such advisory committee shall be determined
from time to time by the Trustees or any Series thereof. The members of any such
advisory committee may receive compensation for their services and may be
allowed such fees and expenses for the attendance at meetings as the Trustees
may from time to time determine to be appropriate.
5.3 Committee Action Without Meeting. The provisions of these
By-Laws covering notices and meetings to the contrary notwithstanding, and
except as required by law, any action required or permitted to be taken at any
meeting of any committee of the Trustees appointed pursuant to Section 5.1 of
these By-laws may be taken without a meeting if a consent in writing setting
<PAGE>
forth the action shall be signed by a majority of the members of the committee
entitled to vote upon the action and such written consent is filed with the
records of the proceedings of the committee.
ARTICLE SIX
OFFICERS
6.1 The Trustees shall annually elect the following officers:
Chairman, President, Secretary and Treasurer. The Trustees may elect or appoint
or request the Chairman or President to appoint such other officers or agents
with such powers as the Trustees may deem to be advisable, including one or more
Vice- Presidents, Assistant Treasurers and Assistant Secretaries, who shall hold
their offices for such terms as shall be specified by the President and shall
exercise such powers and perform such duties as shall be determined from time to
time by the President. The Chairman and the President shall be and any other
officer may, but need not, be a Trustee.
6.2 Any person may hold any two or more offices.
6.3 The salaries of the officers of the Trust shall be fixed
by the Trustees, except that the Trustees may delegate to any officer or
officers the power to fix the compensation of any officer appointed in
accordance with the second sentence of Section 6.1 of these By-Laws.
6.4 Each officer of the Trust shall hold office until his
successor is chosen or until his earlier resignation, death or removal, or the
termination of his office. Any officer may be removed by the Trustees, with or
without cause, whenever in their judgment the best interests of the Trust will
be served thereby. Any officer appointed other than by the Trustees or by the
Shareholders may be removed with or without cause at any time by an officer
having authority to appoint the officer being removed if such superior officer,
in his absolute discretion, shall consider that the best interests of the Trust
will be served thereby.
6.5 The Chairman. The Chairman shall preside at all meetings
of the Shareholders and of the Trustees, may be a signatory on all Annual and
Semi-Annual Reports as may be sent to Shareholders, and shall perform such other
duties as the Trustees may from time to time prescribe.
6.6 President. The President shall be the chief executive
officer o the Trust and shall have general and active management of the business
of the Trust. The President shall also have such powers and perform such duties
as are specifically imposed upon him by law and as may be assigned to him by the
<PAGE>
Trustees. The President shall be ex officio a member of all standing committees,
unless otherwise provided in the resolution appointing the same.
6.7 Vice Presidents. The Vice-Presidents, if any, shall
perform such duties as are generally performed by vice-presidents. The
Vice-Presidents shall perform such other duties and exercise such other powers
as the Trustees shall request or delegate.
6.8 Secretary. The Secretary shall attend all sessions of the
Trustees and all meetings of the Shareholders and record all votes and the
minutes of all proceedings in books to be kept for that purpose and shall
perform like duties for the standing committees when required. He shall give, or
cause to be given, any notice required to be given of any meetings of the
Shareholders and of the Trustees, and shall perform such other duties as may be
prescribed by the Trustees, Chairman or the President. The Assistant Secretary
or Assistant Secretaries shall, in the absence or disability of the Secretary,
or at his request, perform his duties and exercise his powers and authority.
6.9 Treasurer. The Treasurer shall have charge of and be
responsible for all funds, securities, receipts and disbursements of the Trust
and each Series thereunder, and shall deposit, or cause to be deposited, in the
name of the Trust or the appropriate Series, all monies or other valuable
effects, in such banks, trust companies or other depositories as shall, from
time to time, be selected by the Trustees; he shall render to the Chairman,
President and to the Trustees, whenever requested, an account of the financial
condition of the Trust or any Series thereof, and in general, he shall perform
all the duties incident to the office of a Treasurer of a business corporation,
and such other duties as may be assigned to him by the Trustees, Chairman or the
President.
6.10 In case of the absence of any officer of the Trust, or
for any other reason that the Trustees may deem sufficient, the Trustees may
delegate, on an interim or temporary basis, any or all of the powers or duties
of any officer to any other officer or to any Trustee.
ARTICLE SEVEN
CONTRACTS
7.1 The Trust may from time to time, in the discretion of its
Trustees, enter into one or more contracts known generally as investment
advisory contracts pursuant to which the other party to the contract shall
undertake to furnish to the Trust or any Series thereof and to the Trustees
investment advisory services, statistical and research facilities and services
and administrative and other services, all on such terms and conditions as the
Trustees may in their discretion determine.
<PAGE>
The initial investment advisory contract and any subsequent
investment advisory contracts and any amendments thereof, shall not be effective
unless ratified or approved by the Shareholders. The Trust shall enter such
contracts only with investment advisers registered as investment advisers under
the Investment Advisers Act of 1940, as amended.
7.2 All securities and cash of the Trust shall be held by one
or more custodians which shall be banks or trust companies each having capital
and unimpaired surplus of not less than two million dollars. The bank or trust
company shall act pursuant to one or more agreements in which it shall agree to
act as custodian and as agent for the Trust. The custodian agreements shall be
in a form satisfactory to the Trustees of the Trust and shall contain provisions
which comply with applicable law, including the 1940 Act.
7.3 The Trust may from time to time, in the discretion of its
Trustees, enter into one or more contracts with any person, firm or corporation
to act as underwriter for the Trust and to perform such other duties and render
such other services as the Trustees may in their discretion determine.
7.4 If otherwise allowed by law and applicable rules and
regulations, any contract of the character described in Articles 7.1, 7.2 or 7.3
may be entered into with any qualified party although one or more of the members
of the Trustees or officers of the Trust may be an officer, director, trustee,
shareholder or member of the other party to any of these contracts. None of the
contracts shall be invalidated or be void by reason of the existence of any of
these relationships, nor shall any person being in these relationships be liable
by reason of the relationship for any loss or expense of the Trust under or by
reason of any of the contracts or be accountable for any profit realized
directly or indirectly therefrom, if the contract entered into was approved by
the Shareholders of the Trust.
Any individual may be financially interested in or with or
otherwise affiliated with persons who are parties to any of these contracts.
This Article 7.4 shall not be deemed to protect any officer or
Trustee of the Trust against any liability to the Trust or to the holders of the
securities to which he would otherwise by subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of his duties to
the Trust.
<PAGE>
ARTICLE EIGHT
INVESTMENTS
8.1 The authority of the Trustees of the Trust, or its agents
or designees, to invest the funds of the Trust shall be subject tot he
limitations from time to time included by the Trust in its Registration
Statement on Form N-1A, including any amendment thereto filed with the
Commission under the Securities Act of 1933, as amended, and under the 1940 Act
and said limitations shall not be changed without the approval of Shareholders
holding the lesser of (i) sixty-seven per cent (67%) or more of the Shares
present at a meeting if the holders of more than fifty per cent (50%) of the
outstanding Shares of the Trust are present or represented by proxy, or (ii)
more than fifty per cent (50%) of the outstanding voting Shares of the Trust.
ARTICLE NINE
INTERESTED PERSONS
9.1 No officer or Trustee of the Trust or of the other party
to a contract as described in Article Seven shall deal for or on behalf of the
Trust with himself, as principal or agent, or with any corporation or other
organization in which he may have a financial interest, provide, however, that
this prohibition shall not:
(a) Prevent officers or Trustees of the Trust from
buying, holding or selling Shares of the Trust, or from being partners, officers
or directors of or otherwise having a financial interest in the other party to a
contract as described in Article Seven;
(b) Prevent the purchase or sale of securities or
other property, if such transaction is permitted by or is exempt or
exempted under applicable provisions of the 1940 Act; or
(c) Prevent the employment of legal counsel,
registrar, transfer agent, dividend disbursing agent, custodian or trustee who
is, or has a partner, shareholder, officer or director who is, an officer or
Trustee of the Trust or of any other party to a contract as described in Article
Seven if only customary fees are charged for the services to the Trust.
<PAGE>
ARTICLE TEN
NOTICES; WAIVERS OF NOTICE
10.1 Except as otherwise specifically provided by law, the
Declaration or these By-Laws, whenever under the provisions of law, the
Declaration or of these By-Laws notice is required to be given to any
Shareholder, Trustee or officer, it shall not be construed to mean personal
notice, but such notice may be given either by personal notice or by mail by
depositing the same with the United States Postal Service in a postpaid sealed
envelope, addressed to such Shareholder, officer or Trustee at such address as
appears on the books of the Trust, and such notice shall be deemed to be given
at the time when the same shall be thus sent or mailed.
10.2 When any notice whatever is required to be given by law,
by the Declaration or by these By-Laws, waiver thereof by the person or persons
entitled to said notice given before or after the time stated therein, in
writing, shall be deemed equivalent thereto. No notice of any meeting need be
given to any person who shall attend such meeting, such attendance constituting
a waiver of notice, except when a Shareholder attends a meeting solely for the
purpose of stating at the beginning of the meeting any objection to the
transaction of business, and so states his objection at the beginning of the
meeting.
ARTICLE ELEVEN
MISCELLANEOUS
11.1 Fiscal Year. The Trust shall be on a fiscal year
determined by the Trustees.
11.2 Financial Statements. The Trust shall prepare and
distribute to the Shareholders such financial statements and reports, as may
from time to time be required by law.
11.3 Appointment of Agents. The Chairman, President or any
Vice-President shall be authorized and empowered in the name and as the act and
deed of the Trust to name and appoint general and special agents,
representatives and attorneys to represent the Trust in the United States or in
any foreign country or countries and to name and appoint attorneys and proxies
to vote any Shares of stock in any other corporation at any time owned or held
of record by the Trust, and to prescribe, limit and define the powers and duties
of such agents, representatives, attorneys, and proxies and to make
substitution, revocation or cancellation in whole or in part of any power or
authority conferred on any such agent, representative, attorney or proxy. All
powers of attorney or other instruments under which such agents,
<PAGE>
representatives, attorneys, or proxies shall be so named and appointed shall be
signed and executed by the President or Vice President. Any substitution,
revocation or cancellation shall be signed in like manner, provided always that
any agent, representative, attorney or proxy when so authorized by the
instrument appointing him may substitute or delegate his powers in whole or in
part and revoke and cancel such substitutions or delegations. No special
authorization by the Trustees shall be necessary in connection with the
foregoing, but this By-Law shall be deemed to constitute full and complete
authority to the officers above designed to do all the acts and things as they
deem necessary or incident thereto or in connection therewith.
11.4 Auditor. An auditor for the Trust shall be selected
annually in accordance with the 1940 Act and applicable rules and regulations
thereunder.
ARTICLE TWELVE
AMENDMENTS
12.1 Except as otherwise required by law or by the
Declaration, the By-Laws of the Trust may be repealed, amended, adopted or
altered by majority vote of the Trustees of the Trust or by majority vote of the
Shareholders, provided that the Shareholders may provide by resolution that any
By-Law provision repealed, amended, adopted or altered by them may not be
repealed, amended, adopted or altered by the Trustee.
- --------------------------
The Bylaws, adopted and approved by the Trustees on January
26, 1991, have been revised to reflect amendments through January 22, 1992, as
set forth below:
Minutes dated January 22, 1992 - Article Four, Section 4.5
KIRKPATRICK & LOCKHART LLP
1800 Massachusetts Avenue, N.W.
2nd Floor
Washington, D.C. 20016-1800
Telephone (202) 778-9000
Facsimile (202) 778-9100
December 19, 1997
INVESCO Value Trust.
7800 E. Union Avenue
Denver, Colorado 80237
Dear Sir/Madam:
INVESCO Value Trust ("Trust") is a business trust organized under the
laws of the Commonwealth of Massachusetts on July 9, 1987, as INVESCO
Institutional Series Trust. You have requested our opinion regarding certain
matters in connection with the Trust's issuance of its shares of beneficial
interest (the "Shares").
We have, as counsel, participated in various business and other
proceedings relating to the Trust. We have examined copies, either certified or
otherwise proved to be genuine, of the Declaration of Trust and By-Laws of the
Trust, the minutes of meetings of its board of trustees and other documents
relating to its organization and operation, and we are generally familiar with
its business affairs. Based upon the foregoing, it is our opinion that the
Shares of the Trust may be legally and validly issued in accordance with the
Trust's Declaration of Trust and By-Laws and subject to compliance with the
Securities Act of 1933, the Investment Company Act of 1940 and applicable state
laws regulating the offer and sale of securities; and when so issued, the Shares
will be legally issued, fully paid and non-assessable.
The Trust is an entity of the type commonly known as a "Massachusetts
business trust." Under Massachusetts law, shareholders could, under certain
circumstances, be held personally liable for the obligations of the Trust. The
Declaration of Trust states that creditors of, contractors with, and claimants
against the Trust or any series shall look only to the assets of the Trust or
<PAGE>
INVESCO Value Trust
December 19, 1997
Page 2
the appropriate series for payment. It also requires that notice of such
disclaimer be given in each note, bond, contract, certificate, undertaking or
instrument made or issued by the officers or the trustees of the Trust on behalf
of the Trust. The Declaration of Trust further provides: (i) for indemnification
from the assets of the appropriate series for all loss and expense of any
shareholder held personally liable for the obligations of the Trust or any
series by virtue of ownership of shares of such series; and (ii) for the
appropriate series to assume the defense of any claim against the shareholder
for any act or obligation of such series. Thus, the risk of a shareholder's
incurring financial loss on account of shareholder liability is limited to
circumstances in which the Trust or series would be unable to meet its
obligations.
We hereby consent to the filing of this opinion in connection with
Post-Effective Amendment No. 22 to the Trust's Registration Statement on Form
N-1A (File No. 33-3429) to be filed with the Securities and Exchange Commission.
We also consent to the reference to our firm under the caption "Legal Counsel"
in the Statement of Additional Information filed as part of the Registration
Statement.
Very truly yours,
KIRKPATRICK & LOCKHART LLP
/s/ KIRKPATRICK & LOCKHART LLP
------------------------------
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the Prospectuses and
Statement of Additional Information constituting parts of this Post-Effective
Amendment No. 22 to the registration statement on Form N-1A (the "Registration
Statement") of our report dated October 8, 1997, relating to the financial
statements and financial highlights appearing in the August 31, 1997 Annual
Report to Shareholders of INVESCO Value Trust, which is also incorporated by
reference into the Registration Statement. We also consent to the references to
us under the healding "Financial Highlights" in the Prospectuses and under the
headings "Independent Accountants" and "Financial Statements" in the Statement
of Additional Information.
/s/ Price Waterhouse LLP
- --------------------------
Price Waterhouse LLP
Denver, Colorado
December, 19, 1997
EXHIBIT 16(a)
SCHEDULE FOR COMPUTATION OF PERFORMANCE DATA
Total return performance for the one-year, five-year, and ten-year periods ended
August 31, 1997, was 6.64%, 5.65%, and 7.54%, respectively. Total return
performance for each of the periods indicated was computed by finding the
average annual compounded rates of return that would equate the initial ammount
invested to the ending redeemable value, according to the following formula:
P(1 + T)exponent n = ERV
where: P = initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of initial payment
The total return performance figures shown above were determined by solving the
above formula for "T" for each time period and Portfolio indicated.
SEC REPORTING
TOTAL RETURN
Formula in release:
P = $1,000 initial payment T = average annual report return n = number of years
ERV = ending redeemable value
P(1+T)exponent n = ERV
The formula given on pages 64 and 65 of the Release is written to solve for
Ending Redeemable Value. However, the quantity to be reported is T (Average
Annual Total Return).
Because P, n, and ERV are known values, we have solved for T as follows:
T = nth root of (ERV/P) - 1
and have reported those amounts as the total return.
EXHIBIT 16(b)
SCHEDULE FOR COMPUTATION OF PERFORMANCE DATA
Total return performance for the one-year, five-year, and ten-year periods ended
August 31, 1997, was 27.01%, 15.38%, and 13.68%, respectively. Total return
performance for each of the periods indicated was computed by finding the
average annual compounded rates of return that would equate the initial ammount
invested to the ending redeemable value, according to the following formula:
P(1 + T)exponent n = ERV
where: P = initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of initial payment
The total return performance figures shown above were determined by solving the
above formula for "T" for each time period and Portfolio indicated.
SEC REPORTING
TOTAL RETURN
Formula in release:
P = $1,000 initial payment T = average annual report return n = number of years
ERV = ending redeemable value
P(1+T)exponent n = ERV
The formula given on pages 64 and 65 of the Release is written to solve for
Ending Redeemable Value. However, the quantity to be reported is T (Average
Annual Total Return).
Because P, n, and ERV are known values, we have solved for T as follows:
T = nth root of (ERV/P) - 1
and have reported those amounts as the total return.
EXHIBIT 16(c)
SCHEDULE FOR COMPUTATION OF PERFORMANCE DATA
Total return performance for the one-year, five-year, and ten-year periods ended
August 31, 1997, was 32.04%, 17.60%, and 12.74%, respectively. Total return
performance for each of the periods indicated was computed by finding the
average annual compounded rates of return that would equate the initial ammount
invested to the ending redeemable value, according to the following formula:
P(1 + T)exponent n = ERV
where: P = initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of initial payment
The total return performance figures shown above were determined by solving the
above formula for "T" for each time period and Portfolio indicated.
SEC REPORTING
TOTAL RETURN
Formula in release:
P = $1,000 initial payment T = average annual report return n = number of years
ERV = ending redeemable value
P(1+T)exponent n = ERV
The formula given on pages 64 and 65 of the Release is written to solve for
Ending Redeemable Value. However, the quantity to be reported is T (Average
Annual Total Return).
Because P, n, and ERV are known values, we have solved for T as follows:
T = nth root of (ERV/P) - 1
and have reported those amounts as the total return.
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<NAME> VALUE EQUITY FUND
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<NAME> INTERMEDIATE GOVERNMENT BOND FUND
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<PERIOD-END> AUG-31-1997
<INVESTMENTS-AT-COST> 44417906
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<NET-INVESTMENT-INCOME> 2385295
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<NET-CHANGE-FROM-OPS> 475212
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 2385295
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2132651
<NUMBER-OF-SHARES-REDEEMED> 1985434
<SHARES-REINVESTED> 178829
<NET-CHANGE-IN-ASSETS> 4492164
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (503430)
<OVERDISTRIB-NII-PRIOR> 0
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<GROSS-ADVISORY-FEES> 268593
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 615314
<AVERAGE-NET-ASSETS> 44686922
<PER-SHARE-NAV-BEGIN> 12.30
<PER-SHARE-NII> 0.66
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<TABLE> <S> <C>
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<NUMBER> 3
<NAME> TOTAL RETURN FUND
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</TABLE>
