Semiannual Report
February 28, 1998
INVESCO VALUE FUNDS
You should know what INVESCO knows.
INVESCO FUNDS
<PAGE>
Market Overview March 1998
Like a great prize fighter, it appears that the U.S. economy has taken Asia's
best punch and continues to fight. At the beginning of the Asian financial
crisis, in the summer of 1997, investment professionals postulated that Asian
currency problems were "isolated," and would have little effect on the U.S.
economy. Then, as the contagion spread, market pundits theorized that the crisis
would derail economic growth in the U.S. and possibly devastate most of the
world's financial markets -- wrong again. As with most financial crises,
speculation on the length and severity of the situation varies from extreme
pessimism to extreme optimism, with the truth usually between the two.
Over the last six months, this uncertainty increased volatility in the equity
markets -- producing both the first market correction in more than seven years
and record highs for most indexes. However, as fears of deflation swept through
the economy, fixed-income markets experienced a significant rally, with
high-quality obligations realizing the strongest returns. With so much
uncertainty regarding the direction of the U.S. economy, it's important to
examine the known facts:
o The U.S. economy is still the dominant economy in the world. GDP (Gross
Domestic Product) grew 3.8% last year -- the fastest rate since 1988.
o U.S. exports to the Asian/Pacific Rim region are relatively minimal,
currently representing less than 15% of our total exports.
o Inflation remains subdued, as both consumer and producer prices remain
stable.
o Consumer confidence is at its highest level in more than 27 years.
o Unemployment is at historically low levels, and real wages are starting
to increase.
o The chronic U.S. budget deficit might become a surplus in the next few
years.
It appears that the domestic economy is still poised for growth with benign
inflation. Although the Asian financial crisis will influence the profitability
of certain industries, it will probably have only a minor effect on the U.S.
expansion, as consumer demand remains strong here and in Europe. In fact, the
crisis may have been a positive for the U.S, as it applied the brakes to an
exuberant economy before it had the chance to overheat. Plus, the crisis may
create necessary reforms in Asian economies which could allow for greater global
competition. Nonetheless, 1998 may be a more selective stock market with greater
volatility compared to the last three years. For fixed-income investors,
deflationary pressures produced by the Asian crisis should keep both consumer
and producer prices in check as cheaper foreign goods flood the U.S. markets.
This may keep the Federal Reserve Board from changing the interest rate
environment until the crisis has washed through the U.S. economy. The one
possible inflationary pressure remains increasing real wages, given low
unemployment rates. Nevertheless, the overall outlook for the fixed-income
markets continues to be positive.
<PAGE>
INVESCO Value Funds
The line graphs below illustrate the value of a $10,000 investment in each
of the INVESCO Value Funds, plus reinvested dividends and capital gain
distributions, for the 10-year period ended 2/28/98. The charts and other total
return figures cited reflect the funds' operating expenses, but the indexes do
not have expenses, which would, of course, have lowered their performance.(2)
Intermediate Government Bond Fund
Average Annual Total Return
as of 2/28/98 (2)
---------------------------------
1 Year 6.89%
---------------------------------
5 Years 5.53%
---------------------------------
10 Years 7.32%
---------------------------------
Graph:
This line graph compares the value of a $10,000 investment in INVESCO
Intermediate Government Bond Fund to the value of a $10,000 investment in the
Lehman Government/Corporate Bond Intermediate Index, assuming in each case
reinvestment of all dividends and capital gain distributions, for the ten
year period ended 2/28/98.
Intermediate Government Bond Fund
For the six-month period ended 2/28/98, INVESCO Intermediate Government Bond
Fund had a total return of 3.74%, compared to a total return of 4.56% for the
Lehman Intermediate Government Bond Index. (Of course, past performance is not a
guarantee of future results.)(1),(2)
The fund targets a very specific maturity segment of the fixed-income market
- -- bonds maturing within three to five years. Because of this narrow focus, the
fund may overperform or underperform over short market cycles.
During the last six months, we extended the duration of the fund as we have
become less cautious regarding the interest rate environment. (Duration is the
weighted average term-to-maturity of a security's cash flows, generally used to
measure the price volatility of a bond.) In our view, both the Asian financial
crisis and the potential budget surplus bode well for interest rates and the
fixed-income market.
Within this environment of decreasing interest rates, we have maintained our
standard exposure to Treasuries and mortgage-backed securities, making only
minimal adjustments between these obligations during the last six months. We
will continue to employ our value-oriented bond management style to evaluate the
return possibilities for these two types of obligations, and modify portfolio
allocations accordingly. One area that is looking more attractive is
intermediate-term corporate bonds. As spreads widen between these securities and
Treasuries, we may selectively add these obligations to the portfolio.
Fund Management
Intermediate Government Bond Fund is managed by James O. Baker. Before
joining INVESCO, Jim was associated with Willis Investment Counsel, Morgan
Keegan, and Drexel Burnham Lambert. A Chartered Financial Analyst, he holds a BA
from Mercer University.
Ralph H. Jenkins, Jr., assists in managing the fund. He began his investment
career in 1969 and is both a Chartered Financial Analyst and Chartered
Investment Counselor. He earned his MA at the University of Alabama and a BBC
from Auburn University.
<PAGE>
Total Return Fund
Average Annual Total Return
as of 2/28/98 (2)
---------------------------------
1 Year 25.43%
---------------------------------
5 Years 16.43%
---------------------------------
10 Years 14.11%
---------------------------------
Total Return Fund
For the six-month period ended 2/28/98, INVESCO Total Return Fund had a total
return of 12.50%, compared to a total return of 17.62% for the S&P 500, and
6.09% for the Lehman Government/Corporate Bond Index. The fund outperformed its
peer group for the same period, besting the average return of 9.93% as measured
by the Lipper Flexible Portfolio objective. (Lipper Analytical Services, Inc.,
is an independent mutual fund analyst, which tracks total return unadjusted for
commissions. Of course, past performance is not a guarantee of future
results.)(1),(2)
The fund seeks to add value in three ways: through asset allocation, stock
selection, and bond strategy. Asset allocation decisions are based on the
difference between returns on bonds and stocks. If this relationship is
out-of-line with the historical spread of three percent, then the fund's asset
mix is adjusted; 60% stocks and 40% bonds is considered a neutral position.
Historically, our value-based, conservative investment philosophy has helped
create a higher-quality, lower-risk portfolio with minimal portfolio turnover.
Graph:
This line graph compares the value of a $10,000 investment in INVESCO Total
Return Fund to the value of a $10,000 investment in the Lehman
Government/Corporate Bond Intermediate and S&P 500 Indexes, assuming in each
case reinvestment of all dividends and capital gain distributions, for the
ten year period ended 2/28/98.
Our analysis continues to favor stocks relative to other investments. With
the spread on the 30-year Treasury bond yield and INVESCO's implied rate of
return for equities being greater than 300 basis points, equity investors are
presently being rewarded with premium returns. As long as inflation remains in
check and interest rates are low, we consider our current equity valuations
appropriate, and we have adjusted the portfolio accordingly. As of 2/28/98, the
fund's approximate allocation was 26% bonds, 67% equities, and 7% in cash/cash
equivalents.
Individual stock selection continues to drive the equity performance of the
fund. We employ a value-oriented process to identify securities that may be
mispriced by the market. Many times these stocks will exhibit lower
price-to-earnings ratios and higher dividend yields compared to the broad equity
market. Two stocks that we presently favor are Merck & Co. and Dun & Bradstreet.
Merck & Co. has produced strong returns for the fund over the last six months,
as large-cap pharmaceuticals continued to benefit from an improved regulatory
environment and strong product pipelines. Dun & Bradstreet recently completed a
restructuring of its operations which should increase its future profitability.
The fund's bond selection process seeks to identify fixed-income securities
undervalued by the broad market. The analysis of historical relationships
provides the framework within which we make decisions concerning maturity,
market sector, and individual issue selection. Presently, we favor
mortgage-backed securities and continue to underweight corporate obligations.
<PAGE>
Fund Management
Total Return Fund is managed by Edward C. Mitchell, chairman of INVESCO
Capital Management. He earned his MBA at the University of Colorado and a BA
from the University of Virginia. Ed began his investment career in 1969 and is a
Chartered Financial Analyst.
He is assisted by David S. Griffin, who began his investment career in 1982.
A Chartered Financial Analyst, David holds an MBA from the College of William &
Mary, and a BA from Ohio Wesleyan University.
Graph:
This line graph compares the value of a $10,000 investment in INVESCO Value
Equity Fund to the value of a $10,000 investment in the S&P 500 Index,
assuming in each case reinvestment of all dividends and capital gain
distributions, for the ten year period ended 2/28/98.
Value Equity Fund
For the six-month period ended 2/28/98, INVESCO Value Equity Fund achieved
a total return of 15.12%, compared to a total return of 17.62% for the S&P 500.
However, the fund outperformed its peer group for the same period, beating the
average return of 13.21% for funds in the Lipper Growth and Income objective.
(Lipper Analytical Services, Inc., is an independent mutual fund analyst, which
tracks total return unadjusted for commissions. Of course, past performance is
not a guarantee of future results.)(1)(2)
This fund is designed to have a lower risk profile compared to the broad
equity market. Because of our value-oriented investment style, there will
probably be short periods when we underperform the market. However, we're
confident that our strategy will produce strong relative performance over a full
market cycle. Over the last six months we have made minor adjustments in the
portfolio. Our analysis continues to suggest that many segments of the market
may be overvalued. With this in mind, we kept the portfolio structured
conservatively, remaining broadly diversified.
Value Equity Fund
Average Annual Total Return
as of 2/28/98 (2)
---------------------------------
1 Year 30.31%
---------------------------------
5 Years 19.21%
---------------------------------
10 Years 15.40%
---------------------------------
Although individual stock selection rather than sector targeting drives the
performance of the fund, we should note that large-cap pharmaceuticals have
provided strong returns for the fund over the last six months. These companies
continue to benefit from an improved regulatory environment and new product
developments. In addition, these companies' profits are somewhat protected by
patents, with little or no exposure to Asian economies.
In the fund's annual report, we mentioned that one of our favorite
investments is Lowe's Cos, a home improvement retail firm with headquarters in
the Southeast U.S. During the last six months, this stock has been a home run
for the fund as it has almost doubled in price -- illustrating one of our basic
investment philosophies: buy quality companies cheaply. Another name that we
continue to favor is Electronic Data Systems (EDS). EDS is similar to Lowe's in
that it has been out-of-favor with the market for some time, and has a strong
management team.
<PAGE>
This firm should benefit from the "Year 2000" computer problem, which may
increase their future profitability.
Looking forward, after three-plus years of phenomenal appreciation, many
large-capitalization stocks are presently selling at extreme valuation levels.
We feel that this segment of the equity market is overvalued, and we will skew
the portfolio's holdings towards better-valued mid-caps. Within this uncertain
investment environment, we remain cautious in our investment approach, keeping
the fund broadly diversified to help mitigate market volatility.
Fund Management
Value Equity Fund is managed by Michael C. Harhai. Mike began his investment
career in 1972. Before joining INVESCO, he served as a portfolio manager with
Citizens & Southern Investment Advisors and later as head of the equity/balanced
group with Sovran Capital Management. He holds an MBA from the University of
Central Florida and a BA from the University of South Florida.
He is a Chartered Financial Analyst, as is Terrence Irrgang, who assists in
managing the fund. Terry is a 17-year veteran of the investment business, and
holds an MBA from Temple University, as well as a BA from Gettysburg College.
(1)The S&P 500 is an unmanaged index of common stocks considered representative
of the broad U.S. equity market. The Lehman Government/Corporate Bond Index and
Lehman Intermediate Government Bond Index are unmanaged indexes of securities
considered to be representative of the overall domestic fixed-income and
intermediate-term government bond markets, respectively.
(2)Total return assumes reinvestment of dividends and capital gain distributions
for the periods indicated. Past performance is not a guarantee of future
results. Investment return and principal value will fluctuate so that, when
redeemed, an investor's shares may be worth more or less than when purchased.
<PAGE>
INVESCO Value Trust
Ten Largest Common Stock Holdings
February 28, 1998
Description Value
TOTAL RETURN Fund
Compaq Computer $32,062,500
Morgan Stanley Dean Witter Discovery & Co 31,620,703
British Telecommunications PLC
Sponsored ADR Representing 10 Ord Shrs 30,300,000
Ford Motor 28,281,250
Schering-Plough Corp 26,621,875
Electronic Data Systems 26,287,500
First of America Bank 26,219,531
DTE Energy 25,725,000
Unicom Corp 25,650,000
Dun & Bradstreet 25,125,000
VALUE EQUITY Fund
Ford Motor $10,464,062
Electronic Data Systems 9,638,750
Liz Claiborne 9,300,000
Textron Inc 8,992,500
Lowe's Cos 8,765,625
Fannie Mae 8,710,406
Torchmark Corp 8,614,063
Xerox Corp 8,425,313
Whirlpool Corp 8,351,563
American Home Products 8,156,250
Composition of holdings is subject to change.
<PAGE>
INVESCO Value Trust
Statement of Investment Securities
February 28, 1998
UNAUDITED
Shares or
Principal
Description Amount Value
- -----------------------------------------------------------------------------
INTERMEDIATE GOVERNMENT BOND Fund
FIXED INCOME SECURITIES 87.45%
US Government Obligations 69.10%
US Treasury Bonds
9.250%, 2/15/2016 $ 500,000 $ 679,219
7.625%, 2/15/2025 $1,000,000 1,216,875
US Treasury Notes
8.750%, 8/15/2000 $2,000,000 2,144,376
8.500%, 2/15/2000 $1,100,000 1,158,782
8.500%, 11/15/2000 $3,500,000 3,753,750
8.000%, 8/15/1999 $2,000,000 2,067,500
7.500%, 11/15/2001 $1,400,000 1,487,938
7.500%, 5/15/2002 $2,200,000 2,354,000
6.375%, 7/15/1999 $2,000,000 2,021,876
6.375%, 8/15/2002 $2,500,000 2,575,000
6.250%, 2/15/2003 $1,000,000 1,026,875
6.000%, 10/15/1999 $1,000,000 1,006,563
5.750%, 8/15/2003 $1,000,000 1,005,313
-----------
TOTAL US GOVERNMENT OBLIGATIONS
(Cost $22,074,329) 22,498,067
-----------
U S Government Agency Obligations 18.35%
Fannie Mae, Gtd Mortgage
Pass-Through Certificates
6.000%, 5/1/2009 $861,915 854,140
Freddie Mac, Gold
Participation Certificates
8.000%, 10/1/2010 $842,245 867,546
6.500%, 7/1/2001 $820,485 826,237
Government National Mortgage
Association I, Pass-Through
Certificates
7.500%, 3/15/2026 $1,097,624 1,126,579
7.000%, 10/15/2008 $547,205 559,780
6.500%, 10/15/2008 $592,713 597,123
6.000%, 11/15/2008 $634,862 630,817
Federal Farm Credit Bank
Medium-Term Notes
6.320%, 10/12/2010 $500,000 513,905
------------
TOTAL US GOVERNMENT
AGENCY OBLIGATIONS
(Cost $5,929,755) 5,976,127
-----------
TOTAL FIXED INCOME SECURITIES
(Cost $28,004,084) 28,474,194
-----------
<PAGE>
SHORT-TERM INVESTMENTS 12.55%
U S Government Obligations 2.61%
US Treasury Notes, 5.125%, 3/31/1998
(Cost $849,286) $850,000 $849,735
-----------
U S Government Agency Obligations 6.14%
Federal Farm Credit Bank
6.050%, 5/1/1998
(Cost $1,999,722) $2,000,000 1,999,722
-----------
Commercial Paper 0.92%
FINANCIAL 0.92%
Greenwich Funding, 5.510%, 3/12/1998
(Cost $299,494) $300,000 299,494
-----------
Repurchase Agreements 2.88%
Repurchase Agreement with
State Street Bank & Trust Co
dated 2/27/1998 due 3/2/1998
at 5.580%, repurchased at
$938,436 (Collaterized by
US Treasury Bonds due 2/15/2020
at 8.500%, value $966,456)
(Cost $938,000) $938,000 938,000
-----------
TOTAL SHORT-TERM INVESTMENTS
(Cost $4,086,502) 4,086,951
-----------
TOTAL INVESTMENT SECURITIES AT VALUE 100.00%
(Cost $32,090,586)
(Cost for Income Tax Purposes
$32,173,984) $ 32,561,145
==============
TOTAL RETURN Fund
COMMON STOCKS 67.08%
AEROSPACE & DEFENSE 4.00%
Boeing Co 450,000 $ 24,412,500
Lockheed Martin 175,000 20,420,312
Raytheon Co Class B 400,000 23,525,000
Rockwell International 400,000 24,200,000
-----------
92,557,812
-----------
AUTO PARTS 1.04%
Genuine Parts 650,000 24,050,000
-----------
AUTOMOBILES 1.22%
Ford Motor 500,000 28,281,250
-----------
BANKS 4.15%
First Chicago NBD 300,000 24,656,250
First of America Bank 337,500 26,219,531
First Union 300,000 15,806,250
NationsBank Corp 250,000 17,125,000
Wachovia Corp 154,000 12,243,000
-----------
96,050,031
-----------
BEVERAGES 0.51%
Anheuser-Busch Cos 250,000 11,718,750
-----------
<PAGE>
BUILDING MATERIALS 1.85%
Hanson PLC Sponsored ADR
Representing 5 Ord Shrs 900,000 $22,781,250
Sherwin-Williams Co 600,000 20,062,500
-----------
42,843,750
-----------
CHEMICALS 1.73%
Dow Chemical 225,000 20,587,500
Great Lakes Chemical 400,000 19,450,000
-----------
40,037,500
-----------
COMPUTER RELATED 5.14%
Compaq Computer 1,000,000 32,062,500
Computer Associates International 375,000 17,671,875
Electronic Data Systems 600,000 26,287,500
Hewlett-Packard Co 300,000 20,100,000
International Business Machines 220,000 22,976,250
-----------
119,098,125
-----------
CONGLOMERATES 1.02%
National Service Industries 265,000 14,690,937
Textron Inc 120,000 8,992,500
-----------
23,683,437
-----------
DISTRIBUTION 1.03%
Supervalu Inc 500,000 23,812,500
-----------
ELECTRIC UTILITIES 4.67%
DTE Energy 700,000 25,725,000
Edison International 800,000 22,100,000
Entergy Corp 500,000 14,468,750
Texas Utilities 500,000 20,218,750
Unicom Corp 800,000 25,650,000
-----------
108,162,500
-----------
ELECTRICAL EQUIPMENT 1.01%
General Electric 300,000 23,325,000
-----------
FOODS 2.19%
Archer-Daniels-Midland Co 787,500 17,669,531
Heinz (H J) Co 200,000 11,262,500
Unilever NV New York Shrs 340,000 21,866,250
-----------
50,798,281
-----------
HARDWARE & TOOLS 0.73%
Snap-On Inc 400,000 17,000,000
-----------
HEALTH CARE DRUGS --
PHARMACEUTICALS 5.28%
Abbott Laboratories 175,000 13,092,188
American Home Products 200,000 18,750,000
Bristol-Myers Squibb 250,000 25,046,875
Lilly (Eli) & Co 300,000 19,743,750
Merck & Co 150,000 19,134,375
Schering-Plough Corp 350,000 26,621,875
-----------
122,389,063
-----------
<PAGE>
HEALTH CARE RELATED 0.82%
Columbia/HCA Healthcare 700,000 18,987,500
-----------
HOUSEHOLD FURNITURE & APPLIANCES 0.72%
Whirlpool Corp 250,000 16,703,125
-----------
INSURANCE 4.25%
American General 300,000 $ 17,437,500
Lincoln National 200,000 16,750,000
Loews Corp 225,000 22,570,312
Ohio Casualty 500,000 23,375,000
SAFECO Corp 350,000 18,353,125
-----------
98,485,937
-----------
INSURANCE BROKERS 0.82%
Marsh & McLennan 220,000 19,071,250
-----------
INVESTMENT BANK/BROKER FIRM 1.37%
Morgan Stanley Dean Witter
Discovery & Co 453,750 31,620,703
-----------
IRON & STEEL 1.00%
Nucor Corp 450,000 23,175,000
-----------
MANUFACTURING 0.95%
Minnesota Mining & Manufacturing 130,000 11,090,625
York International 250,000 10,984,375
-----------
22,075,000
-----------
METALS MINING 0.82%
Phelps Dodge 300,000 19,050,000
-----------
OFFICE EQUIPMENT & SUPPLIES 1.38%
IKON Office Solutions 300,000 9,806,250
Xerox Corp 250,000 22,171,875
-----------
31,978,125
-----------
OIL & GAS RELATED 3.99%
Amoco Corp 200,000 17,000,000
Exxon Corp 300,000 19,162,500
Norsk Hydro A/S Sponsored ADR
Representing Ord Shrs 500,000 22,125,000
Repsol SA Sponsored ADR
Representing Ord Shrs 450,000 20,025,000
Royal Dutch Petroleum New York
Registry 1.25 Gldr Shrs 260,000 14,121,250
-----------
92,433,750
-----------
PAPER & FOREST PRODUCTS 0.44%
Westvaco Corp 310,000 10,075,000
-----------
<PAGE>
POLLUTION CONTROL 1.33%
Browning-Ferris Industries 400,000 13,325,000
Waste Management 700,000 17,500,000
-----------
30,825,000
-----------
PUBLISHING 0.78%
Gannett Co 280,000 18,077,500
-----------
RAILROADS 0.75%
Illinois Central 450,000 17,465,625
-----------
RETAIL 2.96
Dillard's Inc Class A 500,000 17,812,500
K mart Corp* 500,000 6,687,500
Penney (J C) Co 275,000 19,439,062
Rite Aid 350,000 11,331,250
Tandy Corp 300,000 13,350,000
-----------
68,620,312
-----------
SERVICES 1.09%
Dun & Bradstreet 750,000 $ 25,125,000
-----------
SPECIALTY PRINTING 0.74%
Deluxe Corp 500,000 17,031,250
-----------
TELECOMMUNICATIONS --
LONG DISTANCE 1.31%
British Telecommunications PLC
Sponsored ADR Representing 10
Ord Shrs 300,000 30,300,000
-----------
TELEPHONE 2.94%
Bell Atlantic 150,000 13,462,500
Southern New England
Telecommunications 300,000 18,937,500
Telefonica de Espana SA Sponsored
ADR Representing 3 Shrs 150,000 15,525,000
Telefonos de Mexico SA de CV
Sponsored ADR Representing
Ord Series L Shrs 400,000 20,275,000
-----------
68,200,000
-----------
TEXTILE -- APPAREL
MANUFACTURING 1.41%
Liz Claiborne 350,000 17,500,000
VF Corp 320,000 15,260,000
-----------
32,760,000
-----------
TEXTILE -- HOME FURNISHINGS 0.21%
Shaw Industries 400,000 4,750,000
-----------
TOBACCO 1.43%
Fortune Brands 250,000 9,921,875
Gallaher Group PLC Sponsored
ADR Representing 4 Ord Shrs 250,000 5,781,250
Philip Morris 400,000 17,375,000
-----------
33,078,125
-----------
<PAGE>
TOTAL COMMON STOCKS
(Cost $988,296,436) 1,553,696,201
-------------
FIXED INCOME SECURITIES 25.99%
U S Government Obligations 18.25%
US Treasury Bonds
11.250%, 2/15/2015 $12,950,000 20,307,219
9.375%, 2/15/2006 $18,750,000 23,126,962
9.250%, 2/15/2016 $20,800,000 28,255,510
8.125%, 8/15/2019 $20,800,000 26,084,510
7.625%, 2/15/2025 $30,000,000 36,506,250
7.250%, 8/15/2022 $20,800,000 24,089,000
US Treasury Notes
8.750%, 8/15/2000 $25,000,000 26,804,699
8.000%, 5/15/2001 $20,500,000 21,928,603
7.875%, 11/15/1999 $18,500,000 19,182,187
6.500%, 8/15/2005 $29,300,000 30,719,232
6.375%, 7/15/1999 $26,400,000 26,688,762
6.375%, 1/15/2000 $26,400,000 26,763,000
6.375%, 8/15/2002 $23,750,000 24,462,500
6.250%, 2/15/2003 $23,300,000 $ 23,926,187
6.125%, 8/15/2007 $26,000,000 26,804,387
5.750%, 8/15/2003 $18,300,000 18,397,227
US Treasury Security Stripped
Interest Payment, Generic Tint
Payment, Zero Coupon, 8/15/2003 $25,250,000 18,608,745
TOTAL US GOVERNMENT
OBLIGATIONS
(Cost $407,616,923) 422,654,980
-----------
U S Government Agency Obligations 4.08%
Fannie Mae
Gtd Mortgage Pass-Through
Certificates
8.500%, 3/1/2010 $5,907,105 6,135,592
8.000%, 7/1/2024 $7,710,354 7,997,410
7.500%, 8/1/2007 $1,440,225 1,482,481
6.500%, 5/1/2026 $7,288,834 7,232,199
6.000%, 5/1/2009 $8,634,472 8,556,589
Medium-Term Notes
6.060%, 10/8/2002 $20,000,000 20,183,719
Freddie Mac, Gold
Participation Certificates
8.000%, 10/1/2010 $3,930,478 4,048,550
8.000%, 5/1/2024 $6,288,678 6,521,547
7.500%, 12/1/2026 $9,346,952 9,595,953
6.500%, 7/1/2001 $5,743,394 5,783,655
Government National Mortgage
Association I, Pass-Through
Certificates
7.500%, 3/15/2026 $5,122,246 5,257,371
7.000%, 10/15/2008 $ 913,088 934,071
7.000%, 12/15/2022 $ 212,984 215,983
7.000%, 12/15/2025 $8,675,380 8,777,748
6.500%, 10/15/2008 $ 889,070 895,684
6.000%, 11/15/2008 $ 952,292 946,226
TOTAL US GOVERNMENT
AGENCY OBLIGATIONS
(Cost $92,937,791) 94,564,778
----------
<PAGE>
Corporate Bonds 3.44%
AEROSPACE & DEFENSE 0.07%
Rockwell International, Notes
6.625%, 6/1/2005 $ 1,500,000 1,542,133
-----------
AUTOMOBILES 0.29%
Ford Motor, Notes
7.500%, 11/15/1999 $ 750,000 767,410
General Motors Acceptance, Sr
Unsub Notes, 6.125%, 1/22/2008 $ 6,000,000 5,865,426
-----------
6,632,836
-----------
BANKS 0.64%
BankAmerica Corp, Sub Notes
6.875%, 6/1/2003 $ 4,000,000 4,111,711
National City, Sub Notes
7.200%, 5/15/2005 $ 2,000,000 2,115,198
NationsBank Corp, Sr Notes
5.375%, 4/15/2000 $ 1,250,000 $ 1,234,885
Wachovia Bank, Medium-Term
Notes, 7.000%, 10/17/2008 $ 7,000,000 7,328,125
-----------
14,789,919
-----------
COMMUNICATIONS --
EQUIPMENT & MANUFACTURING 0.22%
Motorola Inc, Sr Notes
6.500%, 3/1/2008 $ 5,000,000 5,119,765
-----------
ELECTRIC UTILITIES 0.20%
Duke Power
1st & Ref Mortgage
7.500%, 4/1/1999 $ 1,000,000 1,015,667
Medium-Term Notes
6.125%, 7/22/2003 $ 2,900,000 2,908,674
Union Electric, 1st Mortgage
6.750%, 10/15/1999 $ 750,000 759,454
-----------
4,683,795
-----------
FINANCIAL 0.39%
Associates Corp of North America
Notes, 6.375%, 10/15/2002 $ 5,000,000 5,042,660
Commercial Credit, Notes
6.375%, 9/15/2002 $ 4,000,000 4,026,240
-----------
9,068,900
-----------
FOODS 0.36%
CPC International, Medium-Term
Notes, Series D
6.875%, 10/15/2003 $ 3,000,000 3,127,386
Campbell Soup, Notes
6.900%, 10/15/2006 $ 5,000,000 5,277,940
-----------
8,405,326
-----------
<PAGE>
INSURANCE 0.23%
CNA Financial, Notes
6.450%, 1/15/2008 $ 5,300,000 5,260,392
-----------
OIL & GAS RELATED 0.22%
Enron Corp, Notes
6.625%, 11/15/2005 $ 5,000,000 5,041,834
-----------
PUBLISHING 0.15%
Gannett Co, Notes
5.850%, 5/1/2000 $ 3,500,000 3,493,727
-----------
RETAIL 0.41%
May Department Stores, Deb
6.875%, 11/1/2005 $ 4,000,000 4,140,096
Wal-Mart Stores, Notes
8.625%, 4/1/2001 $ 5,000,000 5,358,395
-----------
9,498,491
-----------
TELECOMMUNICATIONS --
LONG DISTANCE 0.09%
BellSouth Telecommunications
Notes, 6.500%, 6/15/2005 $ 2,000,000 2,041,422
-----------
TOYS 0.17%
Mattel Inc, Notes
6.750%, 5/15/2000 $ 4,000,000 4,050,184
-----------
TOTAL CORPORATE BONDS
(Cost $78,883,110) $ 79,628,724
-----------
Foreign Corporate Obligations 0.22%
BANKS 0.22%
ABN Amro Bank NV, Global
Sub Notes, 6.625%, 10/31/2001
(Cost $5,000,950) $ 5,000,000 5,062,589
-----------
TOTAL FIXED INCOME SECURITIES
(Cost $584,438,774) 601,911,071
-----------
SHORT-TERM INVESTMENTS 6.93%
U S Government Obligations 2.29%
US Treasury Notes
8.250%, 7/15/1998 $ 26,300,000 26,571,231
5.500%, 2/28/1999 $ 26,400,000 26,400,000
-----------
TOTAL US GOVERNMENT OBLIGATIONS
(Cost $52,728,355) 52,971,231
-----------
Corporate Bonds 0.13%
BEVERAGES 0.07%
PepsiCo Inc, Deb, 7.750%,
10/1/1998 $ 1,500,000 1,516,336
-----------
CONSUMER FINANCE 0.03%
Beneficial Corp, Medium-Term Notes
5.350%, 10/8/1998 $ 800,000 796,741
-----------
<PAGE>
RETAIL 0.03%
Wal-Mart Stores, Notes
5.500%, 3/1/1998 $ 750,000 750,000
----------
TOTAL CORPORATE BONDS
(Cost $3,055,517) 3,063,077
----------
Commercial Paper 1.27%
FINANCIAL 1.27%
Greenwich Funding
5.510%, 3/12/1998
(Cost $29,414,265) $ 29,464,000 29,414,265
-----------
Repurchase Agreements 3.24%
Repurchase Agreement with
State Street Bank & Trust Co
dated 2/27/1998 due 3/2/1998
at 5.580%, repurchased at
$75,023,870 (Collateralized by
US Treasury Bonds due 2/15/2020
at 8.500%, value $76,774,509)
(Cost $74,989,000) $ 74,989,000 74,989,000
-----------
TOTAL SHORT-TERM INVESTMENTS
(Cost $160,187,137) 160,437,573
-----------
TOTAL INVESTMENT
SECURITIES AT VALUE 100.00%
(Cost $1,732,922,347)
(Cost for Income Tax Purposes
$1,732,935,672) $ 2,316,044,845
===============
VALUE EQUITY Fund
COMMON STOCKS 93.80%
AEROSPACE & DEFENSE 3.05%
Lockheed Martin 53,260 $ 6,214,776
Raytheon Co Class B 120,000 7,057,500
-----------
13,272,276
-----------
AUTO PARTS 1.21%
Genuine Parts 142,500 5,272,500
-----------
AUTOMOBILES 2.40%
Ford Motor 185,000 10,464,062
-----------
BANKS 5.08%
First Chicago NBD 80,000 6,575,000
First Union 60,000 3,161,250
NationsBank Corp 111,364 7,628,434
Wachovia Corp 60,000 4,770,000
-----------
22,134,684
-----------
BEVERAGES 1.26%
PepsiCo Inc 150,000 5,484,375
-----------
<PAGE>
BUILDING MATERIALS 4.31%
Hanson PLC Sponsored ADR
Representing 5 Ord Shrs 130,000 3,290,625
Lowe's Cos 150,000 8,765,625
Sherwin-Williams Co 200,000 6,687,500
-----------
18,743,750
-----------
CHEMICALS 0.64%
Dow Chemical 30,600 2,799,900
-----------
COMPUTER RELATED 10.03%
Adaptec Inc* 168,200 4,446,787
Compaq Computer 229,500 7,358,344
Computer Associates International 161,625 7,616,578
Electronic Data Systems 220,000 9,638,750
Hewlett-Packard Co 120,000 8,040,000
International Business Machines 62,700 6,548,231
-----------
43,648,690
-----------
CONGLOMERATES 2.07%
Textron Inc 120,000 8,992,500
-----------
DISTRIBUTION 1.31%
Supervalu Inc 120,000 5,715,000
-----------
ELECTRIC UTILITIES 4.56%
DTE Energy 137,000 5,034,750
Entergy Corp 225,000 6,510,937
Southern Co 135,000 3,332,813
Unicom Corp 155,000 4,969,688
-----------
19,848,188
-----------
ELECTRICAL EQUIPMENT 1.33%
General Electric 74,200 5,769,050
-----------
ELECTRONICS -- SEMICONDUCTOR 1.20%
Texas Instruments 90,000 5,208,750
-----------
FINANCIAL 2.00%
Fannie Mae 136,500 $ 8,710,406
-----------
FOODS 1.00%
Archer-Daniels-Midland Co 194,250 4,358,484
-----------
FOOTWEAR 1.11%
NIKE Inc Class B 110,000 4,826,250
-----------
HEALTH CARE DRUGS --
PHARMACEUTICALS 9.64%
Abbott Laboratories 47,000 3,516,187
Allergan Inc 130,000 4,550,000
American Home Products 87,000 8,156,250
Bristol-Myers Squibb 60,000 6,011,250
Merck & Co 58,700 7,487,919
Schering-Plough Corp 84,000 6,389,250
Warner-Lambert Co 40,000 5,850,000
-----------
41,960,856
-----------
<PAGE>
HEALTH CARE RELATED 2.48%
Biomet Inc 242,000 7,214,625
Columbia/HCA Healthcare 132,000 3,580,500
-----------
10,795,125
-----------
HOUSEHOLD FURNITURE &
APPLIANCES 1.92%
Whirlpool Corp 125,000 8,351,563
-----------
INSURANCE 9.65%
American General 100,000 5,812,500
American International Group 52,750 6,339,891
General Re 26,500 5,644,500
Jefferson-Pilot Corp 57,575 4,829,103
Loews Corp 50,000 5,015,625
SAFECO Corp 110,000 5,768,125
Torchmark Corp 185,000 8,614,063
-----------
42,023,807
-----------
INSURANCE BROKERS 1.19%
Marsh & McLennan 60,000 5,201,250
-----------
IRON & STEEL 0.81%
Nucor Corp 68,200 3,512,300
MACHINERY 1.77%
Dover Corp 200,000 7,725,000
----------
MANUFACTURING 0.97%
York International 96,000 4,218,000
-----------
METALS MINING 0.83%
Phelps Dodge 57,200 3,632,200
-----------
OFFICE EQUIPMENT & SUPPLIES 3.36%
IKON Office Solutions 190,000 6,210,625
Xerox Corp 95,000 8,425,313
-----------
14,635,938
-----------
OIL & GAS RELATED 5.77%
Amoco Corp 55,000 4,675,000
Exxon Corp 70,550 4,506,381
Norsk Hydro A/S Sponsored ADR
Representing Ord Shrs 60,000 2,655,000
Repsol SA Sponsored ADR
Representing Ord Shrs 105,400 4,690,300
Royal Dutch Petroleum New York
Registry 1.25 Gldr Shrs 88,304 4,796,011
YPF SA Sponsored ADR
Representing Class D Shrs 120,000 3,795,000
-----------
25,117,692
-----------
PAPER & FOREST PRODUCTS 1.60%
Kimberly-Clark Corp 125,000 6,960,937
-----------
<PAGE>
POLLUTION CONTROL 0.86%
Waste Management 150,000 3,750,000
-----------
RAILROADS 1.66%
Illinois Central 186,000 7,219,125
-----------
RETAIL 1.74%
Rite Aid 234,000 7,575,750
-----------
SERVICES 1.77%
Dun & Bradstreet 230,000 7,705,000
-----------
TEXTILE -- APPAREL
MANUFACTURING 2.14%
Liz Claiborne 186,000 9,300,000
-----------
TOBACCO 1.82%
Philip Morris 182,200 7,914,313
-----------
TOYS 1.26%
Mattel Inc 130,000 5,500,625
-----------
TOTAL COMMON STOCKS
(Cost $269,426,395) 408,348,346
-----------
SHORT-TERM INVESTMENTS 6.20%
Commercial Paper 3.67%
FINANCIAL 3.67%
Greenwich Funding
5.510%, 3/12/1998
(Cost $15,972,992) $16,000,000 15,972,992
-----------
Repurchase Agreements 2.53%
Repurchase Agreement with
State Street Bank Trust Co
dated 2/27/1998 due 3/2/1998
at 5.580%, repurchased at
$11,023,123 (Collateralized by
US Treasury Bonds due 2/15/2020
at 8.500%, value $11,284,031)
(Cost $11,018,000) $11,018,000 11,018,000
-----------
TOTAL SHORT-TERM INVESTMENTS
(Cost $26,990,992) 26,990,992
-----------
TOTAL INVESTMENT
SECURITIES AT VALUE 100.00%
(Cost $296,417,387)
(Cost for Income Tax Purposes
$297,482,854) $ 435,339,338
=============
* Security is non-income producing.
See Notes to Financial Statements
<PAGE>
<TABLE>
<CAPTION>
INVESCO Value Trust
Statement of Assets and Liabilities
February 28, 1998
UNAUDITED
Intermediate
Government Total Return Value Equity
Bond Fund Fund Fund
---------------------------------------------------
<S> <C> <C> <C>
ASSETS
Investment Securities:
At Cost~ $32,090,586 $1,732,922,347 $296,417,387
==================================================
At Value~ $32,561,145 $2,316,044,845 $435,339,338
Cash 397 830,790 0
Receivables:
Fund Shares Sold 302,130 6,111,417 1,853,768
Dividends and Interest 338,493 8,927,984 780,077
Prepaid Expenses and Other Assets 104,627 230,113 72,118
--------------------------------------------------
TOTAL ASSETS 33,306,792 2,332,145,149 438,045,301
--------------------------------------------------
LIABILITIES
Payables:
Custodian 0 0 14,255
Distributions to Shareholders 12,640 214,042 31,521
Fund Shares Repurchased 15,507 2,360,764 2,050,300
Accrued Distribution Expenses 2,311 0 41,478
Accrued Expenses and Other Payables 8,541 119,501 19,005
--------------------------------------------------
TOTAL LIABILITIES 38,999 2,694,307 2,156,559
--------------------------------------------------
Net Assets at Value $33,267,793 $2,329,450,842 $435,888,742
==================================================
NET ASSETS
Paid-in Capital $33,026,682 $1,733,597,086 $287,871,828
Accumulated Undistributed
(Distributions in Excess of)
Net Investment Income 0 13,408 (23,559)
Accumulated Undistributed Net
Realized Gain (Loss) on
Investment Securities and
Foreign Currency Transactions (229,448) 12,717,850 9,118,522
Net Appreciation of Investment
Securities and Foreign
Currency Transactions 470,559 583,122,498 138,921,951
----------------------------------------------------
Net Assets at Value $33,267,793 $2,329,450,842 $435,888,742
====================================================
Shares Outstanding* 2,644,394 76,832,346 14,524,655
Net Asset Value,
Offering and Redemption
Price per Share $ 12.58 $ 30.32 $ 30.01
====================================================
</TABLE>
<PAGE>
~ Investment securities at cost and value at February 28, 1998 include
repurchase agreements of $938,000, $74,989,000 and $11,018,000 for
Intermediate Government Bond, Total Return and Value Equity Funds,
respectively.
* The Trust has one class of shares which may be divided into different series,
each representing an interest in a separate Fund. At February 28, 1998, there
was an unlimited number of authorized Fund shares.
See Notes to Financial Statements
<TABLE>
<CAPTION>
INVESCO Value Trust
Statement of Operations
Six Months Ended February 28, 1998
UNAUDITED
Intermediate
Government Total Return Value Equity
Bond Fund Fund Fund
--------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME
INCOME
Dividends $ 0 $ 15,581,870 $ 3,456,776
Interest 1,322,366 21,727,735 456,439
Foreign Taxes Withheld 0 (249,319) (20,675)
---------------------------------------------------
TOTAL INCOME 1,322,366 37,060,286 3,892,540
---------------------------------------------------
EXPENSES
Investment Advisory Fees 128,961 6,138,984 1,436,154
Distribution Expenses 5,072 0 97,035
Transfer Agent Fees 117,339 1,651,218 421,138
Administrative Fees 7,834 159,406 33,723
Custodian Fees and Expenses 4,908 104,072 23,904
Professional Fees and Expenses 8,286 43,090 14,710
Registration Fees and Expenses 13,303 116,418 43,109
Reports to Shareholders 7,372 44,581 53,591
Trustees' Fees and Expenses 6,066 65,822 16,807
Other Expenses 3,153 23,854 5,176
---------------------------------------------------
TOTAL EXPENSES 302,294 8,347,445 2,145,347
Fees and Expenses Absorbed by
Investment Adviser (84,438) (24,057) 0
Fees and Expenses Paid Indirectly (1,914) (134,321) (9,038)
NET EXPENSES 215,942 8,189,067 2,136,309
----------------------------------------------------
NET INVESTMENT INCOME 1,106,424 28,871,219 1,756,231
----------------------------------------------------
<PAGE>
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENT SECURITIES
Net Realized Gain on Investment
Securities and Foreign Currency
Transactions 342,848 29,815,314 17,229,322
Change in Net Appreciation of
Investment Securities and Foreign
Currency Transactions 163,345 186,274,468 36,704,414
-------------------------------------------------
NET GAIN ON INVESTMENT SECURITIES 506,193 216,089,782 53,933,736
-------------------------------------------------
Net Increase in Net Assets from
Operations $ 1,612,617 $ 244,961,001 $ 55,689,967
=================================================
</TABLE>
See Notes to Financial Statements
<TABLE>
<CAPTION>
INVESCO Value Trust
Statement of Changes in Net Assets
Intermediate Government
Bond Fund Total Return Fund
Six Months Year Six Months Year
Ended Ended Ended Ended
February 28 August 31 February 28 August 31
--------------------------- --------------------------
1998 1997 1998 1997
UNAUDITED UNAUDITED
<S> <C> <C> <C> <C> <C>
OPERATIONS
Net Investment Income $ 1,106,424 $ 2,385,295 $ 28,871,219 $ 44,496,579
Net Realized Gain on Investment Securities
and Foreign Currency Transactions 342,848 126,618 29,815,314 20,361,309
Change in Net Appreciation of Investment
Securities and Foreign Currency Transactions 163,345 348,594 186,274,468 269,713,544
---------------------------- ---------------------------------
NET INCREASE IN NET ASSETS
FROM OPERATIONS 1,612,617 2,860,507 244,961,001 334,571,432
---------------------------- ---------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
Net Investment Income (1,106,424) (2,385,295) (28,963,828) (44,405,999)
Net Realized Gain on Investment Securities
and Foreign Currency Transactions 0 0 (34,776,937) (4,314,901)
---------------------------- ---------------------------------
TOTAL DISTRIBUTIONS (1,106,424) (2,385,295) (63,740,765) (48,720,900)
---------------------------- ---------------------------------
FUND SHARE TRANSACTIONS
Proceeds from Sales of Shares 18,310,716 26,474,792 595,529,162 997,370,885
Reinvestment of Distributions 966,591 2,208,130 62,810,012 47,962,510
---------------------------- ---------------------------------
19,307,307 28,682,922 658,339,174 1,045,333,395
<PAGE>
Amounts Paid for Repurchases of Shares (30,986,375) (24,665,970) (355,702,673) (517,740,980)
---------------------------- ---------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM FUND SHARE TRANSACTIONS (11,679,068) 4,016,952 302,636,501 527,592,415
---------------------------- ---------------------------------
Total Increase (Decrease) in Net Assets (11,172,875) 4,492,164 483,856,737 813,442,947
NET ASSETS
Beginning of Period 44,440,668 39,948,504 1,845,594,105 1,032,151,158
End of Period $33,267,793 $ 44,440,668 $ 2,329,450,842 $1,845,594,105
============================ =================================
Accumulated Undistributed Net Investment
Income Included in Net Assets at End of
Period $0 $ 0 $ 13,408 $ 106,017
- ----------------------------------------------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS
Shares Sold 1,456,143 2,132,651 20,419,778 39,163,785
Shares Issued from Reinvestment of
Distributions 79,884 178,829 2,168,421 1,844,859
---------------------------- ---------------------------------
1,536,027 2,311,480 22,588,199 41,008,644
Shares Repurchased (2,464,537) (1,985,434) (12,222,342) (20,216,862)
---------------------------- ---------------------------------
Net Increase (Decrease) in Fund Shares (928,510) 326,046 10,365,857 20,791,782
============================ =================================
</TABLE>
See Notes to Financial Statements
<TABLE>
<CAPTION>
INVESCO Value Trust
Statement of Changes in Net Assets (Continued)
Value Equity Fund
Six Months Year
Ended Ended
February 28 August 31
---------------------------------------
1998 1997
UNAUDITED
OPERATIONS
<S> <C> <C>
Net Investment Income $ 1,756,231 $ 4,046,156
Net Realized Gain on Investment Securities
and Foreign Currency Transactions 17,229,322 20,055,067
Change in Net Appreciation of Investment
Securities and Foreign Currency Transactions 36,704,414 57,254,344
---------------------------------------
NET INCREASE IN NET ASSETS
FROM OPERATIONS 55,689,967 81,355,567
---------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
Net Investment Income (1,797,273) (4,071,368)
Net Realized Gain on Investment Securities
and Foreign Currency Transactions (26,582,983) (5,507,949)
---------------------------------------
TOTAL DISTRIBUTIONS (28,380,256) (9,579,317)
---------------------------------------
<PAGE>
FUND SHARE TRANSACTIONS
Proceeds from Sales of Shares 265,374,611 517,380,902
Reinvestment of Distributions 27,200,186 9,315,225
--------------------------------------
292,574,797 526,696,127
Amounts Paid for Repurchases of Shares (253,761,386) (428,752,415)
--------------------------------------
NET INCREASE IN NET ASSETS
FROM FUND SHARE TRANSACTIONS 38,813,411 97,943,712
--------------------------------------
Total Increase in Net Assets 66,123,122 169,719,962
NET ASSETS
Beginning of Period 369,765,620 200,045,658
--------------------------------------
End of Period $435,888,742 $369,765,620
======================================
Accumulated Undistributed (Distributions in Excess of)
Net Investment Income Included in Net Assets at
End of Period $ (23,559) $ 17,483
- ------------------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS
Shares Sold 9,200,412 20,198,347
Shares Issued from Reinvestment of
Distributions 997,711 378,067
--------------------------------------
10,198,123 20,576,414
Shares Repurchased (8,737,452) (16,506,962)
--------------------------------------
Net Increase in Fund Shares 1,460,671 4,069,452
======================================
</TABLE>
See Notes to Financial Statements
<PAGE>
INVESCO Value Trust
Notes to Financial Statements
UNAUDITED
NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES. INVESCO Value
Trust (the "Trust") is organized under the laws of the Commonwealth of
Massachusetts and presently consists of three separate Funds: Intermediate
Government Bond Fund, Total Return Fund and Value Equity Fund. The investment
objective of each Fund is to achieve a high total return on investments through
capital appreciation and current income. The Trust is registered under the
Investment Company Act of 1940 (the "Act") as a diversified, open-end management
investment company.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements. The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of income and expenses during the reporting period. Actual
results could differ from those estimates.
A. SECURITY VALUATION - Equity securities traded on national securities
exchanges or in the over-the-counter market are valued at the last sales
price in the market where such securities are primarily traded. If last
sales prices are not available, securities are valued at the highest
closing bid price obtained from one or more dealers making a market for
such securities or by a pricing service approved by the Trust's trustees.
Debt securities are valued at evaluated bid prices as determined by a
pricing service approved by the Trust's trustees. If evaluated bid prices
are not available, debt securities are valued by averaging the bid prices
obtained from one or more dealers making a market for such securities.
Foreign securities are valued at the closing price on the principal
stock exchange on which they are traded. In the event that closing prices
are not available for foreign securities, prices will be obtained from the
principal stock exchange at or prior to the close of the New York Stock
Exchange. Foreign currency exchange rates are determined daily prior to
the close of the New York Stock Exchange.
If market quotations or pricing service valuations are not readily
available, securities are valued at fair value as determined in good faith
by the Trust's trustees.
Short-term securities are stated at amortized cost (which approximates
market value) if maturity is 60 days or less at the time of purchase, or
market value if maturity is greater than 60 days.
Assets and liabilities initially expressed in terms of foreign currencies
are translated into U.S. dollars at the prevailing market rates as quoted
by one or more banks or dealers on the date of valuation. The cost of
securities is translated into U.S. dollars at the rates of exchange
prevailing when such securities are acquired. Income and expenses are
translated into U.S. dollars at the rates of exchange prevailing when
accrued.
B. REPURCHASE AGREEMENTS - Repurchase agreements held by the Trust are fully
collateralized by U.S. Government securities and such collateral is in the
possession of the Trust's custodian. The collateral is evaluated daily to
ensure its market value exceeds the current market value of the repurchase
agreements including accrued interest. In the event of default on the
obligation to repurchase, the Trust has the right to liquidate the
collateral and apply the proceeds in satisfaction of the obligation. In the
event of default or bankruptcy by the other party to the agreement,
realization and/or retention of the collateral or proceeds may be subject
to legal proceedings.
C. SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME - Security transactions
are accounted for on the trade date and dividend income is recorded on the
ex dividend date. Certain dividends from foreign securities will be
recorded as soon as the Trust is informed of the dividend if such
<PAGE>
information is obtained subsequent to the ex dividend date. Interest
income, which may be comprised of stated coupon rate, market discount,
original issue discount and amortized premium, is recorded on the
accrual basis. Discounts and premiums on debt securities purchased are
amortized over the life of the respective security as adjustments to
interest income. Cost is determined on the specific identification
basis.
Mortgage paydown gain/loss is treated as ordinary income for tax
purposes and is included in interest income on the Statement of Operations.
The Trust may have elements of risk due to concentrated investments in
foreign issuers located in a specific country. Such concentrations may
subject the Trust to additional risks resulting from future political or
economic conditions and/or possible impositions of adverse foreign
governmental laws or currency exchange restrictions. Net realized and
unrealized gain or loss from investment securities includes fluctuations
from currency exchange rates and fluctuations in market value.
The Trust's use of short-term forward foreign currency contracts may
subject it to certain risks as a result of unanticipated movements in
foreign exchange rates. The Trust does not hold short-term forward foreign
currency contracts for trading purposes. The Trust may hold foreign
currency in anticipation of settling foreign security transactions and not
for investment purposes.
Investments in securities of governmental agencies may only be
guaranteed by the respective agency's limited authority to borrow from the
U.S. Government and may not be guaranteed by the full faith and credit of
the United States.
D. FEDERAL AND STATE TAXES - The Trust has complied, and continues to comply,
with the provisions of the Internal Revenue Code applicable to regulated
investment companies and, accordingly, has made or intends to make
sufficient distributions of net investment income and net realized capital
gains, if any, to relieve it from all federal and state income taxes and
federal excise taxes. At August 31, 1997, Intermediate Government Bond Fund
had $411,995, $16,031 and $8,387 in net capital loss carryovers which
expire in the years 2003, 2004 and 2005, respectively.
To the extent future capital gains are offset by capital loss
carryovers, such gains will not be distributed to shareholders.
Dividends paid by the Trust from net investment income and
distributions of net realized short-term capital gains are, for federal
income tax purposes, taxable as ordinary income to shareholders.
Investment income received from foreign sources may be subject to
foreign withholding taxes. Dividend and interest income is shown gross of
foreign withholding taxes in the accompanying financial statements.
E. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS - For Total Return and Value
Equity Funds, dividends and distributions to shareholders are recorded on
the ex dividend/distribution date. All of Intermediate Government Bond
Fund's net investment income is distributed to shareholders by dividends
declared daily and paid monthly. Income dividends are reinvested at the ex
dividend date. The Trust distributes net realized capital gains, if any, to
its shareholders at least annually, if not offset by capital loss
carryovers. Income distributions and capital gain distributions are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles. These differences are primarily
due to differing treatments for mortgage-backed securities, market
discounts, amortized premiums, foreign currency transactions, nontaxable
dividends, net operating losses and expired capital loss carryforwards.
F. EXPENSES - Each of the Funds bears expenses incurred specifically on
its behalf and, in addition, each Fund bears a portion of general
expenses, based on the relative net assets of each Fund.
<PAGE>
Under an agreement between each Fund and the Trust's Custodian, agreed
upon Custodian Fees and Expenses are reduced by credits granted by the
Custodian from any temporarily uninvested cash. Similarly, Transfer Agent
Fees are reduced by credits earned by each Fund from security brokerage
transactions under certain broker/service agreements with third parties.
Such credits are included in Fees and Expenses Paid Indirectly in the
Statement of Operations.
For the six months ended February 28, 1998, Fees and Expenses Paid
Indirectly consisted of the following:
Custodian Fees Transfer
Fund and Expenses Agent Fees
--------------------------------------------------------------------------
Intermediate Government Bond Fund $ 1,914 $ 0
Total Return Fund 51,679 82,642
Value Equity Fund 9,037 1
NOTE 2 - INVESTMENT ADVISORY AND OTHER AGREEMENTS. INVESCO Funds Group, Inc.
("IFG") serves as the Trust's investment adviser. As compensation for its
services to the Trust, IFG receives an investment advisory fee which is accrued
daily at the applicable rate and paid monthly. The fee is based on the annual
rate of each Fund's average net assets as follows:
AVERAGE NET ASSETS
---------------------------------------
$0 to $500 Million Over
$500 to $1 $1
Fund Million Billion Billion
- --------------------------------------------------------------------------------
Intermediate Government Bond Fund 0.60% 0.50% 0.40%
Total Return Fund 0.75% 0.65% 0.50%
Value Equity Fund 0.75% 0.65% 0.50%
In accordance with a Sub-Advisory Agreement between IFG and INVESCO Capital
Management, Inc. ("ICM"), an affiliate of IFG, investment decisions of the Trust
are made by ICM. Fees for such sub-advisory services are paid by IFG.
In accordance with an Administrative Agreement, each Fund pays IFG an annual
fee of $10,000, plus an additional amount computed at an annual rate of 0.015%
of average net assets to provide administrative, accounting and clerical
services. The fee is accrued daily and paid monthly.
IFG receives a transfer agent fee at an annual rate of $20.00 for Total
Return and Value Equity Funds, and $26.00 for Intermediate Government Bond Fund
per shareholder account, or, where applicable, per participant in an omnibus
account, per year. IFG may pay such fee for participants in omnibus accounts to
affiliates or third parties. The fee is paid monthly at one-twelfth of the
annual fee and is based upon the actual number of accounts in existence during
each month.
A plan of distribution pursuant to Rule 12b-1 of the Act (the "Plan") became
effective November 1, 1997 for Intermediate Government Bond and Value Equity
Funds. The Plan provides for compensation of marketing and advertising
expenditures to INVESCO Distributors, Inc. to a maximum of 0.25% of net assets.
For the six months ended February 28, 1998, Intermediate Government Bond and
Value Equity Funds paid the Distributor $2,761 and $55,557, respectively, under
the plan of distribution.
IFG has voluntarily agreed, in some instances, to absorb certain fees and
expenses incurred by Intermediate Government Bond Fund.
NOTE 3 - PURCHASES AND SALES OF INVESTMENT SECURITIES. For the six months ended
February 28, 1998, the aggregate cost of purchases and proceeds from sales of
investment securities (excluding all U.S. Government securities and short-term
securities) were as follows:
<PAGE>
Fund Purchases Sales
- --------------------------------------------------------------------------------
Total Return Fund $ 305,299,355 $ 71,925,547
Value Equity Fund 74,468,319 88,439,749
The aggregate cost of purchases and proceeds from sales of U.S. Government
securities were as follows:
Fund Purchases Sales
- --------------------------------------------------------------------------------
Intermediate Government Bond Fund $ 6,706,286 $ 16,236,656
Total Return Fund 98,180,797 16,750,000
NOTE 4 - APPRECIATION AND DEPRECIATION. At February 28, 1998, the gross
appreciation of securities in which there was an excess of value over tax cost,
the gross depreciation of securities in which there was an excess of tax cost
over value and the resulting net appreciation by Fund were as follows:
<TABLE>
<CAPTION>
Gross Gross Net
Fund Appreciation Depreciation Appreciation
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Intermediate Government Bond Fund $ 475,533 $ 88,372 $ 387,161
Total Return Fund 594,672,588 11,563,415 583,109,173
Value Equity Fund 143,612,565 5,756,081 137,856,484
</TABLE>
NOTE 5 - TRANSACTIONS WITH AFFILIATES. Certain of the Trust's officers and
trustees are also officers and directors of IFG or ICM.
The Trust has adopted an unfunded deferred compensation plan covering all
independent trustees of the Trust who will have served as an independent trustee
for at least five years at the time of retirement. Benefits under this plan are
based on an annual rate equal to 40% of the retainer fee at the time of
retirement.
Pension expenses for the six months ended February 28, 1998, included in
Trustees' Fees and Expenses in the Statement of Operations, and unfunded accrued
pension costs and pension liability included in Prepaid Expenses and Accrued
Expenses, respectively, in the Statement of Assets and Liabilities were as
follows:
<TABLE>
<CAPTION>
Unfunded
Pension Accrued Pension
Fund Expenses Pension Costs Liability
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Intermediate Government Bond Fund $ 503 $ 1,865 $ 4,082
Total Return Fund 16,385 38,653 80,944
Value Equity Fund 3,278 9,615 20,078
</TABLE>
NOTE 6 - LINE OF CREDIT. The Trust has available a Redemption Line of Credit
Facility ("LOC"), from a consortium of national banks, to be used for temporary
or emergency purposes to fund redemptions of investor shares. The LOC permits
borrowings to a maxium of 10% of the Net Assets at Value of each respective
Fund. Each Fund agrees to pay annual fees and interest on the unpaid principal
balance based on prevailing market rates as defined in the agreement. At
February 28, 1998, there were no such borrowings.
<PAGE>
Other Information
UNAUDITED
On October 28, 1997, a special meeting of the shareholders of the Trust was held
at which the approval to change the investment policy to allow each Fund to
utilize futures contracts, options on futures, puts and calls to the extent
permitted by law (Proposal 1) was ratified by Total Return and Value Equity
Funds and failed for Intermediate Government Bond Fund and the approval of a
Plan and Agreement of Distribution for Intermediate Government and Value Equity
Funds (Proposal 2) was ratified. The following is a report on the votes cast:
<TABLE>
<CAPTION>
Proposal For Against Abstain Total
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Intermediate Government Bond Fund
Proposal 1 1,323,336 916,628 91,153 2,331,117
Proposal 2 1,603,043 627,945 100,129 2,331,117
Total Return Fund
Proposal 1 29,034,865 4,697,372 1,942,130 35,674,367
Value Equity Fund
Proposal 1 6,036,336 1,996,642 828,582 8,861,560
Proposal 2 6,627,112 1,374,392 860,056 8,861,560
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
INVESCO Value Trust
Financial Highlights
(For a Fund Share Outstanding Throughout Each Period)
Six Months Period Year
Ended Ended Ended
February 28 Year Ended August 31 August 31 December 31
------------ -------------------------------- ---------- -----------
1998 1997 1996 1995 1994 1993^ 1992
UNAUDITED
Intermediate Government Bond Fund
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value - Beginning of Period $12.44 $12.30 $12.64 $12.16 $13.25 $12.68 $12.89
------- ------ ------- ------ ------- ------ -------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.32 0.66 0.73 0.73 0.70 0.48 0.90
Net Gains or (Losses) on Securities
(Both Realized and Unrealized) 0.14 0.14 (0.34) 0.48 (0.75) 0.57 (0.16)
------ ------ ------ ------ ----- ------ -------
Total from Investment Operations 0.46 0.80 0.39 1.21 (0.05) 1.05 0.74
------ ------ ------ ------ ----- ------ -------
LESS DISTRIBUTIONS
Dividends from Net Investment Income+ 0.32 0.66 0.73 0.73 0.70 0.48 0.90
Distributions from Capital Gains 0.00 0.00 0.00 0.00 0.34 0.00 0.05
------ ------ ------ ------ ----- ------ -------
Total Distributions 0.32 0.66 0.73 0.73 1.04 0.48 0.95
------ ------ ------ ------ ----- ------ -------
Net Asset Value - End of Period $ 12.58 $12.44 $ 12.30 $ 12.64 $ 12.16 $ 13.25 $ 12.68
====== ====== ====== ====== ====== ====== =======
TOTAL RETURN 3.74%* 6.64% 3.12% 10.36% (0.37%) 8.38%* 6.03%
RATIOS
Net Assets - End of Period ($000 Omitted) $33,268 $44,441 $39,949 $37,339 $31,861 $39,384 $29,649
Ratio of Expenses to Average Net Asset # 0.50%*@ 1.02%@ 1.15%@ 1.20% 1.07% 0.96%~ 0.97%
Ratio of Net Investment Income to
Average Net Assets# 2.55%* 5.32% 5.81% 6.04% 5.58% 5.48%~ 6.38%
Portfolio Turnover Rate 17%* 37% 63% 92% 49% 34%* 93%
</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 six
months ended February 28, 1998 and the years ended August 31, 1997 and 1996.
If such expenses had not been voluntarily absorbed, ratio of expenses to
average net assets would have been 0.70% (not annualized), 1.37% and 1.24%,
respectively, and ratio of net investment income to average net assets would
have been 2.35% (not annualized), 4.97% and 5.72%, respectively.
@ Ratio is based on Total Expenses of the Fund, less Expenses Absorbed by
Investment Adviser, which is before any expense offset arrangements.
~ Annualized
<PAGE>
<TABLE>
<CAPTION>
INVESCO Value Trust
Financial Highlights (Continued)
(For a Fund Share Outstanding Throughout Each Period)
Six Months Period Year
Ended Ended Ended
February 28 Year Ended August 31 August 31 December 31
------------- ---------------------------------- --------- -----------
1998 1997 1996 1995 1994 1993^ 1992
UNAUDITED
Total Return Fund
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value - Beginning of Period $ 27.77 $22.60 $20.95 $18.54 $18.27 $17.18 $ 16.43
------- ------ ------ ------ ------ ------ -------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.40 0.77 0.73 0.72 0.69 0.40 0.66
Net Gains on Securities
(Both Realized and Unrealized) 3.03 5.26 1.78 2.46 0.60 1.09 0.93
------- ------ ------ ------ ----- ------ -------
Total from Investment Operations 3.43 6.03 2.51 3.18 1.29 1.49 1.59
------- ------ ------ ------ ----- ------ -------
LESS DISTRIBUTIONS
Dividends from Net Investment Income 0.40 0.77 0.73 0.72 0.60 0.40 0.65
In Excess of Net Investment Income+ 0.00 0.00 0.00 0.00 0.09 0.00 0.00
Distributions from Capital Gains 0.48 0.09 0.13 0.05 0.17 0.00 0.19
In Excess of Capital Gains 0.00 0.00 0.00 0.00 0.16 0.00 0.00
------- ------ ------ ------ ----- ------ -------
Total Distributions 0.88 0.86 0.86 0.77 1.02 0.40 0.84
------- ------ ------ ------ ----- ------ -------
Net Asset Value - End of Period $ 30.32 $27.77 $22.60 $ 20.95 $18.54 $ 18.27 $ 17.18
======= ====== ====== ======= ====== ======= =======
TOTAL RETURN 12.50%* 27.01% 12.06% 17.54% 7.22% 8.72%* 9.84%
RATIOS
Net Assets - End of Period
($000 Omitted) $2,329,451 $1,845,594 $1,032,151 $563,468 $292,765 $220,224 $137,196
Ratio of Expenses to Average
Net Assets# 0.40%*@ 0.86%@ 0.89%@ 0.95% 0.96% 0.93%~ 0.88%
Ratio of Net Investment Income to
Average Net Assets# 1.39%* 3.11% 3.44% 3.97% 3.31% 3.51%~ 4.06%
Portfolio Turnover Rate 7%* 4% 10% 30% 12% 19%* 13%
Average Commission Rate Paid^^ $0.0559* $0.0520 $0.0539 - - - -
</TABLE>
^ From January 1, 1993 to August 31, 1993.
+ Distributions in excess of net 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.
@ Ratio is based on Total Expenses of the Fund, less Expenses Absorbed by
Investment Adviser, if applicable, which is before any offset arrangements.
# Various expenses of the Fund were voluntarily absorbed by IFG for the six
months ended February 28, 1998 and the effect was insignificant.
~ 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.
<PAGE>
<TABLE>
<CAPTION>
INVESCO Value Trust
Financial Highlights (Continued)
(For a Fund Share Outstanding Throughout Each Period)
Six Months Period Year
Ended Ended Ended
February 28 Year Ended August 31 August 31 December 31
----------- --------------------------------------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
1998 1997 1996 1995 1994 1993^ 1992
UNAUDITED
Value Equity Fund
PER SHARE DATA
Net Asset Value --
Beginning of Period $ 28.30 $ 22.24 $ 19.53 $18.12 $ 17.79 $ 16.91 $ 16.57
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.13 0.35 0.35 0.39 0.36 0.24 0.36
Net Gains on Securities
(Both Realized and Unrealized) 3.90 6.62 3.09 2.58 1.20 0.88 0.45
------- ------ ------ ------ ----- ------ -------
Total from Investment Operations 4.03 6.97 3.44 2.97 1.56 1.12 0.81
------- ------ ------ ------ ----- ------ -------
LESS DISTRIBUTIONS
Dividends from Net Investment Income 0.13 0.35 0.35 0.39 0.31 0.24 0.34
In Excess of Net Investment Income 0.00 0.00 0.00 0.00 0.04 0.00 0.00
Distributions from Capital Gains 2.19 0.56 0.38 1.17 0.88 0.00 0.13
------- ------ ------ ------ ----- ------ -------
Total Distributions 2.32 0.91 0.73 1.56 1.23 0.24 0.47
------- ------ ------ ------ ----- ------ -------
Net Asset Value-- End of Period $ 30.01 $ 28.30 $ 22.24 $19.53 $ 18.12 $ 17.79 $ 16.91
======= ====== ====== ====== ====== ====== =======
TOTAL RETURN 15.12%* 32.04% 17.77% 17.84% 9.09% 6.65%* 4.98%
RATIOS
Net Assets -- End of Period
($000 Omitted) $435,889 $369,766 $200,046 $153,171 $111,850 $81,914 $78,609
Ratio of Expenses to Average
Net Assets 0.56%*@ 1.04%@ 1.01%@ 0.97% 1.01% 1.00%~ 0.91%
Ratio of Net Investment Income to
Average Net Assets 0.45%* 1.35% 1.64% 2.17% 1.80% 2.07%~ .19%
Portfolio Turnover Rate 20%* 37% 27% 34% 53% 35%* 37%
Average Commission Rate Paid^^ $0.0539* $0.0538 $0.0589 - - - -
^ From January 1, 1993 to August 31, 1993.
* Based on operations for the period shown and, accordingly, are not
representative of a full year.
@ Ratio is based on Total Expenses of the Fund, which is before any 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 the fiscal years beginning September 1, 1995 and
thereafter.
<PAGE>
FAMILY OF FUNDS
Newspaper
Fund Name Fund Code Ticker Symbol Abbreviation
- --------------------------------------------------------------------------------
International
International Growth 49 FSIGX IntlGr
Emerging Markets 43 * *
Asian Growth 41 IVAGX AsianGr
Pacific Basin 54 FPBSX PcBas
European 56 FEURX Europ
European Small Company 37 IVECX EuroSmCo
Latin American Growth 34 IVSLX LatinAmGr
- --------------------------------------------------------------------------------
Sector
Energy 50 FSTEX Enrgy
Environmental Services 59 FSEVX Envirn
Financial Services 57 FSFSX FinSvc
Gold 51 FGLDX Gold
Health Sciences 52 FHLSX HlthSc
Leisure 53 FLISX Leisur
Realty 42 IVSRX Realty
Technology 55 FTCHX Tech
Utilities 58 FSTUX Util
Worldwide Capital Goods 38 ISWGX WldCap
Worldwide Communications 39 ISWCX WldCom
- --------------------------------------------------------------------------------
Equity
Growth 10 FLRFX Grwth
Dynamics 20 FIDYX Dynm
Small Company Growth 60 FIEGX SmCoGth
Value Equity 46 FSEQX ValEq
Small Company Value 74 IDSCX SmCoVal
S&P 500 Index Fund Class II 23 * *
- --------------------------------------------------------------------------------
All-Weather
Industrial Income 15 FIIIX IndInc
Multi-Asset Allocation 70 IMAAX MulAstAl
Total Return 48 FSFLX TotRtn
Balanced 71 IMABX Bal
- --------------------------------------------------------------------------------
Bond
Short-Term Bond 33 INIBX ShTrBd
Intermediate Government Bond 47 FIGBX IntGov
U.S. Government Securities 32 FBDGX USGvt
Select Income 30 FBDSX SelInc
High Yield 31 FHYPX HiYld
- --------------------------------------------------------------------------------
Tax-Exempt
Tax-Free Intermediate Bond 36 IVTIX *
Tax-Free Long-Term Bond 35 FTIFX TxFre
- --------------------------------------------------------------------------------
Money Market
U.S. Government Money Fund 44 FUGXX InvGvtMF
Cash Reserves 25 FDSXX InvCshR
Tax-Free Money Fund 40 FFRXX InvTaxFree
* This fund does not meet size requirements to be assigned a ticker symbol in
newspaper listings.
For more information about any of the INVESCO Funds, including management fees
and expenses, please call us at 1-800-525-8085 for a prospectus. Read it
carefully before you invest or send money.
<PAGE>
INVESCO FUNDS
INVESCO Distributors, Inc.,(SM)
Distributor
Post Office Box 173706
Denver, CO 80217-3706
1-800-525-8085
PAL(R): 1-800-424-8085
http://www.invesco.com
In Denver, visit one of our
convenient Investor Centers:
Cherry Creek,
155-B Fillmore Street
Denver Tech Center,
7800 East Union Avenue,
Lobby Level
This information must be
preceded or accompanied
by a current prospectus.
</TABLE>
