KNOWLEDGE DISCIPLINE SERVICE CHOICE
YOU SHOULD KNOW WHAT INVESCO KNOWS (TM)
INVESCO Value Funds
Intermediate Government Bond Fund
Total Return Fund
Value Equity Fund
SEMI-
ANNU
AL
INVESCO
SEMIANNUAL REPORT / February 28, 1999
<PAGE>
SHAREHOLDERS IN INVESCO INTERMEDIATE GOVERNMENT BOND FUND, TOTAL RETURN
FUND AND VALUE EQUITY FUND RECENTLY RECEIVED IMPORTANT PROXY INFORMATION. PLEASE
BE SURE TO READ THE PROXY CAREFULLY AND VOTE PROMPTLY ON ALL ISSUES.
INTERMEDIATE GOVERNMENT
BOND FUND (PAGE 3)
AVERAGE ANNUAL TOTAL RETURN,
PERIODS ENDED 2/28/99(1)
6 months 1.47%
- ------------------------------
1 year 5.56%
- ------------------------------
5 years 5.77%
- ------------------------------
10 years 7.61%
TOTAL RETURN FUND
AVERAGE ANNUAL TOTAL RETURN,
PERIODS ENDED 2/28/99(1)
6 months 13.05%
- -------------------------------
1 year 6.53%
- -------------------------------
5 years 15.69%
- -------------------------------
10 years 13.89%
VALUE EQUITY FUND
AVERAGE ANNUAL TOTAL RETURN,
PERIODS ENDED 2/28/99(1)
6 months 21.64%
- -------------------------------
1 year 4.55%
- -------------------------------
5 years 18.03%
- -------------------------------
10 years 14.87%
Graph:
This line graph represents a comparison of the value of a $10,000
investment in the Intermediate Government Bond Fund to the value of a
$10,000 investment in the Lehman Government Bond-Intermediate Index,
assuming in each case reinvestment of all dividends and capital gain
distributions, for the ten year period ended 2/28/99.
Graph:
This line graph represents a comparison of the value of a $10,000
investment in the Total Return Fund to the value of a $10,000 investment
in the Lehman Government/Corporate Bond Index and S&P 500 Index,
assuming in each case reinvestment of all dividends and capital gain
distributions, for the ten year period ended 2/28/99.
Graph:
This line graph represents a comparison of the value of a $10,000
investment in the 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 2/28/99.
The line graphs illustrate the value of a $10,000 investment, plus reinvested
dividends and capital gain distributions, for the 10-year period ended
2/28/99. 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. (Of course, past performance is
not a guarantee of future results.) (1)(2)
<PAGE>
INTERMEDIATE GOVERNMENT BOND FUND
Your Fund's Performance: A Report from the Manager
- --------------------------------------------------------------------------------
Dear Shareholder:
Our fund turned in a modest gain over the past six months, although it mirrored
in reverse the performance of the equity markets. As investors sought haven in
low-risk government securities late last summer, our fund moved up strongly.
Falling interest rates as a result of monetary easing also helped us
considerably. Early this year, however, we surrendered some of these gains as
concerns about inflation briefly resurfaced.
For the six months ended February 28, 1998, the value of your investment in
Intermediate Government Bond Fund rose 1.47%. This can be compared to the Lehman
Government Bond-Intermediate Index, which rose 1.63%. (Of course, past
performance is not a guarantee of future results.)(1),(2)
BETWEEN FLASHING YELLOW AND RED
Of course, the largest question for intermediate government bond investors is
what will happen with interest rates in the near future. We might say that our
gauge for the future direction of rates is somewhere between flashing yellow and
red. Although a tight labor market has yet to have an effect on producer prices,
the question as to whether this can last becomes more urgent with each passing
calendar quarter. Also, the seeming reversal in the world financial situation
might well lead the Federal Reserve Board to reconsider its monetary easing last
fall.
Should these signals move fully into the red, we will seek to reposition the
fund without compromising its intermediate-term focus. We will also continue to
take advantage of other strategies to defend net asset value while boosting
yields. Mortgage-backed securities, for example, have recently offered an
attractive premium for the fund.
/s/ James Baker
James Baker
Portfolio Manager
- --------------------------------------------------------------------------------
FUND MANAGER
JAMES BAKER, CFA
JIM BAKER EARNED HIS BA FROM MERCER UNIVERSITY, AND BEFORE JOINING INVESCO WAS
ASSOCIATED WITH WILLIS INVESTMENT COUNSEL, MORGAN KEENAN, AND DREXEL BURNHAM
LAMBERT. JIM IS ASSISTED BY RALPH H. JENKINS, JR., WHO EARNED A BBC FROM AUBURN
UNIVERSITY AND AN MA FROM THE UNIVERSITY OF ALABAMA. RALPH BEGAN HIS INVESTMENT
CAREER IN 1969.
<PAGE>
TOTAL RETURN FUND
Your Fund's Performance: A Report from the Manager
- -------------------------------------------------------------------------------
Dear Shareholder:
The avoidance of risk is the hallmark of our fund, and this past year many
investors around the world followed suit. Some emerging markets and
small-company investors were swamped by the tide of volatile global markets,
while other technology and large-company investors rode the crest to new highs.
Shares in Total Return Fund rose 13.05% over the past six months. This return
fell in between those of the S&P 500 Index, which rose 30.27%, and the Lehman
Government/ Corporate Bond Index, which rose 1.26%. (Of course, past performance
is not a guarantee of future results.)(1),(2)
THE FLIGHT TO QUALITY
As balanced fund managers who invest in both bonds and equities, we hope to
profit from upward movements in both asset classes, while using gains in one to
offset occasional losses in the other. Usually, we expect our bond portfolio to
have relatively modest yet stable returns, and to outperform our stock holdings
in years when the major equity indexes move lower. This year, however, our bond
portfolio enjoyed quite solid returns. We benefited substantially from the
so-called "flight to quality" late last summer, when investors sought haven from
financial crisis in secure government bonds. Continually falling interest rates,
due to reduced inflationary concerns, also helped our holdings. (Although,
again, past performance is no guarantee of future results.)
Unfortunately, our stock portfolio did not match this performance, even though
some of the most-watched indexes moved dramatically higher. In large part, this
was due to our focus on value-oriented stocks in traditional sectors. Because
these stocks have low price-to-earnings ratios, we view them as less risky, when
chosen properly. Yet in recent months investors have tended to punish companies
in industries such as chemicals, paper, and steel production, fearing that the
problems abroad and a slowdown at home might hurt their profits.
ENCOURAGING CONDITIONS FOR THE FUTURE
Although equity performance was moderately disappointing, we see reasons to
continue with our strategy for the future. First, value stocks often tend to
perform better than growth stocks in declining markets. While no one can
infallibly predict the future direction of stocks or bonds, a degree of caution
appears warranted after several years of strong equity gains. Second, many
stocks in our portfolio should benefit if calm returns to world markets. A
turnaround in Asia, for example, would help many of the companies we invest in
which export to that region.
I will look forward to reporting to you in six months.
/s/ Edward C. Mitchell, Jr.
Edward Mitchell
Portfolio Manager,
Chairman, INVESCO Capital Management
- --------------------------------------------------------------------------------
FUND MANAGER
EDWARD C. MITCHELL, JR., CFA
EDWARD C. MITCHELL, THE CHAIRMAN OF INVESCO CAPITAL MANAGEMENT, EARNED HIS BA
FROM THE UNIVERSITY OF VIRGINIA, AND AN MBA FROM THE UNIVERSITY OF COLORADO. 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.
<PAGE>
VALUE EQUITY FUND
Your Fund's Performance: A Report from the Manager
- --------------------------------------------------------------------------------
Dear Shareholder:
Generally, this has been a frustrating period for those of us who favor a
"value" approach to stock selection. Despite strong gains on the broad indexes,
the market has largely ignored companies with low price-to-earnings ratios. In
general, we can talk about a "valuation gap" that has arisen between growth
stocks and their value counterparts. While undeniably frustrating in the short
term, we believe this gap actually creates encouraging signs for the future.
Indeed, our performance over the past six months was quite strong. For the
six-month period ending February 28, 1999, the value of your investment rose
21.64%. This can be compared to the S&P 500, which rose 30.27% over the same
period. (Of course, past performance is not a guarantee of future
results.)(1),(2)
This gain, while substantial, resulted in only a modest advance for the
year ended February 28, 1999. While large growth company stocks have rebounded
strongly from the lows of late last summer, value stocks have come back in fits
and starts. For all of 1998, the S&P/BARRA Value Index rose only 14.7%.(1)
Overall, we might say that investors have been interested in these stocks only
when they have been most optimistic about the economy.
EXPLAINING THE VALUATION GAP
To understand why, it may be helpful to clarify some of the characteristics
of value stocks. Generally, the markets attach low valuations to companies when
they appear to have only modest prospects for future earnings growth. Investors
may determine that a company is not a leader in its industry, that it has some
serious long-term problems, or that its market is not likely to grow much in the
future. To some, these same factors mean that economic problems will hurt these
firms more quickly and more drastically than others.
Thus, troubles overseas, declines in commodity prices, or other negative
economic news have quickly dampened enthusiasm for companies with apparently
modest earning potential. This has been particularly true of companies in
so-called traditional sectors such as utilities, energy, and industrial
cyclicals. Instead, investors have focused on technology and other sectors that
have seemed less vulnerable to global economic turmoil.
CHALLENGING CONVENTIONAL WISDOM
Successful value investing relies on challenging such conventional
wisdom. We are investing in companies that appear to us to have stronger
prospects than the market presently recognizes. This takes extensive research,
of course. It also takes the patience to wait until the market recognizes those
prospects.
The market's recent relative disdain for value investing--the valuation
gap--creates encouraging conditions for the patient investor. Over the past
several months, we have been buying stocks that are quite inexpensive on a
relative basis. While a broad market downturn could still hurt these stocks, the
upside potential appears substantial.
I look forward to reporting to you again in six months.
/s/ Michael C. Harhai
Michael C. Harhai
Portfolio Manager
- --------------------------------------------------------------------------------
FUND MANAGER
MICHAEL C. HARHAI, CFA
MICHAEL C. HARHAI MANAGES VALUE EQUITY FUND. MIKE HAS A BA FROM THE UNIVERSITY
OF SOUTH FLORIDA AND AN MBA FROM THE UNIVERSITY OF CENTRAL FLORIDA. A CHARTERED
FINANCIAL ANALYST, HE BEGAN HIS CAREER IN 1972. HE IS ASSISTED BY TERRENCE
IRRGANG, A 17-YEAR VETERAN OF THE INVESTMENT BUSINESS. HE EARNED A BA FROM
GETTYSBURG COLLEGE AND AN MBA FROM TEMPLE UNIVERSITY.
<PAGE>
INVESCO / SEMIANNUAL REPORT / FEBRUARY 1999
Moving Forward
- --------------------------------------------------------------------------------
MARKET HEADLINES: SEPTEMBER 1998-FEBRUARY 1999
If the last few months of 1998 were a time of healing for financial markets, it
was indeed a dramatic recovery--at least for some indexes. The worldwide
financial crisis set off in the previous summer by the Russian loan default and
other factors persisted through September. Given October's notorious reputation
in financial circles, many feared for the worst as we entered that month. Yet
beginning in early October, investors began to return to select domestic and
overseas markets.
Leading the way back were the Federal Reserve Board and other major central
banks. A series of interest rate cuts by the banks of most of the industrialized
Western nations restored confidence and liquidity to the markets. Many
large-company stocks, led by those in sectors such as technology and health
care, vaulted back to exceed the highs of the previous spring. Even some Asian
markets, most notably South Korea, recovered as well.
But had the markets truly healed? Many small-company stocks continued to
languish well below their highs. Meanwhile, many foreign markets remained unable
to make a clean break upward. Indeed, after experimenting with a recovery, Latin
American markets plunged back to new lows following the currency crisis in
Brazil.
Other pockets of the market experienced nagging pain. The "flight to quality"
and interest rate cuts helped the prices of low-risk bonds such as Treasuries,
but the high-yield fixed-income market saw buyers evaporate. Commodity prices
continued to slide lower, which provided a boon to American consumers while
taking a toll on commodity producers such as energy firms.
By the beginning of 1999, however, most investors' attention was focused on the
remarkable performance of large technology stocks and other favored names.
Continuing strong growth in the United States, rapid technological change, and
the remarkable absence of inflation appeared an ideal environment for the
best-positioned firms. A cartoon in THE WALL STREET JOURNAL laid out the
equation as many saw it: Alan Greenspan plus the personal computer equals
continuing prosperity.
YEAR 2000 COMPUTER ISSUE.
Many computer systems in use today may not be able to recognize any date after
December 31, 1999. If these systems are not fixed by that date, it is possible
that they could generate erroneous information or fail altogether. INVESCO has
committed substantial resources in an effort to make sure that its own major
computer systems will continue to function on and after January 1, 2000. Of
course, INVESCO cannot fix systems that are beyond its control. If INVESCO's own
systems, or the systems of third parties upon which it relies, do not perform
properly after December 31, 1999, the Funds could be adversely affected.
In addition, the markets for, or values of, securities in which the Funds invest
may possibly be hurt by computer failures affecting portfolio investments or
trading of securities beginning January 1, 2000. For example, improperly
functioning computer systems could result in securities trade settlement
problems and liquidity issues, production issues for individual companies and
overall economic uncertainties. Individual issuers may incur increased costs in
making their own systems Year 2000 compliant. The combination of market
uncertainty and increased costs means that there is a possibility that Year 2000
computer issues may adversely affect the Funds' investments. At this time, it is
generally believed that foreign issuers, particularly those in emerging and
other markets, may be more vulnerable to Year 2000 problems than will be issuers
in the U.S.
<PAGE>
INVESCO / SEMIANNUAL REPORT / FEBRUARY 1999
Moving Forward
- --------------------------------------------------------------------------------
A REVIEW AND STRATEGY SESSION WITH INVESCO'S VALUE
FUND MANAGERS
ED, YOU USE A TOP-DOWN ASSET ALLOCATION APPROACH FOR TOTAL RETURN FUND. COULD
YOU OUTLINE THIS STRATEGY?
ED MITCHELL: Our approach starts with a mathematical model that we have been
developing since the late 1970s. Basically, we analyze the spreads between
effective yields on bonds and equities, and then adjust the portfolio
accordingly. On an individual stock basis, however, we rely on bottom-up
analysis; there are just too many factors that will slip through a stock screen.
JIM USES ANOTHER MODEL, ONE BASED ON INFLATION-ADJUSTED YIELDS FOR INTERMEDIATE
GOVERNMENT BOND FUND. WHAT IS THE ADVANTAGE OF SUCH MODELS?
ED MITCHELL: For one thing, they impose discipline on your investing, which is a
valuable tool in any fund--and especially one that shareholders are using to
help moderate the swings in their portfolios. Clearly, over the past year the
markets have behaved in unusual ways, and this has not been a friendly
environment for our approach. Still, if you have faith in the long-term
characteristics of the market, you have to assume that these characteristics
will resurface.
WHAT ARE SOME OF THOSE UNUSUAL BEHAVIORS?
MIKE HARHAI: One unusual phenomenon would have to be the extremely low prices of
most basic commodities in the midst of economic expansion. The twin forces of
global overcapacity and recession in Asia have hammered energy prices, for
example. Yet many energy companies appear to us to present valuable
opportunities, and there is no doubt that the production of energy will remain a
key component of the economy. In other words, I find it hard to believe that
commodities producers will remain as small a part of the total market--both in
dollar and investor psychology terms--as they are now.
WHAT MIGHT BE AN EXAMPLE OF A GOOD ENERGY COMPANY THAT IS PREPARING FOR THE
FUTURE?
MIKE HARHAI: One stock we hold in both Total Return Fund and Value Equity Fund
is Repsol SA, which is also Spain's largest industrial company. It is a fully
integrated oil and gas enterprise that has produced some solid returns for us.
ON A MORE NEGATIVE NOTE, ONE RECENT ANOMOLY MIGHT BE LOW INTEREST RATES. WILL
THEY MIGRATE HIGHER?
JAMES BAKER: They well might, although it does not yet make sense to be too
pessimistic. Certainly, the continuing expansion in the U.S., the easing of
conditions overseas, and other factors are pointing to the Federal Reserve's
raising rates a bit. On the other hand, recent improvements in productivity have
been quite impressive, which may mean that companies can absorb some production
cost increases without raising prices.
----------------------------------
Investors should keep in mind that, because these funds are actively managed,
holdings will change ~over time.
(1)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.
(2)THE S&P 500 IS AN UNMANAGED INDEX CONSIDERED ~INDICATIVE OF THE BROAD U.S.
STOCK MARKET, WHILE THE S&P/BARRA VALUE INDEX REFLECTS VALUE STOCKS. 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.
<PAGE>
TEN LARGEST COMMON STOCK HOLDINGS
INVESCO VALUE TRUST FUNDS, INC.
FEBRUARY 28, 1999
UNAUDITED
DESCRIPTION VALUE
- -------------------------------------------------------------------------------
TOTAL RETURN FUND
British Telecommunications PLC Sponsored ADR
Representing 10 Ord Shrs $ 52,687,500
Nucor Corp 40,106,250
Schering-Plough Corp 39,156,250
Hanson PLC Sponsored ADR Representing 5 Ord Shrs 36,562,500
Morgan Stanley Dean Witter & Co 36,200,000
Compaq Computer 35,250,000
International Business Machines 34,000,000
Hewlett-Packard Co 33,218,750
Electronic Data Systems 32,550,000
Bristol-Myers Squibb 31,484,375
VALUE EQUITY FUND
Lowe's Cos $ 10,569,487
Oracle Corp 9,744,600
Sun Microsystems 9,721,519
Rite Aid 9,681,750
Fannie Mae 9,555,000
Merck & Co 9,450,300
Schering-Plough Corp 9,397,500
Southwest Airlines 8,748,300
Dun & Bradstreet 7,877,500
Ford Motor 7,627,587
Composition of holdings is subject to change.
<PAGE>
STATEMENT OF INVESTMENT SECURITIES
INVESCO VALUE TRUST FUNDS, INC.
FEBRUARY 28, 1999
UNAUDITED
SHARES OR
PRINCIPAL
% DESCRIPTION AMOUNT VALUE
INTERMEDIATE GOVERNMENT BOND FUND
83.52 FIXED INCOME SECURITIES
48.67 US GOVERNMENT OBLIGATIONS
US Treasury Bonds, 9.250%, 2/15/2016 $ 500,000 $ 684,219
US Treasury Notes
8.750%, 8/15/2000 $ 2,000,000 2,100,626
7.500%, 5/15/2002 $ 1,450,000 1,544,704
6.375%, 3/31/2001 $ 2,200,000 2,252,250
6.375%, 9/30/2001 $ 850,000 873,641
6.375%, 8/15/2002 $ 1,600,000 1,654,501
6.250%, 1/31/2002 $ 2,000,000 2,055,000
6.250%, 2/15/2003 $ 2,000,000 2,066,876
5.750%, 11/30/2002 $ 1,500,000 1,522,969
5.750%, 8/15/2003 $ 2,000,000 2,033,750
5.500%, 2/15/2008 $ 200,000 202,188
===============================================================================
TOTAL US GOVERNMENT OBLIGATIONS (Cost $16,813,805) 16,990,724
===============================================================================
34.85 US GOVERNMENT AGENCY OBLIGATIONS
Fannie Mae, Gtd Mortgage Pass-Through
Certificates
7.000%, 1/1/2028 $ 831,506 842,632
6.500%, 2/1/2028 $ 852,070 846,566
6.000%, 5/15/2008 $ 2,000,000 2,021,714
6.000%, 5/1/2009 $ 684,001 681,805
Federal Farm Credit Bank, Medium-Term Notes
6.320%, 10/12/2010 $ 500,000 510,939
Federal Home Loan Bank
5.675%, 8/18/2003 $ 1,000,000 997,977
Freddie Mac
Gold Participation Certificates
8.000%, 10/1/2010 $ 524,315 541,858
7.000%, 6/1/2028 $ 884,832 896,485
6.500%, 7/1/2001 $ 470,921 475,762
Notes
6.950%, 4/1/2004 $ 2,000,000 2,105,336
Government National Mortgage
Association I
Pass-Through Certificates
7.500%, 3/15/2026 $ 801,037 824,692
7.000%, 10/15/2008 $ 440,709 453,529
6.500%, 10/15/2008 $ 435,315 442,202
<PAGE>
SHARES OR
PRINCIPAL
% DESCRIPTION AMOUNT VALUE
6.000%, 11/15/2008 $ 524,550 $ 525,709
===============================================================================
TOTAL US GOVERNMENT AGENCY OBLIGATIONS (Cost $12,203,777) 12,167,206
===============================================================================
TOTAL FIXED INCOME SECURITIES (Cost $29,017,582) 29,157,930
===============================================================================
16.48 SHORT-TERM INVESTMENTS
8.87 US GOVERNMENT OBLIGATIONS
US Treasury Notes, 8.500%, 2/15/2000
(Cost $3,085,287) $ 3,000,000 3,096,564
===============================================================================
7.61 REPURCHASE AGREEMENTS
Repurchase Agreement with State Street dated 2/26/1999 due 3/1/1999 at
4.720%, repurchased at $2,659,134 (Collaterized by US Treasury Bonds,
due 1/15/2007 at 3.375%, value
$2,711,887) (Cost $2,656,000) $ 2,656,000 2,656,000
===============================================================================
TOTAL SHORT-TERM INVESTMENTS (Cost $5,741,287) 5,752,564
===============================================================================
100.00 TOTAL INVESTMENT SECURITIES AT VALUE
(Cost $34,758,869)(a) $ 4,910,494
===============================================================================
TOTAL RETURN FUND
65.29 COMMON STOCKS
2.45 AEROSPACE & DEFENSE
Boeing Co 450,000 $ 16,003,125
Lockheed Martin 650,000 24,496,875
Precision Castparts 454,100 16,858,462
Raytheon Co Class B 400,000 21,375,000
===============================================================================
78,733,462
0.56 AIRLINES
Southwest Airlines 600,000 18,075,000
===============================================================================
1.20 AUTO PARTS
Cooper Tire & Rubber 750,000 14,812,500
Genuine Parts 800,000 23,950,000
===============================================================================
38,762,500
0.92 AUTOMOBILES
Ford Motor 500,000 29,656,250
===============================================================================
3.26 BANKS
Bank One 486,000 26,122,500
BankAmerica Corp 330,000 21,553,125
First Union 300,000 15,993,750
National City 405,000 28,299,375
Wachovia Corp 154,000 13,099,625
===============================================================================
105,068,375
0.60 BEVERAGES
Anheuser-Busch Cos 250,000 19,171,875
===============================================================================
<PAGE>
SHARES OR
PRINCIPAL
% DESCRIPTION AMOUNT VALUE
1.26 BUILDING MATERIALS
Lowe's Cos 400,000 $ 23,725,000
Sherwin-Williams Co 700,000 16,843,750
===============================================================================
40,568,750
2.65 CHEMICALS
Dow Chemical 200,000 19,675,000
Great Lakes Chemical 600,000 23,362,500
Morton International 700,000 25,287,500
Nalco Chemical 600,000 16,875,000
===============================================================================
85,200,000
4.14 COMPUTER RELATED
Adaptec Inc(b) 600,000 11,962,500
Compaq Computer 1,000,000 35,250,000
Computer Associates International 450,000 18,900,000
Hewlett-Packard Co 500,000 33,218,750
International Business Machines 200,000 34,000,000
===============================================================================
133,331,250
1.82 CONGLOMERATES
Fortune Brands 300,000 9,037,500
Hanson PLC Sponsored ADR
Representing 5 Ord Shrs 900,000 36,562,500
National Service Industries 400,000 12,850,000
===============================================================================
58,450,000
0.90 DISTRIBUTION
Supervalu Inc 1,200,000 28,875,000
===============================================================================
3.72 ELECTRIC UTILITIES
DTE Energy 700,000 27,650,000
Edison International 600,000 15,300,000
Entergy Corp 1,000,000 28,250,000
GPU Inc 500,000 19,937,500
Unicom Corp 800,000 28,450,000
===============================================================================
119,587,500
1.63 ELECTRICAL EQUIPMENT
General Electric 300,000 30,093,750
Grainger (W W) Inc 500,000 22,250,000
===============================================================================
52,343,750
0.82 ELECTRONICS -- SEMICONDUCTOR
Conexant Systems(b) 250,000 4,250,000
Rockwell International 500,000 22,218,750
===============================================================================
26,468,750
1.43 FOODS
Archer-Daniels-Midland Co 892,500 13,499,063
Heinz (H J) Co 200,000 10,887,500
Unilever NV New York Registered Shrs 300,000 21,731,250
===============================================================================
46,117,813
<PAGE>
SHARES OR
PRINCIPAL
% DESCRIPTION AMOUNT VALUE
0.53 HARDWARE & TOOLS
Snap-On Inc 600,000 $ 16,950,000
===============================================================================
5.80 HEALTH CARE DRUGS -- PHARMACEUTICALS
Abbott Laboratories 350,000 16,253,125
American Home Products 400,000 23,800,000
Bristol-Myers Squibb 250,000 31,484,375
Columbia/HCA Healthcare 1,300,000 23,237,500
Lilly (Eli) & Co 300,000 28,406,250
Merck & Co 300,000 24,525,000
Schering-Plough Corp 700,000 39,156,250
===============================================================================
186,862,500
0.75 HOUSEHOLD FURNTITURE & APPLIANCES
Shaw Industries(b) 400,000 8,775,000
Whirlpool Corp 350,000 15,225,000
===============================================================================
24,000,000
4.83 INSURANCE
American General 300,000 21,975,000
Lincoln National 200,000 18,937,500
Loews Corp 400,000 31,275,000
MGIC Investment 700,000 23,843,750
Ohio Casualty 650,000 26,243,750
Old Republic International 700,000 13,168,750
SAFECO Corp 500,000 20,093,750
===============================================================================
155,537,500
0.73 INSURANCE BROKERS
Marsh & McLennan 330,000 23,368,125
===============================================================================
1.12 INVESTMENT BANK/BROKER FIRM
Morgan Stanley Dean Witter & Co 400,000 36,200,000
===============================================================================
1.25 IRON & STEEL
Nucor Corp 900,000 40,106,250
===============================================================================
1.64 MACHINERY
Caterpillar Inc 500,000 22,781,250
Deere & Co 500,000 16,343,750
Dover Corp 400,000 13,600,000
===============================================================================
52,725,000
2.50 MANUFACTURING
Federal Signal 600,000 14,062,500
Illinois Tool Works 350,000 24,062,500
Minnesota Mining & Manufacturing 200,000 14,812,500
Textron Inc 120,000 9,360,000
York International 500,000 18,125,000
===============================================================================
80,422,500
0.45 METALS MINING
Phelps Dodge 300,000 14,550,000
===============================================================================
<PAGE>
SHARES OR
PRINCIPAL
% DESCRIPTION AMOUNT VALUE
1.38 OFFICE EQUIPMENT & SUPPLIES
Ikon Office Solutions 1,200,000 $ 16,950,000
Xerox Corp 500,000 27,593,750
===============================================================================
44,543,750
3.17 OIL & GAS RELATED
Exxon Corp 300,000 19,968,750
Norsk Hydro A/SA Sponsored
DR Representing Ord Shrs 750,000 25,453,125
Repsol SA Sponsored ADR
Representing Ord Shrs 450,000 23,625,000
Royal Dutch Petroleum
New York Registry 1.25 Gldr Shrs 260,000 11,407,500
Yacimientos Petroliferos
Fiscades SA Sponsored ADR
Representing Class D Shrs 750,000 21,750,000
===============================================================================
102,204,375
0.61 PAPER & FOREST PRODUCTS
Kimberly-Clark Corp 250,000 11,812,500
Westvaco Corp 350,000 7,831,250
===============================================================================
19,643,750
1.04 POLLUTION CONTROL
Browning-Ferris Industries 500,000 15,750,000
Waste Management 362,500 17,717,188
===============================================================================
33,467,188
0.55 PUBLISHING
Gannett Co 280,000 17,780,000
===============================================================================
0.73 RAILROADS
CSX Corp 600,000 23,550,000
===============================================================================
2.07 RETAIL
Dillard's Inc Class A 650,000 16,168,750
K mart Corp(b) 500,000 8,750,000
Penney (J C) Co 600,000 21,675,000
Rite Aid 350,000 14,481,250
Toys "R" Us(b) 400,000 5,650,000
===============================================================================
66,725,000
1.81 SERVICES
Dun & Bradstreet 750,000 25,687,500
Electronic Data Systems 700,000 32,550,000
===============================================================================
58,237,500
0.68 SPECIALTY PRINTING
Deluxe Corp 650,000 22,018,750
===============================================================================
1.64 TELECOMMUNICATIONS -- LONG DISTANCE
British Telecommunications PLC
Sponsored ADR
Representing 10 Ord Shrs 300,000 52,687,500
===============================================================================
2.11 TELEPHONE
Bell Atlantic 300,000 17,231,250
SBC Communications 527,040 27,867,240
<PAGE>
SHARES OR
PRINCIPAL
% DESCRIPTION AMOUNT VALUE
Telefonos de Mexico SA de
CV Sponsored ADR
Representing 20 Series L Shrs 400,000 $ 22,875,000
===============================================================================
67,973,490
1.53 TEXTILE -- APPAREL MANUFACTURING
Liz Claiborne 500,000 16,843,750
Unifi Inc 700,000 8,443,750
VF Corp 500,000 24,062,500
===============================================================================
49,350,000
1.01 TOBACCO
Gallaher Group PLC Sponsored
ADR Representing 4 Ord Shrs 250,000 6,968,750
Philip Morris 650,000 25,431,250
===============================================================================
32,400,000
TOTAL COMMON STOCKS (Cost $1,522,917,609) 2,101,713,453
===============================================================================
29.51 FIXED INCOME SECURITIES
13.69 US GOVERNMENT OBLIGATIONS
US Treasury Bonds
9.375%, 2/15/2006 $ 38,750,000 47,589,844
9.250%, 2/15/2016 $ 20,800,000 28,463,510
8.125%, 8/15/2019 $ 20,800,000 26,409,510
7.625%, 2/15/2025 $ 23,000,000 28,599,073
7.250%, 8/15/2022 $ 16,800,000 19,776,758
US Treasury Notes
8.750%, 8/15/2000 $ 25,000,000 26,257,824
8.000%, 5/15/2001 $ 20,500,000 21,691,562
6.500%, 8/15/2005 $ 29,300,000 31,030,545
6.375%, 8/15/2002 $ 23,750,000 24,558,995
6.250%, 2/15/2003 $ 43,300,000 44,747,864
6.125%, 8/15/2007 $ 51,000,000 53,374,711
5.750%, 8/15/2003 $ 27,300,000 27,760,687
5.500%, 2/15/2008 $ 40,000,000 40,437,518
US Treasury Security Stripped Interest
Payment Generic Tint Payment,
Zero Coupon, 8/15/2003 $ 25,250,000 20,029,284
===============================================================================
TOTAL US GOVERNMENT OBLIGATIONS (Cost $423,875,809) 440,727,685
===============================================================================
4.42 US GOVERNMENT AGENCY OBLIGATIONS
Fannie Mae
Gtd Mortgage Pass-Through Certificates
8.500%, 3/1/2010 $ 3,486,321 3,641,183
8.000%, 7/1/2024 $ 4,248,848 4,421,776
7.500%, 8/1/2007 $ 1,011,749 1,043,264
7.500%, 7/1/2024 $ 7,983,986 8,214,084
7.000%, 9/1/2027 $ 13,889,973 14,062,875
7.000%, 12/1/2027 $ 7,912,829 8,018,702
6.500%, 5/1/2026 $ 6,058,183 6,023,893
6.000%, 5/1/2009 $ 6,852,167 6,830,170
<PAGE>
SHARES OR
PRINCIPAL
% DESCRIPTION AMOUNT VALUE
Medium-Term Notes
6.060%, 10/8/2002 $ 20,000,000 $ 20,260,559
Freddie Mac, Gold Participation
Certificates
8.000%, 10/1/2010 $ 2,446,803 2,528,673
8.000%, 5/1/2024 $ 3,862,542 4,026,545
7.500%, 12/1/2026 $ 6,074,517 6,236,038
7.000%, 4/1/2028 $ 10,187,673 10,321,843
6.500%, 7/1/2001 $ 3,296,449 3,330,337
6.500%, 1/1/2029 $ 14,987,257 14,904,527
Government National Mortgage
Association I
Pass-Through Certificates
7.500%, 3/15/2026 $ 3,738,174 3,848,562
7.000%, 10/15/2008 $ 644,896 663,656
7.000%, 12/15/2022 $ 165,699 168,346
7.000%, 12/15/2025 $ 7,090,702 7,197,133
6.500%, 10/15/2008 $ 652,973 663,303
6.500%, 12/15/2028 $ 15,114,848 15,036,400
6.000%, 11/15/2008 $ 786,824 788,563
===============================================================================
TOTAL US GOVERNMENT AGENCY
OBLIGATIONS (Cost $141,306,272) 142,230,432
===============================================================================
1.03 ASSET-BACKED SECURITIES
1.03 CONSUMER FINANCE
Chase Manhattan Credit Card Master
Trust Series 1996-3, Class A,
7.040%, 2/15/2005 $ 18,000,000 18,519,480
Discover Card Master Trust I,
Series 1998-7 Class A, 5.600%,
5/16/2006 $ 15,000,000 14,815,050
===============================================================================
TOTAL ASSET-BACKED SECURITIES (Cost $33,775,046) 33,334,530
===============================================================================
9.84 CORPORATE BONDS
0.95 AUTOMOBILES
Ford Motor Notes, 6.500%, 8/1/2018 $ 15,000,000 14,842,438
General Motors Acceptance
Global Bonds, 5.500%, 1/14/2002 $ 10,000,000 9,909,270
Notes, 6.125%, 1/22/2008 $ 6,000,000 5,944,458
===============================================================================
30,696,166
2.39 BANKS
ABN Amro Bank NV, Sub Notes
7.550%, 6/28/2006 $ 15,000,000 15,896,894
6.625%, 10/31/2001 $ 5,000,000 5,064,754
BankAmerica Corp, Sub Notes,
6.875%, 6/1/2003 $ 4,000,000 4,111,332
National City, Sub Notes,
7.200%, 5/15/2005 $ 2,000,000 2,094,834
Norwest Financial, Sr Notes,
5.625%, 2/3/2009 $ 16,000,000 15,271,199
SunTrust Banks, Sr Notes,
6.250%, 6/1/2008 $ 17,250,000 17,247,618
Wachovia Bank, Medium-Term Notes,
Series 3 7.000%, 10/17/2008 $ 7,000,000 7,389,375
Wachovia Corp, Sub Notes,
6.250%, 8/4/2008 $ 10,000,000 10,024,910
===============================================================================
77,100,916
<PAGE>
SHARES OR
PRINCIPAL
% DESCRIPTION AMOUNT VALUE
0.60 BEVERAGES
Anheuser-Busch Cos, Notes,
5.375%, 9/15/2008 $ 20,000,000 $ 19,374,500
===============================================================================
0.18 CHEMICALS
Eastman Chemical, Notes,
6.375%, 1/15/2004 $ 6,000,000 5,904,509
===============================================================================
0.47 COMMUNICATIONS -- EQUIPMENT &
MANUFACTURING
Motorola Inc, Notes, 6.500%,
3/1/2008 $ 15,000,000 15,293,278
===============================================================================
0.42 ELECTRIC UTILITIES
Duke Energy, Medium-Term Notes
6.125%, 7/22/2003 $ 2,900,000 2,910,602
National Rural Utilities,
Secured Collateral Trust 6.550%,
11/1/2018 $ 10,500,000 10,478,106
===============================================================================
13,388,708
0.74 FINANCIAL
Associates Corp of North America,
Sr Notes 6.375%, 10/15/2002 $ 5,000,000 5,036,414
5.500%, 2/15/2004 $ 15,000,000 14,673,269
Commercial Credit, Notes,
6.375%, 9/15/2002 $ 4,000,000 4,038,711
===============================================================================
23,748,394
1.18 FOODS
CPC International
Medium-Term Notes, Series D
6.875%, 10/15/2003 $ 3,000,000 3,143,640
Notes, Series C, 6.150%,
1/15/2006 $ 15,000,000 15,103,798
Campbell Soup, Notes
6.900%, 10/15/2006 $ 5,000,000 5,326,395
4.750%, 10/1/2003 $ 15,000,000 14,476,618
===============================================================================
38,050,451
0.31 HEALTH CARE RELATED
Guidant Corp, Notes,
6.150%, 2/15/2006 $ 10,000,000 9,854,419
===============================================================================
0.16 INSURANCE
CNA Financial, Notes,
6.450%, 1/15/2008 $ 5,300,000 5,050,438
===============================================================================
0.37 LEISURE TIME
Carnival Corp, Notes,
6.150%, 4/15/2008 $ 12,000,000 11,755,104
===============================================================================
0.36 MACHINERY
Cooper Industries,
Medium-Term Notes, Series 3
6.375%, 5/8/2008 $ 11,600,000 11,661,712
===============================================================================
0.37 MANUFACTURING
Tyco International Group SA,
Gtd Notes 6.125%, 1/15/2009 $ 12,000,000 11,759,326
===============================================================================
0.28 NATURAL GAS
Enron Corp, Notes, 6.625%,
11/15/2005 $ 9,000,000 9,018,585
===============================================================================
0.11 PUBLISHING
Gannett Co, Notes, 5.850%,
5/1/2000 $ 3,500,000 3,511,784
===============================================================================
<PAGE>
SHARES OR
PRINCIPAL
% DESCRIPTION AMOUNT VALUE
0.29 RETAIL
May Department Stores, Deb,
6.875%, 11/1/2005 $ 4,000,000 $ 4,131,908
Wal-Mart Stores, Notes,
8.625%, 4/1/2001 $ 5,000,000 5,312,714
===============================================================================
9,444,622
0.53 TELEPHONE
Ameritech Capital Funding, Notes
6.150%, 1/15/2008 $ 15,000,000 15,124,063
BellSouth Telecommunications, Notes
6.500%, 6/15/2005 $ 2,000,000 2,071,072
===============================================================================
17,195,135
0.13 TOYS
Mattel Inc, Notes, 6.750%,
5/15/2000 $ 4,000,000 4,034,867
===============================================================================
TOTAL CORPORATE BONDS (Cost $319,869,402) 316,842,914
===============================================================================
0.53 FOREIGN GOVERNMENT OBLIGATIONS
Province of Manitoba, Unsecured Deb,
5.500%, 10/1/2008 (Cost $17,518,447) $ 17,500,000 16,966,250
===============================================================================
TOTAL FIXED INCOME SECURITIES
(Cost $936,344,976) 950,101,811
===============================================================================
5.20 SHORT-TERM INVESTMENTS
0.62 US GOVERNMENT OBLIGATIONS
US Treasury Notes, 6.375%, 7/15/1999
(Cost $20,008,518) $ 20,000,000 20,118,759
===============================================================================
0.03 CORPORATE BONDS
0.03 ELECTRIC UTILITES
Duke Energy, 1st & Ref Mortgage, Notes
7.500%, 4/1/1999 (Cost $1,000,832) $ 1,000,000 1,001,587
===============================================================================
4.55 REPURCHASE AGREEMENTS
Repurchase Agreement with
State Street dated 2/26/1999
due 3/1/1999 at 4.720%,
repurchased at $146,290,518
(Collateralized by US Treasury
Bonds, due 1/15/2007 at 3.375%, value
$149,173,809) (Cost $146,233,000) $ 146,233,000 146,233,000
===============================================================================
TOTAL SHORT-TERM INVESTMENTS (Cost $167,242,350) 167,353,346
===============================================================================
100.00 TOTAL INVESTMENT SECURITIES AT VALUE
(Cost $2,626,504,935)
(Cost for Income Tax Purposes $2,626,518,260) $ 3,219,168,610
===============================================================================
VALUE EQUITY FUND
98.02 COMMON STOCKS
2.62 AEROSPACE & DEFENSE
Lockheed Martin 106,520 $ 4,014,473
Precision Castparts 10,000 371,250
Raytheon Co Class B 120,000 6,412,500
===============================================================================
10,798,223
<PAGE>
SHARES OR
PRINCIPAL
% DESCRIPTION AMOUNT VALUE
2.12 AIRLINES
Southwest Airlines 290,400 $ 8,748,300
===============================================================================
1.85 AUTOMOBILES
Ford Motor 128,600 7,627,587
===============================================================================
7.88 BANKS
Bank One 129,600 6,966,000
BankAmerica Corp 111,364 7,273,461
Chase Manhattan 71,600 5,701,150
Commerce Bancshares 105,000 4,278,750
First Union 60,000 3,198,750
Wachovia Corp 60,000 5,103,750
===============================================================================
32,521,861
5.56 BUILDING MATERIALS
Lowe's Cos 178,200 10,569,487
Sherwin-Williams Co 200,000 4,812,500
Vulcan Materials 56,300 7,586,425
===============================================================================
22,968,412
0.73 CHEMICALS
Dow Chemical 30,600 3,010,275
===============================================================================
8.61 COMPUTER RELATED
Compaq Computer 148,200 5,224,050
Computer Associates
International 113,225 4,755,450
International Business
Machines 36,000 6,120,000
Oracle Corp(b) 174,400 9,744,600
Sun Microsystems(b) 99,900 9,721,519
===============================================================================
35,565,619
1.48 CONGLOMERATES
Hanson PLC Sponsored ADR
Representing 5 Ord Shrs 150,000 6,093,750
===============================================================================
1.40 DISTRIBUTION
Supervalu Inc 240,000 5,775,000
===============================================================================
3.69 ELECTRIC UTILITIES
DTE Energy 137,000 5,411,500
GPU Inc 45,000 1,794,375
Southern Co 135,000 3,383,438
TECO Energy 215,600 4,662,350
===============================================================================
15,251,663
1.76 ELECTRICAL EQUIPMENT
General Electric 72,500 7,272,656
===============================================================================
1.49 ELECTRONICS -- SEMICONDUCTOR
Conexant Systems(b) 40,000 680,000
Intel Corp 16,000 1,919,000
Rockwell International 80,000 3,555,000
===============================================================================
6,154,000
<PAGE>
SHARES OR
PRINCIPAL
% DESCRIPTION AMOUNT VALUE
3.52 FINANCIAL
Associates First Capital
Class A 67,408 $ 2,738,450
Berkshire Hathaway Class B(b) 945 2,248,155
Fannie Mae 136,500 9,555,000
===============================================================================
14,541,605
12.35 HEALTH CARE DRUGS-- PHARMACEUTICALS
Abbott Laboratories 94,000 4,365,125
Allergan Inc 65,000 5,297,500
American Home Products 100,000 5,950,000
Bristol-Myers Squibb 60,000 7,556,250
Merck & Co 115,600 9,450,300
Mylan Laboratories 138,000 3,769,125
Schering-Plough Corp 168,000 9,397,500
Warner-Lambert Co 75,600 5,221,125
===============================================================================
51,006,925
1.50 HEALTH CARE RELATED
Biomet Inc 168,900 6,196,519
===============================================================================
0.17 HOUSEHOLD FURNITURE & APPLIANCES
Whirlpool Corp 16,300 709,050
===============================================================================
9.33 INSURANCE
American General 100,000 7,325,000
American International Group 44,225 5,038,886
Jefferson-Pilot Corp 86,362 5,856,423
Loews Corp 50,000 3,909,375
MGIC Investment 110,000 3,746,875
Old Republic International 109,400 2,058,087
SAFECO Corp 110,000 4,420,625
Torchmark Corp 185,000 6,151,250
===============================================================================
38,506,521
1.54 INSURANCE BROKERS
Marsh & McLennan 90,000 6,373,125
===============================================================================
0.74 IRON & STEEL
Nucor Corp 68,200 3,039,163
===============================================================================
0.99 MACHINERY
Dover Corp 120,600 4,100,400
===============================================================================
3.45 MANUFACTURING
Federal Signal 178,500 4,183,594
Illinois Tool Works 30,000 2,062,500
Textron Inc 54,100 4,219,800
York International 103,700 3,759,125
===============================================================================
14,225,019
0.67 METALS MINING
Phelps Dodge 57,200 2,774,200
===============================================================================
<PAGE>
SHARES OR
PRINCIPAL
% DESCRIPTION AMOUNT VALUE
2.63 OFFICE EQUIPMENT & SUPPLIES
Pitney Bowes 69,100 $ 4,366,256
Xerox Corp 117,400 6,479,013
===============================================================================
10,845,269
5.17 OIL & GAS RELATED
Exxon Corp 70,550 4,695,984
Norsk Hydro A/SA Sponsored
ADR Representing Ord Shrs 90,000 3,054,375
Repsol SA Sponsored ADR
Representing Ord Shrs 105,400 5,533,500
Royal Dutch Petroleum
New York Registry 1.25 Gldr Shrs 88,304 3,874,338
Yacimientos Petroliferos
Fiscades SA Sponsored ADR
Representing Class D Shrs 144,700 4,196,300
===============================================================================
21,354,497
0.95 PAPER & FOREST PRODUCTS
Kimberly-Clark Corp 82,700 3,907,575
===============================================================================
0.51 POLLUTION CONTROL
Browning-Ferris Industries 67,100 2,113,650
===============================================================================
1.39 PUBLISHING
American Greetings Class A 108,900 2,579,569
Gannett Co 50,000 3,175,000
===============================================================================
5,754,569
2.34 RETAIL
Rite Aid 234,000 9,681,750
===============================================================================
3.69 SERVICES
Dun & Bradstreet 230,000 7,877,500
Electronic Data Systems 116,600 5,421,900
GATX Corp 55,800 1,928,587
===============================================================================
15,227,987
1.31 SPECIALTY PRINTING
Deluxe Corp 160,000 5,420,000
===============================================================================
3.13 TELEPHONE
Ameritech Corp 75,000 4,903,125
Bell Atlantic 93,100 5,347,431
US WEST 50,000 2,665,625
===============================================================================
12,916,181
1.40 TEXTILE -- APPAREL MANUFACTURING
VF Corp 120,000 5,775,000
===============================================================================
1.03 TOBACCO
Philip Morris 108,200 4,233,325
===============================================================================
1.02 TOYS
Mattel Inc 160,400 4,230,550
===============================================================================
TOTAL COMMON STOCKS
(Cost $264,032,476) 404,720,226
===============================================================================
<PAGE>
SHARES OR
PRINCIPAL
% DESCRIPTION AMOUNT VALUE
1.98 SHORT-TERM INVESTMENTS --
REPURCHASE AGREEMENTS
Repurchase Agreement with
State Street dated 2/26/1999
due 3/1/1999 at 4.720%,
repurchased at $8,181,217
(Collateralized by US Treasury
Notes, due 1/15/2007 at 3.375%, value
$8,346,194) (Cost $8,178,000) $ 8,178,000 $ 8,178,000
===============================================================================
100.00 TOTAL INVESTMENT SECURITIES AT VALUE
(Cost $272,210,476)
(Cost for Income Tax Purposes $272,221,246) $ 412,898,226
===============================================================================
(a) Also represents cost for income tax purposes.
(b) Security is non-income producing.
See Notes to Financial Statements
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
INVESCO Value Trust Funds, Inc.
February 28, 1999
UNAUDITED
Intermediate Total
Government Return
Bond Fund Fund
- -------------------------------------------------------------------------------
ASSETS
Investment Securities:
At Cost(a) $34,758,869 $ 2,626,504,935
===============================================================================
At Value(a) $34,910,494 $ 3,219,168,610
Cash 0 346,707
Receivables:
Investment Securities Sold 0 345,873
Fund Shares Sold 192,165 7,783,625
Dividends and Interest 321,881 12,267,765
Prepaid Expenses and Other Assets 114,198 351,340
===============================================================================
TOTAL ASSETS 35,538,738 3,240,263,920
===============================================================================
LIABILITIES
Payables:
Custodian 12,947 0
Distributions to Shareholders 6,118 179,730
Fund Shares Repurchased 46,308 2,769,547
Accrued Distribution Expenses 6,660 228,491
Accrued Expenses and Other Payables 8,350 160,270
===============================================================================
TOTAL LIABILITIES 80,383 3,338,038
===============================================================================
NET ASSETS AT VALUE $35,458,355 $ 3,236,925,882
===============================================================================
NET ASSETS
Paid-in Capital $35,349,291 $ 2,633,463,435
Accumulated Undistributed (Distributions
in Excess of) Net Investment Income 327 (20,492)
Accumulated Undistributed Net Realized
Gain (Loss) on Investment Securities
and Foreign Currency Transactions (42,888) 10,819,264
Net Appreciation of Investment
Securities and Foreign Currency
Transactions 151,625 592,663,675
===============================================================================
NET ASSETS AT VALUE $35,458,355 $ 3,236,925,882
===============================================================================
Shares Outstanding(b) 2,820,230 105,642,128
Net Asset Value, Offering and Redemption
Price per Share $ 12.57 $ 30.64
===============================================================================
(a)Investment securities at cost and value at February 28, 1999 include
repurchase agreements of $2,656,000 and $146,233,000 for Intermediate
Government Bond and Total Return Funds, respectively.
(b)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,
1999, there was an unlimited number of authorized Fund shares.
See Notes to Financial Statements
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES (CONTINUED)
INVESCO Value Trust Funds, Inc.
FEBRUARY 28, 1999
UNAUDITED
Value
Equity
Fund
- -------------------------------------------------------------------------------
ASSETS
Investment Securities:
At Cost(a) $272,210,476
===============================================================================
At Value(a) $412,898,226
Cash 26,395
Receivables:
Fund Shares Sold 551,178
Dividends and Interest 686,757
Prepaid Expenses and Other Assets 276,269
===============================================================================
TOTAL ASSETS 414,438,825
===============================================================================
LIABILITIES
Payables:
Distributions to Shareholders 2,902
Fund Shares Repurchased 338,789
Accrued Distribution Expenses 80,709
Accrued Expenses and Other Payables 33,112
===============================================================================
TOTAL LIABILITIES 455,512
===============================================================================
NET ASSETS AT VALUE $413,983,313
===============================================================================
NET ASSETS
Paid-in Capital $282,933,649
Accumulated Undistributed (Distributions
in excess of) Net Investment Income (1,266)
Accumulated Undistributed Net Realized
Loss on Investment Securities and
Foreign Currency Transactions (9,636,820)
Net Appreciation of Investment Securities 140,687,750
===============================================================================
NET ASSETS AT VALUE $413,983,313
===============================================================================
Shares Outstanding(b) 14,378,199
Net Asset Value, Offering and Redemption
Price per Share $ 28.79
===============================================================================
(a)Investment securities at cost and value at February 28, 1999 include a
repurchase agreement of $8,178,000.
(b)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,
1999, there was an unlimited number of authorized Fund shares.
See Notes to Financial Statements
<PAGE>
STATEMENT OF OPERATIONS
INVESCO Value Trust Funds, Inc.
SIX MONTHS ENDED FEBRUARY 28, 1999
UNAUDITED
Intermediate Total
Government Return
Bond Fund Fund
INVESTMENT INCOME
INCOME
Dividends $ 0 $ 19,933,490
Interest 985,389 29,159,075
Foreign Taxes Withheld 0 (246,300)
===============================================================================
TOTAL INCOME 985,389 48,846,265
===============================================================================
EXPENSES
Investment Advisory Fees 106,651 8,364,170
Distribution Expenses 43,866 952,947
Transfer Agent Fees 67,505 2,460,956
Administrative Fees 7,666 226,172
Custodian Fees and Expenses 5,054 167,194
Professional Fees and Expenses 7,324 53,712
Registration Fees and Expenses 12,804 133,106
Reports to Shareholders 9,049 68,458
Trustees' Fees and Expenses 5,143 74,363
Other Expenses 2,179 65,999
===============================================================================
TOTAL EXPENSES 267,241 12,567,077
Fees and Expenses Absorbed by
Investment Adviser (86,363) (241,349)
Fees and Expenses Paid Indirectly (2,902) (204,708)
===============================================================================
NET EXPENSES 177,976 12,121,020
===============================================================================
NET INVESTMENT INCOME 807,413 36,725,245
===============================================================================
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENT SECURITIES
Net Realized Gain on:
Investment Securities 346,070 19,125,915
Foreign Currency Transactions 0 19,608
===============================================================================
Total Net Realized Gain 346,070 19,145,523
===============================================================================
Change in Net Appreciation of
Investment Securities (674,637) 274,883,090
===============================================================================
NET GAIN (LOSS) ON INVESTMENT SECURITIES
AND FOREIGN CURRENCY TRANSACTIONS (328,567) 294,028,613
===============================================================================
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 478,846 $ 330,753,858
===============================================================================
See Notes to Financial Statements
<PAGE>
STATEMENT OF OPERATIONS (CONTINUED)
INVESCO Value Trust Funds, Inc.
SIX MONTHS ENDED FEBRUARY 28, 1999
UNAUDITED
Value
Equity
Fund
- -------------------------------------------------------------------------------
INVESTMENT INCOME
INCOME
Dividends $ 3,390,036
Interest 438,738
Foreign Taxes Withheld (29,348)
===============================================================================
TOTAL INCOME 3,799,426
===============================================================================
EXPENSES
Investment Advisory Fees 1,510,071
Distribution Expenses 503,357
Transfer Agent Fees 568,482
Administrative Fees 35,202
Custodian Fees and Expenses 28,410
Professional Fees and Expenses 14,678
Registration Fees and Expenses 27,800
Reports to Shareholders 48,809
Trustees' Fees and Expenses 14,955
Other Expenses 9,450
===============================================================================
TOTAL EXPENSES 2,761,214
Fees and Expenses Absorbed by Investment Adviser (225,987)
Fees and Expenses Paid Indirectly (14,535)
===============================================================================
NET EXPENSES 2,520,692
===============================================================================
NET INVESTMENT INCOME 1,278,734
===============================================================================
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENT SECURITIES
Net Realized Loss on Investment Securities
and Foreign Currency Transactions (9,601,816)
===============================================================================
Change in Net Appreciation of Investment Securities 84,030,748
===============================================================================
NET GAIN ON INVESTMENT SECURITIES AND FOREIGN
CURRENCY TRANSACTIONS 74,428,932
===============================================================================
NET INCREASE IN NET ASSETS FROM OPERATIONS $75,707,666
===============================================================================
See Notes to Financial Statements
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
INVESCO Value Trust Funds, Inc.
INTERMEDIATE GOVERNMENT
BOND FUND
Six Months Year
Ended Ended
February 28 August 31
- -------------------------------------------------------------------------------
1999 1998
UNAUDITED
OPERATIONS
Net Investment Income $ 807,413 $ 1,931,801
Net Realized Gain on Investment
Securities 346,070 440,515
Change in Net Appreciation of Investment
Securities (674,637) 519,048
===============================================================================
NET INCREASE IN NET ASSETS FROM OPERATIONS 478,846 2,891,364
===============================================================================
DISTRIBUTIONS TO SHAREHOLDERS
Net Investment Income (807,413) (1,931,801)
Net Realized Gain on Investment Securities (250,010) 0
===============================================================================
TOTAL DISTRIBUTIONS (1,057,423) (1,931,801)
===============================================================================
FUND SHARE TRANSACTIONS
Proceeds from Sales of Shares 40,719,232 33,923,198
Reinvestment of Distributions 982,824 1,744,866
===============================================================================
41,702,056 35,668,064
Amounts Paid for Repurchases of Shares (42,945,699) (43,787,720)
===============================================================================
NET DECREASE IN NET ASSETS FROM FUND
SHARE TRANSACTIONS (1,243,643) (8,119,656)
===============================================================================
TOTAL DECREASE IN NET ASSETS (1,822,220) (7,160,093)
NET ASSETS
Beginning of Period 37,280,575 44,440,668
===============================================================================
End of Period (Including Accumulated
Undistributed Net Investment Income
of $327 and $327, respectively) $ 35,458,355 $ 37,280,575
===============================================================================
-------------------------------------------------
FUND SHARE TRANSACTIONS
Shares Sold 3,161,447 2,691,029
Shares Issued from Reinvestment of
Distributions 76,635 139,204
===============================================================================
3,238,082 2,830,233
Shares Repurchased (3,340,279) (3,480,710)
===============================================================================
NET DECREASE IN FUND SHARES (102,197) (650,477)
===============================================================================
See Notes to Financial Statements
<PAGE>
INVESCO Value Trust Funds, Inc.
TOTAL RETURN FUND
Six Months Year
Ended Ended
February 28 August 31
- -------------------------------------------------------------------------------
1999 1998
UNAUDITED
OPERATIONS
Net Investment Income $ 36,725,245 $ 67,397,908
Net Realized Gain on Investment
Securities and Foreign Currency
Transactions 19,145,523 86,022,682
Change in Net Appreciation of
Investment Securities and
Foreign Currency Transactions 274,883,090 (79,067,445)
===============================================================================
NET INCREASE IN NET ASSETS FROM
OPERATIONS 330,753,858 74,353,145
===============================================================================
DISTRIBUTIONS TO SHAREHOLDERS
Net Investment Income (36,878,137) (67,353,840)
Net Currency Transactions Realized
Gain on Investment Securities
and Foreign Currency Transactions (77,268,060) (34,772,560)
===============================================================================
TOTAL DISTRIBUTIONS (114,146,197) (102,126,400)
===============================================================================
FUND SHARE TRANSACTIONS
Proceeds from Sales of Shares 800,901,184 1,412,738,595
Reinvestment of Distributions 113,143,852 100,609,294
===============================================================================
914,045,036 1,513,347,889
Amounts Paid for Repurchases of Shares (454,742,821) (770,152,733)
===============================================================================
NET INCREASE IN NET ASSETS FROM FUND
SHARE TRANSACTIONS 459,302,215 743,195,156
===============================================================================
TOTAL INCREASE IN NET ASSETS 675,909,876 715,421,901
NET ASSETS
Beginning of Period 2,561,016,006 1,845,594,105
===============================================================================
End of Period (Including Accumulated
Undistributed (Distributions in
Excess of) Net Investment Income of
($20,492) and $132,400, respectively) $ 3,236,925,882 $ 2,561,016,006
===============================================================================
----------------------------------------------------
FUND SHARE TRANSACTIONS
Shares Sold 25,858,880 46,622,819
Shares Issued from Reinvestment of
Distributions 3,656,082 3,448,941
===============================================================================
29,514,962 50,071,760
Shares Repurchased (14,821,909) (25,589,174)
===============================================================================
NET INCREASE IN FUND SHARES 14,693,053 24,482,586
===============================================================================
See Notes to Financial Statements
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
INVESCO Value Trust Funds, Inc.
VALUE EQUITY FUND
Six Months Year
Ended Ended
February 28 August 31
- -------------------------------------------------------------------------------
1999 1998
UNAUDITED
OPERATIONS
Net Investment Income $ 1,278,734 $ 3,528,628
Net Realized Gain (Loss) on Investment
Securities and Foreign
Currency Transactions (9,601,816) 39,716,148
Change in Net Appreciation of
Investment Securities 84,030,748 (45,560,535)
===============================================================================
NET INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS 75,707,666 (2,315,759)
===============================================================================
DISTRIBUTIONS TO SHAREHOLDERS
Net Investment Income (1,269,164) (3,546,111)
In Excess of Net Investment Income 0 (11,054)
Net Realized Gain on Investment
Securities and Foreign
Currency Transactions (31,634,749) (26,588,368)
===============================================================================
TOTAL DISTRIBUTIONS (32,903,913) (30,145,533)
===============================================================================
FUND SHARE TRANSACTIONS
Proceeds from Sales of Shares 149,441,850 451,339,743
Reinvestment of Distributions 32,679,027 28,948,214
===============================================================================
182,120,877 480,287,957
Amounts Paid for Repurchases of Shares (160,925,181) (467,608,421)
===============================================================================
NET INCREASE IN NET ASSETS FROM FUND
SHARE TRANSACTIONS 21,195,696 12,679,536
===============================================================================
TOTAL INCREASE (DECREASE) IN NET ASSETS 63,999,449 (19,781,756)
NET ASSETS
Beginning of Period 349,983,864 369,765,620
===============================================================================
End of Period (Including Accumulated
Undistributed (Distributions in
Excess of) Net Investment Income of
($1,266) and ($10,836), respectively $ 413,983,313 $ 349,983,864
===============================================================================
-------------------------------------------------------
FUND SHARE TRANSACTIONS
Shares Sold 5,163,895 15,256,421
Shares Issued from Reinvestment
of Distributions 1,150,958 1,058,632
===============================================================================
6,314,853 16,315,053
Shares Repurchased (5,564,273) (15,751,418)
===============================================================================
NET INCREASE IN FUND SHARES 750,580 563,635
===============================================================================
See Notes to Financial Statements
<PAGE>
INVESCO Notes to financial statements -- INVESCO Value Trust Funds, Inc.
NOTE 1 -- ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES. INVESCO Value Trust
Funds, Inc. (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 under procedures
established 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.
<PAGE>
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 information is obtained
subsequent to the ex dividend date. Interest income, which may be comprised of
stated coupon rate, market discount, original issue discount and amortized
premium, is recorded on the accrual basis. Income and expenses on foreign
securities are translated into U.S. dollars at rates of exchange prevailing when
accrued. Discounts and premiums on debt securities purchased are amortized over
the life of the respective security as adjustments to interest income. Cost is
determined on the specific identification basis. The cost of foreign securities
is translated into U.S. dollars at the rates of exchange prevailing when such
securities are acquired.
The Trust may have elements of risk due to investments in foreign issuers
located in a specific country. Such investments 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 U.S. Government.
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, 1998, Intermediate Government Bond Fund had $27,745, $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.
<PAGE>
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 month-end net asset value.
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. FORWARD FOREIGN CURRENCY CONTRACTS -- The Trust enters into short-term
forward foreign currency contracts in connection with planned purchases or sales
of securities as a hedge against fluctuations in foreign exchange rates pending
the settlement of transactions in foreign securities. A forward foreign currency
contract is an agreeement between contracting parties to exchange an amount of
currency at some future time at an agreed upon rate. These contracts are
marked-to-market daily and the related appreciation or depreciation of the
contracts is presented in the Statement of Assets and Liabilities. Any realized
gain or loss incurred by the fund upon the sale of securities is included in the
Statement of Operations.
G. EXPENSES -- Each 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.
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, Distribution Fees and Transfer Agent
Fees may be 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, 1999, Fees and Expenses Paid Indirectly
consisted of the following:
CUSTODIAN FEES DISTRIBUTION TRANSFER
FUND AND EXPENSES FEES AGENT FEES
- -------------------------------------------------------------------------------
Intermediate Government Bond
Fund $ 2,902 $ 0 $ 0
Total Return Fund 89,643 58,452 56,613
Value Equity Fund 14,535 0 0
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:
<TABLE>
<CAPTION>
AVERAGE NET ASSETS
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$500
$0 to Million Over $1 Billion $2 Billion $4 Billion $5 Billion Over
$500 to $1 $1 to $2 to $4 to $5 to $6 $6
Million Billion Billion Billion Billion Billion Billion Billion
- -----------------------------------------------------------------------------------------------------------------------------------
Intermediate Government Bond Fund 0.60% 0.50% 0.40% -- -- -- -- --
Total Return Fund 0.75% 0.65% -- 0.50% 0.45%(a) 0.40%(a) 0.375%(a) 0.35%(a)
Value Equity Fund 0.75% 0.65% 0.50% -- -- -- -- --
(a) Effective May 1, 1996, IFG voluntarily agreed to waive the portion of its fee which
exceeds 0.50% of average net assets in excess of $2 Billion for Total Return Fund. Such
wavier may be discontinued in the future.
</TABLE>
<PAGE>
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.
A plan of distribution pursuant to Rule 12b-1 of the Act (the "Plan") provides
for compensation of marketing and advertising expenditures to INVESCO
Distributors, Inc. ("IDI" or the "Distributor"), a wholly owned subsidiary of
IFG, to a maximum of 0.25% of annual average net assets. For the six months
ended February 28, 1999, Intermediate Government Bond, Total Return and Value
Equity Funds paid the Distributor $42,020, $720,929 and $502,069, respectively,
under the plan of distribution.
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.
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 has voluntarily agreed, in some instances, to absorb certain fees and
expenses incurred by Intermediate Government Bond and Value Equity Funds.
NOTE 3 -- PURCHASES AND SALES OF INVESTMENT SECURITIES. For the six months ended
February 28, 1999, the aggregate cost of purchases and proceeds from sales of
investment securities (excluding all U.S. Government securities and short-term
securities) were as follows:
FUND PURCHASES SALES
- -------------------------------------------------------------------------------
Total Return Fund $ 414,164,433 $ 34,960,473
Value Equity Fund 58,790,805 71,565,380
For the six months ended February 28, 1999, the aggregate cost of purchases and
proceeds from sales of U.S. Government securities were as follows:
FUND PURCHASES SALES
- -------------------------------------------------------------------------------
Intermediate Government Bond Fund $ 14,215,469 $ 14,097,453
Total Return Fund 55,311,093 93,101,008
NOTE 4 -- APPRECIATION AND DEPRECIATION. At February 28, 1999, 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:
GROSS GROSS NET
FUND APPRECIATION DEPRECIATION APPRECIATION
Intermediate Government
Bond Fund $ 336,092 $ 184,467 $ 151,625
Total Return Fund 698,281,447 105,631,097 592,650,350
Value Equity Fund 153,201,582 12,524,602 140,676,980
<PAGE>
NOTE 5 -- TRANSACTIONS WITH AFFILIATES. Certain of the Trust's officers and
trustees are also officers and directors of IFG, IDI or ICM.
The Trust has adopted an unfunded defined benefit 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 50% of the sum of the
retainer fee at the time of retirement plus the annual meeting fee.
Pension expenses for the six months ended February 28, 1999, 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:
UNFUNDED
PENSION ACCRUED PENSION
FUND EXPENSES PENSION COSTS LIABILITY
- -------------------------------------------------------------------------------
Intermediate Government
Bond Fund $ 554 $ 1,943 $ 4,973
Total Return Fund 30,307 65,424 150,270
Value Equity Fund 5,118 11,070 29,123
The independent trustees have contributed to a deferred compensation plan,
pursuant to which they have deferred receipt of a portion of the compensation
which they would otherwise have been paid as trustees of selected INVESCO Funds.
The deferred amounts may be invested in the shares of any of the INVESCO or
Treasurer's Series Trust Funds.
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 maximum of 10% of the Net Assets at Value of each respective
Fund. Each Fund agrees to pay annual fees and interest on the unpaid principal
balance based on prevailing market rates as defined in the agreement. At
February 28, 1999, there were no such borrowings.
<PAGE>
FINANCIAL HIGHLIGHTS
Intermediate Government Bond Fund
(For a Fund Share Outstanding Throughout Each Period)
SIX MONTHS
ENDED
FEBRUARY 28 YEAR ENDED AUGUST 31
- -------------------------------------------------------------------------------
1999 1998 1997 1996 1995 1994
UNAUDITED
PER SHARE DATA
Net Asset Value --
Beginning of Period $ 12.76 $12.44 $12.30 $12.64 $12.16 $13.25
===============================================================================
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income 0.29 0.64 0.66 0.73 0.73 0.70
Net Gains or (Losses)
on Securities (Both
Realized and Unrealized) (0.10) 0.32 0.14 (0.34) 0.48 (0.75)
===============================================================================
TOTAL FROM INVESTMENT
OPERATIONS 0.19 0.96 0.80 0.39 1.21 (0.05)
===============================================================================
LESS DISTRIBUTIONS
Dividends from Net
Investment Income(a) 0.29 0.64 0.66 0.73 0.73 0.70
Distributions from
Capital Gains 0.09 0.00 0.00 0.00 0.00 0.34
===============================================================================
TOTAL DISTRIBUTIONS 0.38 0.64 0.66 0.73 0.73 1.04
===============================================================================
Net Asset Value--
End of Period $ 12.57 $12.76 $12.44 $12.30 $12.64 $12.16
===============================================================================
TOTAL RETURN 1.47%(b) 7.92% 6.64% 3.12% 10.36% (0.37%)
RATIOS
Net Assets --
End of Period
($000 Omitted) $35,458 $37,281 $44,441 $39,949 $37,339 $31,861
Ratio of Expenses to
Average Net
Assets(c) 0.50%(b)(d) 1.01%(d) 1.02%(d) 1.15%(d) 1.20% 1.07%
Ratio of Net
Investment Income
to Average Net
Assets(c) 2.25%(b) 5.11% 5.32% 5.81% 6.04% 5.58%
Portfolio Turnover
Rate 42% (b) 57% 37% 63% 92% 49%
(a)Distributions in excess of net investment income for the year ended August
31, 1994, aggregated less than $0.01 on a per share basis.
(b)Based on operations for the period shown and, accordingly, are not
representative of a full year.
(c)Various expenses of the Fund were voluntarily absorbed by IFG for the six
months ended February 28, 1999 and the years ended August 31, 1998, 1997 and
1996. If such expenses had not been voluntarily absorbed, ratio of expenses
to average net assets would have been 0.74% (not annualized), 1.48%, 1.37%
and 1.24%, respectively, and ratio of net investment income to average net
assets would have been 2.01% (not annualized), 4.64%, 4.97% and 5.72%,
respectively.
(d)Ratio is based on Total Expenses of the Fund, less Expenses Absorbed by
Investment Adviser, which is before any expense offset arrangements.
<PAGE>
FINANCIAL HIGHLIGHTS
Total Return Fund
(For a Fund Share Outstanding Throughout Each Period)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
FEBRUARY 28 YEAR ENDED AUGUST 31
- --------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995 1994
UNAUDITED
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value --
Beginning of Period $ 28.16 $27.77 $22.60 $20.95 $18.54 $18.27
===================================================================================================
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income 0.37 0.83 0.77 0.73 0.72 0.69
Net Gains on
Securities (Both
Realized and Unrealized) 3.30 0.87 5.26 1.78 2.46 0.60
===================================================================================================
TOTAL FROM INVESTMENT
OPERATIONS 3.67 1.70 6.03 2.51 3.18 1.29
===================================================================================================
LESS DISTRIBUTIONS
Dividends from Net
Investment Income 0.37 0.83 0.77 0.73 0.72 0.60
In Excess of Net
Investment Income(a) 0.00 0.00 0.00 0.00 0.00 0.09
Distributions from
Capital Gains 0.82 0.48 0.09 0.13 0.05 0.17
In Excess of Capital
Gains 0.00 0.00 0.00 0.00 0.00 0.16
===================================================================================================
Total Distributions 1.19 1.31 0.86 0.86 0.77 1.02
===================================================================================================
Net Asset Value--
End of Period $30.64 $28.16 $27.77 $22.60 $20.95 $18.54
===================================================================================================
TOTAL RETURN 13.05%(b) 6.02% 27.01% 12.06% 17.54% 7.22%
RATIOS
Net Assets -- End
of Period
($000 Omitted) $3,236,926 $2,561,016 $1,845,594 $1,032,151 $563,468 $292,765
Ratio of Expenses
to Average Net
Assets(c) 0.41%(b)(d) 0.79%(d) 0.86%(d) 0.89%(d) 0.95% 0.96%
Ratio of Net
Investment
Income to Average
Net Assets(c) 1.24%(b) 2.82% 3.11% 3.44% 3.97% 3.31%
Portfolio Turnover
Rate 5% (b) 17% 4% 10% 30% 12%
(a)Distributions in excess of net investment income for the year ended August
31, 1995, aggregated less than $0.01 on a per share basis.
(b)Based on operations for the period shown, and accordingly, are not
representative of a full year.
(c)Various expenses of the Fund were voluntarily absorbed by IFG for the six
months ended February 28, 1999 and the year ended August 31, 1998. If such
expenses had not been voluntarily absorbed, ratio of expenses to average net
assets would have been 0.42% (not annualized) and 0.80%, respectively, and
ratio of net investment income to average net assets would have been 1.23%
(not annualized) and 2.81%, repectively.
(d)Ratio is based on Total Expenses of the Fund, less Expenses Absorbed by
Investment Adviser, if applicable, which is before any expense offset
arrangements.
</TABLE>
<PAGE>
FINANCIAL HIGHLIGHTS
Value Equity Fund
(For a Fund Share Outstanding Throughout Each Period)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
FEBRUARY 28 YEAR ENDED AUGUST 31
- ----------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C> <C>
UNAUDITED
PER SHARE DATA
Net Asset Value -- Beginning
of Period $ 25.68 $28.30 $22.24 $19.53 $18.12 $17.79
====================================================================================================
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income 0.09 0.26 0.35 0.35 0.39 0.36
Net Gains or (Losses) on
Securities (Both
Realized and Unrealized) 5.43 (0.43) 6.62 3.09 2.58 1.20
====================================================================================================
TOTAL FROM INVESTMENT
OPERATIONS 5.52 (0.17) 6.97 3.44 2.97 1.56
====================================================================================================
LESS DISTRIBUTIONS
Dividends from Net
Investment Income 0.09 0.26 0.35 0.35 0.39 0.31
In Excess of Net
Investment Income(a) 0.00 0.00 0.00 0.00 0.00 0.04
Distributions from
Capital Gains 2.32 2.19 0.56 0.38 1.17 0.88
====================================================================================================
Total Distributions 2.41 2.45 0.91 0.73 1.56 1.23
====================================================================================================
Net Asset Value-- End of
Period $ 28.79 $25.68 $28.30 $22.24 $19.53 $18.12
====================================================================================================
TOTAL RETURN 21.64%(b) (1.06%) 32.04% 17.77% 17.84% 9.09%
RATIOS
Net Assets -- End of Period
($000 Omitted) $413,983 $349,984 $369,766 $200,046 $153,171 $111,850
Ratio of Expenses to Average
Net Assets(c) 0.62%(b)(d) 1.15%(d) 1.04%(d) 1.01%(d) 0.97% 1.01%
Ratio of Net Investment
Income to Average
Net Assets(c) 0.32%(b) 0.86% 1.35% 1.64% 2.17% 1.80%
Portfolio Turnover Rate 15% (b) 48% 37% 27% 34% 53%
(a)Distributions in excess of net investment income for the year ended August
31, 1998, aggregated less than $0.01 on a per share basis.
(b)Based on operations for the period shown and, accordingly, are not
representative of a full year.
(c)Various expenses of the Fund were voluntarily absorbed by IFG for the six
months ended February 28, 1999 and the year ended August 31, 1998. If such
expenses had not be voluntarily absorbed, ratio of expenses to average net
assets would have been 0.68% (not annualized) and 1.19%, respectively, and
ratio of net investment income to average net assets would have been 0.26%
(not annualized) and 0.82%, respectively.
(d)Ratio is based on Total Expenses of the Fund, less Expenses Absorbed by
Investment Adviser, if applicable, which is before any expense offset
arrangements.
</TABLE>
<PAGE>
INVESCO FAMILY OF FUNDS
Newspaper
Fund Name Fund Code Ticker Symbol Abbreviation
- ------------------------------------------------------------------------------
INTERNATIONAL
International Blue Chip 09 IIBCX ItlBlChp
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
- ------------------------------------------------------------------------------
STOCK
Growth & Income 21 IVGIX GRI
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 ISPIX SP500II
- ------------------------------------------------------------------------------
COMBINATION STOCK & BOND
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
* Not yet available
For more complete information, including management fees, expenses, and risks,
call or write for a free prospectus. Read it carefully before you invest or send
money.
<PAGE>
INVESCO
YOU SHOULD KNOW WHAT INVESCO KNOWS (TM)
We're easy to stay in touch with:
Investor Services: 1-800-525-8085
PAL(R), your Personal Account Line: 1-800-424-8085
On the World Wide Web: 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
INVESCO Distributors, Inc.(SM), Distributor
Post Office Box 173706
Denver, Colorado 80217-3706
This information must be preceded or accompanied
by a current prospectus
