SEMIANNUAL REPORT
November 30, 1995
INVESCO
EMERGING
GROWTH
FUND
A Smart Choice
For Maximum
Growth Potential
INVESCO FUNDS
<PAGE>
Economic Overview December 1995
A "soft landing" -- moderate inflation with moderate economic growth
- -- may well be underway.
Over the past 11 months, consumer prices have edged up just 2.53% (through
11/30/95). That's considerably below the figure most analysts had anticipated.
Last winter, forecasts for the 1995 consumer inflation rate ran in the 4% to 5%
range. Producer costs have increased at an even slower rate.
However, even as they puzzle over a low-inflation trend, analysts are
hailing the continued economic recovery. Growth in Gross Domestic Product (GDP)
has remained positive at moderate levels considered more sustainable for a
mature market such as the U.S.
These figures appear to indicate the much ballyhooed "soft landing." An
annualized GDP growth rate of 2.5% was the announced target when the Federal
Reserve Board began raising short-term interest rates in February 1994. Growth
then slowed to annualized rates of 2.7% and 1.1% in the first and second
quarters of 1995, respectively.
Feeling confident that wage and price increases are under control, the Fed
directed two modest cuts in short-term interest rates this year. Meanwhile,
inflation has remained subdued in its corner, running at about the same
annualized rate as in 1993 and 1994. Despite an unexpectedly strong 4.2% jump in
the GDP growth rate during the third quarter, the soft landing appears intact.
Stock and bond investors have responded positively to these developments.
Led by technology and financial stocks, the S&P 500 has moved up strongly this
year, achieving a total return of 34.84% for the eleven months ended 11/30/95.
The Lehman Government/Corporate Bond Index advanced 17.51% over the same
period.1
November 1995 saw the Dow break 5,000 for the first time.1 However,
occasional drops have reminded us that this record-breaking pace probably cannot
be sustained indefinitely. Nonetheless, barring any unanticipated surprises in
corporate earnings, the trade deficit or the federal budget, we continue to
expect moderate growth (albeit at a slower rate than we've seen this year) for
many months into the future.
R. Dalton Sim, Chairman and President
INVESCO Trust Company
<PAGE>
Emerging Growth Fund
Performance
For the 12 months ended 11/30/95, INVESCO Emerging Growth Fund achieved a
total return of 26.38% versus the S&P 500, which had a total return of 36.84%.2
The fund's performance was more consistent with its small-capitalization peer
group as represented by the Russell 2000, with a total return of 28.51%.1 (Of
course, past performance is not a guarantee of future results.)
Emerging Growth Fund
Average Annualized Total Return
as of 11/30/952
1 year 26.38%
-----------------------------------
Since inception (12/91) 17.67%
-----------------------------------
The line graph represents the value of a $10,000 investment in INVESCO
Emerging Growth Fund, plus reinvested dividends and capital gain distributions,
from the fund's inception (12/91) through 11/30/95.
The chart and other total return figures cited reflect the fund's operating
expenses, but the indexes do not have expenses, which would have lowered their
performance.2
Graph: This line graph compares the value of a $10,000 investment in
INVESCO Emerging Growth Fund to the value of a $10,000 investment in
the S&P 500 Index and the Russell 2000 Index, assuming in each case
reinvestment of all dividends and capital gain distributions, for
the period from inception (12/91) through 11/30/95.
Strategic Summary
Emerging Growth Fund is managed to capitalize on the significant growth
opportunities unique to smaller companies, while attempting to keep volatility
to a minimum. This combination of appreciation with reasonable risk is sought
through a fundamental approach to stock picking that focuses on a company's
revenue, strong return-on-equity, high margins, low debt, and -- perhaps most
important -- attractive products and services which will allow the company to
meet or beat expectations on earnings.
Our philosophy has allowed the fund to perform relatively well, despite a
recent trend of investors shifting to larger companies. This shift has reflected
general concerns surrounding historic market highs and volatility in the
technology sector. We believe these concerns to be well-founded, and have taken
an aggressive approach to selecting companies which we feel will perform well
over the long-term.
Currently the fund's largest area of investment is technology. In our
judgment, many stocks in this sector have become overvalued, particularly in
those areas in which sales recently peaked and are beginning to slow down --
such as PCs and their components. We have therefore moved out of many of these
segments, and have redirected our efforts toward associated technology areas
including software and service providers. Demand for these companies' products
tends to grow following strong hardware purchases such as those seen during the
second quarter of 1995.
<PAGE>
We are also wary of some of the high valuations experienced by computer
networking companies, yet believe in the long-term growth opportunity this
sector offers. Therefore, we are again looking toward ancillary beneficiaries
such as FORE Systems and Alantec, companies which produce the switching
equipment necessary for networks to connect to the Internet in a fast and
efficient way.
Emerging Growth Fund's second largest portfolio allocation is in the
health care industry. Relatively low market values, an improved regulatory
environment, and increasing demand for health-related services have led to
significant opportunities for the fund in this area.
We have also been analyzing the potential for opportunities in
biotechnology. When their areas of exploration are successful, small biotech
companies can experience tremendous growth. Such was the case with Myriad
Genetics, (listed in the financial statements under "Medical Related") whose
price soared after they isolated a gene associated with identifying an increased
risk of breast cancer.
Graph: Fund Diversification by Value
This bar graph reflects the allocation of the Emerging Growth Fund's
portfolio by value of net assets in Basic Materials, Capital Goods &
Construction, Consumer Cyclical, Consumer Staples, Energy, Finance,
Technology, Transportation & Services, Utilities, and Cash &
Equivalents for the periods ending 11/94, 5/95, and 11/95.
A strong performer has been HBO & Co, one of the larger-sized companies
held by the fund. By developing computer information systems for health care
providers, HBO & Co's value reflects the momentum of 1995's technology boom as
well as growth in the health care sector.
Even as both the technology and health care industries soar, selective
investment in the recently lackluster retail market is beginning to present
attractive, low-priced growth opportunities. Quality names with good concepts,
such as Talbots Inc and Gymboree Corp, appear poised for improvement despite the
current stagnant consumer spending environment.
Another retail company with strong growth potential is Boston Chicken.
This firm has strategically attacked traditionally slow times, such as Christmas
and Thanksgiving, by offering pre-cooked holiday hams. In addition, their
subsidiary, Einstein's Bagels Franchise, should provide access to a relatively
untapped national market, resulting in even greater growth potential for the
parent firm.
<PAGE>
Looking Forward
Emerging Growth Fund's goal is to remain fully invested, with emphasis on
fundamentally sound, small-capitalization companies with the ability to respond
quickly to market opportunities. We believe that this strategy provides a strong
base for continued performance regardless of the projected general economic
slowdown during 1996.
1 The Lehman Government/Corporate Bond Index is an unmanaged index illustrating
the broad fixed-income market. The S&P 500 and Dow Jones Industrial Average are
unmanaged indexes considered representative of the performance of the broad U.S.
stock market. The Russell 2000 is an unmanaged index indicative of domestic
smaller-capitalization stock prices.
2 Total return assumes reinvestment of dividends and capital gain distributions
for the periods indicated. Investment return and principal value will fluctuate
so that, when redeemed, an investor's shares may be worth more or less than when
purchased.
Fund Manager
INVESCO Emerging Growth Fund is managed by INVESCO Vice President John
Schroer. A Chartered Financial Analyst, Schroer received his BS and MBA from the
University of Wisconsin-Madison. He began his investment career in 1990 and was
an Assistant Vice President with Trust Company of the West prior to joining
INVESCO in 1993. He also is co-manager of Strategic Health Sciences Portfolio.
<PAGE>
INVESCO Emerging Opportunity Funds, Inc. ---
Emerging Growth Fund
Ten Largest Common Stock Holdings
November 30, 1995
Description Value
- ------------------------------------------------------------------------------
ALZA Corp $ 6,315,788
Macromedia Inc 6,147,300
Boston Chicken 6,128,625
Zions Bancorp 5,428,500
Mercury General 5,197,500
Aspect Telecommunications 5,032,000
HBO & Co 4,929,015
Horizon/CMS Healthcare 4,237,527
Progress Software 4,222,750
Omnicare Inc 4,152,500
Composition of holdings is subject to change.
<PAGE>
INVESCO Emerging Opportunity Funds, Inc. --
Emerging Growth Fund
Statement of Investment Securities
November 30, 1995
UNAUDITED
Shares or
Principal
Description Amount Value
- ------------------------------------------------------------------------------
COMMON STOCKS 85.57%
ADVERTISING 1.32%
HA-LO Industries* 131,000 $2,652,750
------------
AEROSPACE & DEFENSE 1.28%
Rohr Industries* 175,000 2,559,375
------------
BANKING 2.71%
Zions Bancorp 77,000 5,428,500
------------
BIOTECHNOLOGY 3.85%
Cephalon Inc* 120,000 3,330,000
PAREXEL International* 45,000 1,012,500
UroMed Corp* 335,000 3,391,875
------------
7,734,375
------------
CHEMICALS 1.88%
Agrium Inc 90,000 3,780,000
------------
COMMERCIAL SERVICES 0.49%
APAC TeleServices* 31,200 986,700
------------
COMPUTER SERVICES 1.32%
Broadway & Seymour* 141,000 2,643,750
------------
COMPUTER SOFTWARE 17.53%
CBT Group PLC Sponsored ADR* 70,000 3,780,000
Clarify Inc* 67,500 1,864,687
Cognos Inc* 67,000 2,654,875
Expert Software* 12,500 210,937
Gandalf Technologies* 76,100 1,293,700
Macromedia Inc* 132,200 6,147,300
Medic Computer Systems* 40,000 2,560,000
Meta Software* 93,400 1,587,800
Objective Systems Integrators* 11,000 209,000
Premenos Technology* 16,100 684,250
Progress Software* 133,000 4,222,750
Pyxis Corp* 135,000 2,025,000
Saville Systems PLC Sponsored ADR* 60,900 898,275
Shiva Corp* 50,000 3,700,000
Summit Medical Systems* 149,900 3,335,275
------------
35,173,849
------------
<PAGE>
COMPUTER SYSTEMS 10.84%
Alantec Corp* 52,000 2,119,000
Bay Networks* 91,500 4,117,500
HBO & Co 65,940 4,929,015
Madge Networks NV* 62,390 2,811,449
Radisys Corp* 125,000 1,562,500
Sync Research* 42,000 2,131,500
VeriFone Inc* 140,000 4,095,000
------------
21,765,964
------------
ELECTRICAL EQUIPMENT 1.07%
FORE Systems* 37,000 2,155,250
------------
FINANCE RELATED 1.07%
PMT Services* 76,000 2,137,500
------------
HEALTH CARE RELATED 7.86%
Community Health Systems* 85,000 2,911,250
Horizon/CMS Healthcare* 195,955 4,237,527
Lincare Holdings* 100,000 2,675,000
Physician Reliance Network* 110,000 3,905,000
Schein (Henry) Inc* 81,300 2,052,825
------------
15,781,602
------------
INSURANCE 3.63%
Mercury General 110,000 5,197,500
Orion Capital 50,000 2,087,500
------------
7,285,000
------------
MEDICAL RELATED 5.97%
EP Technologies* 125,000 1,593,750
InStent Inc* 75,000 1,181,250
Myriad Genetics* 30,000 945,000
Omnicare Inc 110,000 4,152,500
Quintiles Transnational* 75,000 3,037,500
ResMed Inc* 75,000 1,068,750
------------
11,978,750
------------
MEDICAL RELATED - DRUGS 5.37%
ALZA Corp* 276,100 6,315,788
Biovail International* 67,047 3,519,968
Elan Corp PLC ADR* 19,700 945,600
------------
10,781,356
------------
RECREATION PRODUCTS 1.43%
Scientific Games Holdings* 85,600 2,878,300
------------
<PAGE>
RETAIL 4.49%
Boston Chicken* 177,000 6,128,625
Gymboree Corp* 60,000 1,417,500
Talbots Inc 50,000 1,456,250
------------
9,002,375
------------
SEMICONDUCTOR EQUIPMENT 0.73%
Burr-Brown Corp* 51,000 1,466,250
------------
TELECOMMUNICATIONS 10.38%
Arch Communications Group* 84,210 2,115,776
Aspect Telecommunications* 148,000 5,032,000
Metrocall Inc* 91,000 2,195,375
Mobilemedia Corp* 95,000 2,458,125
Premisys Communications* 32,000 3,080,000
ProNet Inc* 80,000 2,460,000
Westell Technologies Class A* 16,600 215,800
WorldCom Inc* 100,751 3,274,408
------------
20,831,484
------------
TOBACCO 1.75%
Culbro Corp* 70,000 3,517,500
------------
WHOLESALE 0.60%
Brightpoint Inc* 67,000 1,206,000
------------
TOTAL COMMON STOCKS
(Cost $145,448,138) 171,746,630
------------
SHORT-TERM INVESTMENTS -
REPURCHASE AGREEMENTS 14.43%
Repurchase Agreement with State Street
Bank & Trust Co dated 11/30/1995 due
12/1/1995 at 5.650%, repurchased at
$28,964,545 (Collateralized by US
Treasury Notes due 8/15/1999 at 8.000%,
value $29,506,839)(Cost $28,960,000) 28,960,000 28,960,000
------------
TOTAL INVESTMENT SECURITIES AT VALUE 100.00%
(Cost $174,408,138) (Cost for
Income Tax Purposes $174,432,540) $200,706,630
============
* Security is non-income producing.
See Notes to Financial Statements
<PAGE>
INVESCO Emerging Opportunity Funds, Inc.--
Emerging Growth Fund
Statement of Assets and Liabilities
November 30, 1995
UNAUDITED
ASSETS
Investment Securities at Value~
(Cost $174,408,138)~ $200,706,630
Cash 12,829
Receivables:
Investment Securities Sold 1,451,378
Fund Shares Sold 3,636,426
Dividends and Interest 10,846
Organization Costs (Note 1) 6,965
Prepaid Expenses and Other Assets 49,587
--------------
TOTAL ASSETS 205,874,661
--------------
LIABILITIES
Payables:
Investment Securities Purchased 10,185,852
Fund Shares Repurchased 1,001,551
Accrued Distribution Expenses 35,707
Accrued Expenses and Other Payables 18,985
--------------
TOTAL LIABILITIES 11,242,095
--------------
Net Assets at Value $194,632,566
==============
NET ASSETS
Paid-in Capital* $169,015,757
Accumulated Undistributed Net Investment Loss (633,373)
Accumulated Undistributed Net Realized Loss
on Investment Securities (48,310)
Net Appreciation of Investment Securities 26,298,492
--------------
Net Assets at Value
$194,632,566
==============
Net Asset Value, Offering and Redemption
Price per Share $11.25
=======
~ Investment securities at cost and value at November 30, 1995 include a
repurchase agreement of $28,960,000.
* The Fund has 600 million authorized shares of common stock, par value of
$0.01 per share, of which 17,295,650 were outstanding at November 30, 1995.
See Notes to Financial Statements
<PAGE>
INVESCO Emerging Opportunity Funds, Inc.--
Emerging Growth Fund
Statement of Operations
Six Months Ended November 30, 1995
UNAUDITED
INVESTMENT INCOME
INCOME
Dividends $263,277
Interest 446,286
--------------
TOTAL INCOME 709,563
--------------
EXPENSES
Investment Advisory Fees 679,234
Distribution Expenses 226,411
Transfer Agent Fees 312,627
Administrative Fees 18,585
Custodian Fees and Expenses 27,096
Directors' Fees and Expenses 8,837
Organization Expenses 3,214
Professional Fees and Expenses 14,514
Registration Fees and Expenses 37,492
Reports to Shareholders 45,920
Other Expenses 4,756
--------------
TOTAL EXPENSES 1,378,686
Fees and Expenses Absorbed by Investment Adviser (6,100)
Fees and Expenses Paid Indirectly (14,118)
--------------
NET EXPENSES 1,358,468
--------------
NET INVESTMENT LOSS (648,905)
--------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENT SECURITIES
Net Realized Gain on Investment Securities 4,289,062
Change in Net Appreciation of Investment Securities 26,933,536
--------------
NET GAIN ON INVESTMENT SECURITIES 31,222,598
--------------
Net Increase in Net Assets from Operations $30,573,693
==============
See Notes to Financial Statements
<PAGE>
INVESCO Emerging Opportunity Funds, Inc.--
Emerging Growth Fund
Statement of Changes in Net Assets
Six Months Year
Ended Ended
November 30 May 31
------------ ------------
1995 1995
UNAUDITED
OPERATIONS
Net Investment Income (Loss) $(648,905) $750,967
Net Realized Gain (Loss) on
Investment Securities 4,289,062 (4,319,462)
Change in Net Appreciation
of Investment Securities 26,933,536 10,422,490
------------ ------------
NET INCREASE IN NET
ASSETS FROM OPERATIONS 30,573,693 6,853,995
------------ ------------
DISTRIBUTIONS TO
SHAREHOLDERS
Net Investment Income 0 (735,435)
Net Realized Gain on
Investment Securities 0 (37,702,557)
------------ ------------
TOTAL DISTRIBUTIONS 0 (38,437,992)
------------ ------------
FUND SHARE
TRANSACTIONS
Proceeds from Sales of Shares 197,323,164 243,179,612
Reinvestment of Distributions 0 37,994,518
------------ ------------
197,323,164 281,174,130
Amounts Paid for Repurchases
of Shares (186,991,608) (272,372,582)
------------ ------------
NET INCREASE IN NET
ASSETS FROM FUND SHARE
TRANSACTIONS 10,331,556 8,801,548
------------ ------------
Total Increase (Decrease) in
Net Assets 40,905,249 (22,782,449)
NET ASSETS
Beginning of Period 153,727,317 176,509,766
------------ ------------
End of Period (Including
Accumulated Undistributed
Net Investment Income (Loss)
of ($633,373) and
$15,532, respectively) $194,632,566 $153,727,317
============ ============
FUND SHARE TRANSACTIONS
Shares Sold 18,382,623 22,648,812
Shares Issued from Reinvestment
of Distributions 0 4,141,671
------------ ------------
18,382,623 26,790,483
Shares Repurchased (17,488,867) (25,866,344)
------------ ------------
Net Increase in Fund Shares 893,756 924,139
============ ============
See Notes to Financial Statements
<PAGE>
INVESCO Emerging Opportunity Funds, Inc.
Emerging Growth Fund
Notes to Financial Statements
UNAUDITED
NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES. INVESCO Emerging
Opportunity Funds, Inc., a Maryland Corporation, consists of the Emerging Growth
Fund. The Fund 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 Fund in the preparation of its financial statements.
A. SECURITY VALUATION - Equity securities traded on national securities
exchanges or in the over-the-counter market are valued at the last sale
price in the market where such securities are primarily traded.
If last sale 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 Fund's board of
directors. If market quotations or pricing service valuations are not
readily available, securities are valued at fair value as determined in
good faith by the Fund's board of directors.
Short-term securities are stated at amortized cost (which approximates
market value) if maturity is 60 days or less at the time of purchase, or
market value if maturity is greater than 60 days.
B. REPURCHASE AGREEMENTS - Repurchase agreements held by the Fund are fully
collateralized by U.S. Government securities and such collateral is in the
possession of the Fund's custodian. The collateral is evaluated daily to
ensure its market value exceeds the current market value of the repurchase
agreements including accrued interest.
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. Interest income, which may be comprised of stated coupon
rate, market discount and original issue discount, is recorded on the
accrual basis. Cost is determined on the specific identification basis.
D. FEDERAL AND STATE TAXES - The Fund has complied and continues to
comply with the provisions of the Internal Revenue Code applicable
to regulated investment companies and, accordingly, has made or
intends to make sufficient distributions of net investment income
and net realized capital gains, if any, to relieve it from all
federal and state income taxes and federal excise taxes. At May 31,
1995, the Fund had $1,667,321 in net capital loss carryovers which
expire in the year 2003.
The Fund incurred and elected to defer post-October 31 net
capital losses of $2,491,516 to the period ended May 31,1996. To the
extent future capital gains are offset by capital loss carryovers
and deferred post-October 31 losses, such gains will not be distributed
to shareholders.
Dividends paid by the Fund from net investment income and
distributions of net realized short-term capital gains are, for
federal income tax purposes, taxable as ordinary income to
shareholders.
<PAGE>
E. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS - Dividends and
distributions to shareholders are recorded by the Fund on the ex
dividend/distribution date. The Fund distributes net realized
capital gains, if any, to its shareholders at least annually, if not
offset by capital loss carryovers. Income distributions and capital
gain distributions are determined in accordance with income tax
regulations which may differ from generally accepted accounting
principles. These differences are primarily due to differing
treatments for nontaxable dividends, net operating losses and
expiring capital loss carryforwards.
F. ORGANIZATION COSTS - Organization costs advanced by INVESCO Funds
Group, Inc. ("IFG") are amortized and are payable on a straight-line
basis over a sixty-month period from the date the Fund commenced
operations. IFG has agreed that if it redeems any of its initially
acquired shares of the Fund during the five years from the date the
Fund commenced operations, the proceeds payable to it in respect of
such shares will be reduced by a pro rata share of the Fund's
unamortized organization costs.
G. EXPENSES - Under an agreement between the Fund and the Fund's Custodian,
agreed upon Custodian Fees and Expenses are reduced by credits granted by
the Custodian from any temporarily uninvested cash. Such credits are
included in Fees and Expenses Paid Indirectly in the Statement of
Operations.
NOTE 2 - INVESTMENT ADVISORY AND OTHER AGREEMENTS. IFG serves as the Fund's
investment adviser. As compensation for its services to the Fund, 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 0.75% on the first $350
million of average net assets; reduced to 0.65% on the next $350 million of
average net assets; and 0.55% on average net assets in excess of $700 million.
In accordance with a Sub-Advisory Agreement between IFG and INVESCO Trust
Company ("ITC"), a wholly owned subsidiary of IFG, investment decisions of the
Fund are made by ITC. Fees for such sub-advisory services are paid by IFG.
In accordance with an Administrative Agreement, the 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 $14.00 per
shareholder account, or per participant in an omnibus account. 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 provides for
reimbursement of marketing and advertising expenditures to IFG (the
"Distributor") to a maximum of 0.25% of average annual net assets. Amounts
accrued by the Fund are available to reimburse the Distributor for actual
expenditures incurred within a rolling twelve-month period. For six months ended
November 30, 1995, the Fund paid the Distributor $225,145 for reimbursement of
expenses incurred.
IFG has voluntarily agreed, in some instances, to absorb certain fees and
expenses incurred by the Fund.
<PAGE>
NOTE 3 - PURCHASES AND SALES OF INVESTMENT SECURITIES. For the six months ended
November 30, 1995, the aggregate cost of purchases and proceeds from sales of
investment securities (excluding all U.S. Government securities and short-term
securities) were $253,939,113 and $266,601,274, respectively.
There were no purchases or sales of U.S. Government securities.
NOTE 4 - APPRECIATION AND DEPRECIATION. At November 30, 1995, the gross
appreciation of securities in which there was an excess of value over tax cost
amounted to $28,694,438, and the gross depreciation of securities in which
there was an excess of tax cost over value amounted to $2,420,348, resulting in
net appreciation of $26,274,090.
NOTE 5 - TRANSACTIONS WITH AFFILIATES. Certain of the Fund's officers and
directors are also officers and directors of IFG or ITC.
The Fund has adopted an unfunded noncontributory defined benefit pension
plan covering all independent directors of the Fund who will have served as an
independent director for at least five years at the time of retirement. Benefits
under this plan are based on an annual rate equal to 25% of the retainer fee at
the time of retirement. Pension expenses for the six months ended November 30,
1995, included in Directors' Fees and Expenses in the Statement of Operations
were $1,264. Unfunded accrued pension costs of $6,097 and pension liability of
$11,447 are included in Prepaid Expenses and Accrued Expenses, respectively, in
the Statement of Assets and Liabilities.
<PAGE>
INVESCO Emerging Opportunity Funds, Inc.--
Emerging Growth Fund
Financial Highlights
(For a Fund Share Outstanding throughout Each Period)
<TABLE>
<CAPTION>
Six Months Period
Ended Ended
November 30 Year Ended May 31 May 31
----------- ----------------------------------------- ------------
1995 1995 1994 1993 1992^
UNAUDITED
PER SHARE DATA
<S> <C> <C> <C> <C> <C>
Net Asset Value -
Beginning of Period $9.37 $11.40 $9.89 $7.55 $7.50
----------- ----------------------------------------- ------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss) (0.04) 0.04 (0.01) (0.04) (0.02)
Net Gains on Securities
(Both Realized and Unrealized) 1.92 0.46 1.53 2.38 0.07
----------- ----------------------------------------- ------------
Total from Investment
Operations 1.88 0.50 1.52 2.34 0.05
----------- ----------------------------------------- ------------
LESS DISTRIBUTIONS
Dividends from Net
Investment Income 0.00 0.04 0.00 0.00 0.00
Distributions from Capital Gains 0.00 2.49 0.01 0.00 0.00
----------- ----------------------------------------- ------------
Total Distributions 0.00 2.53 0.01 0.00 0.00
----------- ----------------------------------------- ------------
Net Asset Value - End of Period $11.25 $9.37 $11.40 $9.89 $7.55
=========== ========================================= ============
TOTAL RETURN 20.06% * 4.98% 15.34% 30.95% 0.68%*
RATIOS
Net Assets - End of Period
($000 Omitted) $194,633 $153,727 $176,510 $103,029 $25,579
Ratio of Expenses to
Average Net Assets# 0.76%*@ 1.49% 1.37% 1.54% 1.93%~
Ratio of Net Investment Income (Loss)
to Average Net Assets# (0.36%)* 0.41% (0.26%) (0.70%) (0.95%)~
Portfolio Turnover Rate 151%* 228% 196% 153% 50%*
<FN>
^ From December 27, 1991, commencement of operations, to May 31, 1992.
* These amounts are 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 November 30, 1995 and for the year ended May 31, 1995. If such
expenses had not been voluntarily absorbed, ratio of expenses to average net
assets would have been 0.76% (not annualized) and 1.52%, respectively, and
ratio of net investment income to average net assets would have been (0.36%)
(not annualized) and 0.38%, respectively.
@ Ratio reflects total expenses, less absorbed expenses by the investment
advisor, prior to any expense offset.
~ Annualized
</FN>
</TABLE>
<PAGE>
FAMILY OF FUNDS
Newspaper
Fund Name Fund Code Ticker Symbol Abbreviation
- --------------------------------------------------------------------------------
International
Latin American Growth 34 IVSLX LatinAmGr
European Small Company 37 IVECX EuroSmCo
European 56 FEURX Europ
Pacific Basin 54 FPBSX PcBas
International Growth 49 FSIGX IntlGr
- --------------------------------------------------------------------------------
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
Technology 55 FTCHX Tech
Worldwide Capital Goods 38 ISWGX WldCap
Worldwide Communications 39 ISWCX WldCom
- --------------------------------------------------------------------------------
Growth, Value
Emerging Growth 60 FIEGX Emgrth
Value Equity 46 FSEQX ValEq
Small Company 74 IDSCX DivSmCo
Dynamics 20 FIDYX Dynm
Growth 10 FLRFX Grwth
- --------------------------------------------------------------------------------
Equity-Income
Industrial Income 15 FIIIX IndInc
Utilities 58 FSTUX Util
- --------------------------------------------------------------------------------
Balanced/Multiple-Asset
Multi-Asset Allocation 70 IMAAX MulAstAl
Balanced 71 IMABX Bal
Total Return 48 FSFLX TotRtn
- --------------------------------------------------------------------------------
Bond
High Yield 31 FHYPX HiYld
Select Income 30 FBDSX SelInc
U.S. Government Securities 32 FBDGX USGvt
Intermediate Government Bond 47 FIGBX IntGov
Short-Term Bond 33 INIBX ShTrBd
- --------------------------------------------------------------------------------
Tax-Exempt
Tax-Free Long-Term Bond 35 FTIFX TxFre
Tax-Free Intermediate Bond 36 * *
- --------------------------------------------------------------------------------
Money Market
Tax-Free Money Fund 40 FFRXX N/A
Cash Reserves 25 FDSXX N/A
U.S. Government Money Fund 44 FUGXX N/A
* 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.
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INVESCO FUNDS
To receive general information and prospectuses
on any of INVESCO's funds or retirement plans,
or to obtain current account or price information,
call toll-free:
1-800-525-8085
To reach PAL(r), your 24-hour Personal
Account Line call: 1-800-424-8085
Or write to:
INVESCO Funds Group, Inc.,(sm) Distributor
Post Office Box 173706
Denver, Colorado 80217-3706
If you're in Denver, pleas 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 an effective prospectus.
