INVESCO EMERGING OPPORTUNITY FUNDS INC
N-30D, 1997-01-27
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SEMIANNUAL REPORT

November 30, 1996

INVESCO
EMERGING
GROWTH
FUND


(Effective 2/1/97, INVESCO
Small Company Growth Fund)

A Smart Choice
For Maximum
Growth Potential

INVESCO FUNDS



<PAGE>



Economic Overview                                                 December 1996
     Overheating  -- or headed into a recession?  That's the  question  analysts
have posed all year about the U.S.  economy.
     During the third quarter of 1996, growth moderated to a "normal/dull" level
of 2.2%.  Representing a slowdown from the second  quarter's  relatively  torrid
pace of 4.7%, the current level of economic  expansion should be moderate enough
to stave off  inflation  fears.  The rate of  increase in wages,  benefits,  and
prices for consumer and industrial  goods has not  accelerated  over the past 12
months;  the Consumer Price Index will likely end 1996 up an annualized  rate of
about 3.0% -- in line with the historical  average.
     A moderate inflation level represents a positive factor for the economy. At
the same time,  though, the longevity of the current expansion -- over six years
- -- remains a cause for concern; the post-World War II average is only four and a
half years.  Negative growth hasn't been experienced  since the first quarter of
1993. If the growth rate again approaches 5%, many economists expect the Federal
Reserve  Board  to  launch  a  preemptive  strike  against  inflation,  with the
concomitant danger of cutting the expansion short.
     In mid-autumn,  concern about the Fed and the national  elections  caused a
modest  pullback in equity markets.  Since then,  with the political  status quo
generally  maintained  vis-a-vis the  president  and  Congress,  and the economy
slowing  on  its  own,  the  S&P  500  resumed  its  upward  hike.
     1997 is a post-presidential  election year, when the stock market typically
drops,  and  volatility  may  well  continue.  Currently,  valuations  for  many
individual  stocks appear high.  Moderate action from the Fed over the winter --
an  increase  of .25% in  short-term  interest  rates,  for  example -- might be
interpreted  by  investors  in a  positive  light,  with  a  subsequent  calming
influence on price swings. Conversely,  heavy-handed measures could be viewed as
likely to trigger a recession, with negative consequences for corporate earnings
estimates -- and stock prices;  securities  markets around the globe immediately
dropped  following Fed Chairman Alan  Greenspan's  December  remark that current
stock prices may reflect "irrational exuberance."

INVESCO Emerging Growth Fund
     For the one-year period ended 11/30/96,  INVESCO Emerging Growth Fund had a
total  return of 19.64%.  During the same  period,  the Russell 2000 had a total
return of 16.52%,  and the S&P 500,  27.83%.  For the six months ended 11/30/96,
the fund had a total return of -7.79%;  during that period, the Russell 2000 had
a total  return  of  -1.73%,  and the S&P 500,  14.43%.  The  fund's  short-term
underperformance  versus the indexes may be  attributed  to our  relatively  low
exposure  to energy and finance  stocks  during this  period.  (Of course,  past
performance is not a guarantee of future results.)(1),(2)

                             Emerging Growth Fund
                       Average Annualized Total Return
                              as of 11/30/96(1)

                    1 year                             19.64%
                    ------------------------------------------
                    Since inception (12/91)            18.06%
                    ------------------------------------------

     The line graph  illustrates  the value of a $10,000  investment  in INVESCO
Emerging Growth Fund, plus reinvested  dividends and capital gain distributions,
from inception through 11/30/96.  The chart and other total return figures cited

<PAGE>

reflect the fund's  operating  expenses,  but the indexes do not have  expenses,
which  would,  of course,  have  lowered  their  performance.  (Please note that
effective 11/97, we will compare the fund only to the Russell 2000, an unmanaged
index which reflects performance of  smaller-capitalization  stocks, and exclude
the S&P 500,  an  unmanaged  index  illustrating  performance  of the very broad
universe of large- and small-cap equities.)(1)

Graph:      Total Return Performance(1),(2)

            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 11/96.

Strategic Summary
     Over the first half of 1996,  smaller-capitalization  stocks kept pace with
the S&P 500,  and  turned in  particularly  strong  results  during  the  second
quarter. Over the past six months,  however,  investors have favored stocks with
lower  price-earnings  ratios and higher dividend  yields,  and larger-caps have
advanced  more  strongly.   This   underperformance  of  smaller-caps  has  been
particularly true for companies that went public over the past two years.

Graph:      Fund Diversification by Value

            This graph reflects the  diversification of the Emerging Growth Fund
            by value of total net assets in basic  materials,  capital goods and
            construction,  consumer cyclical, consumer staples, energy, finance,
            technology, transportation and services, utilities, and net cash and
            equivalents,  as of November 30, 1996, May 31, 1996 and November 30,
            1995.

     The national elections -- and their potential effect on the economy through
legislative  initiatives  such  as  health  care  --  have  been  a  significant
distraction. And according to many analysts, the problem for small-caps has been
the uncertain  economy.  The possibility of higher  inflation has made investors
less willing to pay now for earnings  growth  later.  The market's  concern over
sustainability  of corporate  earnings  growth has resulted in a short-term bias
towards  "proven"  winners from the past.  However,  the strong  run-up in stock
prices of those stocks has also increased the likelihood that many are now fully
valued. 
     With the economy settled back down into a moderate expansion, and prices of
many larger-caps  unreasonably high,  investors may well turn to the undervalued
smaller-cap  market.  If inflation remains low, the earnings growth potential of
smaller-caps looks even better on a comparative basis.
     Over the past six months,  we have adjusted the fund's portfolio to reflect
our  expectations  of a  slower-growing  economy,  while  continuing to focus on
stocks of companies with market capitalizations up to $1 billion.
     The market's  top industry  groups in 1996 were  technology,  finance,  and
energy.  Technology has long been a core part of the fund's long-term  strategy.
We have not built up a  corresponding  weighting in energy  companies,  as price
advances may have been driven by  short-term  phenomena and are likely to adjust
as Iran starts  delivering oil to the  international  market.  We did add to our
holdings in finance over the autumn with new positions in insurance, a savings &
loan, and a health care-finance related firm.

<PAGE>

     We remain overweighted in the computer software industry,  where stocks are
selling at low  valuation  levels while  offering  dynamic  growth  potential in
earnings. We're excited about the growth prospects of the following companies in
the computer software industry: Cognos Inc -- a company which develops, markets,
and  supports,   both  directly  and  through  resellers   worldwide,   advanced
client/server  development and reporting  tools;  Saville Systems PLC (ADR) -- a
company which  develops  customer  billing  systems;  and Veritas  Software -- a
developer,  marketer,  and supporter of advanced storage management products and
software quality tools.
     For much of the  year,  stocks  such as HBO & Co were  among  our  stronger
holdings. More recently, medical related stocks were a drag on performance,  due
to much-exaggerated  concerns over the specter of revived  legislative  problems
emanating from a re-elected Clinton Administration.  We have closed positions in
which our target  price was met or we  believed  future  earnings  growth  would
decelerate. Pharmaceuticals, which have outperformed the broad market, remain of
interest;  newer positions in medical  related-drugs  stocks include Amrion Inc,
Arris Pharmaceutical, and Rexall Sundown.
     As a group, consumer cyclicals  underperformed in 1996. Lodging and apparel
companies,  however, were the exceptions.  Holdings in these areas include Stage
Stores.
     Naturally,  future  performance  cannot be  predicted.  But as the domestic
economy continues to slow in 1997 and interest rates stabilize, we hope to see a
reversal  in  the  flow  of  funds  from   over-valued   large-cap  stocks  into
under-valued  small cap stocks.  Emerging  Growth Fund will continue to look for
companies  withaccelerating  earnings  growth  due to rapid  sales  growth,  new
products,  or services.  With its relatively  high cash  position,  the fund has
positioned  itself to take  advantage of  selective  buying  opportunities  that
currently exist in small-cap stocks.

     Fund  Management
     INVESCO Emerging Growth Fund is co-managed by Timothy J. Miller,  Stacie L.
Cowell and Trent E. May, all Chartered Financial Analysts.
     Tim received his MBA from the  University of Missouri,  and a BSBA from St.
Louis  University.  A  16-year  veteran  of  the  investment  business,  he is a
Chartered Financial Analyst.  Before joining INVESCO in 1992, Tim was an analyst
and portfolio manager with Mississippi Valley Advisors.
     Previously,  Stacie  was a senior  equities  analyst  with  Founders  Asset
Management, and a capital markets and trading analyst with Chase Manhattan Bank.
She earned her BA in Economics from Colgate University.
     Trent earned a BS from the Florida  Institute of Technology and an MBA from
Rollins  College.   Before  joining  INVESCO,   he  was  a  senior  equity  fund
manager/analyst at Munder capital Management.

     (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   representative
of  the  performance  of  the  broad  U.S.  stock  market.  The  Russell  2000
is an unmanaged index indicative of smaller-capitalization stocks.



<PAGE>



INVESCO Emerging Opportunity Funds, Inc. -
Emerging Growth Fund
Ten Largest Common Stock Holdings
November 30, 1996

Description                                         Value
- --------------------------------------------------------------
HA-LO Industries                               $8,327,550
Saville Systems PLC Sponsored ADR               8,283,375
Cognos Inc                                      7,786,200
SITEL Corp                                      7,520,800
PAREXEL International                           7,079,400
Orion Capital                                   6,867,488
CBT Group PLC Sponsored ADR                     6,808,000
APAC TeleServices                               6,737,850
Veritas Software                                6,283,812
Wind River Systems                              5,985,881

Composition of holdings is subject to change.


             -------------------------------------------

INVESCO Emerging Opportunity Funds, Inc. -
Emerging Growth Fund
Statement of Investment Securities
November 30, 1996
UNAUDITED
- --------------------------------------------------------------------------------
                                                   Shares or
                                                   Principal
Description                                           Amount             Value
- --------------------------------------------------------------------------------
COMMON STOCKS 83.50%
ADVERTISING 3.07%

HA-LO Industries*                                    216,300        $8,327,550
                                                                  ------------
BIOTECHNOLOGY 1.26%

INCYTE Pharmaceuticals*                               90,000         3,420,000
                                                                  ------------
BUSINESS & COMMERCIAL SERVICES 8.37%

APAC TeleServices*                                   142,600         6,737,850
Employee Solutions*                                  150,000         2,775,000
SITEL Corp*                                          380,800         7,520,800
TeleTech Holdings*                                    85,000         2,677,500
Warrantech Corp*                                     210,000         3,018,750
                                                                  ------------
                                                                    22,729,900
                                                                  ------------

<PAGE>
- --------------------------------------------------------------------------------
                                                   Shares or
                                                   Principal
Description                                           Amount             Value
- --------------------------------------------------------------------------------
                                                                 
COMPUTER PERIPHERALS
   & SUPPLIES 1.21%

Security Dynamics Technologies*                       80,000         3,290,000
                                                                  ------------
COMPUTER SERVICES 1.16%

Technology Solutions*                                 70,000         3,150,000
                                                                  ------------
COMPUTER SOFTWARE 21.25%

Avant Corp*                                          126,700         3,705,975
Brooktrout Technology*                                80,000         2,570,000
CBT Group PLC Sponsored ADR*                         118,400         6,808,000
Cognos Inc*                                          204,900         7,786,200
Forrester Research*                                   12,000           256,500
HNC Software*                                        105,000         3,123,750
Hyperion Software*                                   135,000         2,919,375
Information Management Resources*                     28,000           462,000
JDA Software Group*                                  115,000         3,076,250
Project Software & Development*                       85,000         3,527,500
Saville Systems PLC Sponsored ADR*                   199,000         8,283,375
Scopus Technology*                                    87,000         3,251,625
Vantive Corp*                                         71,000         2,449,500
Veritas Software*                                    135,500         6,283,812
Visio Corp*                                           65,000         3,217,500
                                                                  ------------
                                                                    57,721,362
                                                                  ------------
COMPUTER SYSTEMS 5.57%

BTG Inc*                                              75,000         1,509,375
HBO & Co                                              92,000         5,232,500
Pegasystems Inc*                                      80,000         2,390,000
Wind River Systems*                                  121,850         5,985,881
                                                                  ------------
                                                                    15,117,756
                                                                  ------------
EDUCATION & TRAINING 1.77%

Learning Tree International*                          54,200         2,452,550
Sylvan Learning Systems*                              90,000         2,351,250
                                                                  ------------
                                                                     4,803,800
                                                                  ------------
ELECTRICAL EQUIPMENT 1.85%

Cable Design Technologies*                            93,000         2,720,250
SBS Technologies*                                     86,000         2,311,250
                                                                  ------------
                                                                     5,031,500
                                                                  ------------
<PAGE>

- --------------------------------------------------------------------------------
                                                   Shares or
                                                   Principal
Description                                           Amount             Value
- --------------------------------------------------------------------------------
ENGINEERING 1.09%

Willbros Group*                                      280,000         2,975,000
                                                                  ------------
FINANCE RELATED 1.19%

AMRESCO Inc*                                         150,000         3,225,000
                                                                  ------------
HEALTH CARE RELATED 3.81%

Health Images                                        210,100         3,282,812
HealthCare Financial Partners*                        40,000           500,000
NCS HealthCare Class A*                               88,000         2,420,000
Total Renal Care Holdings*                           121,400         4,157,950
                                                                  ------------
                                                                    10,360,762
                                                                  ------------
HOTELS 1.42%

Prime Hospitality*                                   231,400         3,847,025
                                                                  ------------
INSURANCE 6.32%

Frontier Insurance Group                              70,000         2,677,500
HCC Insurance Holdings                               111,200         3,113,600
Mercury General                                       79,100         4,508,700
Orion Capital                                        110,100         6,867,488
                                                                  ------------
                                                                    17,167,288
                                                                  ------------
MEDICAL RELATED 10.92%

ESC Medical Systems Ltd*                             150,000         3,993,750
Omnicare Inc                                         140,600         4,288,300
PAREXEL International*                               136,800         7,079,400
Quintiles Transnational*                              93,300         5,644,650
Renal Treatment Centers*                             121,500         3,159,000
St Jude Medical*                                      75,000         3,131,250
SEQUUS Pharmaceuticals*                              165,000         2,371,875
                                                                  ------------
                                                                    29,668,225
                                                                  ------------
MEDICAL RELATED - DRUGS 4.29%

Amrion Inc*                                          173,650         3,972,244
Arris Pharmaceutical*                                113,000         1,469,000
Medicis Pharmaceutical Class A*                       75,000         3,290,625
Rexall Sundown*                                      114,800         2,913,050
                                                                  ------------
                                                                    11,644,919
                                                                  ------------
<PAGE>
- --------------------------------------------------------------------------------
                                                   Shares or
                                                   Principal
Description                                           Amount             Value
- --------------------------------------------------------------------------------
RETAIL 5.12%

Insight Enterprises*                                 102,000         3,429,750
Proffitts Inc*                                        48,000         1,944,000
Sports Authority*                                    140,000         3,465,000
Stage Stores*                                        143,000         2,681,250
US Office Products*                                   77,200         2,393,200
                                                                  ------------
                                                                    13,913,200
                                                                  ------------
SAVINGS & LOAN 1.28%

FirstFed Financial*                                  145,000         3,461,875
                                                                  ------------
SEMICONDUCTOR EQUIPMENT 1.00%

Teradyne Inc*                                        115,000         2,716,875
                                                                  ------------
TELECOMMUNICATIONS 1.55%

PairGain Technologies*                                66,100         4,222,138
                                                                  ------------
TOTAL COMMON STOCKS
   (Cost $185,387,948)                                             226,794,175
                                                                  ------------
SHORT-TERM INVESTMENTS -
   REPURCHASE AGREEMENTS 16.50%

Repurchase Agreement with
  State Street Bank & Trust Co
  dated 11/29/1996 due 12/2/1996
  at 5.250%, repurchased at
  $44,849,613 (Collateralized by
  US Treasury Notes due 5/31/1998
  at 6.000%, value $45,736,108)
  (Cost $44,830,000)                            $44,830,000        44,830,000
                                                                  ------------
TOTAL INVESTMENT
 SECURITIES AT VALUE  100.00%
 (Cost  $230,217,948)
 (Cost for Income Tax Purposes
   $230,649,832)                                                  $271,624,175
                                                                  ============
* 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, 1996
UNAUDITED

ASSETS

Investment Securities at Value~
   (Cost $230,217,948)~                                     $271,624,175
Receivables:
   Investment Securities Sold                                    788,738
   Fund Shares Sold                                            4,015,617
   Dividends and Interest                                         28,025
Organization Costs                                                   536
Prepaid Expenses                                                 115,208
                                                         ---------------
TOTAL ASSETS                                                 276,572,299
                                                         ---------------
LIABILITIES

Payables:
   Custodian                                                     430,606
   Investment Securities Purchased                             5,340,607
   Fund Shares Repurchased                                       412,021
Accrued Distribution Expenses                                     55,142
Accrued Expenses and Other Payables                               21,191
                                                         ---------------
TOTAL LIABILITIES                                              6,259,567
                                                         ---------------
Net Assets at Value                                         $270,312,732
                                                         ===============
NET ASSETS

Paid-in Capital*                                            $216,350,243
Accumulated Undistributed Net
   Investment Loss                                           (1,023,119)
Accumulated Undistributed Net
   Realized Gain on Investment
   Securities                                                 13,579,381
Net Appreciation of Investment
   Securities                                                 41,406,227
                                                         ---------------
Net Assets at Value                                         $270,312,732
                                                         ===============
Net Asset Value, Offering and
   Redemption Price per Share                                     $13.26
                                                         ===============

~  Investment securities at cost and value at November 30, 1996 include a
repurchase agreement of $44,830,000.

* The Fund has 600 million authorized shares of common stock, par value of $0.01
per share, of which 20,381,056 were outstanding at November 30, 1996.

See Notes to Financial Statements
<PAGE>



INVESCO Emerging Opportunity Funds, Inc.-
Emerging Growth Fund
Statement of Operations
Six Months Ended November 30, 1996
UNAUDITED

INVESTMENT INCOME

INCOME
Dividends                                                       $116,886
Interest                                                         970,036
                                                         ---------------
   TOTAL INCOME                                                1,086,922
                                                         ---------------
EXPENSES

Investment Advisory Fees                                       1,059,346
Distribution Expenses                                            353,366
Transfer Agent Fees                                              516,599
Administrative Fees                                               26,202
Custodian Fees and Expenses                                       32,524
Directors' Fees and Expenses                                      12,154
Organization Expenses                                              3,215
Professional Fees and Expenses                                    17,244
Registration Fees and Expenses                                    58,662
Reports to Shareholders                                           41,709
Other Expenses                                                     4,358
                                                         ---------------
   TOTAL EXPENSES                                              2,125,379
   Fees and Expenses Paid Indirectly                            (21,717)
                                                         ---------------
   NET EXPENSES                                                2,103,662
                                                         ---------------
NET INVESTMENT LOSS                                          (1,016,740)
                                                         ---------------
REALIZED AND UNREALIZED GAIN (LOSS)
   ON INVESTMENT SECURITIES

Net Realized Gain on Investment
   Securities                                                  6,861,492
Change in Net Depreciation of
   Investment Securities                                    (38,577,770)
                                                         ---------------
NET LOSS ON INVESTMENT SECURITIES                           (31,716,278)
                                                         ---------------
Net Decrease in Net Assets from
   Operations                                              $(32,733,018)
                                                         ===============

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
                                             ---------------      ------------
                                                        1996              1996
                                                   UNAUDITED
OPERATIONS

Net Investment Loss                             $(1,016,740)      $(1,624,741)
Net Realized Gain on
 Investment Securities                             6,861,492        15,778,132
Change in Net Appreciation
 (Depreciation) of Investment
 Securities                                     (38,577,770)        80,619,041
                                             ---------------      ------------
NET INCREASE (DECREASE)
   IN NET ASSETS FROM OPERATIONS                (32,733,018)        94,772,432
                                             ---------------      ------------
DISTRIBUTIONS TO SHAREHOLDERS
   FROM NET REALIZED GAIN ON
   INVESTMENT SECURITIES                                   0       (3,120,041)
                                             ---------------      ------------
FUND SHARE TRANSACTIONS

Proceeds from Sales of Shares                    279,892,302       662,626,265
Reinvestment of Distributions                              0         3,055,949
                                             ---------------      ------------
                                                 279,892,302       665,682,214
Amounts Paid for Repurchases
   of Shares                                   (346,875,664)     (541,032,810)
                                             ---------------      ------------
NET INCREASE (DECREASE) IN
   NET ASSETS FROM FUND
   SHARE TRANSACTIONS                           (66,983,362)       124,649,404
                                             ---------------      ------------
Total Increase (Decrease) in
   Net Assets                                   (99,716,380)       216,301,795

NET ASSETS

Beginning of Period                              370,029,112       153,727,317
                                             ---------------      ------------
End of Period (Including
   Accumulated Undistributed
   Net Investment Loss of
   ($1,023,119) and ($6,379),
   respectively)                                $270,312,732      $370,029,112
                                             ===============      ============
                        ------------------------------------
<PAGE>



FUND SHARE TRANSACTIONS

Shares Sold                                       21,208,349        55,676,741
Shares Issued from Reinvestment
   of Distributions                                        0           261,428
                                             ---------------      ------------
                                                  21,208,349        55,938,169
Shares Repurchased                              (26,552,245)      (46,615,111)
                                             ---------------      ------------
Net Increase (Decrease) in
   Fund Shares                                   (5,343,896)         9,323,058
                                             ===============      ============

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. (the "Fund"), was incorporated in Maryland and
presently consists of the Emerging Growth Fund. The investment  objective of the
Fund is to seek  long-term  capital  growth.  The Fund is  registered  under the
Investment Company Act of 1940 (the "Act") as a diversified, open-end management
investment  company.  Effective February 1, 1997, the Fund's name will change to
INVESCO Emerging Opportunity Funds, Inc. - Small Company Growth Fund.
     The following is a summary of significant  accounting policies consistently
followed  by the  Fund  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 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.
    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 expired 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. Similarly,  Transfer Agent Fees
are reduced by credits earned by the Fund from security  brokerage  transactions
under certain  broker/service  arrangements with third parties. Such credits are
included in Fees and Expenses Paid Indirectly in the Statement of Operations.
   For the six  months  ended  November  30,  1996,  Fees  and  Expenses  Paid
Indirectly  consisted  of $19,651  included in  Custodian  Fees and Expenses and
$2,066 included in Transfer Agent Fees.
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  $20.00  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 annual  average  net  assets.  Amounts
accrued  by the Fund are  available  to  reimburse  the  Distributor  for actual
expenditures  incurred within a rolling  twelve-month period. For the six months
ended   November  30,  1996,  the  Fund  paid  the   Distributor   $371,006  for
reimbursement of expenses incurred.
NOTE 3 -- PURCHASES AND SALES OF INVESTMENT SECURITIES.  For the six months
ended November 30, 1996, the aggregate cost of purchases and proceeds from sales
of  investment   securities   (excluding  all  U.S.  Government  securities  and
short-term securities) were $215,432,320 and $320,340,900, respectively.
     There were no purchases or sales of U.S. Government securities.

<PAGE>


NOTE 4 -- APPRECIATION  AND  DEPRECIATION.  At November 30, 1996, the gross
appreciation  of  securities in which there was an excess of value over tax cost
amounted to $47,795,918 and the gross  depreciation of securities in which there
was an excess of tax cost over value  amounted to  $6,821,575,  resulting in net
appreciation of $40,974,343.
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  deferred  compensation  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 were based on an annual rate equal to 25% of the  retainer  fee at the time
of retirement.  As of July 1, 1996,  benefits are based on an annual rate of 40%
of the retainer fee at the time of retirement.
     Pension  expenses for the six months ended  November 30, 1996,  included in
Directors'  Fees and  Expenses  in the  Statement  of  Operations  were  $1,764.
Unfunded  accrued pension costs of $10,493 and pension  liability of $18,636 are
included  in  Prepaid  Expenses  and  Accrued  Expenses,  respectively,  in  the
Statement of Assets and Liabilities.
NOTE 6 -- LINE OF  CREDIT.  The Fund 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 the Fund.
The Fund agrees to pay annual fees and interest on the unpaid principal  balance
based on prevailing market rates as defined in the agreement. For the six months
ended November 30, 1996, there were no such borrowings.




<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
                                                   ------------      ---------------------------------------------   -------
                                                           1996        1996        1995        1994        1993       1992>
                                                      UNAUDITED
<S>                                                <C>             <C>         <C>         <C>         <C>          <C>

PER SHARE DATA
Net Asset Value - Beginning of Period                    $14.38       $9.37      $11.40       $9.89       $7.55       $7.50
                                                   ------------      ---------------------------------------------   -------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss)                             (0.05)      (0.06)        0.04      (0.01)      (0.04)      (0.02)
Net Gains or (Losses) on Securities
   (Both Realized and Unrealized)                        (1.07)        5.25        0.46        1.53        2.38        0.07
                                                   ------------      --------------------------------------------    -------
Total from Investment Operations                         (1.12)        5.19        0.50        1.52        2.34        0.05
                                                   ------------      --------------------------------------------    -------
LESS DISTRIBUTIONS
Dividends from Net Investment Income                       0.00        0.00        0.04        0.00        0.00        0.00
Distributions from Capital Gains                           0.00        0.18        2.49        0.01        0.00        0.00
                                                   ------------      --------------------------------------------    -------
Total Distributions                                        0.00        0.18        2.53        0.01        0.00        0.00
                                                   ------------      --------------------------------------------    -------
Net Asset Value - End of Period                          $13.26      $14.38      $ 9.37      $11.40      $ 9.89      $ 7.55
                                                   ============      ============================================    =======

TOTAL RETURN                                           (7.79%)*      55.78%       4.98%      15.34%      30.95%      0.68%*

RATIOS
Net Assets - End of Period
   ($000 Omitted)                                      $270,313    $370,029    $153,727    $176,510    $103,029     $25,579
Ratio of Expenses to Average
   Net Assets#                                           0.75%*@      1.48%@       1.49%       1.37%       1.54%      1.93%~
Ratio of Net Investment Income (Loss)
   to Average Net Assets#                              (0.36%)*     (0.78%)       0.41%     (0.26%)     (0.70%)    (0.95%)~
Portfolio Turnover Rate                                    87%*        221%        228%        196%        153%        50%*
Average Commission Rate Paid^^                         $0.2792*           -           -           -           -           -
</TABLE>

> From December 27, 1991, commencement of operations, to May 31, 1992.

*  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 year
ended May 31, 1995. If such expenses had not been voluntarily absorbed, ratio of
expenses to average net assets would have been 1.52% and ratio of net investment
income to average net assets would have been 0.38%.

<PAGE>

@ Ratio is based on Total  Expenses  of the Fund,  which is before  any  expense
offset arrangements.

~ Annualized

^^ The average  commission rate paid is the total brokerage  commissions paid on
applicable purchases and sales of securities for the period divided by the total
number of related shares purchased or sold which is required to be disclosed for
fiscal years beginning September 1, 1995 and thereafter.


<PAGE>

                                FAMILY OF FUNDS

                                                                      Newspaper
Fund Name                          Fund Code       Ticker Symbol    Abbreviation
- --------------------------------------------------------------------------------
International

International Growth                  49               FSIGX            IntlGr
Asian Growth                          41               IVAGX            AsianGr
European                              56               FEURX             Europ
European Small Company                37               IVECX           EuroSmCo
Latin American Growth                 34               IVSLX           LatinAmGr
Pacific Basin                         54               FPBSX             PcBas
- --------------------------------------------------------------------------------
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                 *                 *
Technology                            55               FTCHX             Tech
Utilities                             58               FSTUX             Util
Worldwide Capital Goods               38               ISWGX            WldCap
Worldwide Communications              39               ISWCX            WldCom
- --------------------------------------------------------------------------------
Capital Appreciation

Growth                                10               FLRFX             Grwth
Dynamics                              20               FIDYX             Dynm
Small Company                         74               IDSCX            DivSmCo
Emerging Growth                       60               FIEGX            Emgrth
- --------------------------------------------------------------------------------
Growth & Income

Industrial Income                     15               FIIIX            IndInc
Value Equity                          46               FSEQX             ValEq
Multi-Asset Allocation                70               IMAAX           MulAstAl
Balanced                              71               IMABX              Bal
Total Return                          48               FSFLX            TotRtn
- --------------------------------------------------------------------------------
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                 *                 *
Tax-Free Long-Term Bond               35               FTIFX             TxFre
- --------------------------------------------------------------------------------

<PAGE>

                                FAMILY OF FUNDS

                                                                      Newspaper
Fund Name                          Fund Code       Ticker Symbol    Abbreviation
- --------------------------------------------------------------------------------
Money Market

U.S. Government Money Fund            44               FUGXX           InvGvtMF
Cash Reserves                         25               FDSXX            InvCshR
Tax-Free Money Fund                   40               FFRXX          InvTaxFree

* This fund does not meet size  requirements  to be assigned a ticker  symbol in
newspaper listings.

For more information about any of the INVESCO Funds,  including  management fees
and  expenses,  please  call  us at  1-800-525-8085  for a  prospectus.  Read it
carefully before you invest or send money.


<PAGE>


INVESCO FUNDS

We're easy to stay in touch with:
Investor Services Representatives,
1-800-525-8085
PAL(R), your Personal Account Line,
1-800-424-8085

On the World Wide Web:
http://www.invesco.com

Denver Investor Centers:
Cherry Creek, 155-B Fillmore Street;
Denver Tech Center, 7800 E. Union Avenue,
Lobby Level

INVESCO Funds Group, Inc.,(SM) Distributor
Post Office Box 173706
Denver, Colorado 80217-3706

This information must be preceded or
accompanied by a current prospectus.








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