KNOWLEDGE DISCIPLINE SERVICE CHOICE
- ----------------------------------------------
YOU SHOULD KNOW WHAT INVESCO KNOWS (TM)
- ----------------------------------------------
INVESCO Small Company Growth Fund
ANNUAL
[INVESCO ICON]
INVESCO
ANNUAL REPORT | MAY 31, 1999
<PAGE>
"WE MANAGED TO AVOID MANY OF THE PITFALLS PLAGUING SMALL COMPANY INVESTORS
THIS PAST YEAR BY STICKING WITH OUR GROWTH INVESTMENT DISCIPLINE." (PAGE 3)
"IF A COMPANY IS HAVING PROBLEMS, IT IS USUALLY EASY FOR US TO GET THE CEO
OR CFO ON THE PHONE AND FIND OUT WHAT IS HAPPENING." (PAGE 5)
Graph: INVESCO Small Company Growth Fund Total Return from Inception
(12/91) vs. Russell 2000
This line graph compares the value of a $10, 000 investment in INVESCO
Small Company Growth Fund to the value of a $10,000 investment in the
Russell 2000 Index, assuming in each case reinvestment of all dividends
and capital gains distributions, for the period from inception (12/91)
through 5/31/99.
TOTAL RETURN,
PERIODS ENDED 5/31/99(1)
6 MONTHS 1 YEAR 5 YEARS* INCEPTION (12/91)*
- -------------------------------------------------------------------------------
SMALL COMPANY GROWTH 16.23% 12.91% 16.04% 16.95%
- -------------------------------------------------------------------------------
*AVERAGE ANNUALIZED
The line graph illustrates the value of a $10,000 investment, plus reinvested
dividends and capital gain distributions, from the fund's inception in 12/91
through 5/31/99. The chart and other total return figures cited reflect the
fund's operating expenses, but the index does not have expenses, which would, of
course, have lowered its performance. (Of course, past performance is not a
guarantee of future results.) (1),(2)
<PAGE>
Your Fund's Performance: A Report from the Manager
- --------------------------------------------------------------------------------
Dear Shareholder:
This has been a rewarding past year for our fund, especially when measured
against the performance of small company market indexes. While large company
stocks dominated the market throughout this last fall and winter, over the past
few months investors have taken a new look at the equities of smaller firms.
Given the attractive growth rates and relatively low prices of many of these
companies, we are optimistic that this trend will continue -- and that small
company investors' patience will be rewarded.
For the one year ended May 31, 1999, the value of your shares rose 12.91%. This
return stood in contrast to that of the Russell 2000 over the same period, which
fell 2.69%. (Of course, past performance is not a guarantee of future
results.)(1),(2)
We managed to avoid many of the pitfalls plaguing small company investors this
past year by sticking with our growth investment discipline. Our strategy is
straightforward: We search for companies that are leaders in growing markets. By
targeting such companies, we hope to find firms that will exceed expectations
for earnings and revenue growth. Even in an environment such as this past fall
and winter, when many investors were predisposed to ignore small-capitalization
stocks, such positive surprises will usually attract attention.
We have found many of these opportunities in the technology sector, where
changes such as the Internet have opened new business horizons for small
companies. Firms filling the growing demand for communications speed and
bandwidth in have been a special focus of ours. Applied Micro Circuits, a
producer of integrated circuits for larger communications equipment companies,
has been an especially rewarding investment.
Of course, we have experienced setbacks as well. Several of our investments in
information technology services and temporary help suffered, as worries over
economic conditions have discouraged investors. The liquidity problems with
small stocks have made investors very reluctant to maintain investments in
companies that appear vulnerable.
Over the past few years, small-cap fund managers have cited several facts about
small-company stocks, including that small-company stocks have actually
outperformed larger-company stocks over the long-term, and that small stocks
- --------------------------------------------------------------------------------
FUND MANAGERS
STACIE L. COWELL, CFA
VICE PRESIDENT, INVESCO FUNDS GROUP. BA, COLGATE UNIVERSITY, MS IN FINANCE,
UNIVERSITY OF COLORADO. JOINED INVESCO IN 1996. BEGAN INVESTMENT CAREER IN 1989.
HAS MANAGED THIS FUND SINCE 1997.
SHE IS ASSISTED BY CO-MANAGERS TIMOTHY J. MILLER AND TRENT E. MAY.
<PAGE>
provide a means of diversification. We have paid perhaps less attention to this
debate than some, viewing our job as conducting company-level analysis within
the small-cap arena.
Although assets had been leaving the small-cap sector of the market, we have
seen a slight reversal of that trend in recent months. In March, investors began
moving into smaller stocks based both on renewed faith in the economy and
concerns about the valuations for larger companies. Whether this trend will
continue uninterrupted is difficult to foresee; it does demonstrate, however,
that growth and earnings do eventually result in stock performance.
/s/ Stacie Cowell
Stacie L. Cowell
Vice President
<PAGE>
INVESCO | ANNUAL REPORT | MAY 31, 1999
Moving Forward
- --------------------------------------------------------------------------------
MOVING FORWARD: A REVIEW & STRATEGY SESSION WITH STACIE COWELL
STACIE, CHOOSING STOCKS FOR A SMALL-CAPITALIZATION FUND IS A COMPLICATED
PROPOSITION, IF ONLY BECAUSE OF THE VERY LARGE NUMBER OF COMPANIES AVAILABLE TO
CHOOSE FROM. HOW DO YOU NARROW YOUR SEARCH?
We approach the problem from a couple of angles. For some stocks, we begin with
a screening process that allows us to filter out the majority of companies that
do not meet our minimum requirements for growth and profitability. We may learn
about other companies through channels such as company visits and conferences.
HOW MANY COMPANIES MIGHT MAKE IT INTO THE PORTFOLIO?
Generally, we might own between 80 and 100 different stocks. This is more than
we might hold in our other diversifed growth funds, but we feel the need to
spread our investments more because small company stocks are so volatile. Also,
it is more difficult for us to build positions in companies because the amount
of stock available at any given time--the "float"--will be relatively small.
SOME LOOK ASKANCE AT SMALL COMPANY STOCKS BECAUSE THEY ARE SO VOLATILE AND
ILLIQUID. DO THEY HAVE ANY COMPENSATING ADVANTAGES?
Well, the primary benefit is that the growth potential can be enormous. Another
less commonly acknowledged but very real advantage is that we can have more
direct access to management. If a company is having problems, it is usually
fairly easy for us to get the CEO or CFO on the phone and find out what is
happening.
WHAT IS AN EXAMPLE OF A COMPANY THAT HAS MADE ITS WAY INTO THE PORTFOLIO?
The retailer Cost Plus would be a good one. It competes with Pier One on selling
imported furniture and other goods, but it also carries a selection of imported
foods and wine. Whereas Pier One has pretty much fully penetrated its target
market, Cost Plus has only 200 stores nationwide, and we think they can easily
grow to 500. It's also a company that is benefiting from an identifiable trend,
the demographic boom among the 45-55 age group that buys many of its products.
ANY REGRETS ABOUT THE PAST YEAR?
I wouldn't necessarily call it a regret, but in retrospect it is easy to see how
more Internet investments would have helped us--the stocks have appreciated so
enormously. On the other hand, these are pretty speculative stocks because the
companies will remain unprofitable for the foreseeable future and do not yet
have established business models. We have chosen instead to play the Internet
through our investments in telecommunications equipment and high-speed
communications semiconductor companies.
- --------------------------------------------------------------------------------
MARKET HEADLINES:
JUNE 1998 TO MAY 1999
The strong annual returns recorded at the end of 1998 by large company stock
indexes masked a period of turmoil in the markets as dramatic as any in recent
memory. With investors already nervous about valuations, confidence evaporated
in late summer when the Asian financial crisis appeared ready to spread like
wildfire through the world's emerging markets.
<PAGE>
The quick actions of the Federal Reserve Board, bargain-hunting by stoic
investors, and other factors helped the markets reverse their losses in the
early fall. Yet most important, perhaps, was the continuing strength of the
American economy -- and behind it, the American consumer. Low unemployment and
interest rates, strong wage gains, and a resilient level of consumer confidence
kept money flowing into housing and the auto industry, the two bellwether
industries for the economy. Technology stocks led the rebound, as investors
looked for the industries with the highest growth rates and the most pricing
leverage.
Throughout the fall and winter, the largest, fastest-growing companies left the
rest of the market behind as investors kept one eye on the continuing problems
overseas and another on the blossoming technological promise of the American
economy. First health care stocks and then telecommunications issues
outdistanced the pack. Meanwhile, cyclical issues suffered, as did many small or
slower-growing company stocks.
By the spring of 1999, however, the threat of economic overheating rather than
worldwide depression loomed largest in many investors' minds. Signs of renewed
economic strength abroad and remarkable growth figures at home led many to
believe that the Federal Reserve would soon reverse course and lead interest
rates higher--and indeed, market interest rates crept upward. Too much growth
rather than too little encouraged many to head for cyclical industries poised to
benefit from improving markets.
As the "cyclical rotation" continued, the market averages seemed to bounce
against a ceiling, putting an end to their dizzying ascent since the fall. With
the economic outlook almost too bright and the market near its record levels,
investors began to speak again of the importance of stock selection and asset
allocation in place of playing the averages.
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.
(1) TOTAL RETURN ASSUMES REINVESTMENT OF DIVIDENDS AND CAPITAL GAIN
DISTRIBUTIONS FOR THE PERIODS INDICATED. PAST PERFORMANCE IS NO 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 RUSSELL 2000 IS AN UNMANAGED INDEX INDICATIVE OF SMALLER-CAPITALIZATION
STOCKS.
<PAGE>
TEN LARGEST COMMON STOCK HOLDINGS
Invesco Emerging Opportunity Funds, Inc. -- Small Company Growth Fund
May 31, 1999
DESCRIPTION VALUE
- --------------------------------------------------------------------------------
Genesys Telecommunications Laboratories $3,584,375
Sykes Enterprises 3,579,375
ChiRex Inc 3,471,562
Wild Oats Markets 3,370,938
Unitrode Corp 3,288,375
Affiliated Managers Group 3,071,250
Rental Service 3,032,125
Harrah's Entertainment 2,977,762
ACNielsen Corp 2,959,687
Nabors Industries 2,940,000
Composition of holdings is subject to change.
STATEMENT OF INVESTMENT SECURITIES
Invesco Emerging Opportunity Funds, Inc. -- Small Company Growth Fund
May 31, 1999
SHARES OR
PRINCIPAL
% DESCRIPTION AMOUNT VALUE
- --------------------------------------------------------------------------------
86.30 COMMON STOCKS
2.25 AEROSPACE & DEFENSE
Aeroflex Inc(a) 165,200 $2,405,725
Alliant Techsystems(a) 23,000 1,955,000
Moog Inc Class A Shrs(a) 87,800 2,409,013
================================================================================
6,769,738
1.19 AUTO PARTS
CSK Auto(a) 70,200 1,965,600
O'Reilly Automotive(a) 37,000 1,630,313
================================================================================
3,595,913
2.39 BANKS
City National 74,180 2,920,837
Hudson United Bancorp 65,000 1,990,625
US Trust 26,000 2,279,875
================================================================================
7,191,337
0.36 BIOTECHNOLOGY
Triangle Pharmaceuticals(a) 58,900 1,089,650
================================================================================
0.50 BROADCASTING
Citadel Communications(a) 54,000 1,491,750
================================================================================
1.12 BUILDING MATERIALS
Elcor Corp 50,000 2,018,750
<PAGE>
SHARES OR
PRINCIPAL
% DESCRIPTION AMOUNT VALUE
- --------------------------------------------------------------------------------
NCI Building Systems(a) 54,000 $1,363,500
================================================================================
3,382,250
6.62 COMMUNICATIONS-- EQUIPMENT & MANUFACTURING
Advanced Fibre Communications(a) 152,000 1,586,500
ANTEC Corp(a) 75,900 2,224,819
Carrier Access(a) 39,400 1,398,700
Comverse Technology(a) 19,780 1,336,386
Digital Microwave(a) 214,400 2,706,800
Excel Switching(a) 50,000 1,100,000
Gilat Satellite Networks Ltd(a) 44,600 2,352,650
Melita International(a) 89,800 1,307,713
Power Integrations(a) 30,000 1,456,875
Powerwave Technologies(a) 61,700 1,426,813
REMEC Inc(a) 164,150 2,133,950
Terayon Communication Systems(a) 29,000 931,625
================================================================================
19,962,831
10.25 COMPUTER RELATED
Advantage Learning Systems(a) 82,000 1,824,500
Business Objects SA Sponsored ADR
Representing Ord Shrs(a) 60,100 1,727,875
Entrust Technologies(a) 56,000 1,183,000
Genesys Telecommunications
Laboratories(a) 155,000 3,584,375
Kronos Inc(a) 50,500 1,869,289
Legato Systems(a) 50,300 2,753,925
Mercury Interactive(a) 64,000 2,104,000
Metro Information Services(a) 79,100 1,819,300
Netopia Inc(a) 70,000 1,968,750
OneMain.com Inc(a) 53,000 1,106,375
PSINet Inc(a) 41,300 1,837,850
Peregrine Systems(a) 84,000 1,926,750
Rhythms NetConnections(a) 15,250 739,625
SalesLogix Corp(a) 67,600 794,300
USWeb Corp(a) 43,210 1,096,454
Verity Inc(a) 33,000 1,095,188
Visual Networks(a) 47,000 1,386,500
WebTrends Corp(a) 72,800 2,083,900
================================================================================
30,901,956
0.66 DISTRIBUTION
Insight Enterprises(a) 78,400 1,989,400
================================================================================
<PAGE>
SHARES OR
PRINCIPAL
% DESCRIPTION AMOUNT VALUE
- --------------------------------------------------------------------------------
1.34 ELECTRICAL EQUIPMENT
DII Group(a) 69,500 $2,289,156
Flextronics International Ltd(a) 35,000 1,750,000
================================================================================
4,039,156
2.32 ELECTRONICS
Anaren Microwave(a) 93,900 2,012,981
LeCroy Corp(a) 66,475 1,155,003
Mettler-Toledo International(a) 91,800 2,272,050
Veeco Instruments(a) 50,000 1,537,500
================================================================================
6,977,534
4.88 ELECTRONICS -- SEMICONDUCTOR
ANADIGICS Inc(a) 112,100 2,802,500
Applied Micro Circuits(a) 34,500 2,039,812
Cree Research(a) 23,800 1,310,487
Galileo Technology Ltd(a) 53,000 1,649,625
Maker Communications(a) 75,000 1,715,625
QLogic Corp(a) 17,400 1,909,650
Unitrode Corp(a) 158,000 3,288,375
================================================================================
14,716,074
0.81 ENTERTAINMENT
SFX Entertainment Class A Shrs(a) 44,600 2,427,913
================================================================================
2.56 EQUIPMENT -- SEMICONDUCTOR
American Xtal Technology(a) 137,000 2,868,437
Brooks Automation(a) 140,000 2,590,000
Photronics Inc(a) 115,000 2,271,250
================================================================================
7,729,687
1.48 FINANCIAL
HealthCare Financial Partners(a) 85,900 2,899,125
MicroFinancial Inc 128,200 1,554,425
================================================================================
4,453,550
0.81 FOODS
Suiza Foods(a) 67,000 2,453,875
================================================================================
0.99 GAMING
Harrah's Entertainment(a) 137,700 2,977,762
================================================================================
2.47 HEALTH CARE DRUGS -- PHARMACEUTICALS
Accredo Health(a) 37,200 1,013,700
Alkermes Inc(a) 47,000 1,163,250
ChiRex Inc(a) 115,000 3,471,562
<PAGE>
SHARES OR
PRINCIPAL
% DESCRIPTION AMOUNT VALUE
- --------------------------------------------------------------------------------
Roberts Pharmaceutical(a) 95,000 $1,805,000
================================================================================
7,453,512
3.54 HEALTH CARE RELATED
Laser Vision Centers(a) 34,500 1,966,500
MedQuist Inc(a) 70,000 2,572,500
Pharmaceutical Product Development(a) 62,000 1,658,500
Province Healthcare(a) 112,400 2,430,650
ResMed Inc(a) 21,000 589,313
Sunrise Assisted Living(a) 39,000 1,443,000
================================================================================
10,660,463
0.89 INSURANCE
HCC Insurance Holdings 120,600 2,683,350
================================================================================
1.42 INVESTMENT BANK/BROKER FIRM
Affiliated Managers Group(a) 105,000 3,071,250
National Discount Brokers Group(a) 26,200 1,218,300
================================================================================
4,289,550
1.59 LEISURE TIME
Action Performance(a) 57,200 2,173,600
Intrawest Corp 165,000 2,629,688
================================================================================
4,803,288
0.59 MANUFACTURING
Pentair Inc 40,000 1,765,000
================================================================================
5.00 OIL & GAS RELATED
Basin Exploration(a) 41,000 686,750
Global Marine(a) 145,700 2,048,906
Louis Dreyfus Natural Gas(a) 92,000 1,794,000
Nabors Industries(a) 147,000 2,940,000
Newfield Exploration(a) 100,500 2,550,188
Precision Drilling(a) 143,000 2,600,813
Unit Corp(a) 415,000 2,464,063
================================================================================
15,084,720
1.37 PERSONAL CARE
Ocular Sciences(a) 51,100 1,558,550
Playtex Products(a) 170,000 2,571,250
================================================================================
4,129,800
0.77 PUBLISHING
Big Flower Holdings(a) 75,000 2,334,375
================================================================================
0.64 RESTAURANTS
Papa John's International(a) 49,000 1,935,500
================================================================================
<PAGE>
SHARES OR
PRINCIPAL
% DESCRIPTION AMOUNT VALUE
- --------------------------------------------------------------------------------
7.36 RETAIL
American Eagle Outfitters(a) 63,600 $ 2,595,675
Ames Department Stores(a) 53,200 2,181,200
Cost Plus(a) 55,000 2,055,625
eToys Inc(a) 25,700 1,559,669
Footstar Inc(a) 48,000 1,863,000
InterTAN Inc(a) 160,000 2,470,000
J Jill Group(a) 66,100 1,065,862
Men's Wearhouse(a) 110,000 2,808,439
Tuesday Morning(a) 107,600 2,205,800
Wild Oats Markets(a) 115,000 3,370,938
================================================================================
22,176,208
0.56 SAVINGS & LOAN
FirstFed Financial(a) 90,000 1,698,750
================================================================================
14.05 SERVICES
ACNielsen Corp(a) 105,000 2,959,687
AHL Services(a) 103,350 2,738,775
Corporate Executive Board(a) 47,300 1,386,481
Cotelligent Inc(a) 154,200 2,062,425
Critical Path(a) 21,600 1,151,550
Digital River(a) 26,000 627,250
Harte-Hanks Inc 119,900 2,727,725
INSpire Insurance Solutions(a) 135,000 2,354,062
Integrated Electrical Services(a) 72,000 1,084,500
Jack Henry & Associates 43,220 1,526,206
Media Metrix(a) 16,700 794,294
Metzler Group(a) 47,200 1,545,800
NCO Group(a) 70,800 2,159,400
NetGravity Inc(a) 59,500 1,256,938
Pegasus Systems(a) 27,000 941,625
ProBusiness Services(a) 53,200 1,649,200
Profit Recovery Group International(a) 33,200 1,222,175
Provant Inc(a) 123,600 1,931,250
Rental Service(a) 127,000 3,032,125
Safeguard Scientifics(a) 20,200 1,477,125
Sykes Enterprises(a) 115,000 3,579,375
Sylvan Learning Systems(a) 59,000 1,607,750
TSI International Software Ltd(a) 115,000 2,544,375
================================================================================
42,360,093
<PAGE>
SHARES OR
PRINCIPAL
% DESCRIPTION AMOUNT VALUE
- --------------------------------------------------------------------------------
0.89 TELECOMMUNICATIONS-- CELLULAR & WIRELESS
Proxim Inc(a) 69,800 $ 2,687,300
================================================================================
1.78 TELECOMMUNICATIONS -- LONG DISTANCE
Dycom Industries(a) 52,450 2,530,712
Viatel Inc(a) 63,000 2,835,000
================================================================================
5,365,712
0.56 TELEPHONE
Inet Technologies(a) 99,200 1,692,600
================================================================================
0.84 TEXTILE -- APPAREL MANUFACTURING
Quiksilver Inc(a) 88,500 2,522,250
================================================================================
0.48 TEXTILE -- HOME FURNISHINGS
Linens 'n Things(a) 36,600 1,459,425
================================================================================
0.97 TRANSPORTATION
Eagle USA Airfreight(a) 61,800 2,912,325
================================================================================
TOTAL COMMON STOCKS (Cost $229,273,355) 260,164,597
================================================================================
13.70 SHORT-TERM INVESTMENTS -- REPURCHASE AGREEMENTS
Repurchase Agreement with State
Street dated 5/28/1999 due
6/1/1999 at 4.720%, repurchased
at $41,311,654 (Collateralized
by US Treasury Notes, due
1/15/2008 at 3.625%, value
$42,120,723) (Cost 41,290,000) $41,290,000 41,290,000
================================================================================
100.00 TOTAL INVESTMENT SECURITIES AT VALUE
(Cost $270,563,355)
(Cost for Income Tax Purposes
$272,033,944) $301,454,597
================================================================================
(a) Security is non-income producing.
See Notes to Financial Statements
<PAGE>
STATEMENT OF ASSETS AND LIABIILITIES
Invesco Emerging Opportunity Funds, Inc. -- Small Company Growth Fund
May 31, 1999
ASSETS
Investment Securities at Value (Cost $270,563,355)(a) $ 301,454,597
Cash 96,503
Receivables:
Investment Securities Sold 3,887,329
Fund Shares Sold 18,138,168
Dividends and Interest 40,302
Prepaid Expenses and Other Assets 54,325
================================================================================
TOTAL ASSETS 323,671,224
================================================================================
LIABILITIES
Payables:
Investment Securities Purchased 3,850,643
Fund Shares Repurchased 1,615,949
Accrued Distribution Expenses 60,698
Accrued Expenses and Other Payables 34,488
================================================================================
TOTAL LIABILITIES 5,561,778
================================================================================
NET ASSETS AT VALUE $ 318,109,446
================================================================================
NET ASSETS
Paid-in Capital(b) $ 266,665,076
Accumulated Undistributed Net Investment Loss (21,512)
Accumulated Undistributed Net Realized Gain on
Investment Securities and Foreign Currency Transactions 20,574,640
Net Appreciation of Investment Securities and Foreign
Security Transactions 30,891,242
================================================================================
NET ASSETS AT VALUE $ 318,109,446
================================================================================
NET ASSET VALUE, Offering and Redemption
Price per Share $ 12.08
================================================================================
(a) Investment securities at cost and value at May 31, 1999 include a
repurchase agreement of $41,290,000.
(b) The Fund has 200 million authorized shares of common stock, par value of
$0.01 per share, of which 26,328,923 were outstanding at May 31, 1999.
See Notes to Financial Statements
<PAGE>
STATEMENT OF OPERATIONS
Invesco Emerging Opportunity Funds, Inc. -- Small Company Growth Fund
May 31, 1999
INVESTMENT INCOME
INCOME
Dividends $ 244,603
Interest 2,179,990
Foreign Taxes Withheld (2,455)
================================================================================
TOTAL INCOME 2,422,138
================================================================================
EXPENSES
Investment Advisory Fees 1,973,393
Distribution Expenses 657,798
Transfer Agent Fees 1,116,282
Administrative Fees 54,324
Custodian Fees and Expenses 62,805
Directors' Fees and Expenses 21,595
Professional Fees and Expenses 31,952
Registration Fees and Expenses 69,165
Reports to Shareholders 177,855
Other Expenses 14,054
================================================================================
TOTAL EXPENSES 4,179,223
Fees and Expenses Absorbed by Investment Adviser (201,069)
Fees and Expenses Paid Indirectly (35,321)
================================================================================
NET EXPENSES 3,942,833
================================================================================
NET INVESTMENT LOSS (1,520,695)
================================================================================
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENT SECURITIES
Net Realized Gain on:
Investment Securities 22,194,189
Foreign Currency Transactions 106,985
================================================================================
Total Net Realized Gain 22,301,174
================================================================================
Change in Net Appreciation (Depreciation) of:
Investment Securities 17,430,661
Foreign Currency Transactions (13,154)
================================================================================
Total Net Appreciation 17,417,507
================================================================================
NET GAIN ON INVESTMENT SECURITIES AND
FOREIGN CURRENCY TRANSACTIONS 39,718,681
================================================================================
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 38,197,986
================================================================================
See Notes to Financial Statements
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
Invesco Emerging Opportunity Funds, Inc. -- Small Company Growth Fund
YEAR ENDED MAY 31
- --------------------------------------------------------------------------------
1999 1998
OPERATIONS
Net Investment Loss $ (1,520,695) $ (1,309,186)
Net Realized Gain on Investment Securities
and Foreign Currency Transactions 22,301,174 74,467,963
Change in Net Appreciation of Investment
Securities and Foreign Currency Transactions 17,417,507 (10,293,630)
================================================================================
NET INCREASE IN NET ASSETS FROM OPERATIONS 38,197,986 62,865,147
================================================================================
DISTRIBUTIONS TO SHAREHOLDERS FROM
NET REALIZED GAIN ON INVESTMENT
SECURITIES AND FOREIGN CURRENCY
TRANSACTIONS (26,845,319) (70,523,447)
================================================================================
FUND SHARE TRANSACTIONS
Proceeds from Sales of Shares 606,918,472 517,944,195
Reinvestment of Distributions 26,316,463 68,478,048
================================================================================
633,234,935 586,422,243
Amounts Paid for Repurchases of Shares (599,096,847) (600,416,027)
================================================================================
NET INCREASE (DECREASE) IN NET ASSETS FROM
FUND SHARE TRANSACTIONS 34,138,088 (13,993,784)
================================================================================
TOTAL INCREASE (DECREASE) IN NET ASSETS 45,490,755 (21,652,084)
NET ASSETS
Beginning of Period 272,618,691 294,270,775
================================================================================
End of Period (Including Accumulated Undistributed
Net Investment Loss of ($21,512) and ($15,689),
respectively) $ 318,109,446 $ 272,618,691
================================================================================
-------------------------------------------------------
FUND SHARE TRANSACTIONS
Shares Sold 54,131,470 38,262,375
Shares Issued from Reinvestment of Distributions 2,518,300 6,425,767
================================================================================
56,649,770 44,688,142
Shares Repurchased (53,229,883) (44,729,581)
================================================================================
NET INCREASE (DECREASE) IN FUND SHARES 3,419,887 (41,439)
================================================================================
See Notes to Financial Statements
<PAGE>
INVESCO Notes to financial statements - Invesco Emerging Opportunity Funds,Inc.
Small Company Growth Fund
NOTE 1 -- ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES. INVESCO Emerging
Opportunity Funds, Inc. is incorporated in Maryland and presently consists of
Small Company Growth Fund (the "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.
On May 20, 1999, shareholders of the Fund approved an Agreement and Plan of
Conversion and Termination providing for the conversion of the Fund from a
separate series of INVESCO Emerging Opportunity Funds, Inc. to a separate series
of INVESCO Stock Funds, Inc. INVESCO Stock Funds, Inc. fiscal year-end is July
31.
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.
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 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.
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.
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. In the event of default on the obligation to
repurchase, the Fund 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.
<PAGE>
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 Fund 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. 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 Fund may have elements of risk due to investments in foreign issuers located
in a specific country. Such investments may subject the Fund 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 Fund'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 Fund does not hold short-term forward foreign currency contracts for
trading purposes. The Fund may hold foreign currency in anticipation of settling
foreign security transactions and not for investment purposes.
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.
The Fund incurred and elected to defer post-October 31 net capital losses of
$1,393,414 to the year ended May 31, 2000. To the extent future capital gains
are offset by capital loss carryovers, 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.
Investment income received from foreign sources may be subject to foreign
withholding taxes. Dividend and interest income is shown gross of foreign
withholding taxes in the accompanying financial statements.
E. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- 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 foreign currency
transactions, nontaxable dividends, net operating losses and expired capital
loss carryforwards. For the year ended May 31, 1999, the Fund reclassified
$1,493,316 from accumulated undistributed net realized gain on investment
securities to accumulated undistributed net investment income and reclassified
$21,556 from paid-in capital to accumulated undistributed net investment income.
F. FORWARD FOREIGN CURRENCY CONTRACTS -- The Fund 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 agreement 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.
<PAGE>
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. INVESCO Funds Group, Inc.
("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; 0.65% on the next
$350 million of average net assets; 0.55% on average net assets from $700
million to $2 billion; 0.45% on average net assets from $2 billion to $4
billion; 0.40% on average net assets from $4 billion to $6 billion; 0.375% on
average net assets from $6 billion to $8 billion; and 0.35% on average net
assets in excess of $8 billion. Effective May 13, 1999, all of the breakpoints
in excess of $2 billion became contractual.
A plan of distribution pursuant to Rule 12b-1 of the Act 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 year ended May 31, 1999,
the Fund paid the Distributor $658,293 under the plan of distribution.
IFG receives a transfer agent fee at an annual rate of $20.00 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, the Fund paid 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. Effective May 13, 1999, the Fund pays
IFG an annual fee of $10,000 plus an additional amount computed at an annual
rate of 0.045% of average net assets.
IFG has voluntarily agreed to absorb certain fees and expenses incurred by the
Fund.
NOTE 3 -- PURCHASES AND SALES OF INVESTMENT SECURITIES. For the year ended May
31, 1999, the aggregate cost of purchases and proceeds from sales of investment
securities (excluding all U.S. Government securities and short-term securities)
were $461,219,512 and $486,325,500, respectively.
There were no purchases or sales of U.S. Government securities.
NOTE 4 -- APPRECIATION AND DEPRECIATION. At May 31, 1999, the gross appreciation
of securities in which there was an excess of value over tax cost amounted to
$44,322,914 and the gross depreciation of securities in which there was an
excess of tax cost over value amounted to $14,902,261, resulting in net
appreciation of $29,420,653.
NOTE 5 -- TRANSACTIONS WITH AFFILIATES. Certain of the Fund's officers and
directors are also officers and directors of IFG or IDI.
The Fund has adopted an unfunded defined benefit 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 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 year ended May 31, 1999, included in Directors' Fees
and Expenses in the Statement of Operations were $6,335. Unfunded accrued
pension costs of $12,503 and pension liability of $34,014 are included in
Prepaid Expenses and Accrued Expenses, respectively, in the Statement of Assets
and Liabilities.
<PAGE>
The independent directors have contributed to a deferred fee agreement, pursuant
to which they have deferred receipt of a portion of the compensation which they
would otherwise have been paid as directors of selected INVESCO Funds. The
deferred amounts may be invested in the shares of any of the INVESCO Funds.
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. At May 31, 1999, there were
no such borrowings.
NOTE 7 -- ACQUISITION OF INVESCO DIVERSIFIED FUNDS, INC. -- SMALL COMPANY VALUE
FUND ("TARGET FUND"). On June 4, 1999, the Fund acquired all the net assets of
the Target Fund pursuant to an Agreement and Plan of Reorganization and
Termination approved by the Target Fund shareholders on May 20, 1999. The
acquisition was accomplished by a tax-free exchange of 3,019,096 shares of the
Fund (valued at $37,196,562) for the 3,719,526 shares of the Target Fund
outstanding on June 4, 1999. The Target Fund's net assets at that date
($37,196,562), including $3,216,394 of unrealized appreciation, were combined
with those of the Fund. The aggregate net assets of the Fund and the Target Fund
immediately before the acquisition were $341,636,283 and $37,196,562,
respectively. The net assets of the Fund after the acquisition were
$378,832,845.
----------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of
INVESCO Emerging Opportunity Funds, Inc.
In our opinion, the accompanying statement of assets and liabilities, including
the statement of investment securities, and the related statements of operations
and of changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of INVESCO Small Company Growth Fund
(the sole portfolio constituting INVESCO Emerging Opportunity Funds, Inc.,
hereafter referred to as the "Fund") at May 31, 1999, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended and the financial highlights for each of
the five years in the period then ended, in conformity with generally accepted
accounting principles. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the responsibility of the
Fund's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at May 31, 1999 by correspondence with the custodian
and brokers, provide a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Denver, Colorado
July 6, 1999
<PAGE>
FINANCIAL HIGHLIGHTS
Invesco Emerging Opportunity Funds, Inc. -- Small Company Growth Fund
(For a Fund Share Outstanding Throughout Each Period)
<TABLE>
<CAPTION>
YEAR ENDED MAY 31
- --------------------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value-- Beginning of Period $ 11.90 $ 12.82 $ 14.38 $ 9.37 $ 11.40
=============================================================================================================
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss)(a) 0.00 (0.06) (0.07) (0.06) 0.04
Net Gains or (Losses) on Securities
(Both Realized and Unrealized) 1.35 2.56 (0.96) 5.25 0.46
=============================================================================================================
TOTAL FROM INVESTMENT OPERATIONS 1.35 2.50 (1.03) 5.19 0.50
=============================================================================================================
LESS DISTRIBUTIONS
Dividends from Net Investment Income 0.00 0.00 0.00 0.00 0.04
Distributions from Capital Gains 1.17 3.42 0.53 0.18 2.49
=============================================================================================================
TOTAL DISTRIBUTIONS 1.17 3.42 0.53 0.18 2.53
=============================================================================================================
Net Asset Value-- End of Period $ 12.08 $ 11.90 $ 12.82 $ 14.38 $ 9.37
=============================================================================================================
TOTAL RETURN 12.91% 22.65% (7.08%) 55.78% 4.98%
RATIOS
Net Assets -- End of Period
($000 Omitted) $318,109 $272,619 $294,259 $370,029 $153,727
Ratio of Expenses to Average
Net Assets(b) 1.51%(c) 1.48%(c) 1.52%(c) 1.48%(c) 1.49%
Ratio of Net Investment Income
(Loss) to Average Net Assets(b) (0.58%) (0.42%) (0.55%) (0.78%) 0.41%
Portfolio Turnover Rate 203% 158% 216% 221% 228%
</TABLE>
(a) Net investment income (loss) for the year ended May 31, 1999 aggregated less
than $0.01 on a per share basis.
(b) Various expenses of the Fund were voluntarily absorbed by IFG for the years
ended May 31, 1999, 1997 and 1995. If such expenses had not been voluntarily
absorbed, ratio of expenses to average net assets would have been 1.59%,
1.54% and 1.52%, respectively, and ratio of net investment income (loss) to
average net assets would have been (0.66%), (0.57%), and 0.38%,
respectively.
(c) Ratio is based on Total Expenses of the Fund, less Expenses Absorbed by
Investment Adviser, which is before any expense offset arrangements.
<PAGE>
OTHER INFORMATION
UNAUDITED
On May 20, 1999, a special meeting of the shareholders of the Fund was held at
which the ten directors identified below were elected. The selection of
PricewaterhouseCoopers LLP as independent accountants (Proposal 1), the approval
of changes to the fundamental investment restrictions identified below (Proposal
2) and the approval of an Agreement and Plan of Conversion and Termination
providing for the conversion of INVESCO Small Company Growth Fund from a
separate series of INVESCO Emerging Opportunity Funds, Inc., to a separate
series of INVESCO Stock Funds, Inc. (Proposal 3) were ratified. The following is
a report of the votes cast:
<TABLE>
<CAPTION>
WITHHELD/
NOMINEE/PROPOSAL FOR AGAINST ABSTAIN TOTAL
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Charles W. Brady 13,553,881 0 409,295 13,963,176
Fred A. Deering 13,549,233 0 413,943 13,963,176
Mark H. Williamson 13,560,088 0 403,088 13,963,176
Dr. Victor L. Andrews 13,566,204 0 396,972 13,963,176
Bob R. Baker 13,563,662 0 399,514 13,963,176
Lawrence H. Budner 13,567,957 0 395,219 13,963,176
Dr. Wendy Lee Gramm 13,567,730 0 395,446 13,963,176
Kenneth T. King 13,558,129 0 405,047 13,963,176
John W. McIntyre 13,569,646 0 393,530 13,963,176
Dr. Larry Soll 13,573,364 0 389,812 13,963,176
Proposal 1 13,484,611 130,651 347,913 13,963,175
Proposal 2
Modification of Fundamental
Investment Restrictions on:
a -- Borrowing and adoption of
non-fundamental restriction
on borrowing 11,916,456 440,195 1,606,525 13,963,176
b --Issuance of senior
securities 11,913,055 443,596 1,606,525 13,963,176
c --Investing in another
investment company 11,920,773 435,878 1,606,525 13,963,176
d --Issuer diversification 11,921,324 435,327 1,606,525 13,963,176
e --Loans 11,917,300 439,351 1,606,525 13,963,176
f --Investing in commodities 11,914,050 442,601 1,606,525 13,963,176
g --Real estate investments 11,922,981 433,670 1,606,525 13,963,176
h --Underwriting securities 11,921,623 435,028 1,606,525 13,963,176
i --Industry concentration 11,920,994 435,657 1,606,525 13,963,176
Elimination of Fundamental
Investment Restrictions on:
j -- Short sales and margin
purchases and adoption of
non-fundamental restriction
on short sales and margin
purchases 11,914,050 442,601 1,606,525 13,963,176
k --Investing in companies
for the purpose of exercising
control or management 11,921,169 435,482 1,606,525 13,963,176
l -- Fund ownership of securities
also owned by directors and
officers of the Fund or its
investment adviser 11,916,013 440,638 1,606,525 13,963,176
<PAGE>
OTHER INFORMATION (CONTINUED)
WITHHELD/
NOMINEE/PROPOSAL FOR AGAINST ABSTAIN TOTAL
- -----------------------------------------------------------------------------------------------
m -- Mortgaging, pledging or
hypothecating securities 11,918,383 438,268 1,606,525 13,963,176
n --Investments in oil, gas
and other mineral leases or
programs 11,918,931 437,720 1,606,525 13,963,176
o --Investing in securities of
newly formed issuers 11,921,477 435,174 1,606,525 13,963,176
Proposal 3 12,079,310 365,607 1,518,259 13,963,176
</TABLE>
<PAGE>
INVESCO Family of Funds
Newspaper
Fund Name Fund Code Ticker Symbol Abbreviation
- --------------------------------------------------------------------------------
International
International Blue Chip 09 IIBCX ItlBlChp
Pacific Basin 54 FPBSX PcBas
European 56 FEURX Europ
Latin American Growth 34 IVSLX LtnAmerGr
- --------------------------------------------------------------------------------
Sector
Energy 50 FSTEX Enrgy
Financial Services 57 FSFSX FinSvc
Gold 51 FGLDX Gold
Health Sciences 52 FHLSX HlthSc
Leisure 53 FLISX Leisur
Realty 42 IVSRX Realty
Technology-Class II 55 FTCHX Tech
Utilities 58 FSTUX Util
Worldwide Communications 39 ISWCX WldCom
(as of 7/30/99, Telecommunications) (as of 8/1/99
Telecomm)
- --------------------------------------------------------------------------------
Stock
Growth & Income 21 IVGIX Gro&Inc
INVESCO Endeavor 61 IVENX Endeavor
Blue Chip Growth 10 FLRFX BlChpGro
Dynamics 20 FIDYX Dynm
Small Company Growth 60 FIEGX SmCoGth
Value Equity 46 FSEQX ValEq
S&P 500 Index Fund-Class II 23 ISPIX SP500II
- --------------------------------------------------------------------------------
Combination Stock & Bond
Industrial Income 15 FIIIX IndInc
(as of 7/30/99, Equity Income) (as of 8/1/99,
EquityInc)
Total Return 48 FSFLX TotRtn
Balanced 71 IMABX Bal
- --------------------------------------------------------------------------------
Bond
U.S. Government Securities 32 FBDGX USGvt
Select Income 30 FBDSX SelInc
High Yield 31 FHYPX HiYld
Tax-Free Bond (formerly,
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
Money Market Reserve 96 IMRXX INVESCOMMR
Tax-Exempt Reserve 95 ITTXX INVESCOTTE
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 ICON]
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, 3003 East Third Avenue, Suite 1
Denver Tech Center, 7800 East Union Avenue, Lobby Level
INVESCO Distributors, Inc.,(SM) Distributor
Post Office Box 173706
Denver, CO 80217-3706
This information must be preceded or accompanied
by a current prospectus.
A60 9016 7/99
