The
Global
Health Sciences
Fund
Semiannual Report
April 30, 1996
INVESCO
<PAGE>
The Global Health Sciences Fund
Semiannual Report
Table of Contents
Report of Investment Manager 1
Statement of Investment Securities 5
Statement of Assets and Liabilities 12
Statement of Operations 13
Statement of Cash Flows 14
Statement of Changes in Net Assets 15
Notes to Financial Statements 16
Quarterly Results of Operations 20
Financial Highlights 21
Other Information: 22
Dividend and Reinvestment Plan 22
Miscellaneous 24
<PAGE>
The Global Health Sciences Fund Semiannual Report
April 30, 1996
Dear Shareholder:
We are pleased to report that, for the first half of 1996, the Global Health
Sciences Fund (the "Fund") continued to experience excellent performance. For
the six-month period ended April 30, 1996, the Fund's net asset value rose
30.25%, while the share price rose 25.42%. While past performance is not a
guarantee of future returns, these results compare favorably with both the
Standard and Poor's Health-Care Composite Index (up 11.56%) -- the benchmark
used to measure Fund performance vis-a-vis a broad universe of health-care
stocks -- as well as the broad market as measured by the Standard & Poor's 500
index (up 13.52%).
The Fund has benefited from a multitude of positive developments, ranging from
potential legislative changes at the Food & Drug Administration ("FDA") to the
introduction of a new device which assists in the treatment of blocked coronary
arteries. In the following paragraphs, we would like to touch upon a few of the
factors which have affected the Fund's performance, discuss current positioning
of the Fund, and briefly review each of the sub-sectors within the portfolio.
There has been much attention and speculation given to the issue of health-care
reform, and likewise on the crafting of legislation targeted at achieving such
reform. For better or worse, legislative attempts at reform remain in the
discussion stages. We expect reform rhetoric to reach a crescendo as the
November elections approach. But, with little significant action actually taken,
1996 has already proven to be similar to previous years. Although we continue to
have a healthy degree of skepticism regarding the passage and implementation of
government-led reform, it is inevitable that government-sponsored health
insurance must change from its current form. The projected growth of the
Medicare and Medicaid programs, combined with federal budget realities, leave
few alternatives. It is worth mentioning that, for the first time ever -- and
several years sooner than anticipated -- Medicare will operate with a financial
deficit for fiscal year 1996.
More significant government action came in the form of changes in the operation
of the FDA. Several times in recent years, the FDA has been criticized as being
too strict with regulatory interpretations in application and scope. This
criticism is often preceded by a regulatory "crackdown" triggered by a consumer
product failure, in this case the breast implant controversy. Consumer groups
and Congress began to mount pressure on the FDA, believing the agency had gone
too far and might actually be causing harm by slowing the introduction of
innovative treatments. Beginning in 1995 and continuing today, the FDA has
responded by accelerating approval times through various administrative changes.
The Fund benefited from a stronger-than-usual flurry of new product approvals in
late 1995 in the pharmaceutical and device sectors. This is significant because
new products typically generate stronger revenue growth and are accompanied by
higher margins.
<PAGE>
GRAPH:
The Global Health Sciences Fund
Percent of Total Net Assets by Sub-Sector
This bar graph reflects the allocation of The Global Health Sciences
Fund's portfolio by value of net assets in Biotechnology, Health Care
Delivery, Medical Devices & Supplies, Pharmaceuticals, and Net Cash for
the periods ending 4/30/96, 10/31/95, and 4/30/96.
Pharmaceuticals
Our outlook remains positive for the pharmaceutical industry. New product
introduction, along with cost-cutting opportunities, continue to guide our stock
selection within this sub-sector. Recent additions to the portfolio included
Pfizer Inc (PFE) -- in the midst of a strong multi-product introduction cycle --
and Eli Lilly & Co (LLY), which is on the cusp of a major new product cycle.
While specific holdings may change, we expect this group to remain relatively
constant as a percentage of the portfolio weighting.
Medical Devices and Supplies
After significantly and successfully overweighting this group for much of 1995,
more recently we have been steadily reducing our positions within the device
sub-sector. Due to higher valuations and relative earnings growth slowdown, we
feel it prudent to bring our exposure to a more normal level. However, we
continue to be very positive on those companies with proprietary new products
either on the market or soon to be introduced.
GRAPH:
The Global Health Sciences Fund Market Value
and Net Asset Value as of 4/30/96
This line graph compares the Market Value and the Net Asset Value of a
$10,000 investment in The Global Health Sciences Fund to the value of a
$10,000 investment in the S&P 500 Index, assuming in each case
reinvestment of all dividends and capital gain distributions, for the
period from inception (12/91) through 4/30/96.
Health Care Delivery
In contrast, during 1995 we significantly underweighted this group, with equal
success. This year, we have been selectively increasing the Fund's exposure to
health care delivery. For additional investments within this group, Health
Maintenance Organizations (HMOs) appear a sub-sector with potential. After a
rather rocky 1995, a few HMOs appear to be attractive candidates for our
portfolio, as many of the specific problems were of a short-term nature. We
currently own Oxford Health Plans (OXHP) and US HealthCare (USHC), and
anticipate purchasing others depending on company fundamentals and share
valuations.
<PAGE>
Biotechnology
The biotechnology weighting has remained relatively constant throughout the
six-month period. We continue to search for new investment opportunities in this
area, yet remain selective on both fundamentals as well as share valuations.
Conclusion
We are pleased with the performance of the Fund over the past six months and
hope that you are as well. Additionally, we remain enthusiastic about the
prospects for the health care industry and how we have sought to position the
Fund to best capitalize on those prospects.
/s/ John Schroer
- ----------------------
Sincerely
John R. Schroer
Vice President, INVESCO Trust Company
Manager, The Global Health Sciences Fund
<PAGE>
The Global Health Sciences Fund
Ten Largest Common Stock Holdings
April 30, 1996
Description Value Percent of Net Assets
- --------------------------------------------------------------------------
HBO & Co $20,306,250 4.1%
Oxford Health Plans 16,968,000 3.4
Dura Pharmaceuticals 12,840,000 2.6
Waters Corp 12,822,500 2.6
Sofamor/Danek Group 11,298,750 2.3
Protocol Systems 11,163,750 2.3
Astra AB Series A Shrs 11,088,944 2.2
Pharmacia & Upjohn 10,950,975 2.2
Nellcor Puritan Bennett 10,682,000 2.2
US HealthCare 10,425,000 2.1
=====
Total 26.0%
Composition of holdings is subject to change.
<PAGE>
The Global Health Sciences Fund
Statement of Investment Securities
April 30, 1996
<TABLE>
<CAPTION>
Shares or
Principal
Description Amount Value
- ---------------------------------------------------------------------------------------------
COMMON STOCKS
& WARRANTS 84.18%
BIOTECHNOLOGY 14.39%
<S> <C> <C>
Alexion Pharmaceuticals* 100,000 $887,500
Alexion Pharmaceuticals*^ 335,526 2,288,814
Alexion Pharmaceuticals Warrants
(Exp 1997)*^@ 31,250 0
Amgen Inc* 160,000 9,200,000
Arris Pharmaceutical* 232,000 3,596,000
Athena Neurosciences* 480,000 9,180,000
BioCryst Pharmaceuticals* 166,666 2,270,824
Biogen Inc* 104,000 6,851,000
Connective Therapeutics* 104,000 910,000
Creative BioMolecules* 360,000 2,958,750
Ecogen Technologies I*^~ 60 792,000
Genzyme Corp* 20,000 1,125,000
ID Biomedical* 640,000 4,240,000
INCYTE Pharmaceuticals* 250,000 8,031,250
LXR Biotechnology* 425,000 2,656,250
MedClone Inc Warrants (Exp 1998)*^@ 709,300 0
Pharmos Corp*~ 603,312 1,527,134
Sequana Therapeutics* 112,000 2,366,000
Synaptic Pharmaceuticals* 103,500 1,733,625
Synaptic Pharmaceuticals*^ 125,000 1,884,375
Titan Pharmaceuticals*^~ 488,215 3,295,451
Unisyn Technologies*^~ 20,754 20,754
Unisyn Technologies Warrants (Exp 2001)*^@~ 333,773 0
Vical Inc* 200,000 3,012,500
Xenometrix Inc*^ 261,007 1,688,389
------------
70,515,616
------------
HEALTH CARE DELIVERY 15.23%
HBO & Co 171,000 20,306,250
Medaphis Corp* 160,000 7,380,000
Medical Associates of America*^~ 502,935 1
Oxford Health Plans* 336,000 16,968,000
PhyCor Inc* 91,250 4,494,063
RoTech Medical* 200,000 8,300,000
Total Renal Care Holdings* 177,700 6,797,025
US HealthCare 200,000 10,425,000
------------
74,670,339
------------
MEDICAL DEVICES & SUPPLIES 26.10%
ATS Medical* 166,666 1,666,660
ATS Medical Warrants (Exp 1997)*^ 166,666 166,666
Arterial Vascular Engineering* 58,600 2,578,400
<PAGE>
Baxter International 190,000 8,407,500
Biocompatibles International PLC*^ 960,000 5,234,984
Boston Scientific* 90,000 3,881,250
Cardiometrics Inc* 200,000 1,109,375
Cardiovascular Diagnositics* 300,000 3,150,000
Clarus Medical Systems Warrants
(Exp 2000)*^@~ 2,224 0
Corvita Corp* 217,292 2,213,662
Corvita Corp Warrants (Exp 1999)*^ 16,114 34,947
Diametrics Medical* 326,221 2,324,325
Electroscope Inc*^ 190,000 950,000
IDEXX Laboratories* 228,100 10,150,450
Imatron Inc Warrants (Exp 1996)*^ 400,000 862,500
InVision Technologies* 72,726 777,259
KeraVision Inc* 206,185 3,273,187
Landec Corp* 100,000 1,900,000
Matritech Inc* 414,900 6,379,087
Medtronic Inc 31,200 1,657,500
Metra Biosystems*^ 210,356 2,413,835
Nellcor Puritan Bennett* 218,000 10,682,000
Physio-Control International* 120,500 2,349,750
Protocol Systems*~ 572,500 11,163,750
Sofamor/Danek Group* 345,000 11,298,750
STERIS Corp* 250,000 8,125,000
Tecnol Medical Products* 450,000 8,775,000
UroMed Corp* 219,467 2,304,403
Waters Corp* 460,000 12,822,500
Xillix Technologies*~ 711,538 1,306,533
------------
127,959,273
------------
PHARMACEUTICALS 28.46%
ALPHARMA Inc Class A 350,000 8,575,000
American Home Products 55,000 5,802,500
Astra AB Series A Shrs 250,000 11,114,634
Bristol-Myers Squibb 100,000 8,225,000
CIMA Labs* 333,333 2,287,498
Crown Laboratories*^~ 726,458 1,042,013
Dura Pharmaceuticals* 240,000 12,840,000
Ergo Science* 440,800 9,146,600
Fuisz Technologies Ltd* 18,500 475,913
Fuisz Technologies Ltd*^ 368,632 8,092,291
Lilly (Eli) & Co 150,000 8,850,000
Matrix Pharmaceutical* 361,300 9,393,800
PAREXEL International* 117,100 5,767,175
Penederm Inc* 200,000 3,400,000
Pfizer Inc 145,000 9,986,875
Pharmacia & Upjohn 286,300 10,950,975
Quintiles Transnational* 60,000 4,395,000
Sandoz AG Registered Shrs 9,200 10,047,680
Shaman Pharmaceuticals* 166,667 1,187,502
Watson Pharmaceuticals* 166,540 7,910,650
------------
139,491,106
------------
TOTAL COMMON STOCKS & WARRANTS
(Cost $270,055,836) 412,636,334
------------
<PAGE>
PREFERRED STOCKS 6.54%
BIOTECHNOLOGY 2.29%
Cadus Pharmaceuticals, Series A Conv Pfd*^~ 2,188,184 7,658,644
Ingenex Inc, Series B Pfd*^~ 103,055 600,000
MedClone Inc, Series G Conv Pfd*^ 872,096 523,258
Osiris Therapeutics, Series C Conv Pfd*^ 352,941 1,199,999
Unisyn Technologies Series A Conv Pfd*^~ 758,258 758,258
Series B Conv Pfd*^~ 499,500 499,500
------------
11,239,659
------------
HEALTH CARE DELIVERY 2.21%
Advanced Health Series A Conv Pfd*^ 485,900 3,187,504
Series C Conv Pfd*^ 200,000 1,348,000
Multum Information Services
Series B Conv Pfd*~ 1,000,000 2,570,000
Physicians Online Series A Conv Pfd*^ 361,500 3,220,965
Series C Conv Pfd*^ 55,558 500,022
------------
10,826,491
------------
MEDICAL DEVICES & SUPPLIES 2.04%
Adeza Biomedical, Series II Conv Pfd*^~ 1,000,000 1,000,000
Cambridge Heart, Series A Conv Pfd*^~ 1,300,000 1,950,000
Clarus Medical Systems
Series I Conv Pfd*^~ 106,664 533,320
Series II Conv Pfd*^~ 77,239 386,195
InterVentional Technologies
Series F Pfd*^ 250,000 2,125,000
Janus Biomedical, Series A Conv Pfd*^ 400,000 1,000,000
Norian Corp, Series D Pfd*^ 2,142,858 1,500,001
OrbTek Inc, Series A Conv Pfd*^ 714,286 1,500,001
------------
9,994,517
------------
TOTAL PREFERRED STOCKS
(Cost $18,789,892) 32,060,667
------------
FIXED INCOME SECURITIES 0.53%
BIOTECHNOLOGY 0.02%
MedClone Inc, 10.000% Promissory Notes,
6/30/1996*^** 110,520 110,520
------------
HEALTH CARE DELIVERY 0.00%
Medical Associates of America
Conv Sr Notes 7.000%, 2/28/1999*^~>> 1,689,904 100
------------
MEDICAL DEVICES & SUPPLIES 0.51%
OrbTek Inc, 10.000% Conv Promissory Notes
6/30/2000^ 500,000 500,000
11/24/2000^ 2,000,000 2,000,000
------------
2,500,000
------------
TOTAL FIXED INCOME SECURITIES
(Cost $4,300,424) 2,610,620
------------
<PAGE>
OTHER SECURITIES 0.41%
PHARMACEUTICALS 0.41%
Spiros Development Units*^~
(Each unit consists of 1
callable shr of cmn stock
and 1 Series S wrnt to buy
1.20 shrs of Dura Phamaceuticals
cmn stock)(Cost $2,000,010) 66,667 2,000,010
------------
SHORT-TERM INVESTMENTS -
COMMERCIAL PAPER8.33%
DIVERSIFIED COMPANIES 1.55%
General Electric 5.250%, 5/1/1996 7,565,000 7,565,000
------------
FINANCE RELATED 6.78%
Beneficial Corp 5.230%, 5/1/1996 2,014,000 2,014,000
General Motors Acceptance
5.300%, 5/6/1996 10,000,000 10,001,472
Prudential Funding 5.250%, 5/8/1996 8,611,000 8,611,000
Sears Roebuck Acceptance 5.310%,
5/3/1996 9,440,000 9,440,000
5.260%, 5/3/1996 3,182,000 3,182,000
------------
33,248,472
------------
TOTAL SHORT-TERM INVESTMENTS
(Cost $40,813,472) 40,813,472
------------
OTHER INVESTMENTS 0.01%
(Cost $72,543) 89,700 72,245
------------
TOTAL INVESTMENT SECURITIES AT VALUE 100.00%
(Cost $336,032,177) (Cost for
Income Tax Purposes
$336,033,115) 490,193,348
============
<FN>
* Security is non-income producing.
< Security has no market value at April 30, 1996.
~ Security is an affliated company (See Note 5).
** Security is a defaulted security with respect to cumulative interest
payments of $5,526 at April 30, 1996.
>> Security is a defaulted security with respect to cumulative interest
payments of $256,302 at April 30, 1996. The security has been devalued to
$100.
^ The following are restricted securities at April 30, 1996:
</FN>
</TABLE>
<PAGE>
Schedule of Restricted or Illiquid Securities
<TABLE>
<CAPTION>
Fair Value
Date Fair as a % of
Security Name Acquired Cost Value Net Assets
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ATS Medical Warrants (Exp 1997) 11/18/1992 $0 $166,666 0.03%
Adeza Biomedical, Series II Conv Pfd 12/21/1994 1,000,000 1,000,000 0.20
Advanced Health Series A Conv Pfd 8/30/1993 48,590 3,187,504 0.65
Series C Conv Pfd 1/27/1995 1,500,000 1,348,000 0.27
Alexion Pharmaceuticals 6/15/1993 1,000,000 2,288,814(b) 0.46
Alexion Pharmaceuticals Warrants (Exp 1997) 6/15/1993 0 0 0.00
Biocompatibles International PLC 3/05/1993 960,000 5,234,984(a) 1.06
Cadus Pharmaceutical, Series A Conv Pfd 7/30/1993 1,000,000 7,658,644 1.55
Cambridge Heart, Series A Conv Pfd 9/29/1993 1,300,000 1,950,000 0.40
Clarus Medical Systems Series I Conv Pfd 12/23/1992 533,320 533,320 0.11
Series II Conv Pfd 12/23/1992 111,196 386,195 0.08
Warrants (Exp 2000) 12/23/1992 0 0 0.00
Corvita Corp Warrants (Exp 1999) 11/4/1992 0 34,947(d) 0.01
Crown Laboratories 8/20/1993 1,089,698 1,042,013(c) 0.21
Ecogen Technologies I 1/16/1992- 1/28/1994 684,000 792,000 0.16
Electroscope Inc 4/27/1993 750,000 950,000 0.19
Fuisz Technologies Ltd 9/28/1992- 8/11/1994 1,999,996 8,092,291 1.64
Imatron Inc Warrants (Exp 1996) 9/11/1992 400,000 862,500 0.18
Ingenex Inc, Series B Pfd 9/27/1994 600,000 600,000 0.12
InterVentional Technologies, Series F Pfd 10/19/1992 2,000,000 2,125,000 0.43
Janus Biomedical, Series A Conv Pfd 3/2/1994 1,000,000 1,000,000 0.20
MedClone Inc Series G Conv Pfd 10/21/1993- 7/15/1994 1,500,005 523,258 0.11
10.000% Promissory Notes 6/29/1995- 12/31/1995 110,520 110,520 0.02
Warrants (Exp 1998) 10/21/1993- 7/15/1994 0 0 0.00
Medical Associates of America 2/24/1992- 8/31/1992 530,491 1 0.00
Medical Associates of America,
7.000%, Sr Conv Notes, 2/28/1999 2/24/1992- 2/28/1994 1,689,904 100 0.00
Metra Biosystems 1/11/1994 1,300,000 2,413,835(c) 0.49
Norian Corp, Series D Pfd 5/8/1992 1,500,001 1,500,001 0.30
OrbTek Inc, Series A Conv Pfd 5/12/1994- 2/9/1995 1,500,001 1,500,001 0.30
10.000% Conv Promissory Notes, 6/30/2000 6/30/1995 500,000 500,000 0.10
11/24/2000 11/24/1995 2,000,000 2,000,000 0.41
Osiris Therapeutics, Series C Conv Pfd 5/24/1994 - 12/23/1994 1,199,999 1,199,999 0.24
<PAGE>
Physicians Online Series A Conv Pfd 8/30/1993 964,000 3,220,965 0.65
Series C Conv Pfd 2/29/1996 500,022 500,022 0.10
Spiros Development Units 12/29/1995 2,000,010 2,000,010 0.41
Synaptic Pharmaceutical 1/19/1993 1,000,000 1,884,375(d) 0.38
Titan Pharmaceuticals 7/19/1993 2,000,000 3,295,451(a) 0.67
Unisyn Technologies 2/28/1994 999,961 20,754 0.00
Unisyn Technologies Series A Conv Pfd 12/27/1994 758,258 758,258 0.15
Series B Pfd 2/6/1996 499,500 499,500 0.10
Warrants (Exp 2001) 7/27/1994 0 0 0.00
Xenometrix Inc 7/28/1992- 2/21/1996 2,099,978 1,688,389(a) 0.34
------------ ------------ ------------
$38,629,450 $62,868,317 12.72%
============ ============ ============
<FN>
(a) - Fair value represents 75% of the security's publicly traded value.
(b) - Fair value represents 80% of the security's publicly traded value.
(c) - Fair value represents 85% of the security's publicly traded value.
(d) - Fair value represents 90% of the security's publicly traded value.
</FN>
</TABLE>
See Notes to Financial Statements
<PAGE>
The Global Health Sciences Fund
Statement of Assets and Liabilities
April 30, 1996
UNAUDITED
ASSETS
Investment Securities at Value
(Cost $336,032,177) $490,193,348
Cash 346
Receivables:
Investment Securities Sold 4,941,340
Dividends and Interest 258,411
Prepaid Expenses and Other Assets 44,393
--------------
TOTAL ASSETS 495,437,838
--------------
LIABILITIES
Payables: Investment Securities Purchased 475,912
Investment Advisory Fees 390,782
Administrative Fees 53,660
Accrued Expenses and Other Payables 187,873
--------------
TOTAL LIABILITIES 1,108,227
--------------
Net Assets at Value 494,329,611
==============
NET ASSETS
Paid-in Capital* 281,405,932
Accumulated Undistributed Net Investment Loss (1,401,152)
Accumulated Undistributed Net Realized Gain on
Investment Securities and Foreign Currency
Transactions 60,163,660
Net Appreciation of Investment Securities
and Foreign Currency Transactions 154,161,171
--------------
Net Assets at Value $494,329,611
==============
Net Asset Value per Share 24.11
==============
* The Fund has an unlimited number of authorized shares of common stock, par
value of $0.01 per share, of which 20,507,200 were outstanding at April 30,
1996.
See Notes to Financial Statements
<PAGE>
The Global Health Sciences Fund
Statement of Operations
Six Months Ended April 30, 1996
INVESTMENT INCOME
INCOME
Dividends $832,318
Interest 544,831
--------------
TOTAL INCOME 1,377,149
--------------
EXPENSES
Investment Advisory Fees 2,180,176
Administrative Fees 305,278
Custodian Fees and Expenses 74,794
NYSE Listing Fee 16,125
Organization Expenses 3,467
Professional Fees and Expenses 35,275
Reports to Shareholders 80,235
Transfer Agent Fees 17,854
Trustees' Fees and Expenses 27,728
Other Expenses 37,369
--------------
NET EXPENSES 2,778,301
--------------
NET INVESTMENT LOSS (1,401,152)
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENT SECURITIES
Net Realized Gain on Investment Securities
and Foreign Currency Transaction 63,483,674
Change in Net Appreciation of Investment
Securities and Foreign Currency Transactions 52,744,025
--------------
NET GAIN ON INVESTMENT SECURITIES 116,227,699
--------------
Net Increase in Net Assets from Operations 114,826,547
==============
See Notes to Financial Statements
<PAGE>
The Global Health Sciences Fund
Statement of Cash Flows
For the Six Months Ended April 30, 1996
Increase (Decrease) in Cash
Cash Flows From Operating Activities:
Dividends and Interest Received, Net of Foreign
Withholding Taxes $1,272,541
Expenses Paid (2,873,914)
Purchases of Short-Term Portfolio Investments, Net (20,034,741)
Purchases of Long-Term Portfolio Investments (165,021,157)
Sales of Long-Term Portfolio Investments 186,629,829
Other 27,772
--------------
Net Cash Flows From Operating Activities 330
--------------
Net Increase in Cash 330
Cash at Beginning of Year 16
--------------
Cash at End of Year 346
--------------
Reconciliation of Net Increase in Net
Assets from Operations to Net Cash
Flows From Operating Activities
Net Increase in Net Assets from Operations 114,826,547
--------------
Increase in Investments 10,693,094
Net Realized Gain (63,483,674)
Increase in Appreciation (52,744,025)
Increase in Receivable for Investment Securities Sold (1,378,515)
Decrease in Payable for Investment Securities Purchased (7,807,505)
Increase in Dividends and Interest Receivable (173,433)
Increase in Prepaid Expenses and Other Assets (27,772)
Increase in Accrued Expenses and Other Payables 95,613
--------------
Total Adjustments (114,826,217)
--------------
Net Cash Flows From Operating Activities 330
==============
See Notes to Financial Statements
<PAGE>
The Global Health Sciences Fund
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months Year
Ended Ended
April 30 October 31
------------ ------------
1996 1995
UNAUDITED
OPERATIONS
<S> <C> <C>
Net Investment Loss $(1,401,152) $(2,188,534)
Net Realized Gain on Investment Securities
and Foreign Currency Transactions 63,483,674 46,749,534
Change in Net Appreciation of
Investment Securities and Foreign Currency
Transactions 52,744,025 81,107,756
------------ ------------
Total Increase In Net Assets 114,826,547 125,668,756
------------ ------------
Beginning of Period 379,503,064 253,834,308
------------ ------------
End of Period (Including Accumulated
Undistributed Net Investment Loss of
$1,401,152 and $0, respectively) 494,329,611 379,503,064
============ ============
See Notes to Financial Statements
</TABLE>
<PAGE>
The Global Health Sciences Fund
Notes to Financial Statements
UNAUDITED
NOTE 1 -- ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES. The Global Health
Sciences Fund (the "Fund") was organized as a Massachusetts Business Trust on
November 18, 1991. The investment objective of the Fund is to seek capital
appreciation through investments in the health sciences related business
sectors. The Fund is registered under the Investment Company Act of 1940 (the
"Act") as a diversified, closed-end management investment company. Prior to
commencing investment operations on January 24, 1992, the Fund had no operations
other than the sale to INVESCO Trust Company (the "Investment Adviser") of 7,200
shares of beneficial interest for $100,440 on January 13, 1992.
Organizational costs of $34,800 have been deferred and are amortized on a
straight-line basis over a sixty-month period from the date the Fund commenced
operations.
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 revenues 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
trustees.
Debt securities are valued at evaluated bid prices as determined by
a pricing service approved by the Fund's board of trustees. If evaluated
bid prices are not available, debt securities are valued by averaging the
bid prices obtained from one or more dealers making a market for such
securities.
If market quotations or pricing service valuations are not readily
available, securities are valued at a fair value as determined in good
faith by the Fund's board of trustees. Restricted securities are valued in
accordance with procedures established by the Fund's board of trustees.
Short-term securities are stated at amortized cost (which
approximates market value) if maturity is 60 days or less at the time of
purchase, or market value if maturity is greater than 60 days.
B. 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. Discounts on debt securities purchased are
amortized over the life of the respective security as adjustments to
interest income. Cost is determined on the specific identification basis.
<PAGE>
Restricted securities held by the Fund may not be sold except in
exempt transactions or in a public offering registered under the
Securities Act of 1933. The risk of investing in such securities is
generally greater than the risk of investing in the securities of widely
held, publicly traded companies. Lack of a secondary market and resale
restrictions may result in the inability of the Fund to sell a security at
a fair price and may substantially delay the sale of the security which
the Fund seeks to sell. In addition, these securities may exhibit greater
price volatility than securities for which secondary markets exist. The
Fund has demand registration rights for certain restricted securities held
at April 30, 1995, which can be exercised upon the registration of a
qualifying public offering by each company in the future. The Fund may
incur registration costs associated with these public offerings. There is
no assurance such offerings will occur.
C. FEDERAL AND STATE TAXES - The Fund has complied and continues to comply
with the provisions of the Internal Revenue Code applicable to regulated
investment companies and, accordingly, has made or intends to make
sufficient distributions of net investment income and net realized capital
gains, if any, to relieve it from all federal and state income taxes and
federal excise taxes. At October 31, 1995, the Fund had $3,086,263 in net
capital loss carryovers which expire, if not used, in the year 2001. To
the extent future capital gains are offset by capital loss carryovers,
such gains will not be distributed to shareholders.
Net capital loss carryovers utilized in 1995 amounted to $46,693,558.
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.
D. 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 non- taxable dividends, net operating losses and
expired capital loss carryforwards.
NOTE 2 -- INVESTMENT ADVISORY AND OTHER AGREEMENTS. INVESCO Trust Company
("ITC") serves as the Fund's investment adviser. As compensation for its
services to the Fund, ITC 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 1.00% of ending weekly net assets.
Under the terms of the Administrative Agreement with the former
administrator, certain admininstrative services were provided to the Fund for
fees based upon an annual rate of average net assets ranging from 0.20% to
0.10%. As of May 1, 1996, INVESCO Funds Group, Inc. ("IFG") became the
administrator for the Fund. The Fund will pay IFG an annual fee of $250,000 to
provide administrative, accounting and clerical services. The fee is accrued
daily and paid monthly.
NOTE 3 -- PURCHASES AND SALES OF INVESTMENT SECURITIES. For the six months ended
April 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 $157,213,652 and $188,008,344, respectively. There were no
purchases or sales of U.S. Government securities.
<PAGE>
NOTE 4 -- APPRECIATION AND DEPRECIATION. At April 30, 1996, the gross
appreciation of securities in which there was an excess of value over tax cost
amounted to $162,401,887 and the gross depreciation of securities in which there
was an excess of tax cost over value amounted to $8,241,654, resulting in net
appreciation of $154,160,233.
NOTE 5 -- TRANSACTIONS WITH AFFILIATES AND AFFILIATED COMPANIES. For the six
months ended April 30, 1996, PaineWebber Incorporated (an affiliate of the
former administrator) earned $14,146 in commissions for brokerage transactions.
Certain of the Fund's officers and trustees are also officers and
directors of ITC or IFG.
An affiliated company represents ownership by the Fund of at least 5% of
the voting securities of the issuer during the period, as defined in the Act. A
summary of the transactions with affiliates during the six months ended April
30, 1996, in which the issuer was an affiliate of the Fund, is as follows:
<TABLE>
<CAPTION>
Realized
Purchases Sales Gain/(Loss) Value
------------------- --------------------
Affiliate Shares Cost Shares Cost on Investmentsat 4/30/96
- ----------- -------- -------- -------- -------- ------------------------
<S> <C> <C> <C> <C> <C> <C>
Adeza Biomedical,
Series II Conv Pfd - - - - - 1,000,000
Cadus Pharmaceutical,
Series A Conv Pfd - - - - - 7,658,644
Cambridge Heart,
Series A Pfd - - - - - 1,950,000
Clarus Medical Systems,
Series I Pfd - - - - - 533,320
Series II Pfd 55,000 275,000 - - - 386,195
Warrants - - - - - 0
Crown Laboratories - - - - - 1,042,013
Ecogen Technologies I - - - - - 792,000
Ingenex Inc,
Series B Pfd - - - - - 600,000
Medical Associates
of America - - - - - 1
Medical Associates
of America
Conv Sr Notes
7.000%, 2/28/1999 - - - - - 100
Multum Information Service
Series B Conv Pfd - - - - - 2,570,000
Pharmos Corp - - - - - 1,527,134
Protocol Systems 42,500 442,188 - - - 11,163,750
Spiros Development Units 66,667 2,000,010 - - - 2,000,010
Titan Pharmaceuticals
Series A Pfd - - - - - 3,295,451
Unisyn Technologies - - - - - 20,754
Unisyn Technologies
Series A Conv Pfd - - - - 758,258
Series B Pfd 499,500 499,500 - - - 499,500
Warrants - - - - - 0
Xillix Technologies - - - - - 1,306,533
----------
37,103,663
==========
No dividend income was received from any affiliated companies.
</TABLE>
<PAGE>
The Global Health Sciences Fund
Quarterly Results of Operations
UNAUDITED
<TABLE>
<CAPTION>
Net Realized
and Unrealized
Gain (Loss) on
Net Investments and
Investment Investment Foreign Currency
Income Loss Transactions
-------------------- -------------------- --------------------
Total Per Total Per Total Per
Quarter Ended (000) Share (000) Share (000) Share
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
January 31, 1996 $568 $0.028 $(746) $(0.036) $76,808 $3.745
April 30, 1996 809 0.039 (655) (0.032) 39,420 1.922
-------- -------- -------- -------- -------- --------
Totals 1,377 0.067 (1,401) (0.068) 116,228 5.667
======== ======== ======== ======== ======== ========
January 31, 1995 332 0.016 (783) (0.038) 16,035 0.782
April 30, 1995 631 0.031 (62) (0.003) 26,838 1.309
July 31, 1995 488 0.024 (148) (0.007) 41,947 2.045
October 31, 1995 380 0.018 (1,195) (0.059) 43,037 2.099
-------- -------- -------- -------- -------- --------
Totals 1,831 0.089 (2,188) (0.107) 127,857 6.235
======== ======== ======== ======== ======== ========
January 31, 1994 593 0.029 (256) (0.012) 22,626 1.103
April 30, 1994 295 0.014 (605) (0.030) (17,076) (0.832)
July 31, 1994 336 0.017 (687) (0.033) (15,086) (0.736)
October 31, 1994 531 0.026 (205) (0.010) 20,661 1.007
-------- -------- -------- -------- -------- --------
Totals 1,755 0.086 (1,753) (0.085) 11,125 0.542
======== ======== ======== ======== ======== ========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Net Increase
(Decrease) in
Net Assets Market Price
from Operations on NYSE
-------------------- --------------------
Total Per
Quarter Ended (000) Share High Low
- ---------------- -------- -------- -------- --------
<S> <C> <C> <C> <C>
January 31, 1996 $76,062 $3.709 $18.625 $14.625
April 30, 1996 38,765 1.890 18.875 17.000
-------- --------
Totals 114,827 5.599
======== ========
January 31, 1995 15,252 0.744 10.625 9.375
April 30, 1995 26,776 1.306 12.000 10.625
July 31, 1995 41,799 2.038 13.500 11.000
October 31, 1995 41,842 2.040 15.125 13.250
-------- --------
Totals 125,669 6.128
======== ========
January 31, 1994 22,370 1.091 12.000 10.500
April 30, 1994 (17,681) (0.862) 11.625 9.875
July 31, 1994 (15,773) (0.769) 10.875 9.375
October 31, 1994 20,456 0.997 10.750 9.500
-------- --------
Totals 9,372 0.457
======== ========
</TABLE>
<PAGE>
The Global Health Sciences Fund
Financial Highlights
(For a Fund Share Outstanding Throughout Each Period)
<TABLE>
<CAPTION>
Six Months Period
Ended Ended
April 30 Year Ended October 31 October 31
------------ --------------------------------------- -----------
1996 1995 1994 1993 1992^
UNAUDITED
PER SHARE DATA
Net Asset Value -
<S> <C> <C> <C> <C> <C>
Beginning of Period $18.506 $12.378 $12.121 $12.643 $13.950
------------ --------------------------------------- -----------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss) (0.068) (0.107) (0.085) 0.205 0.071
Net Gains or (Losses) on Securities
(Both Realized and Unrealized) 5.667 6.235 0.542 (0.652) (1.345)
------------ --------------------------------------- -----------
Total from Investment Operations 5.599 6.128 0.457 (0.447) (1.274)
LESS DISTRIBUTIONS
Dividends from Net Investment Income 0.000 0.000 0.200 0.075 0.000
Offering Costs Charged to Paid-In Capital 0.000 0.000 0.000 0.000 0.033
------------ --------------------------------------- -----------
Total Distributions 0.000 0.000 0.200 0.075 0.033
------------ --------------------------------------- -----------
Net Asset Value - End of Period 24.105 18.506 12.378 12.121 12.643
============ ======================================= ===========
Share Price - End of Period $18.500 $14.750 $10.000 $11.500 $11.500
============ ======================================= ===========
TOTAL RETURN 25.42%* 47.50% (11.49%) 0.67% (17.56%)*
============ ======================================= ===========
RATIOS
Net Assets - End of Period
($000 Omitted) $494,330 $379,503 $253,834 $248,564 $259,279
Ratio of Expenses to Average Net Assets 0.64%* 1.33% 1.41% 1.39% 1.35%~
Ratio of Net Investment Income (Loss)
to Average Net Assets (0.32%)* (0.72%) (0.70%) 1.74% 0.72%~
Portfolio Turnover Rate 37%* 105% 121% 226% 215%*
<FN>
^ From January 24, 1992, commencement of operations, to October 31, 1992.
>> Total investment return is calculated assuming a purchase of common stock
at the current market price on the first day and a sale at the current
market price on the last day of each period reported. Dividends and
distributions, if any, are assumed, for purposes of this calculation, to
be reinvested at prices obtained under the Fund's dividend reinvestment
plan. Total investment return does not reflect sales charges or brokerage
commissions.
* Based on operations for the period shown and, accordingly, are not representative of a full year.
~ Annualized
</FN>
</TABLE>
<PAGE>
The Global Health Sciences Fund
Other Information
Dividend Reinvestment Plan
Shareholders of the fund who have Shares registered directly in their own
names automatically participate in the Fund's Dividend Reinvestment Plan (the
"Plan"), unless and until an election is made to withdraw from the Plan as
herein provided. State Street Bank and Trust Company (the "Agent"), acts as
agent under the Plan on behalf of participating shareholders. Shareholders who
do not wish to have distributions automatically reinvested should so notify the
Fund c/o State Street Bank and Trust Company, P.O. Box 366, Boston,
Massachusetts 02101. Under the Plan, all of the Fund's dividends and capital
gains and other distributions to shareholders will be reinvested in full and
fractional Shares as described below. A shareholder who owns Shares registered
in his broker's or nominee name, and whose broker does not provide facilities
for a dividend reinvestment program, may be required to have his Shares
registered in his own name in order to participate in the Plan. Shareholders
wishing to participate in the Plan whose Shares are held in the name of a broker
or nominee should consult their brokers as to how to accomplish dividend
reinvestment.
Whenever the Fund declares an income dividend or a capital gain or other
distribution (collectively, "Dividends"), non-participants in the Plan will
receive cash and participants in the Plan will receive the equivalent in Shares.
The Shares will be acquired by the Agent for the participant's account,
depending upon the circumstances described below, either (i) through receipt of
additional unissued but authorized Shares ("Newly Issued Shares") or (ii) by the
purchase of outstanding Shares on the open market ("Open-Market Purchases") on
the New York Stock Exchange or elsewhere.
If on the payment date for a Dividend the net asset value per Share is
equal to or less than the market price per Share plus estimated brokerage
commissions (such condition being referred to herein as "Market Premium"), the
Agent will purchase from the Fund Newly Issued Shares on behalf of the
participant at a price per Share equal to the greater of the net asset value per
Share or 95% of the then current market price per Share. This discount from the
current market price reflects savings in underwriting and other costs which the
Fund would otherwise incur to raise additional capital.
If on the payment date for a Dividend the net asset value per Share is
greater than the market price per Share (such condition being referred to herein
as "Market Discount"), the Agent will endeavor to invest the Dividend amount in
Shares acquired on behalf of the participant in Open-Market Purchases. In the
event of a Market Discount on the payment date, the Agent will have up to 30
days after the payment date to invest the Dividend amount in Shares acquired in
Open-Market Purchases.
Registered shareholders who acquire their Shares in open-market
transactions and who do not wish to have their Dividends automatically
reinvested should so notify the Fund in writing. If a shareholder has not
previously elected to receive cash Dividends and the Agent does not receive
notice of an election to receive cash Dividends prior to the record date of any
Dividends, the Shareholder will automatically receive such Dividends in
additional Shares.
<PAGE>
Participants in the Plan may withdraw from the Plan by providing written
notice to the Agent at least 30 days prior to the applicable Dividend payment
date. When a participant withdraws from the Plan, or upon termination of the
Plan as provided below, certificates for whole Shares credited to his account
under the Plan will, upon request, be issued. Whether or not a participant
requests that certificates for whole Shares be issued, a cash payment will be
made for any fraction of a Share credited to such account.
The Agent will maintain all shareholder accounts in the Plan and furnish
written confirmations of all transactions in the accounts, including information
needed by shareholders for personal and tax records. Shares in the account of
each Plan participant will be held by the Agent in non-certificated form in the
name of the participant, and each shareholder's proxy will include those shares
purchased pursuant to the Plan. Each participant, nevertheless, has the right to
receive certificates for whole Shares owned. The Agent will distribute all proxy
solicitation materials to participating shareholders. In the case of
shareholders, such as banks, brokers or nominees, which hold Shares for others
who are the beneficial owners participating in the Plan, the Agent will
administer the Plan on the basis of the number of Shares certified from time to
time by the shareholder as representing the total amount of Shares registered in
the shareholder's name and held for the account of beneficial owners
participating in the Plan.
There will be no charge to participants for reinvesting Dividends other
than their share of brokerage commissions as discussed below. The Agent's fees
for administering the Plan and handling the reinvestment of Dividends will be
paid by the Fund. Each participant's account will be charged a pro-rata share of
brokerage commissions incurred with respect to the Agent's Open-Market Purchases
in connection with the reinvestment of Dividends. Brokerage charges for
purchasing small amounts of Shares for individual accounts through the Plan are
expected to be less than the usual brokerage charges for such transactions
because the Agent will be purchasing Shares for all the participants in blocks
and prorating the lower commission that may be attainable.
The automatic reinvestment of Dividends will not relieve participants of
any income tax which may be payable on such Dividends. In the case of non-U.S.
participants whose Dividends are subject to United States income tax withholding
and in the case of any participants subject to 30% federal backup withholding,
the Agent will reinvest Dividends after deduction of the amount required to be
withheld.
The Fund reserves the right to amend or terminate the Plan by written
notice to participants. All correspondence concerning the Plan should be
directed to the Agent at the address referred to in the first paragraph of this
section.
<PAGE>
Miscellaneous
Since April 30, 1996, there were (i) no material changes in the Fund's
investment objectives or policies, (ii) no changes to the Fund's charter or
by-laws, and (iii) no material changes in the principal risk factors associated
with investment in the Fund. Mr. R. Dalton Sim continues to serve as President
and Trustee of the Fund and Mr. John Schroer assumed primary responsibility for
the day-to-day management of the Fund's portfolio.
Mr. Schroer joined INVESCO Trust Company ("ITC") in 1993 and became a Vice
President of ITC in 1995. A Chartered Financial Analyst, Mr. Schroer received
his BS and MBA from the University of Wisconsin - Madison and began his
investment career in 1989. In addition to Mr. Schroer's responsibilities as
portfolio manager of the Fund, he also manages the INVESCO Strategic Health
Sciences Portfolio and the INVESCO Emerging Growth Fund.
<PAGE>
The Global Health Sciences Fund
- -------------------------------
Charles W. Brady Chairman of the Board of Trustees
R. Dalton Sim President and Trustee
John R. Schroer Vice President
Fred A. Deering Trustee
A.D. Frazier, Jr. Trustee
Dan J. Hesser Trustee
John W. McIntyre Trustee
Larry Soll, Ph.D. Trustee
Glen A. Payne Secretary
Ronald L. Grooms Treasurer, Chief Financial and Accounting Officer
Investment Adviser
- ------------------
INVESCO Trust Company
7800 East Union Avenue
Suite 1100
Denver, Colorado 80237
Administrator
- -------------
INVESCO Funds Group, Inc.
7800 East Union Avenue
Suite 800
Denver, Colorado 80237
Custodian
- ---------
State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02110
Shareholder Servicing Agent
- ---------------------------
Boston Equiserve, Inc.
2 Heritage Drive
North Quincy, Massachusetts 02171
Independent Accountants
- -----------------------
Price Waterhouse LLP
950 Seventeenth Street
Denver, Colorado 80202
Counsel
- -------
Kirkpatrick & Lockhart
1800 M Street, N.W.
South Lobby, 9th Floor
Washington, D.C. 20036
To receive information on the Dividend Reinvestment Plan, call toll-free:
1-800-451-6788
To obtain current Net Asset Values, call toll-free: 1-800-528-8765
This report, including the financial statements herein, is sent to the
shareholders of the Fund for their information. It is not a prospectus,
circular, or representation intended for use in the purchase or sale of shares
of the Fund or any securities mentioned in this report.
