Invesco Global
Health Sciences Fund
Semiannual Report
April 30, 1998
<PAGE>
Invesco Global Health Sciences Fund
Semiannual Report
o The Fund will pay its first quarterly distribution on June 3, 1998 to
Shareholders of record on May 19, 1998.
o The Fund launched its website ghs.invesco.com, on April 16, 1998, making
available current Fund information to investors.
o While past performance is no guarantee of future results, for the six months
ended April 30, 1998, shareholders enjoyed a market price total return of
almost 35%.
o Invesco Global Health Sciences Fund's total assets under management were over
$599 million as of April 30, 1998.
The INVESCO Global Health Sciences Fund is an aggressive growth closed-end
fund that focuses on health care, a global field of unlimited potential growth.
The Fund is managed by INVESCO, which historically has been an industry leader
in investment management.
Contents
1 Performance Highlights
2 Letter from the Chairman
4 Report of Investment Manager
11 Ten Largest Common Stock Holdings
12 Statement of Investment Securities
18 Forward Foreign Currency Contracts
19 Statement of Assets and Liabilities
20 Statement of Operations
21 Statement of Cash Flows
22 Statement of Changes in Net Assets
23 Notes to Financial Statements
29 Financial Highlights
30 Other Information
33 Shareholder Information
33 Trustees and Officers
<PAGE>
Performance Highlights
Invesco Global Health Sciences Fund
- -------------------------------------------------------------------------------
For the 6 Months
Ended 4/30/1998 Fiscal 1997 Fiscal 1996 Fiscal 1995
- -------------------------------------------------------------------------------
Net Asset Value-
Total Return 17.26%* 18.60% 20.10% 49.52%
Share Price - Total Return 34.72%* 32.98% 15.25% 47.50%
Total Distributions $2.847 $4.4727 $ 0.00 $ 0.00
Total Net Assets -
End of Period $599.6 $ 526.2 $ 455.8 $379.5
Ratio of Expenses to
Average Net Assets 0.58%*@ 1.22%@ 1.21% 1.33%
Portfolio Turnover 55%* 145% 91% 105%
- -------------------------------------------------------------------------------
Past performance is no guarantee of future results.
* Based on operations for the period shown, and, accordingly, are not
representative of a full year.
@ Ratio is based on Total Expenses of the Fund, which is before any expense
offset arrangements.
Graph: This bar graph reflects the net asset value of the fund for the
periods ending 4/30/94, 4/30/95, 4/30/96, 4/30/97 and 4/30/98.
Graph: This bar graph reflects the stock price of the fund for the periods
ending 4/30/94, 4/30/95, 4/30/96, 4/30/97 and 4/30/98.
* price reflects the $4.4727 capital gains distribution paid on December 23,
1996
@ price reflects the $2.847 capital gains distribution paid on December 19, 1997
<PAGE>
Letter from the Chairman
INVESCO Global Health Sciences Fund
April 1998
Dear Shareholder:
During the last six months, an environment of low inflation and strong
economic growth has helped to provide strong returns from health care stocks. We
have seen large-cap pharmaceutical companies drive performance of INVESCO Global
Health Sciences Fund ("GHS" or the "Fund"), and we continue to expect the
pharmaceutical sector will be the largest sector in the portfolio over the
near-term. While past performance is no guarantee of future results, for the six
months ended April 30, 1998, the Fund returned 17.3% based on net asset value
("NAV"), and 34.7% based on market value.
Since you received your copy of the Fund's 1997 Report to Shareholders,
there have been two significant events for the Fund. First, on April 3, 1998,
the Securities and Exchange Commission ("SEC") granted the Fund an exemptive
order, which permits the Fund to make quarterly distributions at a rate of 2.5%
of NAV - 10% annually - to Fund shareholders. Implementation of this fixed
distribution policy was contingent upon the grant by the SEC of the exemptive
order. This order permits the Fund to include realized capital gains, if any,
when making quarterly distributions. The Board of Trustees implemented this
policy at the quarter end following the grant of the exemptive order, which was
April 30, 1998.
On April 16, 1998, the Fund launched a new website. The site can be
accessed by typing in the Internet address ghs.invesco.com or by selecting the
Fund's link at INVESCO Funds Group, Inc.'s ("IFG") homepage, www.invesco.com.
The site communicates to shareholders and new customers important Fund
information such as historical performance, current NAV and stock prices,
distribution history, reports to shareholders and news features.
The Board of Trustees and IFG believe that these two events will help
manage the Fund's discount to net asset value. The Board approved the fixed
distribution policy as a result of ongoing analysis to identify strategies that
may be effective in maintaining smaller discounts. Similarly, launching the
website was part of an enhanced investor relations program for the Fund designed
to strengthen the Fund's presence in the financial community. We believe by
providing the Fund proactive investor relations support we are helping to
enhance investors' understanding of the Fund, which could increase market demand
and reduce the discount.
Your Board of Trustees continues to evaluate new ways to further enhance
shareholder value. We are committed to serving our shareholders and look forward
to assisting you with your future investment needs. Should you ever need
assistance, please do not hesitate to contact us directly at 800-528-8765.
Sincerely,
Hubert L. Harris, Jr.
- ---------------------------
Hubert L. Harris, Jr.
Chairman of the Board of Trustees
INVESCO Global Health Sciences Fund
<PAGE>
Report of Investment Manager
Invesco Global Health Sciences Fund
April 30, 1998
- --------------------------------------------------------------------------------
In the last six months, the market environment for health care stocks has
significantly improved. Continued low inflation and strong economic growth have
provided a positive backdrop for equities overall, including the health care
sector. During this time period, investors have placed increased emphasis on
earnings and liquidity, creating a two-tier health care equity market in which
market-leading pharmaceuticals outperformed smaller health care companies. Large
pharmaceutical companies remain a vital part of our portfolio strategy, and
companies like Bristol-Myers Squibb, Lilly (Eli) & Co., Merck & Co., Pfizer
Inc., SmithKline Beecham PLC, and Warner-Lambert Co. produced significant gains
for the Fund in the last six months. We continue to believe that large
pharmaceuticals offer some of the best investment opportunities in the market
because these companies are benefiting from an improved regulatory environment,
strong new product pipelines, and effective marketing campaigns.
Another area providing strong returns for the Fund during the last six
months was the medical devices and supplies subsector - especially Guidant Corp.
and Medtronic Inc. These firms are experiencing accelerating revenues and
earnings, as patients seek to improve their quality of life as they age.
While the Fund's private placements somewhat lagged the market during the
last six months, we remain confident that above average gains may be produced by
restricted securities over time. Private placements will remain a critical
ingredient in the portfolio's composition as the Fund's closed-end capital
structure allows us to take advantage of these investment opportunities.
Fund Performance
For the six-month period ended April 30, 1998, the Fund had a total return of
17.26% based on net asset value and a total return of 34.72% based on market
value. During this period, both the net asset value and market return
significantly outperformed the average open-end fund return of 12.70% in the
Lipper Health/Biotechnology category.
For the three-year period ended April 30, 1998, the Fund had an average
annual return of 28.92% based on net asset value, and 38.36% based on market
price performance. Both of these returns also outperformed the average open-end
fund return of 26.11% for the Lipper Health/Biotechnology category. (Of course,
past performance is not a guarantee of future results.)
Pharmaceuticals
We continue to believe that size matters in the pharmaceutical industry, and
large-cap pharmaceutical companies remain the dominant theme in the portfolio.
To be successful in the global economy, pharmaceutical companies must be able to
register, market, and distribute their products worldwide. This requires
substantial capital and resources which are only available to large-cap firms.
In addition, these institutions have the financial capability to allocate
enormous amounts of capital towards research and development, resulting in
strong new product pipelines. This has dramatically improved the earnings'
outlook for these companies, as new drugs typically drive revenue and earnings
growth for pharmaceuticals. Further, the Food and Drug Administration (FDA) has
significantly cut the approval time for new drugs, directly benefiting those
firms.
Another positive for the pharmaceutical industry is that consumers are
becoming better educated and more aware of available products. In many cases,
patients are requesting prescriptions for their ailments before the doctor has a
chance to recommend a product - benefiting pharmaceuticals with large direct
marketing budgets.
<PAGE>
Presently, the Fund has focused over 50% of its assets in pharmaceuticals.
We remain concentrated in market-leading names like Merck & Co., Pfizer Inc.,
and Warner-Lambert Co. In fact, our favorite pharmaceutical company remains
Pfizer - one of the Fund's largest holdings as of April 30, 1998. Pfizer's new
anti-impotence pill, called Viagra, is easy to use with few side effects, and
works approximately 70% of the time. The potential for this drug is staggering
as it estimated that half of men between the ages of 40 and 70 have experienced
some form of sexual dysfunction. At $7 to $10 per pill, it could easily be one
of the best-selling drugs of all time, perhaps producing average annual sales in
excess of $2 billion within a few years. In addition, Pfizer has begun testing
the drug on women which, if successful, could only enhance its market potential.
Graph: This line graph represents a comparison of the value of The INVESCO
Global Health Sciences Fund's Net Asset Value and Stock Price to the
S&P Health Care Composite Index based on the value of a $10,000
investment in the fund in January 1992.
Fund's Net Asset Value and Stock Price Compared to S&P Health Care
Compositeubased upon the value of a $10,000 investment in the Fund in January
1992.
The charts 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 their performance.
Source: Invesco and FactSet
Although large-cap pharmaceutical stocks have experienced significant
appreciation in the last six months, the Fund will continue to favor these
issues. A fundamental change has occurred in this subsector, giving large- cap
pharmaceutical companies a distinct advantage over smaller drug companies. Until
this environment changes, we plan to remain heavily invested in this area.
Medical Devices and Supplies
This area also continues to produce strong returns for the Fund. As health care
systems throughout the world focus on reducing medical expenditures, exceptional
opportunities exist for companies providing products which enhance patient care
while reducing long-term costs. Some of the most significant gains in extending
the quality of life for patients have been made in the field of cardiac
research. Market-leading companies like Guidant Corp. and Medtronic Inc. have
experienced tremendous growth in earnings, as their products for use in cardiac
rhythm management, angioplasty devices, coronary artery disease intervention,
and cardiac surgery have been well-received by the market. We continue to be
positive on the medical devices and supplies subsector, as current valuation
levels look reasonable compared to the growth in earnings. However, stock
selectivity will remain crucial, and the Fund will concentrate its investments
in companies with proprietary products and defensible market positions.
<TABLE>
<CAPTION>
Worldwide Market for Pacemakers & Impantable Defibrillators
<S> <C> <C> <C> <C> <C> <C> <C>
1999E 1998E 1997 1996 1995 1994 1993
- ------------------------------------------------------------------------------------------------------------
Pacing Market
Total Units 530,000 500,000 474,000 475,000 431,000 401,250 375,000
Total Revenue $2,550 $2,400 $2,320 $2,415 $2,161 $1,943 $1,765
- ------------------------------------------------------------------------------------------------------------
Tachy Market
Total Units 72,500 56,400 44,300 33,100 29,500 23,000 16,900
Total Revenue $1,510 $1,230 $1,004 $ 790 $ 660 $ 510 $ 370
</TABLE>
Source: J.P. Morgan
<PAGE>
Biotechnology
Although we remain optimistic about the long-term prospects for the
biotechnology sector, the current market environment favors firms with
predictable earnings. This market bias has negatively affected many
biotechnology firms in the early stages of product development and, in many
cases, years away from being profitable. We have focused the Fund's investments
in this sector towards companies with commercially viable products that are in
the latter stages of development - a strategy we will maintain until the market
environment changes for this sector.
Health Care Delivery
The Fund has avoided health maintenance organizations (HMOs) and hospitals over
the last six months. The inability of HMOs to control costs has produced
negative sentiment towards this industry. Although we are excited about the
long-term prospects of HMOs, we will avoid this particular industry until the
underlying fundamentals improve. Instead, we have focused investments in this
subsector towards firms benefiting from the increased need for health care data,
like Cognizant Corp. Cognizant offers proprietary research data to health care,
media, and technology companies. This includes tracking pharmaceutical data on
drug use and end-unit sales, which is highly beneficial to the sector's
profitability. The company is planning to split into two companies in the near
future, IMS HEALTH and Nielsen Media Research, with IMS HEALTH concentrating on
health care-related data.
Private Placements
When investing in private placements or restricted securities, the Fund attempts
to identify promising young companies with the potential to make significant,
commercially viable contributions to the health care system. Due to the Fund's
unique closed-end capital structure, we are able to invest up to 25% of the
Fund's assets in these types of securities. This benefits shareholders as Fund
management is able to examine technology on the cutting edge of the health care
industry before the broad market has a chance to value it, and also helps
management identify future trends within the industry. While past performance is
no guarantee of future results, over the three-year period ended April 30, 1998,
the Fund's restricted securities produced an average annualized return of
30.40% (on a gross return basis).
Chart: This chart shows Fund's sector breakdown as of 4/30/98:
pharmaceuticals - 57%, medical devices and supplies - 24%,
health care delivery - 10%, biotechnology - 8%, and other - 1%.
*Holdings and composition of holdings are subject to change.
There are three main reasons for the reduction in the Fund's restricted
securities position over the last six months:
o The phenomenal bull market of the last six months significantly increased the
value of the Fund's freely tradable assets, decreasing the percentage of total
assets in restricted securities.
o Companies like Advanced Health and Cambridge Heart, once private placements,
became freely tradable over the last six months and are no longer classified
as restricted securities.
o A few long-term holdings were marked down to reflect a decrease in their
market value. Our goal is to have 15% to 20% of the portfolio in restricted
securities. The increase will be gradual as each investment requires proper
due diligence and financial analysis.
Chart: This graph shows the annual pharmaceutical expenditures by age group
as of April 30, 1998
Source: Bureau of Labor Statistics and Gruntal & Co., L.L.C.
<PAGE>
Although restricted securities offer the opportunity for above average
returns, their risky nature reinforces the need for in-depth research on each
company. Currently, we are excited about the long-term potential of two
particular private placements: Instrumentation Metrics and Orchid Biocomputer.
Instrumentation Metrics has developed a noninvasive and nondestructive
technology platform that uses near-infrared light in combination with advanced
algorithms to measure blood composition. This technology may revolutionize
clinical and analytical chemistry. Through the use of an optical processing unit
and application-specific software, this platform technology can measure blood
analytes without breaking the surface of the skin. Currently, the company has
targeted the self-monitoring of blood glucose by diabetics as the first market
in which to deploy its technology platform. This may allow diabetics, of whom
there are more than 2.4 million in the United States alone, to test their
glucose levels multiple times a day without the discomfort of pricking
themselves with a needle. In addition, the company feels that its proprietary
technology platform can be applied to various industries.
Orchid is addressing one of the most important parameters of drug
discovery, namely increasing sample throughput and decreasing the time of
experiments. By using the same technology used to make computer chips, Orchid is
creating miniaturized versions of drug discovery and diagnostic instruments
found in laboratories around the world. These microchemical processors precisely
manipulate complex mixtures of fluids and simultaneously perform thousands of
chemical reactions. These processors could transform the drug development
process. The company already has a strategic collaboration with SmithKline
Beecham PLC and an affiliation with Sarnoff Corp., as well as working agreements
with the Department of Defense and Motorola Inc.
Our goal when investing in private companies is that one day these firms
will become freely tradable, producing significant capital gains for the Fund.
When these institutions complete their initial public offering or otherwise
provide liquidity for their shareholders, it may unlock rewards for the Fund's
shareholders. One such company that enhanced shareholder returns over the last
six months was Nanogen, Inc. Nanogen, Inc. is attempting to integrate advanced
microelectronics and molecular biology into a platform technology with broad
commercial applications in the fields of medical diagnostics, biomedical
research, genomics, genetic testing and drug discovery. If Nanogen's platform
technology proves to be successful, it could provide a low-cost, highly
efficient, accurate and versatile integrated system that could significantly
improve the quality of health care.
Nanogen, Inc. originally purchased by the Fund as a private company,
completed its IPO on April 13, 1998, at a price $11 per share - substantially
above our historical cost of $6 per share. Even though the company is public, we
are still required to carry the stock as a restricted security throughout 1998.
During this time period, we will apply a discount to market value of 20%
starting from Nanogen's IPO date, and gradually reduce the discount until the
security becomes freely tradable at the end of the year. In comparison, private
companies generally are carried on the books at historical cost, reflecting our
conservative bias when valuing private placements.
Investors need to remember that, as exciting as these technologies sound,
these companies are in the early stages of development and it may be several
years before they are profitable. Looking forward, we will continue with our
disciplined, long-term approach to private placement investments, gradually
increasing the Fund's percentage of restricted securities as sound investment
opportunities present themselves.
<PAGE>
Looking Forward
The health care sector should be a major engine of growth for world economies in
years to come. We expect to continue to focus a substantial portion of the
Fund's assets on market-leading pharmaceutical companies. We believe these
companies are well-positioned to benefit from dominant market positions, an
improved regulatory environment and strong new product pipelines. The Fund's
exposure to smaller companies will be increased through our use of private
placements; however, that increase will be gradual, because we have a
comparatively narrow IPO calendar for the remainder of 1998. As long as interest
rates remain relatively stable, the technical underpinnings for the health care
sector should remain positive.
Sincerely,
/s/ John R. Schroer
- ---------------------
John R. Schroer, CFA
Senior Vice President
Invesco Funds Group, Inc.
Vice President and Portfolio Manager
Invesco Global Health Sciences Fund
<PAGE>
Ten Largest Common Stock Holdings
Invesco Global Health Sciences Fund
April 30, 1998
- ---------------------------------------------------------------------------
Percent of
Description Value Net Assets
- ---------------------------------------------------------------------------
Bristol-Myers Squibb $ 36,421,000 6.1%
Warner-Lambert Co 36,324,000 6.0
Schering-Plough Corp 32,851,250 5.5
American Home Products 30,358,750 5.1
Guidant Corp 29,425,000 4.9
Pfizer Inc 28,418,981 4.7
Merck & Co 27,715,000 4.6
SmithKline Beecham PLC Sponsored ADR
Representing 5 Ord Shrs 26,826,950 4.5
Sofamor/Danek Group 22,288,500 3.7
Glaxo Wellcome PLC Sponsored ADR
Representing 2 Ord Shrs 21,380,625 3.6
- ---------------------------------------------------------------------------
Total $292,010,056 48.7%
===========================================================================
Composition of holdings is subject to change.
<PAGE>
Statement of Investment Securities
Invesco Global Health Sciences Fund
April 30, 1998
Unaudited
- -------------------------------------------------------------------------------
Shares or
Principal
Description Amount Value
- -------------------------------------------------------------------------------
Common Stocks & Warrants 91.22%
Biotechnology 5.29%
- -------------------------------------------------------------------------------
Alexion Pharmaceuticals* 466,776 $ 6,301,476
Algos Pharmaceutical* 1,500 49,312
Cadus Pharmaceutical*~ 354,000 2,787,750
Creative BioMolecules* 85,400 635,163
Ecogen Technologies I*^~ 60 1
Genentech Inc* 168,000 11,634,000
MedClone Trust*^@ 216,608 0
PathoGenesis Corp* 46,900 1,858,413
Sepracor Inc* 53,000 2,451,250
Titan Pharmaceuticals* 488,215 2,166,454
Trimeris Inc* 136,274 1,345,706
Trimeris Inc*^ 313,726 2,323,533
Unisyn Technologies*^~ 20,754 7,264
Unisyn Technologies Warrants (Exp 2001)*^~@ 333,773 0
Xenometrix Inc*^~ 261,007 198,202
----------
31,758,524
----------
Health Care Delivery 8.76%
- -----------------------------------------------------------------------------
ABR Information Services* 100,000 2,893,750
Cognizant Corp 202,800 10,431,525
Columbia/HCA Healthcare 364,200 11,995,837
HBO & Co 184,000 11,005,500
McKesson Corp 230,000 16,258,125
----------
52,584,737
Medical Devices & Supplies 20.26%
- ------------------------------------------------------------------------------
Beckman Coulter 156,000 8,687,250
Becton Dickinson 117,600 8,187,900
Cambridge Heart* 265,963 2,526,648
Clarus Medical Systems Warrants
(Exp 2000)*^~@ 2,224 0
Emisphere Technologies* 169,000 2,820,188
Guidant Corp 440,000 29,425,000
IDEXX Laboratories* 195,200 4,318,800
Johnson & Johnson 244,000 17,415,500
Lynx Therapeutics*~ 350,000 3,675,000
Medtronic Inc 289,800 15,250,725
Nanogen Inc*^ 416,666 3,208,328
OrbTek Inc*^~ 88,385 1
OrbTek Inc Warrants
(Exp 2001)*^~@ 50,000 0
(Exp 2002)*^~@ 200,000 0
Sofamor/Danek Group* 254,000 22,288,500
VidaMed Inc*~ 1,052,632 3,750,002
VidaMed Inc Warrants (Exp 2000)*^~@ 263,158 0
------------
121,553,842
------------
<PAGE>
Pharmaceuticals 56.91%
- -----------------------------------------------------------------------------
Abbott Laboratories 187,000 13,674,375
ALZA Corp 219,600 10,527,075
American Home Products 326,000 30,358,750
Bristol-Myers Squibb 344,000 36,421,000
Forest Laboratories* 250,000 9,046,875
Glaxo Wellcome PLC Sponsored ADR
Representing 2 Ord Shrs 378,000 21,380,625
ICN Pharmaceuticals 405,000 19,946,250
Lilly (Eli) & Co 247,700 17,230,631
MedImmune Inc* 228,000 12,027,000
Merck & Co 230,000 27,715,000
Monsanto Co 137,000 7,243,875
Novartis AG Registered Shrs++ 4,200 6,944,278
Pfizer Inc 249,700 28,418,981
Schering-Plough Corp 410,000 32,851,250
Shire Pharmaceuticals Group PLC* 337,800 2,468,183
SmithKline Beecham PLC Sponsored ADR
Representing 5 Ord Shrs 450,400 26,826,950
Triangle Pharmaceuticals* 137,000 2,123,500
Warner-Lambert Co 192,000 36,324,000
------------
341,528,598
------------
Total Common Stocks & Warrants (Cost $396,538,938) 547,425,701
- -----------------------------------------------------------------------------
Preferred Stocks 7.05%
Biotechnology 2.59%
- -----------------------------------------------------------------------------
Exelixis Pharmaceuticals, Series C, Pfd*^ 1,125,000 $ 2,250,000
Genomica Corp, Series A, Pfd*^~ 2,490,075 1,500,000
GenoPlex Inc, Series A, Pfd*^~ 200,000 200,000
Ingenex Inc, Series B, Pfd*^ 103,055 600,000
MedClone Trust, Series G, Conv Pfd*^ 872,096 113,372
Ontogeny Inc, Series E, Pfd*^ 1,000,000 2,500,000
Orchid Biocomputer, Series C, Conv Pfd*^~ 450,450 5,000,000
Osiris Therapeutics, Series C, Conv Pfd*^ 352,941 1,199,999
Physiome Sciences, Series B, Pfd*^~ 909,090 1,499,999
Unisyn Technologies
Series A, Conv Pfd*^~ 758,258 265,390
Series B, Pfd*^~ 499,500 174,825
Series C, Pfd*^~ 696,710 243,849
-----------
15,547,434
-----------
Health Care Delivery 0.79%
- ----------------------------------------------------------------------------
Caresoft Inc, Series A, Pfd*^~ 540,541 1,000,001
Physicians Online
Series A, Pfd*^~ 361,500 3,220,965
Series C, Pfd*^~ 55,558 500,022
----------
4,720,988
----------
<PAGE>
Medical Devices & Supplies 3.67%
- ----------------------------------------------------------------------------
Adeza Biomedical, Series II, Conv Pfd*^ 416,666 1,216,665
Clarus Medical Systems
Series I, Pfd*^~ 106,664 533,320
Series II, Pfd*^~ 77,239 386,196
Instrumentation Metrics, Series C, Conv Pfd*^~ 500,000 5,057,500
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*^ 267,857 1,499,999
OrbTek Inc, Series A, Conv Pfd*^~ 714,286 1
SOMNUS Medical Technologies, Series B, Pfd*^~ 1,000,000 10,200,000
-----------
22,018,681
-----------
Total Preferred Stocks (Cost $38,286,366) 42,287,103
- ----------------------------------------------------------------------------
Fixed Income Securities 0.12%
Medical Devices & Supplies 0.12%
- ----------------------------------------------------------------------------
OrbTek Inc, Conv Promissory Notes, 10.000%
6/30/2000*^~+ $ 500,000 $ 133,333
11/22/2000*^~+ $1,000,000 266,667
11/24/2000*^~+ $1,000,000 266,667
OrbTek Inc, Conv Promissory Notes
Zero Coupon, 11/24/2000*^~+ $ 250,000 66,667
-----------
Total Fixed Income Securities (Cost $2,750,000) 733,334
- ----------------------------------------------------------------------------
Other Securities 0.11%
Medical Devices & Supplies 0.11%
- ----------------------------------------------------------------------------
Axogen Ltd, Units*
(Each unit consists of one cmn shr of Axogen
and one wrnt to purchase Elan representing one ADR)
(Cost $205,200) 11,400 655,500
- ----------------------------------------------------------------------------
Short-Term Investments 1.50%
- ----------------------------------------------------------------------------
Corporate Bonds 0.04%
Medical Devices & Supplies 0.04%
- ----------------------------------------------------------------------------
OrbTek Inc, Secured Conv Promissory Notes
Zero Coupon, 12/31/1998*^~+ (Cost $1,000,000) $1,000,000 266,667
Repurchase Agreements 1.46%
- ----------------------------------------------------------------------------
Repurchase Agreement with State Street Bank
& Trust Co dated 4/30/1998 due 5/1/1998
at 5.470%, repurchased at $8,746,329
(Collateralized by US Treasury Bonds
due 11/15/2015 at 9.875%, value $8,977,637)
(Cost $8,745,000) $8,745,000 8,745,000
----------
Total Short-Term Investments (Cost $9,745,000) 9,011,667
- ----------------------------------------------------------------------------
<PAGE>
Total Investment Securities At Value 100.00%
(Cost $447,525,504)
(Cost for Income Tax Purposes $448,818,253) $600,113,305
- ----------------------------------------------------------------------------
* Security is non-income producing.
~ Security is an affiliated company (See Notes).
@ Security has no market value at April 30, 1998.
++ Security has been designated as collateral for forward foreign
currency contracts.
+ Security is a payment-in-kind (PIK) bond. PIK bonds may make interest
payments in additional securities.
^ The following are restricted securities at April 30, 1998:
Schedule of Restricted or Illiquid Securities
- -------------------------------------------------------------------------------
Fair Value
Acquisition Acquisition as a % of
Description Date(s) Cost Fair Value Net Assets
- -------------------------------------------------------------------------------
Adeza Biomedical,
Series II,
Conv Pfd 12/21/1994 $ 999,998 $1,216,665 0.20%
Caresoft Inc,
Series A, Pfd 7/21/1997 1,000,001 1,000,001 0.17
Clarus Medical Systems
Series I, Pfd 12/23/1992 2,000,000 533,320 0.09
Series II, Pfd 12/23/1992-
2/9/1996 386,196 386,196 0.06
Warrants (Exp 2000) 12/23/1992 0 0 0.00
Ecogen Technologies I 11/16/1992-
1/28/1994 684,000 1 0.00
Exelixis Pharmaceuticals,
Series C, Pfd 4/9/1997 2,250,000 2,250,000 0.38
Genomica Corp,
Series A, Pfd 10/6/1997 1,500,000 1,500,000 0.25
GenoPlex Inc,
Series A, Pfd 9/15/1997 200,000 200,000 0.03
Ingenex Inc,
Series B, Pfd 9/27/1994 600,000 600,000 0.10
Instrumentation Metrics
Series C, Conv Pfd 2/25/1998 5,057,500 5,057,500 0.84
InterVentional Tech-
nologies Series F, Pfd 10/19/1992 2,000,000 2,125,000 0.35
Janus Biomedical,
Series A, Conv Pfd 3/2/1994 1,000,000 1,000,000 0.17
MedClone Trust 9/30/1997 151,965 0 0.00
MedClone Trust,
Series G, Conv Pfd 10/21/1993-
7/15/1994 1,500,005 113,372 0.02
Nanogen Inc 4/15/1998 2,499,996 3,208,328(b) 0.54
Norian Corp,
Series D, Pfd 8/5/1992 1,499,999 1,499,999 0.25
Ontogeny Inc,
Series E, Pfd 3/13/1997 2,500,000 2,500,000 0.42
OrbTek Inc 1/9/1997 216,849 1 0.00
<PAGE>
OrbTek Inc
Conv Promissory Notes, 10.000%
6/30/2000 6/30/1995 $ 500,000 $ 133,333 0.02%
11/22/2000 11/24/1995 1,000,000 266,667 0.05
11/24/2000 4/29/1996 1,000,000 266,667 0.05
Conv Promisory Notes,
Zero Coupon
11/24/2000 10/4/1996 250,000 66,667 0.01
Secured Conv Promis-
sory Notes Zero
Coupon, 12/31/1998 2/14/1997 1,000,000 266,667 0.05
Series A, Conv Pfd 5/12/1994-
2/9/1995 1,500,001 1 0.00
Warrants (Exp 2001) 10/4/1996 0 0 0.00
Warrants (Exp 2002) 2/14/1997 0 0 0.00
Orchid Biocomputer,
Series C, Conv Pfd 3/27/1998 5,000,000 5,000,000 0.83
Osiris Therapeutics,
Series C, Conv Pfd 12/23/1994 1,199,999 1,199,999 0.20
Physicians Online
Series A, Conv Pfd 8/30/1993 964,000 3,220,965 0.54
Series C, Conv Pfd 2/29/1996 500,022 500,022 0.08
Physiome Sciences,
Series B, Pfd 11/7/1997 1,499,999 1,499,999 0.25
Trimeris Inc 12/12/1997 2,000,000 2,323,533(a) 0.39
SOMNUS Medical Technologies
Series B, Pfd 9/11/1996 3,000,000 10,200,000(c) 1.70
Unisyn Technologies 2/28/1994 999,961 7,264 0.00
Unisyn Technologies
Series A, Conv Pfd 12/27/1994 758,258 265,390 0.04
Series B, Pfd 2/6/1996 499,500 174,825 0.03
Series C, Pfd 4/25/1997 870,888 243,849 0.04
Warrants (Exp 2001) 7/27/1994 0 0 0.00
VidaMed Inc Warrants
(Exp 2000) 9/22/1997 0 0 0.00
Xenometrix Inc 7/20/1992-
12/2/1994 2,099,978 198,202(c) 0.03
-------------------------------------
$50,689,115 $49,024,433 8.18%
============================================================================
(a) Fair value represents 75% of the security's publicly traded value.
(b) Fair value represents 80% of the security's publicly traded value.
(c) Fair value represents 90% of the security's publicly traded value.
<PAGE>
Forward Foreign Currency Contracts
Invesco Global Health Sciences Fund
Open at April 30, 1998:
UNAUDITED
- ------------------------------------------------------------------------------
Currency Currency Unrealized
Currency/Value Date Units Sold Value (US$) Loss
- -------------------------------------------------------------------------------
Swiss Franc(5/19/1998) 8,200,000 $5,850,622 $179,022
===============================================================================
See Notes to Financial Statements
<PAGE>
Statement of Assets and Liabilities
Invesco Global Health Sciences Fund
April 30, 1998
Unaudited
- ----------------------------------------------------------------------
Assets
- ----------------------------------------------------------------------
Investment Securities at Value (Cost $447,525,504)~ $600,113,305
Cash 664
Receivables:
Investment Securities Sold 514,816
Dividends and Interest 579,530
Appreciation on Forward Foreign Currency Contracts 179,022
Prepaid Expenses 37,449
------------
Total Assets $601,424,786
- ----------------------------------------------------------------------
Liabilities
- ----------------------------------------------------------------------
Payables:
Investment Securities Purchased 1,821,452
Fund Shares Repurchased 414
Accrued Expenses and Other Payables 29,139
------------
Total Liabilities $ 1,851,005
- ----------------------------------------------------------------------
Net Assets at Value $599,573,781
======================================================================
Net Assets
- ----------------------------------------------------------------------
Paid-in Capital* $393,793,796
Accumulated Undistributed Net Investment Income 46,287
Accumulated Undistributed Net Realized Gain on
Investment Securities and Foreign Currency Transactions 52,968,177
Net Appreciation of Investment Securities
and Foreign Currency Transactions 152,765,521
------------
Net Assets at Value $599,573,781
======================================================================
Net Asset Value per Share $21.56
======================================================================
~ Investment securities at cost and value at April 30, 1998 include a
repurchase agreement of $8,745,000.
* The Fund has an unlimited number of authorized shares of common stock, par
value of $0.01 per share, of which 27,812,476 were outstanding at April 30,
1998.
See Notes to Financial Statements
<PAGE>
Statement of Operations
Invesco Global Health Sciences Fund
Six Months Ended April 30, 1998
Unaudited
Investment Income
- ----------------------------------------------------------------------
Income
Dividends $ 2,049,426
Interest 1,233,203
Foreign Taxes Withheld (91,409)
------------
Total Income 3,191,220
- ----------------------------------------------------------------------
Expenses
Investment Advisory Fees 2,668,771
Administrative Fees 125,000
Custodian Fees and Expenses 57,428
NYSE Listing Fee 25,744
Professional Fees and Expenses 172,047
Transfer Agent Fees 22,445
Trustees' Fees and Expenses 27,797
Report to Shareholders 29,315
Other Expenses 17,460
---------
Total Expenses 3,146,007
Fees and Expenses Paid Indirectly (1,074)
---------
Net Expenses 3,144,933
- ----------------------------------------------------------------------
Net Investment Income 46,287
- ----------------------------------------------------------------------
Realized And Unrealized Gain (Loss) On Investment Securities
- ----------------------------------------------------------------------
Net Realized Gain on Investment Securities
and Foreign Currency Transactions 58,829,183
Change in Net Appreciation of Investment Securities
and Foreign Currency Transactions 34,657,603
-----------
Net Gain On Investment Securities 93,486,786
- ----------------------------------------------------------------------
Net Increase in Net Assets from Operations $ 93,533,073
======================================================================
See Notes to Financial Statements
<PAGE>
Statement of Cash Flows
Invesco Global Health Sciences Fund
For the Six Months Ended April 30, 1998
Unaudited
- ----------------------------------------------------------------------
Increase (Decrease) in Cash
- ----------------------------------------------------------------------
Cash Flows from Operating Activities:
Dividends and Interest Received
Net of Foreign Withholding Taxes $ 3,008,383
Expenses Paid (5,148,759)
Sales Net of Purchases of Short-Term
Portfolio Investments 15,449,977
Purchases of Long-Term Portfolio Investments (280,082,430)
Sales of Long-Term Portfolio Investments 286,867,901
Increase in Appreciation of Forward Foreign
Currency Contracts 1,314,246
Other 5,329
------------
Net Cash Flows from Operating Activities 21,414,647
------------
Cash Flows Used for Financing Activities:
Payments for Units Redeemed (414)
Distributions Paid to Common Shareholders (20,173,900)
------------
(20,174,314)
------------
Net Increase in Cash 1,240,333
Cash at Beginning of Year (1,239,669)
------------
Cash at End of Year $ 664
- ----------------------------------------------------------------------
Reconciliation of Net Increase in Net Assets from
Operations to Net Cash Flows from Operating Activities
- ----------------------------------------------------------------------
Net Increase in Net Assets from Operations $ 93,533,073
Decrease in Investments 13,974,887
Net Realized Gain (58,829,183)
Increase in Appreciation of Investment Securities (34,657,603)
Decrease in Receivable for Investment Securities Sold 6,983,768
Increase in Payable for Investment Securities Purchased 1,216,237
Increase in Appreciation of Forward Foreign
Currency Contracts 1,314,246
Increase in Dividends and Interest Receivable (111,623)
Increase in Prepaid Expenses and Other Assets (5,329)
Decrease in Accrued Expenses and Other Payables (2,003,826)
------------
Total Adjustments (72,118,426)
------------
Net Cash Flows From Operating Activities $ 21,414,647
======================================================================
See Notes to Financial Statements
<PAGE>
Statement of Changes in Net Assets
Invesco Global Health Sciences Fund
- -----------------------------------------------------------------------------
Six Months Ended
April 30, 1998 Year Ended
UNAUDITED October 31, 1997
- -----------------------------------------------------------------------------
Operations
- -----------------------------------------------------------------------------
Net Investment Income (Loss) $ 46,287 $ (698,116)
Net Realized Gain on Investment Securities
and Foreign Currency Transactions 58,829,183 64,895,920
Change in Net Appreciation of Investment
Securities and Foreign Currency
Transactions 34,657,603 35,661,374
----------------------------------
Net Increase in Net Assets from
Operations 93,533,073 99,859,178
- -----------------------------------------------------------------------------
Distributions To Shareholders
Net Realized Gain on Investment
Securities and Foreign
Currency Transactions (70,500,000) (91,697,472)
------------------------------------
Fund Share Transactions
Reinvestment of Distributions 50,326,100 62,210,610
------------------------------------
Total Increase in Net Assets 73,359,173 70,372,316
- -----------------------------------------------------------------------------
Beginning of Period 526,214,608 455,842,292
------------------------------------
End of Period (Including Accumulated
Undistributed Net Investment
Income of $46,287 and $0,
respectively) $599,573,781 $526,214,608
=============================================================================
Fund Share Transactions
- -----------------------------------------------------------------------------
Shares Issued from Reinvestment of
Distributions and Net Increase in
Fund Shares 3,049,909 4,255,367
=============================================================================
See Notes to Financial Statements
<PAGE>
Notes to Financial Statements
Invesco Global Health Sciences Fund
Unaudited
- --------------------------------------------------------------------------------
NOTE 1 - Organization And Significant Accounting Policies. Invesco Global Health
Sciences Fund (the "Fund") was organized as a Massachusetts Business Trust on
November 18, 1991 and commenced investment operations on January 24, 1992. 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.
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 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.
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 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.
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. The cost of securities is
translated into U.S. dollars at the rates of exchange prevailing when such
securities are acquired. Income and expenses are translated into U.S. dollars at
rates of exchange prevailing when accrued.
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
exdividend 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. Discounts and premiums on debt
securities purchased are amortized over the life of the respective security as
adjustments to interest income. Cost is determined on the specific
identification basis.
The Fund may have elements of risk due to concentrated investments in
specific industries or foreign issuers located in a specific country. Such
concentrations 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.
The net position of such forward contracts is presented in the Statement
of Assets and Liabilities and may have additional elements of risk which may not
necessarily be reflected.
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, 1998, 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.
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.
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
witholding taxes. Dividend and interest income is shown gross of foreign
witholding taxes in the accompanying financial statements.
<PAGE>
E. Dividends And Distributions To Shareholders - Dividends and distributions to
shareholders are recorded by the Fund on the exdividend/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 market
discounts, amortized premiums, foreign currency transactions, nontaxable
dividends, net operating losses and expired capital loss carryforwards.
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.
At April 30, 1998, the Fund had outstanding forward foreign currency
contracts. Unrealized gain or loss on forward foreign currency contracts is
calculated daily as the difference between the contract exchange rate and the
closing forward rate applied to the face amount of the contract.
Forward foreign currency contracts held by the Fund are fully
collateralized by other securities which are notated in the Statement of
Investment 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 forward foreign currency contract.
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 univested cash. Such credits are included in Fees
and Expenses Paid Indirectly in the Statement of Operations.
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% on the first $500 million of ending weekly net
assets and 0.90% on ending weekly net assets in excess of $500 million.
Effective February 4, 1998, such responsibilities were transferred to INVESCO
Funds Group, Inc. ("IFG").
In accordance with an Administrative Agreement, the Fund pays 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, 1998, the aggregate cost of purchases and
proceeds from sales of investment securities (excluding all U.S. government
securities and short-term securities) were $281,831,987 and $279,884,133,
respectively.
There were no purchases or sales of U.S. Government securities.
NOTE 4 - Appreciation And Depreciation.
At April 30, 1998, the gross appreciation of securities in which there was an
excess of value over tax cost amounted to $167,573,116 and the gross
depreciation of securities in which there was an excess of tax cost over value
amounted to $16,278,064, resulting in net appreciation of $151,295,052.
NOTE 5 - Transactions With Affiliates And Affiliated Companies.
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 during the six months ended April 30, 1998, in which
the issuer was an affiliate of the Fund, is as follows on the next page:
<PAGE>
<TABLE>
<CAPTION>
Realized
Purchases Sales Gain (Loss) Value
--------------- -------------- on Investment at
Affiliate Shares Cost Shares Cost Securities 4/30/98
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Cadus Pharmaceutical - - 375,395 $ 514,666 $1,619,165 $2,787,750
Caresoft Inc,
Series A, Pfd - - - - - 1,000,001
Clarus Medical Systems
Series I, Pfd - - - - - 533,320
Series II, Pfd - - - - - 386,196
Warrants (Exp 2000) - - - - - 0
Ecogen Technologies I - - - - - 1
Electroscope Inc - - 380,000 990,000 (610,000) 0
Genomica Corp.
Series A, Pfd - - - - - 1,500,000
GenoPlex Inc,
Series A, Pfd - - - - - 200,000
Instrumentation Metrics
Series C, Conv Pfd 500,000 5,057,500 - - - 5,057,500
Janus Biomedical
Series A, Conv Pfd - - - - - 1,000,000
Lynx Therapeutics - - - - - 3,675,000
Multum Information Services
Series B, Pfd - - 1,000,000 1,000,000 (1,000,000) 0
Series E, Pfd - - 250,294 851,000 (715,592) 0
OrbTek Inc - - - - - 1
OrbTek Inc
Conv Promissory Notes,
10.000%
6/30/2000 - - - - - 133,333
11/22/2000 - - - - - 266,667
11/24/2000 - - - - - 266,667
Conv Promissory Notes
Zero Coupon, 11/24/2000- - - - - 266,667
Secured Conv Promissory Notes
Zero Coupon, 12/31/1998- - - - - 266,667
Series A, Conv Pfd - - - - - 1
Warrants (Exp 2001) - - - - - 0
Warrants (Exp 2002) - - - - - 0
Orchid Biocomputer
Series C, Conv Pfd 450,450 5,000,000 - - - 5,000,000
Physicians Online
Series A, Conv Pfd - - - - - 3,220,965
Series C, Conv Pfd - - - - - 500,022
Physiome Sciences
Series B, Pfd 909,090 1,499,999 - - - 1,499,999
SOMNUS Medical Technologies
Series B, Pfd - - - - - 10,200,000
Unisyn Technologies - - - - - 7,264
Unisyn Technologies
Series A, Conv Pfd - - - - - 265,390
Series B, Pfd - - - - - 174,825
Series C, Pfd - - - - - 243,849
Warrants (Exp 2001) - - - - - 0
Vidamed Inc - - - - - 3,750,002
Vidamed Inc Warrants
(Exp 2000) - - - - - 0
Xenometrix Inc - - - - - 198,202
- -----------------------------------------------------------------------------------------------
$42,200,289
- -----------------------------------------------------------------------------------------------
No dividend income was received from any affiliated companies.
<PAGE>
Financial Highlights
INVESCO Global Health Sciences Fund
(For a Fund Share Outstanding Throughout Each Period)
- --------------------------------------------------------------------------------
Six Months
Ended Year Ended October 31
April 30 --------------------------------------------------
1998 1997 1996 1995 1994 1993
- --------------------------------------------------------------------------------
Per Share Data Unaudited
- --------------------------------------------------------------------------------
Net Asset Valueu
Beginning of Period $ 21.250 $ 22.230 $ 18.506 $ 12.378 $ 12.121 $ 12.643
-----------------------------------------------------------
Income From Investment Operations
Net Investment
Income (Loss) 0.002 (0.071) (0.097) (0.107) (0.085) 0.205
Net Gains or (Losses)
on Securities
(Both Realized and
Unrealized) 3.155 3.564 3.821 6.235 0.542 (0.652)
- --------------------------------------------------------------------------------
Total from
Investment Operations 3.157 3.493 3.724 6.128 0.457 (0.447)
- --------------------------------------------------------------------------------
Less Distributions
Dividends from
Net Investment Income 0.000 0.000 0.000 0.000 0.200 0.075
Distributions from
Capital Gains 2.847 4.473 0.000 0.000 0.000 0.000
--------------------------------------------------------
Total Distributions 2.847 4.473 0.000 0.000 0.200 0.075
- --------------------------------------------------------------------------------
Net Asset Value,
End of Period $ 21.560 $ 21.250 $ 22.230 $ 18.506 $ 12.378 $12.121
================================================================================
Share Price,
End of Period $ 19.813 $ 17.313 $ 17.000 $ 14.750 $ 10.000 $ 11.500
================================================================================
Total Return+ 34.72%* 32.98% 15.25% 47.50% (11.49%) 0.67%
- --------------------------------------------------------------------------------
Ratios
Net Assets -
End of Period
($000 Omitted) $599,574 $526,215 $455,842 $379,503 $253,834 $248,564
Ratio of Expenses
to Average Net
Assets 0.58%*@ 1.22%@ 1.21% 1.33% 1.41% 1.39%
Ratio of Net
Investment Income
(Loss) to Average
Net Assets 0.01%* (0.15%) (0.44%) (0.72%) (0.70%) 1.74%
Portfolio Turnover
Rate 55%* 145% 91% 105% 121% 226%
- --------------------------------------------------------------------------------
+ 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.
<PAGE>
* Based on operations for the period shown and, accordingly, are not
representative of a full year.
@ Ratio is based on Total Expenses of the Fund, which is before any expense
offset arrangements.
<PAGE>
(Other Information)
INVESCO Global Health Sciences Fund
Unaudited
- --------------------------------------------------------------------------------
Dividends and Capital Gains Distribution History
- --------------------------------------------------------------------------------
Net Investment Long-Term Short-Term
Income Capital Gains Capital Gains
Ex Date Payable Date (per share) (per share) (per share)
- --------------------------------------------------------------------------------
December 24, 1992 January 15, 1993 $0.075 - -
December 23, 1993 January 14, 1994 $0.200 - -
November 29, 1996 December 23, 1996 - $3.8925 $0.5802
November 14, 1997 December 19, 1997 - $2.847 -
May 15, 1998 June 3, 1998 - $0.5389* -
* It is estimated that the source of the distribution is long-term capital
gains. However, it is possible that the source of a portion of the
distribution may be later recharacterized.
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, 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, a capital gain or other
distribution (collectively, "Dividends") in cash, non-participants in the Plan
will receive cash and participants in the Plan will receive the equivalent in
Shares. Whenever the Fund declares Dividends in additional unissued but
authorized shares ("Newly Issued Shares") non-participants in the Plan will
receive Newly Issued Shares and participants in the Plan will receive shares. In
either instance, the shares received by Plan participants will be acquired by
the Agent for the participant's account, depending upon the circumstances
described below, either (i) through receipt of 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.
<PAGE>
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.
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.
When the Securities and Exchange Commission (SEC) granted the Fund the
necessary exemptive relief, the Plan was amended so that Open-Market Purchases
will be made only in the event that the Fund declares an income dividend, a
capital gain or other distribution payable only in cash.
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.
Annual Shareholders Meeting
The Fund's annual meeting of shareholders will be later this summer.
Shareholders will vote on re-election of Dr. Larry Soll as a Trustee,
ratification of the appointment of Price Waterhouse LLP as the Fund's
independent accountants, and two shareholders proposals requested to be included
in the proxy statement for this year's annual meeting of shareholders. In
addition to Dr. Larry Soll, the following persons serve as Trustees of the Fund:
Messrs. Fred A. Deering, Hubert L. Harris, and John W. McIntyre.
<PAGE>
Miscellaneous
For the six months ended April 30, 1998, 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. Hubert L. Harris, Jr. was re-elected
to serve as Chairman of the Board of Trustees and Mr. Dan J. Hesser was
re-elected to serve as President and Chief Operating Officer of the Fund. John
Schroer continued to act as the Fund's portfolio manager and vice president.
Mr. Schroer joined INVESCO Funds Group, Inc. ("IFG") in 1992 and became a
Senior Vice President of IFG in 1996. In addition to Mr. Schroer's
responsibilities as portfolio manager of the Fund, he also manages the INVESCO
Strategic Health Sciences Fund. Mr. Schroer has been an officer of Invesco
Global Health Sciences Fund since January 1996.
Mr. Schroer received his B.S. and M.B.A. degrees from the University of
Wisconsin-Madison. He began his investment management career in 1990 with the
Trust Company of the West as an investment analyst. He was eventually given
additional responsibilities by Trust Company of the West in Los Angeles as
Assistant Vice President with analytical responsibilities in the health care
industry.
<PAGE>
Shareholder Information
Investment Adviser
INVESCO Funds Group, Inc.
Investment Division
7800 East Union Avenue
Suite 1100
Denver, CO 80237
Administrator
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
Custodian
State Street Bank and
Trust Company
225 Franklin Street
Boston, MA 02110
Shareholder
Servicing Agent
Boston Equiserve, Inc.
150 Royall Street
Mail Stop 45-02-62
Canton, MA 02021
Independent
Accountants
Price Waterhouse LLP
950 Seventeenth Street
Denver, CO 80202
Counsel
Kirkpatrick & Lockhart
1800 M Street, N.W.
South Lobby, 9th Floor
Washington, D.C. 20036
For information about
Invesco Global Health
Sciences Fund or current
net asset values, please call
toll-free 1-800-528-8765
ghs.invesco.com
For questions on dividend
reinvestment, please call
toll-free 1-800-426-5523
<PAGE>
Trustees and Officers
- --------------------------------------------------------------------------------
Trustees
Hubert L. Harris, Jr.
Chairman of the Board of
Trustees
Fred A. Deering
Trustee
John W. McIntyre
Trustee
Larry Soll, Ph.D.
Trustee
Officers
Dan J. Hesser
President and Chief
Operating Officer
John R. Schroer
Vice President
Glen A. Payne
Secretary
Ronald L. Grooms
Treasurer, Chief
Financial and
Accounting Officer
<PAGE>
INVESCO Global
Health Sciences Fund
INVESCO Funds Group Inc.
Investment Division
7800 East Union Avenue
Suite 1100
Denver, Colorado 80237
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