INVESCO GLOBAL HEALTH SCIENCES FUND
1999
ANNUAL REPORT
[INVESCO ICON] INVESCO
<PAGE>
HIGHLIGHTS
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INVESCO GLOBAL HEALTH SCIENCES FUND
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For the 12 Months Ended 10/31
1999 1998 1997 1996 1995
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<S> <C> <C> <C> <C> <C>
Net Asset Value-Total Return(1)(4) 4.90% 20.74% 18.60% 20.10% 49.52%
Share Price-Total Return(1)(4) 4.74% 40.29% 32.98% 15.25% 47.50%
Total Distributions $4.0846 $3.9248 $4.4727 $0.00 $0.00
Total Net Assets-End of Period (millions) $678.0 $586.3 $526.2 $455.8 $379.5
Ratio of Expenses to Average Net Assets 1.20%(3) 1.21%(3) 1.22%(3) 1.21% 1.33%
Portfolio Turnover Rate 129% 87% 145% 91% 105%
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<PAGE>
INVESCO Global Health Sciences Fund is an aggressive growth
closed-end fund that focuses on health care, a global industry
with vast growth potential. The fund is managed by INVESCO, which
is an industry leader in investment management.
The fund is managed by INVESCO through the selective allocation
of holdings in the subsectors of pharmaceuticals, medical devices
and supplies, biotechnology, and health care delivery, and seeks
returns that exceed those of the broader market. The fund's broad
investment charter allows investments in private companies that
represent the next generation in health care technology. These
companies may have the potential to complete an initial public
offering and deliver new-product announcements. Thus, while past
performance is no guarantee of future results, the fund is
designed to seek long-term net asset value growth.
INVESCO Global Health Sciences Fund's total net assets under
management were more than $678 million as of October 31, 1999.
<PAGE>
LETTER FROM THE CHAIRMAN
Dear Shareholder:
The major indexes recorded another healthy advance for the 12 months ending
in October 1999. Yet this is a market that continues to be more narrowly focused
in its rewards. Certain sectors, particularly technology, have soared to record
highs, while others have lagged. While small- and mid-sized stocks have
recovered somewhat, they still trailed the largest stocks substantially.
Finally, growth stocks have continued their dominance over value
stocks--although here, too, the gap has narrowed.
The market's rise has also been very uneven, with most of the broader
averages moving sideways since the spring. The clearest culprit behind the
market's slowdown was rising interest rates. With the American economic
expansion entering its ninth year and world growth recovering, the possibility
of increasing inflationary pressures worried many observers. Several moderately
troubling inflation signals were enough for the Federal Reserve to raise rates
on two occasions, and market interest rates headed higher accordingly.
By the fall, higher rates had taken their toll on interest-rate sensitive
sectors such as homebuilding and financial services. The public received the
message as well: Consumer confidence, while still high, began to drift lower as
the public considered higher mortgage interest rates and a flatter stock market.
Meanwhile, the bond markets languished due to the higher rates and poor
technical conditions.
Overseas, meanwhile, world stock markets bounced back during the 12 months
ended October 31, 1999, with virtually every major nation recording a gain in
its major index. Leading the pack were some of the smaller European markets,
such as Finland, Sweden, and Greece, and some of the Asian markets that had been
especially punished last year, including Hong Kong and South Korea. Most notable
of all, however, were the impressive gains in Japan, the slumbering giant whose
economy had fallen into a steep recession the year before.
What caused the sudden burst of confidence? Clearly the liquidity provided
to the world financial system in the form of interest rate cuts by many of the
world's central banks helped. So did the continuing expansions in the United
States and Europe. A degree of calm following the bottoming-out of Asian
currencies also allowed investors to reconsider their worst-case scenarios for
the fragile markets in Asia and Latin America. Perhaps the most direct
explanation was simply that stocks had become cheap enough for many to see good
buying opportunities.
GRAPH: INVESCO GLOBAL HEALTH SCIENCES FUND
MONTHLY DISCOUNT/PREMIUM
1/31/95 - 10/31/99 (1),(4)
This line graph illustrates the monthly discount/premium for INVESCO Global
Health Sciences Fund for the period 1/31/95 to 10/31/99.(1),(4)
<PAGE>
With the world economy coming back to life and domestic consumer confidence
remaining high, rising U.S. interest rates barely slowed down most major
American companies. Indeed, profit growth at many firms skyrocketed back from
its slowdown last year. This posed a strong contrast to the classic late stages
of most expansions, when profit growth should theoretically slow. If anything,
leading companies seemed to be picking up speed.
OUR RETURNS
Against this turbulent backdrop, our fund fared well, but not as well on a
relative basis as we might have hoped. For most of the past several years, the
health care sector has been on the favored side of the market's valuation
divide. As we have previously reported to you, this has reflected the remarkable
earnings growth of the major drug makers and other leading firms.
Unfortunately, this year the situation was somewhat different. Although we
managed to record a gain for the past 12 months--our fund was up 4.90% based on
net asset value and 4.74% based on market value--these returns lagged well
behind those of the S&P 500 Index of large company stocks, which rose 25.66%
over the same period. (Past performance is no guarantee of future
results.)(4),(6)
Inside, Senior Vice President and Portfolio Manager John Schroer explains
in detail why we believe this period of underperformance will be a temporary
one. In the meantime, allow me to reiterate what we believe are the fundamental
drivers--which are not subject to short-term market vagaries--that make us at
INVESCO so enthusiastic about the health care sector:
o DEMOGRAPHICS -- As the world's population ages and becomes more
prosperous, health care spending increases.
o NEW PRODUCT DEVELOPMENT -- Many companies today are focused on
developing products that improve the quality as well as the length of
life.
o SMOOTHER PRODUCT LAUNCHES -- With the aid of technology, companies are
better equipped to determine which products have the greatest
potential and concentrate their efforts on those products, insuring
higher success rates and higher R&D productivity.
o LESS TIME TO MARKET -- Shorter development time and approval time
afford companies a longer period of patent protection and extended
exclusivity.
o CONSISTENT EARNINGS -- Regardless of the economic environment, health
care companies have traditionally produced steady and predictable
earnings.
OUR RIGHTS OFFERING
INVESCO Global Health Sciences Fund completed a highly successful rights
offering in June, raising an additional $107.9 million in new capital. The money
raised helped us to diversify our portfolio at a time when the health care
sector had been out of favor and share prices were below their peak levels. It
allowed the fund the flexibility to take advantage of these market opportunities
without selling current holdings that the manager believed were good long-term
investments. Raising additional capital through the rights offering also allowed
the fund to avoid creating a potential tax liability by mitigating the need to
sell appreciated assets to take advantage of new opportunities.
<PAGE>
THE MANAGED DISTRIBUTION POLICY
Like most closed-end funds, INVESCO Global Health Sciences Fund's share
price has traded at a discount to its net asset value. After thorough research,
the fund's Board of Trustees concluded that a managed distribution policy was in
the best interest of shareholders. Under this policy, the fund will pay
shareholders in cash a quarterly distribution of 2.5% of the fund's net asset
value. Since the announcement of the new policy, the discount to net asset value
has been reduced, and it is my opinion that this benefit to shareholders can be
attributed to both the fund's strong performance and the new distribution
policy.
Management of the portfolio has changed only slightly with the new
distribution policy. The distributions are now more predictable and will be made
quarterly instead of annually. This helps the fund to manage the cash required
to make the distributions, since the amounts are generally smaller and more
regular. Smoothing out the distributions eliminates the need to raise
potentially large cash positions required prior to a one-time, year-end
distribution. It also eliminates the changes in equity and industry weightings
that would result from raising the cash required for a single large
distribution.
The fund's closed-capital structure allows us to invest in securities that
it couldn't own to the same degree if it was an open-end investment company. By
investing in illiquid securities, private placements and restricted securities,
the fund is able to participate in the potentially large financial upside
associated with innovative companies offering new technology that is on the
cutting edge of the health care industry--firms that "fly below the radar
screen" of open-end funds.
IN SUMMARY
Both individual stocks and entire market sectors fall in and out of favor
with investors based on valuations, prominent earnings surprises, regulatory
changes, or other factors. We might recall that, a year ago, it was technology
stocks that had fallen farthest and fastest in reaction to the Asian economic
crisis. Of course, there is no guarantee that next year health care stocks will
rally as strongly as technology stocks have over this past one. Still, health
care investors might want to keep in mind the extent to which fortunes can
change seemingly overnight in our current market environment.
Ultimately, we believe an investment in a growth sector such as health care
is akin to placing one's faith in the importance of long-term economic trends in
determining stock prices. Over the short run, valuations will tend to get ahead
of themselves and then fall backward, as we have seen recently. Yet year by year
the importance of health care in the economy asserts itself.
We thank you for your investment.
/s/ Charles W. Brady
Charles W. Brady
Chairman
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REVIEW & OUTLOOK
A Review of the Health Sciences Industry and
INVESCO Global Health Sciences Fund
By John Schroer, Senior Vice President,
INVESCO Funds Group
<PAGE>
Beauty is in the eye of the beholder --especially in the stock market. Unfor-
tunately, after three years of standout performance, health care stocks have not
been as attractive in the latter context over our past fiscal year. The health
care sector has trailed the returns of the broader market, and at the end of our
reporting period, many of the largest stocks were down considerably from their
highs in the spring of this year.
Nonetheless, we are confident that the extraordinarily consistent earnings
growth enjoyed by many health care stocks will eventually draw attention to them
again. Indeed, periods of unfashionability can be welcome ones for long-term
investors. As long as the fundamentals do not deteriorate, declines in the
prices of good companies can offer attractive buying opportunities. Because our
faith in many of the sector's market leaders remains unshaken, we have taken
advantage of the price declines to add to our holdings.
GRAPH: GLOBAL HEALTH SCIENCES (1),(4)
This line graph compares the value of a $10,000 investment in INVESCO
Global Health Sciences Fund's share price and net asset value to the value
of a $10,000 investment in the S&P Health Care Composite Index, assuming in
each case reinvestment of dividends and capital gain distributions, for
the period beginning October 1991 and ending October 31, 1999.
PHARMACEUTICALS:
NO YEAR-ON-YEAR IMPROVEMENT
Over the past several years, pharmaceutical stocks have enjoyed a remarkable
record of double-digit earnings growth. This has been due to the continuing
growth in drug spending by consumers worldwide, and has reflected profound
demographic and technological trends. This unusually strong performance record
has drawn considerable attention from growth investors, and has resulted in very
solid gains for the stocks and for our fund.
Given the "profits recession" that many non-health care stocks faced last year,
however, earnings growth outside the pharmaceutical industry has been very
healthy this year--diminishing the relative performance of the pharmaceutical
sub-sector. We should emphasize, however, that profits growth has not been as
impressive in the health care sector precisely because drug companies
continued to perform well in the face of the slowdown last year--making their
year-over-year comparisons more challenging.
In this sense, perhaps, drug companies have been similar to the good student in
school, from whom competence is always expected and not always rewarded.
Instead, investors have been quick to invest in many non-pharmaceutical firms
that seemed headed for dire problems just last year.
EARNINGS, THE PIPELINE, AND OTHER CONCERNS
Of course, not all the sector's problems have come from this comparison
phenomenon. The prominent drug maker Pfizer set off the slide in pharmaceutical
stocks by warning in April that its second-quarter earnings would come in below
<PAGE>
expectations (although its third-quarter earnings came in above expectations).
This set off a round of worries about the quality of the new-drug pipelines for
the major drug manufacturers. Also, some investors became concerned that patents
would be expiring soon on many of the most lucrative existing drugs, such as Eli
Lilly's famous Prozac antidepressant medication.
While understandable, in our opinion these concerns discount the profound
advantages the leading drug companies have in researching and developing new
drugs--advantages that have become all the more important in the global market-
place with its complicated web of national regulations. Also, although older
drugs will undoubtedly face greater competition, the demand for new medications
seems unlikely to abate anytime soon.
Indeed, the pharmaceutical industry has seen some of its most successful product
launches over our fiscal year, led by Monsanto and Pfizer's Celebrex, Merck's
Vioxx, SmithKline's Avandia, and Lilly's Actose. The new product pipeline
remains strong as well. Two particularly promising examples come in American
Home Products' Rapamune, designed to prevent rejection of transplanted kidneys
and recently approved by the Food & Drug Administration, and Pharmacia and
Upjohn's Vestral, an antidepressant awaiting FDA approval.
We have every reason to hope that the next year will bring a new round of
promising drugs. Some analysts have drawn a comparison to the movie industry,
suggesting that the drug firms need to come up with some "blockbusters" of their
own in order to lure consumers back. We believe this analogy is inappropriate.
People need medications; they don't need to go to the movies. Clearly, the list
of wants and needs remains large in the field of medicine, and demand for new
medications appears far from being fulfilled. Consumers remain unlikely to stay
home and ignore the results of drug company research.
The bar graph illustrates the following plot points:
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INDUSTRY GROWTH
NEW DRUGS APPROVED BY THE FDA YEARLY
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1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
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NUMBER OF APPROVALS 21 20 23 23 30 26 25 22 28 53 39 39
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MEDICARE AND MERGERS
Another concern for investors has been the increased attention to Medicare
reform. Clearly, the prospect of price controls and other regulations poses a
threat to the profitability of pharmaceutical firms, which have operated largely
outside the scope of the Medicare program. President Clinton's proposal to add
prescription drug benefits to the program suggested to some that new regulation
was on the horizon.
Again, however, we believe that such concerns were overdrawn. Reforms in the
health care system have been proposed periodically over the past several years,
yet none of them have made a lasting impact on pharmaceutical firms. Indeed,
<PAGE>
drug treatments are among the most cost-effective means of providing medical
care, suggesting that they will be less affected by budget-cutting and cost
controls.
Recently, many of the drug stocks have rallied following the announcement of a
planned merger between Warner-Lambert and American Home Products--which was
quickly followed by a rival offer for American Home Products by Pfizer. While we
own large positions in both Warner-Lambert and Pfizer, we expect such merger
news to remain only a sidelight to the research and development that will
ultimately drive performance in the industry.
Because our faith in the ability of the large-capitalization drug companies to
continue to innovate, we have taken the recent slump in their share prices to
increase our positions. As we re-allocated assets during the month of September,
we increased our weighting in large-capitalization pharmaceuticals to 57.39%
from 43.8%.
The pie chart below contains the following:
PORTFOLIO HOLDINGS
% OF NET ASSETS
10/31/99
Cash & Cash Equivalents 5.78%
Health Care Delivery 2.46%
Pharmaceuticals 57.39%
Biotechnology 24.27%
Medical Devices & Supplies 10.10%
MEDICAL DEVICES
While the large pharmaceutical firms dominate both the sector and our portfolio,
we are constantly on the lookout for opportunities in other health care firms.
Medical device makers provided some rewarding returns for the fund during the
previous year, but their performance has been more mixed over the last 12
months. Demand for medical devices such as coronary stents and pacemakers has
leveled off, cooling revenue growth for prominent firms such as Medtronic.
Delays in new product approvals have also taken their toll.
In recent months, we have significantly reduced our holdings in Guidant and
Medtronic at very opportune prices, helping to decrease our total medical
devices and supplies position from 11.3% on September 30 to 10.1%. Although we
believe these are excellent companies, given the apparent lack of a growth
catalyst near-term, we will be extremely selective in the foreseeable future.
BIOTECHNOLOGY: MERGING INTO THE MAINSTREAM
Biotechnology firms have enjoyed a much better year. Industry leaders such as
Amgen and Biogen have experienced tremendous sales growth--Amgen for its Epogen
(anemia) and Neupogen (cancer) sales, and Biogen for its Avonex (multiple
sclerosis) sales. We have recently added these two companies to our top ten
holdings, with Amgen at 3.2% of total net assets and Biogen at 3.0%. Idec
Pharmaceutical's Rituxan (non-Hodgkin's lymphoma) and MedImunne's Synagis
<PAGE>
(respiratory syntical viral infection in infants) are also expected to
experience strong sales growth.
Just as important from our growth investing perspective, the biotechnology
product pipeline appears extremely strong. Amgen has four candidates in Phase
III trials, two of which--the anemia and cancer drug NESP and the prostate
cancer drug Abarelix-- represent billion-dollar market opportunities. Gilead has
two Phase III candidates in addition to two new products, Tamiflu (influenza)
and Adefovir (HIV treatment) anticipated to receive approval by year-end.
Biogen's Amevive, designed to treat severe psoriasis, is expected to progress to
Phase III trials early this winter.
Increased merger and acquisition activity has been another contributing factor
in the success of the biotech group, drawing attention to and increasing
investor interest in these stocks. Notably, many of these acquisitions have
involved large pharmaceutical companies moving into the industry: Warner-Lambert
acquired Agouron Pharmaceuticals, Johnson & Johnson acquired Centocor, Abbott
took over Alza, and Merck acquired Sibia Neurosciences.
This pattern suggests the extent to which the lines between biotechnology and
traditional drug development are becoming blurred. We are adjusting the
portfolio accordingly by increasing our holdings. As of October 29,
biotechnology accounted for 24.27% of the portfolio.
AN UPDATE ON PRIVATE PLACEMENTS
As many of you know, the fund's closed-end structure enables us to invest up to
25% of assets in private placements or restricted securities. This strategy
allows us to examine cutting edge technology before the broad market has had a
chance to value it, and also helps us to identify possible future trends within
the health care sector.
We will continue to be extremely selective in choosing private placement
investments, searching for opportunities targeting specific markets. A key part
of this selection criterion includes a viable and timely exit strategy.
Since our last report, we have made three Private Investment in Public Equity
(PIPE) deals:
o Xoma, Ltd., a biopharmaceutical company developing products to treat
infections, infectious complications, and immunologic and inflammatory
disorders.
o Collateral Therapeutics, Inc., a biotech company developing new
therapeutics for cardiovascular diseases, based on gene therapy techniques
which hold the promise of growing new blood vessels in damaged heart
tissue.
o Transkaryotic Therapies, Inc., a biotech company which is currently
building a broad and renewable product pipeline based on three proprietary
development platforms: gene activated proteins, niche protein products, and
gene therapy.
We also made a follow-on investment in Masimo Corporation, which designs,
develops, manufactures and licenses advanced signal processing and sensor
technologies for the non-invasive monitoring of vital signs.
<PAGE>
Investments in private placements remain an important component of our holdings.
We expect to increase assets in private placements over the long-term, since we
believe that these securities provide the potential for significant capital
appreciation. Indeed, one of our largest private holdings, Physicians' Online,
was purchased this past year by Mediconsult.com, which provides health
information and organizes online support networks for chronic conditions.
IN SUMMARY
As this year has shown us, market sectors are especially subject to changes in
investor sentiment. Bad news for one company often leads investors to make
conclusions about the sector as a whole. We believe that the market has
overreacted to modest signs of trouble for some of the largest firms, in large
part because years of tremendous performance have made expectations very high.
Yet we continue to be very impressed by the fundamentals of the health care
sector, and we see significant opportunity for investors. While there are no
guarantees, I believe these companies will continue to exhibit steady,
predictable earnings growth overthe next several years, driven by new product
launches and a good economy with low inflation and low interest rates. Indeed, I
am pleased to report that there were no product failures experienced by any of
the companies in which we invested, nor any significant earnings shortfalls that
negatively influenced our performance.
Finally, it is important to concentrate onthe most important fundamental of all:
The world's population has grown a little bit older and a little bit richer over
the past year. Every indication is that the consumption of advanced
pharmaceuticals and medical devices and services will continue to increase.
Given the significant barriers to entry in the sector, this seems to us to offer
great prospects for the best-positioned firms. Our plan is to continue to be
there when the market realizes these opportunities.
John R. Schroer
<PAGE>
FINANCIAL REPORT
TEN LARGEST COMMON STOCK HOLDINGS
INVESCO GLOBAL HEALTH SCIENCES FUND
OCTOBER 31, 1999
PERCENT OF
DESCRIPTION VALUE NET ASSETS
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Warner-Lambert Co $ 41,496,514 6.12%
Johnson & Johnson 37,521,450 5.53
Bristol-Myers Squibb 37,063,567 5.47
Merck & Co 36,181,047 5.34
Pfizer Inc 34,677,445 5.11
Schering-Plough Corp 34,115,895 5.03
AstraZeneca Group PLC Sponsored
ADR Representing Ord Shrs 25,967,700 3.83
Lilly (Eli) & Co 25,344,278 3.74
Amgen Inc 21,771,750 3.21
Biogen Inc 20,584,512 3.04
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Total $ 314,724,158 46.42%
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Composition of holdings is subject to change.
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STATEMENT OF INVESTMENT SECURITIES
INVESCO GLOBAL HEALTH SCIENCES FUND
OCTOBER 31, 1999
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COUNTRY SHARES OR
CODE IF PRINCIPAL
% DESCRIPTION NON US AMOUNT VALUE
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<S> <C> <C> <C> <C>
86.77 COMMON STOCKS & WARRANTS
21.12 BIOTECHNOLOGY
Affymetrix Inc(a) 3,000 $ 264,375
Amgen Inc(a) 273,000 21,771,750
Aradigm Corp(a) 380,952 3,142,854
Biogen Inc(a) 277,700 20,584,512
Chiron Corp(a) 280,300 8,006,069
Collateral Therapeutics(a)(f) 200,000 2,825,000
Ecogen Technologies I(a)(b)(f) 60 1
Enzon Inc(a) 224,900 6,592,381
Genentech Inc(a) 121,100 17,650,325
Genomica Corp Warrants (Exp 2003)(a)(b)(c)(f) 76,646 0
GenoPlex Inc Warrants (Exp 2003)(a)(b)(c)(f) 60,000 0
Gilead Sciences(a) 46,903 2,963,683
Human Genome Sciences(a) 26,500 2,315,437
ICOS Corp(a) 81,300 2,332,293
IDEC Pharmaceuticals(a) 19,600 2,277,275
Immunex Corp(a) 163,700 10,313,100
MedClone Trust(a)(b)(f) 216,608 1
MedImmune Inc(a) 141,040 15,796,480
Millennium Pharmaceuticals(a) 31,300 2,194,913
Orchid Biocomputer Warrants (Exp 2004)(a)(b)(c)(f) 90,000 0
PE Corp-PE Biosystems Group 132,400 8,589,450
QLT PhotoTherapeutics(a) CA 112,500 4,767,188
Titan Pharmaceuticals(a) 211,815 1,787,189
Transkaryotic Therapies(a)(f) 166,000 6,947,100
Triangle Pharmaceuticals(a) 140,000 2,275,000
Trimeris Inc(a) 135,400 2,437,200
Xenometrix Inc(a)(b)(f) 215,485 42,666
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145,876,242
1.43 HEALTH CARE DELIVERY
Caresoft Inc Warrants (Exp 2004)(a)(b)(f) 59,460 59
Columbia/HCA Healthcare 410,500 9,903,312
Physicians Online(a)(b)(f) 847 7,225
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9,910,596
7.89 MEDICAL DEVICES & SUPPLIES
Bard (C R) Inc 185,700 10,016,194
Baxter International 215,175 13,959,478
Clarus Medical Systems Warrants (Exp 2000)(a)(b)(c)(f) 2,224 0
Fidus Medical Technology Warrants (Exp 2001)(a)(b)(f) 1,000,000 1,000
Guidant Corp(a) 87,650 4,327,719
Medtronic Inc 359,626 12,452,050
<PAGE>
COUNTRY SHARES OR
CODE IF PRINCIPAL
% DESCRIPTION NON US AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------------------
Nanogen Inc(a) 416,666 $ 2,916,662
SOMNUS Medical Technologies(a)(b) 990,000 2,227,500
VidaMed Inc Warrants (Exp 2000)(a)(c)(f) 263,158 0
Waters Corp(a) 121,900 6,475,938
Xomed Surgical Products(a) 35,100 2,134,519
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54,511,060
56.33 PHARMACEUTICALS
Abbott Laboratories 483,200 19,509,200
Allergan Inc 161,200 17,308,850
American Home Products 208,700 10,904,575
AstraZeneca Group PLC Sponsored ADR Representing Ord Shrs 567,600 25,967,700
Bristol-Myers Squibb 482,520 37,063,567
Forest Laboratories(a) 47,400 2,174,475
Glaxo Wellcome PLC Sponsored ADR Representing 2 Ord Shrs 176,500 10,567,938
Inhale Therapeutic Systems(a) 71,400 1,967,963
Johnson & Johnson 358,200 37,521,450
Jones Pharmaceutical 40,700 1,261,700
Lilly (Eli) & Co 367,975 25,344,278
Merck & Co(d) 454,750 36,181,047
Monsanto Co 185,700 7,149,450
Pfizer Inc 877,910 34,677,445
Pharmacia & Upjohn 381,500 20,577,156
Schering-Plough Corp 689,210 34,115,895
Shire Pharmaceuticals Group PLC(a) UK 61,125 661,980
Smithkline Beecham PLC Sponsored ADR
Representing 5 Ord Shrs 49,500 3,168,000
Takeda Chemical Industries Ltd JA 143,000 8,207,838
Warner-Lambert Co 519,925 41,496,514
Yamanouchi Pharmaceutical Ltd JA 292,700 13,266,299
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389,093,320
TOTAL COMMON STOCKS & WARRANTS (Cost $492,535,773) 599,391,218
========================================================================================================================
5.35 PREFERRED STOCKS
2.44 BIOTECHNOLOGY
Exelixis Pharmaceuticals, Series C Shrs, Pfd(a)(f) 1,125,000 3,375,000
Genomica Corp
Series A Shrs, Pfd(a)(b)(f) 2,490,075 1,792,854
Series B Shrs, Pfd(a)(b)(f) 1,899,865 1,367,903
GenoPlex Inc, Series A Shrs, Pfd(a)(b)(f) 610,520 610,521
Ingenex Inc, Series B Shrs, Pfd(a)(f) 103,055 62,864
MedClone Trust, Series G Shrs, Conv Pfd(a)(b)(f) 872,096 113,372
Ontogeny Inc, Series E Shrs, Pfd(a)(f) 1,000,000 3,000,000
Orchid Biocomputer, Series C Shrs, Conv Pfd(a)(b)(f) 450,450 3,873,870
<PAGE>
COUNTRY SHARES OR
CODE IF PRINCIPAL
% DESCRIPTION NON US AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------------------
Osiris Therapeutics, Series C Shrs, Conv Pfd(a)(f) 352,941 $ 1,199,999
Physiome Sciences, Series B Shrs, Pfd(a)(b)(f) 909,090 1,499,999
========================================================================================================================
16,896,382
0.89 HEALTH CARE DELIVERY
Caresoft Inc
Series A Shrs, Pfd(a)(b)(f) 540,541 1,000,001
Series B Shrs, Pfd(a)(b)(f) 119,320 507,079
Physicians Online
Series A Shrs, Pfd(a)(b)(f) 361,500 3,669,225
Series C Shrs, Pfd(a)(b)(f) 55,558 972,265
========================================================================================================================
6,148,570
2.02 MEDICAL DEVICES & SUPPLIES
Adeza Biomedical, Series II Shrs, Conv Pfd(a)(f) 416,666 1,216,665
Aerogen Inc, Series D Shrs, Pfd(a)(f) 1,142,858 2,000,001
Clarus Medical Systems
Series I Shrs, Pfd(a)(b)(f) 106,664 1
Series II Shrs, Pfd(a)(b)(f) 77,239 115,857
Fidus Medical Technology, Series F Shrs, Pfd(a)(b)(f) 1,500,000 3,000,000
Instrumentation Metrics, Series C Shrs, Conv Pfd(a)(b)(f) 500,000 5,057,500
InterVentional Technologies, Series F Shrs, Pfd(a)(f) 250,000 1,375,000
Janus Biomedical, Series A Shrs, Conv Pfd(a)(b)(f) 400,000 1
Masimo Corp
Series C Shrs, Pfd(a)(f) 125,000 1,000,000
Series F Shrs, Pfd(a)(f) 15,909 174,999
========================================================================================================================
13,940,024
TOTAL PREFERRED STOCKS (Cost $38,618,223) 36,984,976
========================================================================================================================
7.88 SHORT-TERM INVESTMENTS
0.35 CORPORATE BONDS
0.26 BIOTECHNOLOGY
Orchid Biocomputer, Sub Conv Bridge Notes
9.750%, 5/24/2000(b)(e)(f) $ 1,800,000 1,800,000
========================================================================================================================
0.09 HEALTH CARE DELIVERY
Physicians Online
Bridge Notes, 11.000%, 10/31/2000(b)(e)(f) $ 337,390 337,390
Bridge Notes II, 11.000%, 2/28/2000(b)(e)(f) $ 296,853 296,853
========================================================================================================================
634,243
TOTAL CORPORATE BONDS (Cost $2,434,243) 2,434,243
========================================================================================================================
7.53 COMMERCIAL PAPER
7.53 FINANCIAL
Associates Corp of North America, 5.310%, 11/1/1999 $ 31,126,000 31,126,000
<PAGE>
COUNTRY SHARES OR
CODE IF PRINCIPAL
% DESCRIPTION NON US AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------------------
Chevron USA, 5.270%, 11/2/1999 $ 20,841,000 $ 20,841,000
========================================================================================================================
TOTAL COMMERCIAL PAPER (Cost $51,967,000) 51,967,000
========================================================================================================================
TOTAL SHORT-TERM INVESTMENTS (Cost $54,401,243) 54,401,243
========================================================================================================================
100.00 TOTAL INVESTMENT SECURITIES AT VALUE
(Cost $585,555,239)
(Cost for Income Tax Purposes $591,759,708) $ 690,777,437
========================================================================================================================
</TABLE>
(a) Security is non-income producing.
(b) Security is an affiliated company (See Notes).
(c) Security has no market value at October 31, 1999.
(d) Security has been designated as collateral for Short Sales.
(e) Rate is subject to change. Rate shown reflects current rate.
(f) The following are restricted securities at October 31, 1999:
SCHEDULE OF RESTRICTED OR ILLIQUID SECURITIES
<TABLE>
<CAPTION>
ACQUISITION ACQUISITION FAIR VALUE AS A
DESCRIPTION DATES(S) COST FAIR VALUE % OF NET ASSETS
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Adeza Biomedical, Series II Shrs, Conv Pfd 12/21/1994 $ 999,998 $ 1,216,665 0.18%
Aerogen, Inc, Series D Shrs, Pfd 8/25/1998 2,000,001 2,000,001 0.29
Caresoft Inc
Series A Shrs, Pfd 7/21/1997 1,000,001 1,000,001 0.15
Series B Shrs, Pfd 2/25/1999 507,079 507,079 0.07
Warrants (Exp 2004) 2/25/1999 59 59 0.00
Clarus Medical Systems
Series I Shrs, Pfd 12/23/1992 2,000,000 1 0.00
Series II Shrs, Pfd 11/9/1994-
2/9/1996 386,196 115,857 0.02
Warrants (Exp 2000) 5/2/1992 0 0 0.00
Collateral Therapeutics 8/11/1999 3,150,000 2,825,000 0.42
Ecogen Technologies I 11/16/1992-
1/28/1994 684,000 1 0.00
Exelixis Pharmaceuticals, Series C Shrs, Pfd 4/9/1997 2,250,000 3,375,000 0.50
Fidus Medical Technology
Series F Shrs, Pfd 8/14/1998 3,000,000 3,000,000 0.44
Warrants (Exp 2001) 8/14/1998 1,000 1,000 0.00
Genomica Corp
Series A Shrs, Pfd 10/6/1997 1,500,000 1,792,854 0.26
Series B Shrs, Pfd 10/9/1998-
12/16/1998 1,367,903 1,367,903 0.20
Warrants (Exp 2003) 10/9/1998 0 0 0.00
<PAGE>
ACQUISITION ACQUISITION FAIR VALUE AS A
DESCRIPTION DATES(S) COST FAIR VALUE % OF NET ASSETS
- -------------------------------------------------------------------------------------------------------------------------
GenoPlex Inc
Series A Shrs, Pfd 9/15/1997-
6/25/1998 $ 610,521 $ 610,521 0.09%
Warrants (Exp 2003) 6/25/1998 0 0 0.00
Ingenex Inc, Series B Shrs, Pfd 9/27/1994 600,000 62,864 0.01
Instrumentation Metrics, Series C Shrs, Conv Pfd 2/25/1998 5,057,500 5,057,500 0.75
InterVentional Technologies, Series F Shrs, Pfd 10/19/1992 2,000,000 1,375,000 0.20
Janus Biomedical, Series A Shrs, Conv Pfd 3/2/1994 1,000,000 1 0.00
Masimo Corp
Series C Shrs, Pfd 10/7/1998 1,000,000 1,000,000 0.15
Series F Shrs, Pfd 9/14/1999 174,999 174,999 0.03
MedClone Trust 9/30/1997 151,965 1 0.00
MedClone Trust, Series G Shrs, Conv Pfd 10/21/1993-
7/20/1994 1,500,005 113,372 0.02
Ontogeny Inc, Series E Shrs, Pfd 3/13/1997 2,500,000 3,000,000 0.44
Orchid Biocomputer
Series C Shrs, Conv Pfd 3/27/1998 5,000,000 3,873,870 0.57
Sub Conv Bridge Notes, 9.750%, 5/24/2000 5/27/1999 1,800,000 1,800,000 0.27
Warrants (Exp 2004) 5/27/1999 0 0 0.00
Osiris Therapeutics, Series C Shrs, Conv Pfd 5/26/1994 1,199,999 1,199,999 0.18
Physicians Online 10/11/1999 8 7,225 0.00
Physicians Online
Bridge Notes, 11.000%, 10/31/2000 6/10/1998 337,390 337,390 0.05
Bridge Notes II, 11.000%, 2/28/2000 7/16/1999 296,853 296,853 0.04
Series A Shrs, Pfd 8/31/1993 964,000 3,669,225 0.54
Series C Shrs, Pfd 2/29/1996 500,022 972,265 0.14
Physiome Sciences, Series B Shrs, Pfd 11/7/1997 1,499,999 1,499,999 0.22
Transkaryotic Therapies(a) 10/28/1999 6,640,000 6,947,100 1.02
VidaMed Inc Warrants (Exp 2000) 9/22/1997 0 0 0.00
Xenometrix Inc(a) 7/28/1992-
12/2/1994 1,602,925 42,666 0.01
========================================================================================================================
$ 53,282,423 $49,242,271 7.26%
========================================================================================================================
</TABLE>
(a) Fair value represents 90% of the security's publicly traded value.
<PAGE>
SHORT SELLS
INVESCO GLOBAL HEALTH SCIENCES FUND
OPEN AT OCTOBER 31, 1999
CURRENT
MARKET UNREALIZED
SECURITY SHARES PROCEEDS VALUE APPRECIATION
- --------------------------------------------------------------------------------
Duramed Pharmaceuticals 130,000 $ 1,478,081 $ 1,080,625 $ 397,456
================================================================================
SUMMARY OF INVESTMENTS BY COUNTRY
INVESCO GLOBAL HEALTH SCIENCES FUND
OCTOBER 31, 1999
% OF
COUNTRY INVESTMENT
COUNTRY CODE SECURITIES VALUE
- --------------------------------------------------------------------------------
Canada (not including ADR's) CA 0.69% $ 4,767,188
Japan (not including ADR's) JA 3.11 21,474,137
United Kingdom (not including ADR's) UK 0.09 661,980
United States (includes ADR's) US 96.11 663,874,132
================================================================================
100.00% $690,777,437
================================================================================
See Notes to Financial Statements
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
INVESCO GLOBAL HEALTH SCIENCES FUND
OCTOBER 31, 1999
ASSETS
Investment Securities at Value (Cost $585,555,239) $ 690,777,437
Cash 69
Receivables:
Investment Securities Sold 1,809,015
Dividends and Interest 524,371
Prepaid Expenses and Other Assets 30,542
================================================================================
TOTAL ASSESTS 693,141,434
================================================================================
LIABILITIES
Payables:
Investment Securities Purchased 13,926,359
Securities Sold Short 1,080,625
Accrued Expenses & Other Payables 104,272
================================================================================
TOTAL LIABILITIES 15,111,256
================================================================================
NET ASSETS AT VALUE $ 678,030,178
================================================================================
NET ASSETS
Paid-in Capital(a) $ 543,954,886
Accumulated Undistributed Net Investment Income 920,686
Accumulated Undistributed Net Realized Gain on
Investment Securities and Foreign Currency Transactions 28,348,840
Net Appreciation of Investment Securities and Foreign
Currency Transactions 104,805,766
================================================================================
NET ASSETS AT VALUE $ 678,030,178
================================================================================
NET ASSET VALUE PER SHARE $ 17.96
================================================================================
(a) The Fund has an unlimited number of authorized shares of common stock, par
value of $0.01 per share, of which 37,757,644 were outstanding at October
31, 1999.
See Notes to Financial Statements
<PAGE>
STATEMENT OF OPERATIONS
INVESCO GLOBAL HEALTH SCIENCES FUND
YEAR ENDED OCTOBER 31, 1999
INVESTMENT INCOME
INCOME
Dividends $ 4,791,019
Interest 1,687,820
Other Income 250,764
Foreign Taxes Withheld (86,227)
================================================================================
TOTAL INCOME 6,643,376
================================================================================
EXPENSES
Investment Advisory Fees 6,079,099
Administrative Fees 619,011
Custodian Fees and Expenses 123,916
NYSE Listing Fee 44,152
Professional Fees and Expenses 37,477
Transfer Agent Fees 73,695
Trustees' Fees and Expenses 107,196
Reports to Shareholders 343,415
Other Expenses 16,258
================================================================================
TOTAL EXPENSES 7,444,219
Fees and Expenses Paid Indirectly (4,111)
================================================================================
NET EXPENSES 7,440,108
================================================================================
NET INVESTMENT LOSS (796,732)
================================================================================
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENT SECURITIES
Net Realized Gain (Loss) on:
Investment Securities 80,912,125
Foreign Currency Transactions (2,640,646)
Short Sell Transactions 687,316
================================================================================
Total Net Realized Gain 78,958,795
================================================================================
Change in Net Appreciation (Depreciation) of:
Investment Securities (18,931,777)
Foreign Currency Transactions 2,786,332
================================================================================
Total Net Depreciation (16,145,445)
================================================================================
NET GAIN ON INVESTMENT SECURITIES AND
FOREIGN CURRENCY TRANSACTIONS 62,813,350
================================================================================
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 62,016,618
================================================================================
See Notes to Financial Statements
<PAGE>
STATEMENT OF CASH FLOWS
INVESCO GLOBAL HEALTH SCIENCES FUND
FOR THE YEAR ENDED OCTOBER 31, 1999
INCREASE (DECREASE) IN CASH
- --------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Dividends and Interest Received,
Net of Foreign Withholding Taxes $ 6,433,222
Expenses Paid (7,501,298)
Purchases Net of Sales of Short-Term Portfolio Investments (17,834,480)
Purchases of Long-Term Portfolio Investments (782,345,441)
Sales of Long-Term Portfolio Investments 791,497,343
Proceeds of Securities Sold Short 17,501,613
Purchases of Short Sale Securities (37,807,645)
Other 11,295
================================================================================
Net Cash Flows From Operating Activities (30,045,391)
================================================================================
CASH FLOWS USED FOR FINANCING ACTIVITIES:
Distributions Paid to Common Shareholders (78,224,862)
Proceeds from Sales in Connection with Rights Offering 107,975,588
================================================================================
Net Cash Flows from Financing Activities 29,750,726
Net Decrease in Cash (294,665)
Cash at Beginning of Year 294,734
================================================================================
Cash at End of Year $ 69
================================================================================
RECONCILIATION OF NET INCREASE IN NET ASSETS FROM OPERATIONS
TO NET CASH FLOWS FROM OPERATING ACTIVITIES
Net Increase in Net Assets from Operations $ 62,016,618
================================================================================
Decrease in Investments (25,186,438)
Net Realized Gain (78,958,795)
Decrease in Appreciation of Investment Securities 16,145,445
Decrease in Receivable for Investment Securities Sold 21,805,184
Decrease in Payable for Investment Securities Purchased (2,959,542)
Decrease in Depreciation of Foreign Currency Transactions (130,878)
Increase in Dividends and Interest Receivable (210,154)
Decrease in Prepaid Expenses and Other Assets 11,295
Increase in Accrued Expenses and Other Payables (22,578,126)
================================================================================
Total Adjustments (92,062,009)
================================================================================
NET CASH FLOWS FROM OPERATING ACTIVITIES $ (30,045,391)
================================================================================
See Notes to Financial Statements
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
INVESCO GLOBAL HEALTH SCIENCES FUND
YEAR ENDED OCTOBER 31
- --------------------------------------------------------------------------------
1999 1998
OPERATIONS
Net Investment Loss $ (796,732) $ (949,824)
Net Realized Gain on Investment
Securities, Foreign Currency
Transactions and Short Sale
Transactions 78,958,795 108,304,943
Change in Net Appreciation (Depreciation)
of Investment Securities and Foreign
Currency Transactions (16,145,445) 2,843,293
================================================================================
NET INCREASE IN NET ASSETS FROM OPERATIONS 62,016,618 110,198,412
================================================================================
DISTRIBUTIONS TO SHAREHOLDERS
Net Realized Gain on Investment Securities
and Foreign Currency Transactions (120,410,363) (100,476,287)
================================================================================
FUND SHARE TRANSACTIONS
Proceeds from Sales of Shares in Connection
with Rights Offering 107,975,588 0
Reinvestment of Distributions 42,185,501 50,326,101
================================================================================
NET INCREASE IN NET ASSETS FROM FUND SHARE
TRANSACTIONS 150,161,089 50,326,101
================================================================================
TOTAL INCREASE IN NET ASSETS 91,767,344 60,048,226
NET ASSETS
Beginning of Period 586,262,834 526,214,608
================================================================================
End of Period $ 678,030,178 $ 586,262,834
================================================================================
FUND SHARE TRANSACTIONS
Shares Issued in Connection with Rights
Offering 7,601,529 0
Shares Issued from Reinvestment of
Distributions and Net Increase in
Fund Shares 2,343,639 3,049,909
================================================================================
NET INCREASE IN FUND SHARES 9,945,168 3,049,909
================================================================================
See Notes to Financial Statements
<PAGE>
INVESCO NOTES TO FINANCIAL STATEMENTS
INVESCO GLOBAL HEALTH SCIENCES FUND, INC.
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
at the close of the regular trading day on that exchange (generally, 4:00 p.m.
New York time) in the market where such securities are primarily traded. If last
sales prices are not available, securities are valued at the highest closing bid
prices at the close of the regular trading day (generally, 4:00 p.m. New York
time) and 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 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.
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.
<PAGE>
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.
C. OPTIONS -- The Fund may hold options for investment purposes with the intent
to hedge the portfolio against ongoing exposure to market value and interest
rate fluctuations. The use of such instruments may involve certain risks as a
result of unanticipated movements in the market. A lack of correlations between
the value of an instrument underlying an option and the asset being hedged, or
expected adverse price movements could render the Fund's hedging strategy
unsuccessful. In addition, there can be no assurance that a liquid secondary
market will exist for any option purchased or sold. The Fund will realize a gain
or loss upon the expiration or closing of the option transaction. When an option
is exercised, the proceeds on sales for a written call option, the purchase cost
for a written put option, or the cost of the security for a purchased put or
call option is adjusted by the amount of premium received or paid. Options
written are reported as a liability in the Statement of Assets and Liabilities
and are marked-to-market on a daily basis. Realized gains or losses on purchased
option transactions are included in Net Realized Gain (Loss) on Investment
Securities in the Statement of Operations.
D. SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME -- Security transactions
are accounted for on the trade date and dividend income is recorded on the ex
dividend date. Certain dividends from foreign securities will be recorded as
soon as the Fund is informed of the dividend if such information is obtained
subsequent to the ex dividend date. Interest income, which may be comprised of
stated coupon rate, market discount, original issue discount and amortized
premium, is recorded on the accrual basis. The receivable for securities sold is
net of $814,000 collectibility allowance. Income and expenses on foreign
securities are translated into U.S. dollars at rates of exchange prevailing when
accrued. Other Income includes reimbursement of $247,316. 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 cost of foreign securities is translated into U.S.
dollars at the rates of exchange prevailing when such securities are acquired.
The Fund may have elements of risk due to 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 Fund's use of short sell instruments may involve certain risks as a result
of unanticipated movements in the market. Although the potential for gain is
limited to the difference between the price at which the Fund sold the security
short and the cost of borrowing the security, its potential for loss could be
unlimited because there is no limit to the replacement cost of the borrowed
security.
<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 October 31, 1999, 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.
E. 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. For the fiscal year ended October 31, 1999,
33.11% and 66.89% of the Fund's capital gain distributions were from short-term
and long-term capital gains, respectively.
Investment income received from foreign sources may be subject to foreign
withholding taxes. Dividend and interest income is shown gross of foreign
withholding taxes in the accompanying financial statements.
F. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Dividends and distributions to
shareholders are recorded by the Fund on the ex dividend/distribution date. The
Fund distributes 2.5% of net asset value to its shareholders quarterly with an
additional year-end distribution depending on the amount of the Fund's yearly
net realized capital gains, 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, non taxable
dividends, net operating losses and expired capital loss carryforwards. For the
year ended October 31, 1999, the Fund reclassified $1,717,418 from accumulated
undistributed net realized gain to accumulated undistributed net investment
income. Net investment income, net realized gains, paid-in capital and net
assets were not affected.
G. SHORT SALES -- Short sales are transactions in which the Fund sells a
security it does not own in anticipation of an expected decline in the price of
that security. The Fund is obligated to replace the borrowed security. A
separate asset account is created for the proceeds retained by the broker, and
an offsetting liability account is established until the short sale is closed.
The liability account is marked-to-market to reflect the current value of the
security sold short and is presented in the Statement of Assets and Liabilities.
<PAGE>
At October 31, 1999, the Fund had an outstanding short sell. Short sells 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 value of the short sell.
H. 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.
I. CASH FLOWS -- The cash amount shown in the Statement of Cash Flows is the
amount reported as cash in the Statement of Assets and Liabilities and
represents cash on hand in its custodian bank and does not include any
short-term investments at October 31, 1999.
J. EXPENSES -- Under an agreement between the Fund and the Fund's custodian,
agreed upon Custodian Fees and Expenses are reduced by credits granted by the
custodian from any temporarily uninvested cash. Such credits are included in
Fees and Expenses Paid Indirectly in the Statement of Operations.
NOTE 2 -- INVESTMENT ADVISORY AND OTHER AGREEMENTS. INVESCO Funds Group, Inc.
("IFG") serves as the Fund's investment adviser. As compensation for its
services to the Fund, IFG receives an investment advisory fee which is accrued
daily at the applicable rate and paid monthly. The fee is based on the annual
rate of 1.00% on the first $500 million of ending daily net assets and 0.90% on
ending daily net assets in excess of $500 million.
In accordance with an Administrative Agreement, the Fund pays IFG a fee based on
the annual rate of 0.10% on ending daily net assets 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 year ended
October 31, 1999, the aggregate cost of purchases and proceeds from sales of
investment securities (excluding all U.S. Government securities and short-term
securities) were $779,385,899 and $769,949,588, respectively.
There were no purchases or sales of U.S. Government securities.
NOTE 4 -- APPRECIATION AND DEPRECIATION. At October 31, 1999, the gross
appreciation of securities in which there was an excess of value over tax cost
amounted to $113,967,184 and the gross depreciation of securities in which there
was an excess of tax cost over value amounted to $14,949,455, resulting in net
appreciation of $99,017,729.
NOTE 5 -- TRANSACTIONS WITH AFFILIATES AND AFFILIATED COMPANIES. Certain of the
Fund's officers and trustees are also officers and directors of IFG.
The Fund has adopted an unfunded defined benefit deferred compensation plan
covering all independent trustees of the Fund who will have served as an
independent trustee for at least five years at the time of retirement. Benefits
under this plan are based on an annual rate equal to 50% of the sum of the
retainer fee at the time of retirement plus the annual meeting fee.
<PAGE>
Pension expenses for the year ended October 31, 1999, included in Trustees' Fees
and Expenses in the Statement of Operations were $45,671. Unfunded accrued
pension costs of $0 and pension liability of $45,671 are included in Prepaid
Expenses and Accrued Expenses, respectively, in the Statement of Assets and
Liabilities.
Certain independent trustees have contributed to a deferred compensation plan,
pursuant to which they have deferred receipt of a portion of the compensation
which they would otherwise have been paid as trustees of the Fund. The deferred
amounts may be invested in the shares of the Fund.
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 year ended October 31, 1999, in which the
issuer was an affiliate of the Fund, is as follows:
<TABLE>
<CAPTION>
REALIZED
PURCHASES SALES GAIN (LOSS)
--------------------- -------------------- ON INVESTMENT VALUE
AFFILIATED SHARES COST SHARES COST SECURITIES AT 10/31/99
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Caresoft Inc
Series A Shrs, Pfd -- -- -- -- -- $1,000,001
Series B Shrs, Pfd 119,320 $ 507,079 -- -- -- 507,079
Warrants (Exp 2004) 59,460 59 -- -- -- 59
Clarus Medical Systems
Series I Shrs, Pfd -- -- -- -- -- 1
Series II Shrs, Pfd -- -- -- -- -- 115,857
Warrants (Exp 2000) -- -- -- -- -- 0
Ecogen Technologies I -- -- -- -- -- 1
Fidus Medical Technology
Series F Shrs, Pfd -- -- -- -- -- 3,000,000
Warrants (Exp 2001) -- -- -- -- -- 1,000
Genomica Corp
Series A Shrs, Pfd -- -- -- -- -- 1,792,854
Series B Shrs, Pfd 1,388,889 1,000,000 -- -- -- 1,367,903
Warrants (Exp 2003) -- -- -- -- -- 0
GenoPlex Inc
Series A Shrs, Pfd -- -- -- -- -- 610,521
Warrants (Exp 2003) -- -- -- -- -- 0
Instrumentation Metrics
Series C Shrs, Conv Pfd -- -- -- -- -- 5,057,500
Janus Biomedical
Series A Shrs, Conv Pfd -- -- -- -- -- 1
MedClone Trust -- -- -- -- -- 0
MedClone Trust
Series G Shrs, Conv Pfd -- -- -- -- -- 113,372
Orchid Biocomputer
Series C Shrs, Conv Pfd -- -- -- -- -- 3,873,870
Sub Conv Bridge Notes
9.750%,
5/24/2000 1,800,000 1,800,000 -- -- -- 1,800,000
Warrants (Exp 2004) 90,000 -- -- -- -- 0
Physicians Online 847 8 -- -- -- 7,225
Bridge Notes, 11.000%
10/31/2000 -- -- -- -- -- 337,390
Bridge Notes II
11.000%, 2/28/2000 296,853 296,853 -- -- -- 296,853
Series A Shrs, Pfd -- -- -- -- -- 3,669,225
Series C Shrs, Pfd -- -- -- -- -- 972,265
<PAGE>
REALIZED
PURCHASES SALES GAIN (LOSS)
--------------------- -------------------- ON INVESTMENT VALUE
AFFILIATED SHARES COST SHARES COST SECURITIES AT 10/31/99
- ------------------------------------------------------------------------------------------------------------------------
Physiome Sciences
Series B Shrs, Pfd -- -- -- -- -- $ 1,499,999
SOMNUS Medical
Technologies -- -- 10,000 $ 30,000 $ 19,998 2,227,500
Xenometrix Inc -- -- 45,522 497,054 (487,227) 42,666
========================================================================================================================
$ 28,293,142
========================================================================================================================
Options associated with securities may be included in sales figures.
</TABLE>
Interest income in the amount of $76,538, $37,628 and $9,796 was received from
Orchid Biocomputer, Sub Conv Bridge Notes, 9.750%, 5/24/2000, Physicians Online,
Bridge Notes, 11.000%, 10/31/2000 and Physicians Online, Bridge Notes II,
11.000%, 2/28/2000, respectively, during the fiscal year ended October 31, 1999.
No dividend income was received from any other affiliated companies.
NOTE 6 -- RIGHTS OFFERING. During the year ended October 31, 1999, the Fund
issued 7,601,529 shares with net proceeds of $107,975,588 in connection with a
rights offering of the Fund's shares. Shareholders of record on May 25, 1999
were issued one non-transferable right for every five shares owned, entitling
shareholders the opportunity to acquire one newly issued share of common stock
for each right held at a subscription price of $14.84 per share (less estimated
sales commissions of $0.59 per share). Offering costs attributed to the Rights
Offering are approximately $600,000 and were charged to additional paid-in
capital, of which, $100,000 was paid to PaineWebber Inc., the underwriter, as
reimbursement for its expenses.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees and Shareholders of
INVESCO Global Health Sciences Fund
In our opinion, the accompanying statement of assets and liabilities, including
the statement of investment securities, and the related statements of
operations, of cash flows and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
INVESCO Global Health Sciences Fund at October 31, 1999, and the results of its
operations and cash flows for the year then ended, the changes in its net assets
for each of the two years in the period then ended and the financial highlights
for each of the five years in the period then ended, in conformity with
generally accepted accounting principles. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at October 31, 1999 by
correspondence with the custodian and brokers, provide a reasonable basis for
the opinion expressed above.
As disclosed in the Statement of Investment Securities and the accompanying
Schedule of Restricted or Illiquid Securities, securities valued at $49,242,271
(7.26 percent of net assets), have been estimated by the Board of Trustees in
the absence of readily available market values. Those estimated values may
differ significantly from the values that would have been used had a ready
market for the securities existed, and the differences could be material.
PricewaterhouseCoopers LLP
Denver, Colorado
December 6, 1999
<PAGE>
FINANCIAL HIGHLIGHTS
INVESCO GLOBAL HEALTH SCIENCES FUND
(FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
Year Ended October 31
- ------------------------------------------------------------------------------------------------------------
1999(a) 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value-- Beginning of Period $ 21.080 $ 21.250 $ 22.230 $ 18.506 $ 12.378
============================================================================================================
INCOME FROM INVESTMENT OPERATIONS
Net Investment Loss (0.024)(b) 0.000 (0.071) (0.097) (0.107)
Net Gains on Securities
(Both Realized and Unrealized) 0.989(b) 3.755 3.564 3.821 6.235
============================================================================================================
TOTAL FROM INVESTMENT OPERATIONS 0.965 3.755 3.493 3.724 6.128
============================================================================================================
LESS DISTRIBUTIONS
Distributions from Capital Gains 4.085 3.925 4.473 0.000 0.000
============================================================================================================
Net Asset Value-- End of Period $ 17.960 $ 21.080 $ 21.250 $ 22.230 $ 18.506
============================================================================================================
Share Price-- End of Period $ 16.375 $ 19.500 $ 17.313 $ 17.000 $ 14.750
============================================================================================================
Total Return(c) 4.74% 40.29% 32.98% 15.25% 47.50%
RATIOS
Net Assets-- End of Period
($000 Omitted) $ 678,030 $ 586,263 $ 526,215 $ 455,842 $ 379,503
Ratio of Expenses to Average Net Assets 1.20%(d) 1.21%(d) 1.22%(d) 1.21% 1.33%
Ratio of Net Investment Loss to Average
Net Assets (0.13%) (0.17%) (0.15%) (0.44%) (0.72%)
Portfolio Turnover Rate 129% 87% 145% 91% 105%
</TABLE>
(a) The per share information was computed using average shares.
(b) Per share data includes an additional 7,601,529 shares attributed to the
Rights Offering at June 21, 1999.
(c) 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.
(d) 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
<TABLE>
<CAPTION>
NET INVESTMENT LONG-TERM SHORT-TERM
INCOME CAPITAL GAINS CAPITAL GAINS
EX DATE PAYABLE DATE (PER SHARE) (PER SHARE) (PER SHARE)
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
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 -- $ 2.8470 --
May 15, 1998 June 3, 1998 -- $ 0.5389 --
August 7, 1998 August 25, 1998 -- $ 0.5389 --
November 13, 1998 December 18, 1998 -- $ 2.2689 $ 0.3615
February 5, 1999 February 24, 1999 -- $ 0.3280 $ 0.1940
May 7, 1999 May 26, 1999 -- -- $ 0.4850
August 6, 1999 August 24, 1999 -- $ 0.4030 $ 0.0442
November 19, 1999 December 17, 1999 $ 0.0703 $ 0.8235 $ 0.0463
</TABLE>
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/her broker's
or nominee name, and whose broker does not provide facilities for a dividend
reinvestment program, may be required to have his/her Shares registered in
his/her 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") 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. Open-Market Purchases will be made
only in the event that the Fund declares an income dividend or a capital gain or
other distribution payable only in cash.
<PAGE>
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 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
Dividend 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/her 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 shareholders 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.
<PAGE>
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 was held on May 10, 1999. Shareholders
voted to re-elect Fred A. Deering as Trustee and ratify the appointment of
PricewaterhouseCoopers LLP as the Fund's independent accountants. The resulting
vote count for each proposal is listed in the next column:
1. Election of one Class A Trustee:
Fred A. Deering
For: 27,912,485.280
Withheld Authority: 404,735.676
2. Ratification of Appointment of PricewaterhouseCoopers LLP as the Fund's
Independent Accountants:
For: 28,063,605.829
Against: 117,676.578
Abstain: 135,948.549
In addition to Mr. Deering, the following persons serve as Trustees of the Fund:
Larry Soll, Ph.D., Charles W. Brady and John W. McIntyre.
MISCELLANEOUS
For the year ended October 31, 1999, there were no changes to the Fund's charter
or by-laws and no material changes in the principal risk factors associated with
investment in the Fund. There were no material changes in the Fund's investment
objectives or policies other than adoption of the fixed distribution policy. The
policy requires the Fund to make quarterly distributions at a rate of 2.5% of
NAV -- 10% annually -- to Fund shareholders. 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 the Trust Company of the West in Los Angeles as
Assistant Vice President with analytical responsibilities in the health care
industry.
--------------------------------------------------
<PAGE>
YEAR 2000 COMPUTER ISSUE
(UNAUDITED)
Many computer systems in use today may not be able to recognize any date after
December 31, 1999. If these systems are not fixed by that date, it is possible
that they could generate erroneous information or fail altogether. INVESCO has
committed substantial resources in an effort to make sure that its own major
computer systems will continue to function on and after January 1, 2000. Of
course, INVESCO cannot fix systems that are beyond its control. If INVESCO's own
systems, or the systems of third parties upon which it relies, do not perform
properly after December 31, 1999, the fund could be adversely affected.
In addition, the markets for, or values of, securities in which the fund invest
may possibly be hurt by computer failures affecting portfolio investments or
trading of securities beginning January 1, 2000. For example, improperly
functioning computer systems could result in securities trade settlement
problems and liquidity issues, production issues for individual companies and
overall economic uncertainties. Individual issuers may incur increased costs in
making their own systems Year 2000 compliant. The combination of market
uncertainty and increased costs means that there is a possibility the Year 2000
computer issues may adversely affect the fund's investments. At this time, it is
generally believed that foreign issuers, particularly those in emerging and
other markets, may be more vulnerable to Year 2000 problems than will be issuers
in the U.S.
<PAGE>
TRUSTEES AND OFFICERS
TRUSTEES
Charles W. Brady
Chairman of the Board of Trustees
Fred A. Deering
Trustee
John W. McIntyre
Trustee
Larry Soll, Ph.D.
Trustee
OFFICERS
Mark H. Williamson
President & Cheif operating Officer
John R. Schroer
Vice President
Glen A. Payne
Secretary
Ronald L. Grooms
Treasurer, Principal Financial
& Accounting Officer
For information about INVESCO Global Health Sciences Fund or current net asset
values, please call toll-free, 1-800-528-8765, or visit our Web site at
www.ghs.invesco.com
For questions on dividen reinvestment, please call toll-free, 1-800-426-5523
<PAGE>
SHAREHOLDER INFORMATION
INVESTMENT ADVISOR
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, Colorado 80237
ADMINISTRATOR
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, Colorado 80237
CUSTODIAN
State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02110
SHAREHOLDER SERVICING AGENT
Boston Equiserve, Inc.
150 Royall Street
Mail Stop 45-02-62
Canton, Massachusetts 02021
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoppers LLP
950 Seventh Street
Denver, colorado 80202
COUNSEL
Kirkpatrick & Lockhart
1800 M Street, N.W.
South Lobby, 9th Floor
washington, D.C. 20036
<PAGE>
[GLOBAL HEALTH SCIENCES FUND ICON]
INVESCO GLOBAL HEALTH SCIENCES FUND
INVESCO Funds Group, Inc.
7800 East Union Avenue
Suite 1100
Denver, Colorado 80237
(1) PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
(2) BASED ON OPERATIONS FOR THE PERIOD SHOWN AND, ACCORDINGLY, ARE NOT
REPRESENTATIVE OF A FULL YEAR.
(3) RATIO IS BASED ON TOTAL EXPENESE OF THE FUND, WHICH IS BEFORE ANY EXPENSE
OFFSET ARRANGEMENTS.
(4) TOTAL RETURN ASSUMES REINVESTMENT OF DIVIDENDS AND CAPITAL GAIN
DISTRIBUTIONS. PAST PERFORMATIONCE IS NOT A GUARANTEE OF FUTURE RESULTS.
(5) COMPOSITION OF BOLDINGS IS SUBJECT TO CHANGE.
(6) THE S&P HEALTH CARE COMPOSITE IS AN UNMANAGED INDEX REFLECTING PERFORMANCE
OF HEALTH CARE STOCKS WHILE THE S&P 500 REFLECTS THE BROAD U.S. STOCK
MARKET.
AGHS 12/99
