OCTOBER 31, 2000
ANNUAL REPORT
--------------------------------------------------------------------------------
INVESCO Global Health Sciences Fund
"THE UNLOCKING OF THE HUMAN GENOME, WHILE DESTINED TO HAVE ONLY A MODEST
SHORT-TERM IMPACT ON THE INDUSTRY, WAS AN IMPORTANT FACTOR DRIVING INTEREST IN
BIOTECHNOLOGY."
SEE PAGE 6
[INVESCO ICON] INVESCO FUNDS(R)
A Member of the AMVESCAP Group
<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 Funds, which is an industry leader in investment
management.
INVESCO Funds employs a selective allocation of holdings in the subsectors of
pharmaceuticals, medical devices and supplies, biotechnology, and health care
delivery, seeking 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 products. Thus,
while past performance is not a 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 $938 million as of October 31, 2000.
<PAGE>
"...DRUG STOCKS HAVE BENEFITED FROM THEIR PERCEIVED DEFENSIVE CHARACTERISTICS,
INCLUDING PREDICTABLE EARNINGS GROWTH AND LOWER VALUATIONS, WHICH MAY PROVIDE
GREATER STABILITY FOR INVESTORS IN THE EVENT OF AN ECONOMIC SLOWDOWN."
TABLE OF CONTENTS
LETTER FROM THE CHAIRMAN.........................................3
FUND REPORT......................................................6
INVESTMENT HOLDINGS.............................................10
FINANCIAL STATEMENTS............................................16
NOTES TO FINANCIAL STATEMENTS...................................20
FINANCIAL HIGHLIGHTS............................................24
OTHER INFORMATION...............................................25
INVESCO GLOBAL HEALTH SCIENCES FUND
FOR THE 12 MONTHS ENDED OCTOBER 31, 2000
--------------------------------------------------------------------------------
2000 1999 1998 1997 1996
Net Asset Value--
Total Return(1) 52.72% 4.90% 20.74% 18.60% 20.10%
Share Price--Total Return(1) 40.75% 4.74% 40.29% 32.98% 15.25%
Total Distributions $2.4086 $4.0846 $3.9248 $4.4727 $0.00
Total Net Assets--
End of Period (millions) $938.5 $678.0 $586.3 $526.2 $455.8
Ratio of Expenses
to Average Net Assets 1.16%(2) 1.20%(2) 1.21%(2) 1.22%(2) 1.21%
Portfolio Turnover Rate 196% 129% 87% 145% 91%
(1) PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. TOTAL RETURN ASSUMES
REINVESTMENT OF DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS.
(2) RATIO IS BASED ON TOTAL EXPENSES OF THE FUND, WHICH IS BEFORE ANY EXPENSE
OFFSET ARRANGEMENTS.
<PAGE>
LETTER FROM THE CHAIRMAN
Dear Shareholder:
Although returns were not quite as robust as the previous year, the major U.S.
stock market averages all enjoyed positive returns for the 12-month period ended
October 31, 2000. Performance for the various sectors of the market has been
exceedingly volatile, as investors have rotated in and out of different sectors
throughout the year. After a slow start last fall, many so-called Old Economy
stocks have recently returned to favor. Meanwhile, the Nasdaq Composite Index,
led by technology and biotechnology companies, performed strongly at the end of
1999 and the first part of 2000, but has given up considerable ground over the
last six months. Concerns over future growth and the dot-com shake-out have
pressured these shares and eroded some of the sector's high valuations.
RISING INTEREST RATES CREATE VOLATILITY
The market's movements this past year have been governed, in part, by the
actions of the Federal Reserve (the Fed). A series of interest rate increases by
the Fed were followed by stock market volatility, particularly punishing
interest rate-sensitive shares. By June, signs that the economy was starting to
cool helped ease interest rate concerns. Investors began to hope that an end to
central bank interest rate hikes was in sight, and revisited many of the New
Economy shares sold off during the spring correction. Growth stocks rallied in
June, aided by the Fed's widely anticipated decision to leave short-term
interest rates unchanged. The Federal Reserve Open Market Committee also voted
to leave rates unchanged in August and October, and policymakers hinted that
this recent round of monetary tightening may be over -- barring a significant
reacceleration in the U.S. expansion.
While easing interest rate fears initially alleviated pressure on high-valuation
stocks, the subsequent rally proved short-lived as a spate of earnings
disappointments quickly focused investor attention on the upcoming earnings
season. In particular, a number of companies warned that slowing economic
growth, higher fuel prices, and a sagging euro currency had hindered their
results.
These pressures fell especially hard on cyclically sensitive businesses and
those with multinational exposure. But New Economy companies were not immune
from these pressures, as evidenced by surprise earnings disappointments from
several New Economy stalwarts. Most recently, semiconductor manufacturer Intel
warned of disappointing third quarter results -- news that triggered a global
technology sell-off in September.
INDUSTRY SPENDING PLANS REMAIN STRONG
Behind this correction were growing concerns that technology spending was
starting to slow amid a deceleration in wireless subscriber growth, as well as
funding pressures on a number of emerging dot-com companies and
telecommunications providers. Despite these fears, overall industry spending
plans remain robust, if not as strong as they were last year. Moreover,
productivity gains created by this technology investment continue to keep
inflation contained -- good news for the economy, interest rates, and financial
markets.
On another positive note, a number of market sectors have outperformed the
broader market recently. In the health care industry, for example, euphoria over
the mapping of the human genome continued to fuel strong, if volatile,
performance by biotechnology stocks.
<PAGE>
INVESCO GLOBAL HEALTH SCIENCES FUND
INTERNATIONAL MARKETS PROVIDE MIXED RESULTS
Overseas, markets have had mixed performance during the period, with Asian and
African markets experiencing overall declines, while European and Latin American
markets have enjoyed positive overall performance. The Southeast Asian markets
have continued to struggle, with significant declines in Indonesia and Thailand.
The Indonesian market endured a great deal of volatility during the past 12
months amid the political upheaval in East Timor.
Political events have also had an influence on Latin American equity markets,
particularly in Mexico. After 71 years of rule, Mexico's Institutional
Revolutionary Party was defeated in the presidential elections by opposition
candidate Vicente Fox. A former executive at Coca-Cola, President Fox is
perceived to be a positive development for capitalism in Mexico and potentially
other emerging markets.
BIOTECH STOCKS RALLY
Amidst this year's volatility, the health care sector overall has enjoyed strong
performance. Early in the year, biotechnology stocks led a significant Nasdaq
rally. In March, however, the Nasdaq correction dragged the biotechnology
sub-sector down along with it. Yet, while the Nasdaq and many technology stocks
languished throughout the summer, biotech stocks rebounded with solid
performance. Buoyed by these strong results, health care has been among the
best-performing sectors this year.
Performance for Global Health Sciences Fund has kept pace with the significant
gains in the health care sector. For the 12 months ended October 31, 2000, the
fund rose 40.75% based on market price and 52.72% based on NAV. The fund's
returns are well in excess of all three major market averages for the same time
period. The Nasdaq Composite enjoyed the best return of the major averages
during the period at 13.59%, followed by the S&P 500 Index at 6.08%, then the
Dow Jones Industrial Average at 3.83%. (Of course, past performance is not a
guarantee of future results.)(1),(2)
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 pays shareholders a
quarterly distribution of 2.5% of the fund's net asset value.
Management of the portfolio has changed only slightly with this distribution
policy. The distributions are now more predictable and are 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.
GLOBAL HEALTH SCIENCES HAS KEPT PACE WITH THE SIGNIFICANT GAINS IN THE HEALTH
CARE SECTOR, POSTING A 40.75% RETURN BASED UPON MARKET PRICE, AND 52.72% BASED
ON NAV FOR THE PAST YEAR.
<PAGE>
The fund's capital structure allows us to invest in securities that are not
included in many open-end investment company portfolios. 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 -- typically, firms that fly below the radar screen of
similar open-end funds.
FAVORABLE LONG-TERM OUTLOOK
We believe the health care sector remains an exciting area of long-term growth
opportunity. Health sciences companies continue to be on the leading edge of one
of the most important revolutions in today's economy -- the discovery of new
products and treatments to improve and extend human lives.
Health care companies are responding to the increasing needs of the world's
aging populations by increasing their spending on research and development,
improving their technologies, and reducing the time it takes to bring their
products to market.
Although the health care sector experienced attractive returns this past year,
there is no assurance, of course, that it will continue to do so. As was the
case this past year, sectors have fallen in and out of favor quickly as
short-term market volatility has increased. We don't expect that short-term
market volatility will decrease any time soon, but we do continue to strongly
believe in the long-term growth prospects for the health care sector.
Sincerely,
/s/ Mark H. Williamson
----------------------
Mark H. Williamson
Chairman
LINE GRAPH: INVESCO GLOBAL HEALTH SCIENCES FUND
MONTHLY DISCOUNT/PREMIUM 1/31/96 - 10/31/00
This line graph illustrates the monthly discount/premium for INVESCO Global
Health Sciences Fund for the period 1/31/96 to 10/31/00.
1/31/96 -16.14
4/30/96 -23.27
7/31/96 -23.30
10/31/96 -23.49
1/31/97 -20.01
4/30/97 -19.27
7/31/97 -19.86
10/31/97 -18.99
1/30/98 -07.77
4/30/98 -08.10
7/30/98 -08.10
10/30/98 -07.50
1/29/99 -07.81
4/30/99 -10.76
7/30/99 -12.31
10/29/99 -08.63
1/31/00 -17.12
4/28/00 -12.67
7/30/00 -15.56
10/29/00 -17.82
11/3/97: Announcement of plan for managed policy
4/16/98: Implementation of managed distribution policy
6/18/99: Rights offering
<PAGE>
(1) PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. TOTAL RETURN ASSUMES
REINVESTMENT OF DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS. INVESTMENT RETURN AND
PRINCIPAL AMOUNT MAY VARY SO THAT, WHEN REDEEMED, AN INVESTOR'S SHARES MAY BE
WORTH MORE OR LESS THAN WHEN PURCHASED.
(2) THE NASDAQ COMPOSITE INDEX IS AN UNMANAGED INDEX OF STOCKS TRADED
OVER-THE-COUNTER, THE S&P 500 IS AN UNMANAGED INDEX CONSIDERED REPRESENTATIVE OF
THE BROAD STOCK MARKET, AND THE DOW JONES INDUSTRIAL AVERAGE IS AN UNMANAGED
INDEX REFLECTING PERFORMANCE OF LARGE-CAP STOCKS. THE INDEXES ARE NOT MANAGED;
THEREFORE, THEIR PERFORMANCE DOES NOT REFLECT MANAGEMENT FEES AND OTHER EXPENSES
ASSOCIATED WITH THE FUND.
<PAGE>
GLOBAL HEALTH SCIENCES FUND
YOUR FUND'S REPORT
FUND PERFORMANCE
Dear Shareholder:
The recent 12-month period has been rewarding for the health care sector. While
most health care industries witnessed advances, biotechnology shares proved
dominant.
The unlocking of the human genome, while destined to have only a modest
short-term impact on the industry, was an important factor driving interest in
biotechnology. This news helped bring investors back to biotechnology stocks
following a spring sell-off triggered by concern over soaring valuations. If
anything, this correction provided stocks with a firm foundation for further
advances, and biotechnology shares have continued to move higher, supported by
encouraging testing results, a series of lucrative partnerships with other
firms, and strong sales of new drugs.
Traditional pharmaceutical stocks have had a more mixed performance. The
long-term earnings potential tied to industry consolidation and new drug
development has been clouded by increasing talk of a Medicare drug benefit,
which could lead to greater government oversight of drug pricing. In their
favor, however, drug stocks have benefited from their perceived defensive
characteristics, including predictable earnings growth and lower valuations,
which may provide greater stability for investors in the event of an economic
slowdown.
PROMISING BIOTECH FUNDAMENTALS
The mapping of the human genome has been a tremendous driver for the
biotechnology sector's performance this year. On the more important level of
business fundamentals, however, biotechnology firms continued to show promising
results for their existing treatments, with more companies achieving
profitability.
During the year, several of our leading holdings enjoyed strong gains based on
positive results for their products. Strong sales of its flagship heart drug
helped COR Therapeutics post better-than-expected operating results, which in
turn sent its stock soaring. Protein Design Labs also moved higher, helped by
its drug development partnership with pharmaceutical giant Eli Lilly & Co and
healthy profits from its antibody technology.
Our stock selection within the biotechnology area continues to focus on
companies -- such as Genentech Inc -- that already have commercial products that
support earnings or have a promising pipeline of compounds in the late stages of
clinical trials. Genentech's new blood thinner, TNKase, was recently approved by
the U.S. Food and Drug Administration, and promises to simplify the treatment
for heart attacks. Expectations are also high for Genentech's asthma drug,
Anti-IgE, a humanized monoclonal antibody that will be launched next year. At
the same time, we continue to steer clear of pure genetic research companies,
whose earnings growth may not be realized until far into the future.
<PAGE>
--------------------------------------------------------------------------------
GLOBAL HEALTH SCIENCES FUND
TOP 10 COMMON STOCK HOLDINGS
% of Total net assets as of 10/31/00
--------------------------------------------------------------------------------
Merck & Co.........................................4.50%
IDEC Pharmaceuticals...............................3.60%
Lilly (Eli) & Co...................................3.54%
Pharmacia Corp.....................................3.46%
Genentech Inc......................................3.09%
Orchid Biosciences.................................2.98%
Genomica Corp......................................2.93%
Amgen Inc..........................................2.88%
Protein Design Labs................................2.78%
Waters Corp........................................2.72%
HOLDINGS AND COMPOSITION OF HOLDINGS ARE SUBJECT TO CHANGE.
--------------------------------------------------------------------------------
DRUG STOCKS OFFER STABILITY
Many of our large pharmaceutical holdings also advanced over the period, though
the gains were generally more subdued. Standouts included pharmaceutical
stalwarts Merck & Co, American Home Products, and Pfizer Inc. Merck continues to
generate vigorous earnings growth through robust sales of its Cox-2
pain-inhibiting drug Vioxx, the world's fastest growing prescription arthritis
treatment, and Zocor, its cholesterol-lowering agent. American Home Products
recently reported strong sales and earnings growth supported by strong demand
for its products, including Effexor, which treats depression and anxiety, and
Enbrel, a rheumatoid arthritis drug.
BAR CHART: MATURATION OF THE BIOTECH PIPELINES
BIOTECH THERAPEUTIC PRODUCTS APPROVED OR LIKELY TO BE APPROVED
This bar chart illustrates the number of biotech products approved or likely to
be approved for the period of 1982 to 2001.
1982 1
1983 0
1984 0
1985 1
1986 4
1987 2
1988 3
1989 3
1990 4
1991 4
1992 4
1993 6
1994 7
1995 10
1996 22
1997 23
1998 22
1999 9
2000e 15
2001e 21
Meanwhile, Pfizer has rebounded from a summer profits disappointment to beat
earnings expectations in the third quarter. The company continues to trim
expenses while growing sales of its blockbuster drugs, including arthritis
<PAGE>
treatment Celebrex and cholesterol-lowering agent Lipitor. Pfizer garnered these
drugs through its merger with Warner-Lambert Co -- another fund holding --
earlier this year. We are very optimistic about the synergies created by the
marriage of Pfizer and Warner-Lambert, and believed the combined company is
well-positioned to be a research and marketing powerhouse with tremendous
long-term potential.
A FOCUS ON SPECIALTY PHARMACEUTICALS
Another part of our strategy has been to focus on so-called "specialty
pharmaceutical" firms. These smaller firms either create and market a smaller
range of targeted drugs, or specialize in producing generic versions of popular
medications. Inhale Therapeutic Systems, for example, develops drugs that can be
delivered to the deep lung. The stock moved solidly higher in the early summer,
helped by its development partnerships with larger pharmaceutical firms.
OTHER HEALTH SCIENCES OPPORTUNITIES
Most of the remaining areas of the portfolio have also aided our performance. We
have raised our weighting in medical device companies, including Medtronic Inc
and Guidant Corp, to take advantage of firming demand for defibrillators used to
treat congenital heart failure. Another standout is PE Corp-PE Biosystems Group,
which makes the complex computers used in the sequencing of genetic code.
While we have remained underweight in the health care services industry due to
our concerns over potential Medicare reform, we have found select areas of
opportunity here. In particular, we have added a position in Laboratory Corp of
America Holdings, which is poised to capitalize on the increased out-sourcing of
medical testing. By conducting diagnostic testing for an array of doctors'
offices and hospitals, Lab Corp can capitalize on economies of scale in
purchasing and operating expensive diagnostic equipment.
PRIVATE PLACEMENTS
A key differentiator for the fund has been its success in investing in private
equity. The fund's ability to invest up to 25% of its assets in private
placements or restricted securities has proven to be beneficial to our
performance over the years. It has allowed us to make investments in promising
young companies within the health care industry and to benefit from their
revaluation as they move from the private to the public sector.
Since our last report, we have participated in a number of private placement
opportunities:
o In July, the fund made private placement investments in Aerogen Inc Series
F Shrs & Third Wave Technologies Series F Shrs. Aerogen specializes in the
development, manufacture and commercialization of products for the
controlled delivery of drugs to the lungs, which is called pulmonary drug
delivery. Drugs can be delivered via a fine mist, or aerosol, to the lungs
to treat respiratory conditions such as asthma, or through the lungs to the
bloodstream to treat diseases or conditions outside the lungs such as
diabetes. Third Wave Technologies develops and commercializes simple,
low-cost nucleic acid platform technologies to fundamentally alter disease
discovery, diagnosis and treatment.
o In August, the fund made a private placement investment in Optimize, Inc
Pfd Series C. Optimize Inc is developing wireless personal imaging and
communication systems for minimally invasive procedures.
o In August, the fund made a follow-on investment in Instrumentation Metrics,
and in September, a private investment in the public company, STAAR
Surgical. Instrumentation Metrics is developing technology that will
eliminate the necessity for diabetics to draw blood to measure their blood
glucose levels. The technology employs diffuse reflectance near infrared
technology to accurately measure blood glucose without the need for finger
sticks to draw blood. STARR Surgical specializes in implanted interior
<PAGE>
contact lenses (ICL) to correct nearsightedness, farsightedness, and
astigmatism as an alternative to surgical procedures. Because the ICL is so
far away from the vulnerable parts of the eye, experts say it could pose
the fewest dangers to a person's sight.
Private placements remain a core component of the fund's holdings. Generally, we
would like to maintain 15% to 20% of the portfolio's assets invested in private
placements, depending on market conditions. In an effort to further enhance our
capability, we have recently welcomed a new member to our management team who
specializes in private equity investments. Francisco Salva joined us in June as
Director of Private Placements from the San Francisco venture capital firm
Petrikoff Ventures, where he focused on a number of industries, including
medical devices. His experience with the due diligence process, extensive
contacts in Silicon Valley, and his professionalism will be extremely beneficial
to our private investment effort.
FUND MANAGEMENT
JOHN R. SCHROER, CFA
GLOBAL HEALTH SCIENCES FUND
JOHN SCHROER IS A SENIOR VICE PRESIDENT AND DIRECTOR OF RESEARCH OF INVESCO
FUNDS GROUP. JOHN BEGAN HIS INVESTMENT CAREER IN 1989 AFTER EARNING AN MBA AND
BA FROM THE UNIVERSITY OF WISCONSIN-MADISON. HE IS A CHARTERED FINANCIAL
ANALYST.
TOM WALD
NAMED CO-MANAGER OF GLOBAL HEALTH SCIENCES FUND
VICE PRESIDENT THOMAS R. WALD HAS BEEN NAMED CO-MANAGER OF INVESCO GLOBAL HEALTH
SCIENCES FUND. TOM ALSO CO-MANAGES INVESCO DYNAMICS FUND. PRIOR TO JOINING
INVESCO FUNDS GROUP IN 1997, HE WAS THE SENIOR HEALTH CARE ANALYST AT MUNDER
CAPITAL MANAGEMENT. TOM BEGAN HIS INVESTMENT CAREER IN 1988, AND HOLDS AN MBA
FROM THE WHARTON SCHOOL, THE UNIVERSITY OF PENNSYLVANIA, AND A BA FROM TULANE
UNIVERSITY. HE IS ALSO A CHARTERED FINANCIAL ANALYST.
PIE CHART: PORTFOLIO HOLDINGS
% OF TOTAL NET ASSETS
AS OF 10/31/00
[PIE CHART]
Biotechnology.................38.64%
Pharmaceuticals...............38.31%
Medical Devices and Supplies..16.47%
Health Care Delivery...........7.00%
Short-Term.....................1.52%
Other.........................(1.94%)
"WE BELIEVE OUR BALANCED EXPOSURE AND FOCUS ON HIGH-GROWTH BIOTECHNOLOGY STOCKS
AND STABLE PHARMACEUTICAL FIRMS HAVE RESULTED IN A STRATEGY WELL-POISED TO TAKE
ADVANTAGE OF SEVERAL DIFFERENT MARKET SCENARIOS." - JOHN SCHROER
We are excited about the prospects that exist in the private equity market of
the health care industry. We will continue with our disciplined approach to
private placement investments, gradually increasing our holdings as quality
investment opportunities present themselves.
LOOKING AHEAD
We believe our balanced exposure and focus on high-growth biotechnology stocks
and stable pharmaceutical firms have resulted in a strategy well-poised to take
advantage of several different market scenarios. As we saw in 1998, fears about
<PAGE>
an economic slowdown generally lead investors to the health care sector, which
tends to see strong demand for its products no matter where the economy is
headed. On the other hand, should investors regain their appetite for
high-growth companies, it may well be our biotechnology holdings that continue
to drive the portfolio higher. While events can always take us by surprise, we
are optimistic that we will be able to offer more good news in our future
reports.
Sincerely,
/s/ John R. Schroer
-------------------
John R. Schroer
Senior Vice President
LINE GRAPH: INVESCO GLOBAL HEALTH SCIENCES FUND
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 all dividends and capital gain distributions, for the period
beginning December 1991 and ending October 31, 2000.
INVESCO Global Health Sciences Fund - S&P Health Care
Net Asset Value Share Price Composite Index
12/91 $10,000 $10,000 $10,000
10/92 $ 9,061 $7,603 $8,653
10/93 $ 8,738 $7,655 $7,435
10/94 $ 9,077 $6,783 $8,342
10/95 $13,571 $10,005 $11,864
10/96 $16,298 $11,531 $14,960
10/97 $19,330 $15,334 $20,227
10/98 $23,339 $21,512 $28,312
10/99 $24,482 $22,531 $31,155
10/00 $37,390 $31,713 $35,714
PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. THE TOTAL RETURN ASSUMES
REINVESTMENT OF DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS.
THE LINE GRAPHS ILLUSTRATE THE VALUE OF A $10,000 INVESTMENT, PLUS REINVESTED
DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS, SINCE INCEPTION THROUGH 10/31/00. THE
CHART AND OTHER TOTAL RETURN FIGURES CITED REFLECT THE FUND'S OPERATING
EXPENSES, BUT THE INDEX DOES NOT HAVE EXPENSES, WHICH WOULD HAVE LOWERED ITS
PERFORMANCE.
<PAGE>
TRUSTEES AND OFFICERS
TRUSTEES
MARK H. WILLIAMSON
President & Chief Operating Officer
Chairman of the Board of Directors
CHARLES W. BRADY
Trustee
FRED A. DEERING
Trustee
JOHN W. MCINTYRE
Trustee
LARRY SOLL, PH.D.
Trustee
OFFICERS
JOHN R. SCHROER
Vice President
GLEN A. PAYNE
Secretary
RONALD L. GROOMS
Treasurer, Principal Financial
& Accounting Officer
SHAREHOLDER INFORMATION
INVESTMENT ADVISER
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
PricewaterhouseCoopers LLP
1670 Broadway, Suite 1000
Denver, Colorado 80202
<PAGE>
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 ASSETS
VALUES, PLEASE CALL TOLL-FREE, 1-800-528-8765, OR VISIT OUR WEB SITE AT
WWW.GHS.INVESCO.COM.
FOR QUESTIONS ON DIVIDEND REINVESTMENT, PLEASE CALL TOLL-FREE, 1-800-426-5523.
<PAGE>
FINANCIAL REPORT
TEN LARGEST COMMON STOCK HOLDINGS
INVESCO Global Health Sciences Fund
October 31, 2000
PERCENT OF
DESCRIPTION VALUE NET ASSETS
--------------------------------------------------------------------------------
Merck & Co $42,207,669 4.50%
IDEC Pharmaceuticals 33,792,338 3.60
Lilly (Eli) & Co 33,211,750 3.54
Pharmacia Corp 32,488,115 3.46
Genentech Inc 29,015,250 3.09
Orchid Biosciences 27,987,102 2.98
Genomica Corp 27,490,021 2.93
Amgen Inc 27,016,256 2.88
Protein Design Labs 26,102,497 2.78
Waters Corp 25,527,488 2.72
================================================================================
Total $304,838,486 32.48%
================================================================================
Composition of holdings is subject to change.
<PAGE>
STATEMENT OF INVESTMENT SECURITIES
INVESCO Global Health Sciences Fund
October 31, 2000
<TABLE>
<CAPTION>
COUNTRY SHARES OR
CODE IF PRINCIPAL
% DESCRIPTION NON US AMOUNT VALUE
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
92.59 COMMON STOCKS & WARRANTS
35.60 BIOTECHNOLOGY
Abgenix Inc(a) 238,000 $18,772,250
Alexion Pharmaceuticals(a) 67,690 6,997,454
Alkermes Inc(a) 89,880 3,331,177
Amgen Inc(a) 466,300 27,016,256
Amylin Pharmaceuticals(a) 325,000 3,290,625
Cambridge Antibody Technology Group PLC(a) UK 38,100 2,378,975
Celgene Corp(a) 61,200 3,939,750
Cell Therapeutics(a) 242,100 16,194,220
Celltech Group PLC(a) UK 113,685 2,261,623
Collateral Therapeutics(a) 200,000 5,056,250
COR Therapeutics(a) 243,800 13,774,700
Cubist Pharmaceuticals(a) 176,500 7,583,990
Curis Inc(a) 398,660 5,033,083
Ecogen Technologies I(a)(b)(f) 60 1
Exelixis Pharmaceuticals(a) 843,750 18,615,234
Genentech Inc(a) 351,700 29,015,250
Genomica Corp(a)(b)(f) 2,574,424 27,490,021
Genomica Corp Warrants (Exp 2003)(a)(b)(f) 25,173 214,427
Gilead Sciences(a) 36,000 3,096,000
IDEC Pharmaceuticals(a) 172,300 33,792,338
ILEX Oncology(a) 123,600 4,480,500
Immunex Corp(a) 387,600 16,497,224
Introgen Therapeutics(a) 450,000 5,315,625
Medarex Inc(a) 321,920 19,677,360
MedClone Trust(a)(f) 216,608 1
MedImmune Inc(a) 306,200 20,017,825
NPS Pharmaceuticals(a) 228,800 9,809,800
Protein Design Labs(a) 193,240 26,102,497
Targeted Genetics(a) 265,300 2,653,000
Trimeris Inc(a) 115,000 8,136,250
Xenometrix Inc(a)(b)(f) 215,485 72,726
===================================================================================================
340,616,432
5.99 HEALTH CARE DELIVERY
AmeriSource Health Class A Shrs(a) 275,000 11,945,313
CIGNA Corp 41,700 5,085,315
First Health Group(a) 42,900 1,673,100
IMS Health 476,300 11,252,587
Laboratory Corp of America Holdings(a) 55,900 7,539,513
<PAGE>
COUNTRY SHARES OR
CODE IF PRINCIPAL
% DESCRIPTION NON US AMOUNT VALUE
---------------------------------------------------------------------------------------------------
Mediconsult.com Inc(a)(f) 1,166,757 656,301
Mediconsult.com Inc Escrowed Shares(a)(f) 129,639 40,512
SYNAVANT Inc(a) 15,820 72,179
UnitedHealth Group 173,700 18,998,438
===================================================================================================
57,263,258
13.42 MEDICAL DEVICES & SUPPLIES
Baxter International 176,100 14,473,219
Edwards Lifesciences(a) 190,200 2,555,812
Guidant Corp(a) 186,100 9,851,669
Invitrogen Corp(a) 183,600 13,965,075
Medtronic Inc 69,953 3,799,322
Orchid Biosciences(a)(b)(f) 1,521,555 $ 27,987,102
Orchid Biosciences Warrants (Exp 2004)(a)(b)(f) 179,910 3,084,332
PE Corp-PE Biosystems Group 95,800 11,208,600
Physiometrix Inc Warrants (Exp 2001)(a)(f) 111,111 1,071,943
St Jude Medical(a) 147,600 8,118,000
STAAR Surgical(a)(f) 475,000 6,733,125
Waters Corp(a) 351,800 25,527,488
===================================================================================================
128,375,687
37.58 PHARMACEUTICALS
Allergan Inc 124,080 10,430,475
ALZA Corp(a) 241,130 19,516,459
American Home Products 164,480 10,444,480
AstraZeneca Group PLC Sponsored ADR
Representing Ord Shrs 168,600 8,040,113
Bristol-Myers Squibb 340,800 20,767,500
DUSA Pharmaceuticals(a) 321,900 8,409,638
Forest Laboratories(a) 28,900 3,829,250
Fujisawa Pharmaceutical Ltd JA 409,700 12,869,961
Human Genome Sciences(a) 252,700 22,336,311
ICN Pharmaceuticals 412,700 15,708,394
Inhale Therapeutic Systems(a) 133,900 6,661,525
Lilly (Eli) & Co 371,600 33,211,750
Merck & Co 469,300 42,207,669
Millennium Pharmaceuticals(a) 246,480 17,885,205
Pfizer Inc(d) 416,003 17,966,130
Pharmacia Corp(d) 590,693 32,488,115
Sanofi-Synthelabo SA FR 212,100 11,146,110
Schering AG GM 231,700 12,961,669
SmithKline Beecham PLC Sponsored ADR
Representing 5 Ord Shrs 6,900 449,794
Takeda Chemical Industries Ltd JA 112,100 7,381,619
<PAGE>
COUNTRY SHARES OR
CODE IF PRINCIPAL
% DESCRIPTION NON US AMOUNT VALUE
---------------------------------------------------------------------------------------------------
Teva Pharmaceutical Industries Sponsored ADR
Representing Ord Shrs 115,640 6,837,215
Titan Pharmaceuticals(a) 209,965 8,835,327
Vertex Pharmaceuticals(a) 239,700 22,318,317
Yamanouchi Pharmaceutical Ltd JA 151,800 6,867,772
===================================================================================================
359,570,798
TOTAL COMMON STOCKS & WARRANTS (Cost $606,194,325) 885,826,175
===================================================================================================
5.88 PREFERRED STOCKS & WARRANTS
2.30 BIOTECHNOLOGY
Athersys Inc, Conv Pfd, Series F Shrs(a)(f) 416,667 5,000,000
Cellomics Inc, Pfd, Series C Shrs(a)(b)(f) 383,982 7,000,000
DoubleTwist Inc, Pfd, Series D Shrs(a)(f) 2,657,807 4,000,000
GenoPlex Inc, Pfd, Series A Shrs(a)(b)(f) 610,520 610,521
GenoPlex Inc Warrants (Warrants to purchase Pfd,
Series A Shrs, Exp 2003)(a)(b)(c)(f) 60,000 0
Ingenex Inc, Conv Pfd, Series B Shrs(a)(f) 103,055 62,864
MedClone Inc, Conv Pfd, Series G Shrs(a)(f) 872,096 113,372
Osiris Therapeutics, Conv Pfd, Series C Shrs(a)(f) 352,941 $ 1,199,999
Structural Bioinformatics, Pfd, Series D Shrs(a)(f) 650,407 4,000,003
===================================================================================================
21,986,759
0.84 HEALTH CARE DELIVERY
Caresoft Inc
Conv Pfd, Series C Shrs(a)(b)(f) 1,182,107 2,553,352
Pfd, Series A Shrs(a)(b)(f) 1,627,102 3,514,541
Pfd, Series B Shrs(a)(b)(f) 238,640 515,463
Warrants (Warrants to purchase Pfd,
Series A Shrs, Exp 2004)(a)(b)(f) 118,920 59
Warrants (Warrants to purchase Pfd,
Series C Shrs, Exp 2004)(a)(b)(c)(f) 314,960 0
Physiome Sciences, Pfd, Series B Shrs(a)(b)(f) 909,090 1,499,998
===================================================================================================
8,083,413
2.74 MEDICAL DEVICES & SUPPLIES
Adeza Biomedical, Conv Pfd, Series II Shrs(a)(f) 416,666 1,216,665
Aerogen Inc, Pfd
Series D Shrs(a)(b)(f) 1,142,858 2,000,001
Series F Shrs(a)(b)(f) 888,889 2,000,000
AFx Inc
Pfd, Series F Shrs(a)(b)(f) 1,500,000 3,000,000
Warrants (Warrants to purchase Pfd,
Series F Shrs, Exp 2001)(a)(b)(f) 1,000,000 1,000
Instrumentation Metrics, Conv Pfd,
Series C Shrs(a)(b)(f) 586,748 5,934,956
InterVentional Technologies, Conv Pfd,
Series F Shrs(a)(f) 250,000 1,375,000
Janus Biomedical, Conv Pfd, Series A Shrs(a)(f) 400,000 1
<PAGE>
COUNTRY SHARES OR
CODE IF PRINCIPAL
% DESCRIPTION NON US AMOUNT VALUE
---------------------------------------------------------------------------------------------------
Masimo, Pfd
Conv, Series F Shrs(a)(f) 15,909 174,999
Series C Shrs(a)(f) 125,000 1,000,000
Optimize Inc, Pfd, Series C Shrs(a)(f) 2,631,579 7,000,000
Third Wave Technologies, Pfd, Series F Shrs(a)(f) 237 2,496,489
===================================================================================================
26,199,111
TOTAL PREFERRED STOCKS & WARRANTS (Cost $58,513,911) 56,269,283
===================================================================================================
1.53 SHORT-TERM INVESTMENTS
0.04 CORPORATE BONDS
0.04 HEALTH CARE DELIVERY
Mediconsult.com Inc, Bridge Notes
12.500%(e), 12/31/2000(f) (Cost $337,390) $ 337,390 337,390
===================================================================================================
1.49 COMMERCIAL PAPER
1.49 CONSUMER FINANCE
American Express Credit
6.580%, 11/2/2000 (Cost $14,292,000) $ 14,292,000 14,292,000
===================================================================================================
TOTAL SHORT-TERM INVESTMENTS (Cost $14,629,390) 14,629,390
===================================================================================================
100.00 TOTAL INVESTMENT SECURITIES AT VALUE
(Cost $679,337,626)
(Cost for Income Tax Purposes $692,321,789) $ 956,724,848
===================================================================================================
</TABLE>
(a) Security is non-income producing.
(b) Security is an affiliated company (See Note 5).
(c) Security has no market value at October 31, 2000.
(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, 2000:
SCHEDULE OF RESTRICTED OR ILLIQUID SECURITIES
<TABLE>
<CAPTION>
ACQUISITION ACQUISITION VALUE AS A
DESCRIPTION DATE(S) COST VALUE %OF NET ASSETS
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Adeza Biomedical, Conv Pfd, Series II Shrs 12/21/1994 $ 999,998 $ 1,216,665 0.13%
Aerogen Inc, Pfd
Series D Shrs 8/25/1998 2,000,001 2,000,001 0.21
Series F Shrs 7/6/2000 2,000,000 2,000,000 0.21
Afx Inc
Pfd, Series F Shrs 8/14/1998 3,000,000 3,000,000 0.32
Warrants (Warrants to purchase Pfd, Series F Shrs, Exp 2001) 8/14/1998 1,000 1,000 0.00
Athersys Inc, Conv Pfd, Series F Shrs 4/17/2000 5,000,000 5,000,000 0.53
<PAGE>
SCHEDULE OF RESTRICTED OR ILLIQUID SECURITIES (CONTINUED)
ACQUISITION ACQUISITION VALUE AS A
DESCRIPTION DATE(S) COST VALUE %OF NET ASSETS
------------------------------------------------------------------------------------------------------------------------------------
Caresoft Inc
Conv Pfd, Series C Shrs 5/8/2000 3,002,552 2,553,352 0.27
Pfd, Series A Shrs 7/21/1997-
12/3/1999 1,986,251 3,514,541 0.37
Pfd, Series B Shrs 2/25/1999 507,080 515,463 0.05
Warrants (Warrants to purchase Pfd, Series A Shrs, Exp 2004) 2/25/1999 59 59 0.00
Warrants (Warrants to purchase Pfd, Series C Shrs, Exp 2004) 5/8/2000 0 0 0.00
Cellomics Inc, Pfd, Series C Shrs 10/2/2000 7,000,000 7,000,000 0.75
DoubleTwist Inc, Pfd, Series D Shrs 2/18/2000 4,000,000 4,000,000 0.43
Ecogen Technologies I 11/16/1992-
1/28/1994 684,000 1 0.00
Genomica Corp(a) 10/6/1997 -
9/29/2000 7,867,902 27,490,021 2.93
Genomica Corp Warrants (Exp 2003)(a) 10/9/1998 0 214,427 0.02
GenoPlex Inc
Pfd, Series A Shrs 9/15/1997-
6/25/1998 610,521 610,521 0.06
Warrants (Warrants to purchase Pfd, Series A Shrs, Exp 2003) 6/25/1998 0 0 0.00
Ingenex Inc, Conv Pfd, Series B Shrs 9/27/1994 600,000 62,864 0.01
Instrumentation Metrics, Conv Pfd, Series C Shrs 2/25/1998-
8/31/2000 5,934,956 5,934,956 0.63
InterVentional Technologies, Conv Pfd, Series F Shrs 10/19/1992 2,000,000 1,375,000 0.15
Janus Biomedical, Conv Pfd, Series A Shrs 3/2/1994 1,000,000 1 0.00
Masimo Corp, Pfd
Conv, Series F Shrs 9/14/1999 174,999 174,999 0.02
Series C Shrs 10/7/1998 1,000,000 1,000,000 0.11
MedClone Trust 9/30/1997 151,965 1 0.00
MedClone Inc, Conv Pfd, Series G Shrs 10/21/1993 -
7/20/1994 1,500,005 113,372 0.01
Mediconsult.com Inc(b) 8/31/1993 -
10/11/1999 1,363,063 656,301 0.07
Mediconsult.com Inc
Bridge Notes, 12.500%, 12/31/2000 6/10/1998 337,390 337,390 0.04
Escrowed Shrs(c) 12/31/1999 100,968 40,512 0.00
Optimize Inc, Pfd, Series C Shrs 8/15/2000 7,000,000 7,000,000 0.75
Orchid Biosciences(b) 5/10/2000 7,903,350 27,987,102 2.98
Orchid Biosciences Warrants (Exp 2004)(b) 5/27/1999 0 3,084,332 0.33
Osiris Therapeutics, Conv Pfd, Series C Shrs 5/26/1994 1,199,999 1,199,999 0.13
Physiome Sciences, Pfd, Series B Shrs 11/7/1997 1,499,998 1,499,998 0.16
Physiometrix Inc Warrants (Exp 2001) 2/29/2000 1 1,071,943 0.11
STAAR Surgical(b)(d) 9/28/2000 6,650,000 6,733,125 0.72
Structural Bioinformatics, Pfd, Series D Shrs 3/24/2000 $ 4,000,003 $ 4,000,003 0.43%
Third Wave Technologies, Pfd, Series F Shrs 7/27/2000 2,496,489 2,496,489 0.27
<PAGE>
SCHEDULE OF RESTRICTED OR ILLIQUID SECURITIES (CONTINUED)
ACQUISITION ACQUISITION VALUE AS A
DESCRIPTION DATE(S) COST VALUE %OF NET ASSETS
------------------------------------------------------------------------------------------------------------------------------------
Xenometrix Inc(b) 7/20/1992 -
12/2/1994 1,602,925 72,726 0.01
=================================================================================================================================
$ 85,175,475 $123,957,164 13.21%
=================================================================================================================================
</TABLE>
(a) Fair value represents 85% of the security's publicly traded value.
(b) Fair value represents 90% of the security's publicly traded value.
(c) Fair value represents 50% of the security's publicly traded value.
(d) After year end, security was valued at market value, as it was freely
traded.
SHORT SALES
INVESCO Global Health Sciences Fund
Open at October 31, 2000
<TABLE>
<CAPTION>
CURRENT UNREALIZED
MARKET APPRECIATION
SECURITY SHARES PROCEEDS VALUE (DEPRECIATION)
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Dendrite International 120,000 $ 3,614,254 $ 2,610,000 $ 1,004,254
Glaxo Wellcome PLC Sponsored ADR Representing 2 Ord Shrs 135,000 7,964,137 7,855,313 108,824
Johnson & Johnson 75,000 6,810,679 6,909,375 (98,696)
Maxim Pharmaceuticals 165,000 8,706,321 7,321,875 1,384,446
PolyMedica Corp 25,000 1,210,272 1,437,500 (227,228)
==============================================================================================================================
$ 28,305,663 $ 26,134,063 $ 2,171,600
==============================================================================================================================
</TABLE>
SUMMARY OF INVESTMENTS BY COUNTRY
INVESCO Global Health Sciences Fund
October 31, 2000
% OF
COUNTRY INVESTMENT
COUNTRY CODE SECURITIES VALUE
--------------------------------------------------------------------------------
France (not including ADR's) FR 1.17% $ 11,146,110
Germany (not including ADR's) GM 1.35 12,961,669
Japan (not including ADR's) JA 2.83 27,119,352
United Kingdom (not including ADR's) UK 0.49 4,640,598
United States (includes ADR's) US 94.16 900,857,119
================================================================================
100.00% $ 956,724,848
See Notes to Financial Statements
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
INVESCO Global Health Sciences Fund
October 31, 2000
ASSETS
Investment Securities at Value (Cost $679,337,626) $ 956,724,848
Cash 3,260
Receivables:
Investment Securities Sold 53,740,096
Dividends and Interest 378,794
Prepaid Expenses and Other Assets 158,071
================================================================================
TOTAL ASSETS 1,011,005,069
================================================================================
LIABILITIES
Payables:
To Broker 845,082
Investment Securities Purchased 45,245,015
Investment Securities Sold Short at Value (Proceeds $28,305,663) 26,134,063
Depreciation on Forward Foreign Currency Contracts 6,242
Accrued Expenses and Other Payables 280,478
================================================================================
TOTAL LIABILITIES 72,510,880
================================================================================
NET ASSETS AT VALUE $ 938,494,189
================================================================================
NET ASSETS
Paid-in Capital(a) $ 557,015,204
Accumulated Undistributed Net Investment Loss (85,099)
Accumulated Undistributed Net Realized Gain on Investment
Securities, Foreign Currency Transactions and Securities
Sold Short 102,827,628
Net Appreciation of Investment Securities, Foreign Currency
Transactions and Securities Sold Short 278,736,456
================================================================================
NET ASSETS AT VALUE $ 938,494,189
================================================================================
NET ASSET VALUE PER SHARE $ 24.25
================================================================================
(a) The Fund has an unlimited number of authorized shares of common stock, par
value of $0.01 per share, of which 38,705,515 were outstanding at
October 31, 2000.
See Notes to Financial Statements
<PAGE>
STATEMENT OF OPERATIONS
INVESCO Global Health Sciences Fund
Year Ended October 31, 2000
INVESTMENT INCOME
INCOME
Dividends $ 2,774,817
Interest 1,523,503
Foreign Taxes Withheld (31,353)
================================================================================
TOTAL INCOME 4,266,967
================================================================================
EXPENSES
Investment Advisory Fees 7,683,110
Administrative Services Fees 798,123
Custodian Fees and Expenses 102,931
NYSE Listing Fee 59,690
Professional Fees and Expenses 209,148
Transfer Agent Fees 88,350
Trustees' Fees and Expenses 115,634
Reports to Shareholders 165,919
Other Expenses 27,563
================================================================================
TOTAL EXPENSES 9,250,468
Fees and Expenses Paid Indirectly (56,640)
================================================================================
NET EXPENSES 9,193,828
================================================================================
NET INVESTMENT LOSS (4,926,861)
================================================================================
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENT SECURITIES
Net Realized Gain on:
Investment Securities 167,899,736
Foreign Currency Transactions 480,886
Securities Sold Short 2,413,385
================================================================================
Total Net Realized Gain 170,794,007
================================================================================
Change in Net Appreciation (Depreciation) of:
Investment Securities 175,186,893
Foreign Currency Transactions (3,030,347)
Securities Sold Short 1,774,144
================================================================================
Total Net Appreciation 173,930,690
================================================================================
NET GAIN ON INVESTMENT SECURITIES,
FOREIGN CURRENCY TRANSACTIONS AND SECURITIES SOLD SHORT 344,724,697
================================================================================
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 339,797,836
================================================================================
See Notes to Financial Statements
<PAGE>
STATEMENT OF CASH FLOWS
INVESCO Global Health Sciences Fund
For the Year Ended October 31, 2000
INCREASE (DECREASE) IN CASH
--------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Dividends and Interest Received,
Net of Foreign Withholding Taxes $ 4,412,544
Expenses Paid (9,370,034)
Sales Net of Purchases of Short-Term Portfolio Investments 34,910,948
Purchases of Long-Term Portfolio Investments (1,432,915,955)
Sales of Long-Term Portfolio Investments 1,452,347,236
Proceeds of Securities Sold Short 83,305,047
Purchases of Securities Sold Short (54,064,080)
Realized Loss From Foreign Currency Transactions (6,242)
Payable to Broker 845,082
Prepaid Assets (127,529)
================================================================================
Net Cash Flows From Operating Activities 79,337,017
================================================================================
CASH FLOWS USED FOR FINANCING ACTIVITIES:
Distributions Paid to Shareholders (79,333,826)
================================================================================
Net Increase in Cash 3,191
Cash at Beginning of Year 69
================================================================================
Cash at End of Year $ 3,260
================================================================================
RECONCILIATION OF NET INCREASE IN NET ASSETS FROM OPERATIONS
TO NET CASH FLOWS FROM OPERATING ACTIVITIES
Net Increase in Net Assets from Operations $ 339,797,836
================================================================================
Decrease in Investments 78,777,287
Net Realized Gain (170,794,007)
Increase in Appreciation of Investment Securities
and Foreign Currency Transactions (173,930,690)
Increase in Receivable for Investment Securities Sold (51,931,081)
Increase in Payable for Investment Securities Purchased 31,318,656
Decrease in Depreciation of Foreign Currency Contracts 6,242
Decrease in Dividends and Interest Receivable 145,577
Increase in Prepaid Expenses and Other Assets (127,529)
Increase in Accrued Expenses and Other Payables 176,206
Increase in Payable for Securities Sold Short 25,053,438
Increase in Payable to Broker 845,082
================================================================================
Total Adjustments (260,460,819)
================================================================================
Net Cash Flows From Operating Activities $ 79,337,017
================================================================================
See Notes to Financial Statements
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
INVESCO Global Health Sciences Fund
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31
2000 1999
------------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATIONS
Net Investment Loss $ (4,926,861) $ (796,732)
Net Realized Gain on Investment Securities, Foreign
Currency Transactions and Securities Sold Short 170,794,007 78,958,795
Change in Net Appreciation (Depreciation) of Investment
Securities, Foreign Currency Transactions
and Securities Sold Short 173,930,690 (16,145,445)
================================================================================================
NET INCREASE IN NET ASSETS FROM OPERATIONS 339,797,836 62,016,618
================================================================================================
DISTRIBUTIONS TO SHAREHOLDERS
Net Investment Income (2,654,362) 0
Net Realized Gain on Investment Securities,
Foreign Currency Transactions and Securities Sold Short (89,653,448) (120,410,363)
================================================================================================
TOTAL DISTRIBUTIONS (92,307,810) (120,410,363)
================================================================================================
FUND SHARE TRANSACTIONS
Proceeds from Sales of Shares in Connection
with Rights Offering -- 107,975,588
Reinvestment of Distributions 12,973,985 42,185,501
================================================================================================
NET INCREASE IN NET ASSETS FROM
FUND SHARE TRANSACTIONS 12,973,985 150,161,089
================================================================================================
TOTAL INCREASE IN NET ASSETS 260,464,011 91,767,344
NET ASSETS
Beginning of Period 678,030,178 586,262,834
================================================================================================
End of Period (Including Accumulated Undistributed
Net Investment Income (Loss) of ($85,099)
and $920,686, respectively) $ 938,494,189 $ 678,030,178
================================================================================================
-----------------------------------------------------------------------------
FUND SHARE TRANSACTIONS
Shares Issued In Connection with Rights Offering -- 7,601,529
Shares Issued from Reinvestment of Distributions 947,871 2,343,639
================================================================================================
NET INCREASE IN FUND SHARES 947,871 9,945,168
================================================================================================
</TABLE>
See Notes to Financial Statements
<PAGE>
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. INVESCO
Global Health Sciences 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 accounting principles
generally accepted in the United States 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 the exchange (generally 4:00 p.m.
Eastern time) 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 as 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.
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.
<PAGE>
C. SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME -- Security transactions
are accounted for on the trade date and dividend income is recorded on the
ex-dividend date. Certain dividends from foreign securities will be recorded as
soon as the Fund is informed of the dividend if such information is obtained
subsequent to the ex-dividend date. Interest income, which may be comprised of
stated coupon rate, market discount, original issue discount and amortized
premium, is recorded on the accrual basis. The receivable for investment
securities sold is net of $814,285 collectibility allowance. Income and expenses
on foreign securities are translated into U.S. dollars at rates of exchange
prevailing when accrued. 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 investments
may subject the Fund to additional risks resulting from future political or
economic conditions and/or possible impositions of adverse foreign governmental
laws or currency exchange restrictions. Net realized and unrealized gain or loss
from investment securities includes fluctuations from currency exchange rates
and fluctuations in market value.
The Fund's use of short-term forward foreign currency contracts may subject it
to certain risks as a result of unanticipated movements in foreign exchange
rates. The Fund does not hold short-term forward foreign currency contracts for
trading purposes. The Fund may hold foreign currency in anticipation of settling
foreign security transactions and not for investment purposes.
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, 2000, 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. Of the ordinary income distributions
declared for the year ended October 31, 2000, 59.93% qualified for the dividends
received deduction available to the Fund's corporate shareholders. For the
fiscal year ended October 31, 2000, 1.98% and 98.02% 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.
<PAGE>
E. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Dividends and distributions to
shareholders are recorded by the Fund on the ex- dividend/distribution date. The
Fund distributes 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 accounting principles generally
accepted in the United States. 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. For the year ended October 31, 2000, the Fund reclassified
$6,661,771 from accumulated undistributed net realized gain to accumulated
undistributed net investment income and reclassified $86,333 from accumulated
undistributed net investment income to paid in capital. Net investment income,
net realized gains and net assets were not affected.
F. SHORT SALES -- The Fund engages in short sales as part of its normal
investment activities. 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 will incur a loss as a result of the short sale if the
price of the borrowed security increases between the date of the short sale and
the date on which the Fund replaces such security. The Fund will realize a gain
if there is a decline in the price of the security between those dates, if the
decline exceeds the cost of borrowing the security and other transaction costs.
There can be no assurance that the Fund will be able to close out a short
position at any particular time. 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.
Until the Fund replaces a borrowed security, it will maintain at all times cash
or liquid securities or other collateral with a broker or other custodian in an
amount equal to or higher than the current market value of the security sold
short. The liability account is valued to reflect the current value of the
securities sold short and is presented in the Statement of Assets and
Liabilities. Dividend expense on short sales is recorded on the ex-dividend
date.
At October 31, 2000, the Fund had outstanding short sales. Short sales 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 sales.
G. FORWARD FOREIGN CURRENCY CONTRACTS -- The Fund enters into short-term forward
foreign currency contracts in connection with planned purchases or sales of
securities as a hedge against fluctuations in foreign exchange rates pending the
settlement of transactions in foreign securities. A forward foreign currency
contract is an agreement between contracting parties to exchange an amount of
currency at some future time at an agreed upon rate. These contracts are
marked-to-market daily and the related appreciation or depreciation of the
contracts is presented in the Statement of Assets and Liabilities. Any realized
gain or loss incurred by the Fund upon the sale of securities is included in the
Statement of Operations.
H. 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, 2000.
I. 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.
<PAGE>
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 Services 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, 2000, the aggregate cost of purchases and proceeds from sales of
investment securities (excluding all U.S. Government securities and short-term
securities) were as follows:
POSITION PURCHASES SALES
-------------------------------------------------------------------------
Investment Securities and
Foreign Currency Transactions 1,464,234,611 1,504,136,427
Investment Securities Sold Short 54,064,080 83,305,047
There were no purchases or sales of U.S. Government securities.
NOTE 4 -- APPRECIATION AND DEPRECIATION. At October 31, 2000, the gross
appreciation of securities in which there was an excess of value over tax cost
amounted to $291,477,887 and the gross depreciation of securities in which there
was an excess of tax cost over value amounted to $27,074,828, resulting in net
appreciation of $264,403,059.
The above appreciation and depreciation does not include short sales.
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 as of January 1, 2000, equal to 50%
of the sum of the retainer fee plus the meeting attendance fees. Prior to
January 1, 2000, benefits under this plan were based on an annual rate equal to
50% of the sum of the retainer fee at the time of retirement plus the meeting
attendance fees.
Pension expenses for the year ended October 31, 2000, included in Trustees' Fees
and Expenses in the Statement of Operations were $45,671. Unfunded accrued
pension costs of $119,257 and pension liability of $210,599 are included in
Prepaid Expenses and Accrued Expenses, respectively, in the Statement of Assets
and Liabilities.
The 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, 2000, in which the
issuer was an affiliate of the Fund, is as follows:
<PAGE>
<TABLE>
<CAPTION>
REALIZED
PURCHASES SALES GAIN ON
--------------------- --------------------- INVESTMENT VALUE
AFFILIATE SHARES COST SHARES COST SECURITIES AT 10/31/2000
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Aerogen Inc, Pfd
Series D Shrs -- -- -- -- -- $ 2,000,001
Series F Shrs 888,889 $ 2,000,000 -- -- -- 2,000,000
Afx Inc
Pfd, Series F Shrs -- -- -- -- -- 3,000,000
Warrants
(Warrants to purchase
Pfd, Series F Shrs,
Exp 2001) -- -- -- -- -- 1,000
Caresoft Inc
Bridge Notes, 8.000%
6/30/2000 2,800,000 2,800,000 2,800,000 $ 2,800,000 $ 0 --
Conv Pfd, Series C Shrs 1,182,107 3,002,552 -- -- -- 2,553,352
Pfd, Series A Shrs 273,010 986,249 -- -- -- 3,514,541
Pfd, Series B Shrs -- -- -- -- -- 515,463
Warrants (Exp 2000) 1 0 1 0 0 --
Warrants (Warrants to
purchase Pfd, Series A
Shrs, Exp 2004) -- -- -- -- -- 59
Warrants (Warrants to
purchase Pfd, Series C
Shrs, Exp 2004) 314,960 0 -- -- -- 0
Cellomics Inc, Pfd,
Series C Shrs 383,982 7,000,000 -- -- -- 7,000,000
Claris Medical Systems
Pfd, Series I Shrs -- -- 106,664 2,000,000 (2,000,000) --
Pfd, Series II Shrs -- -- 77,239 386,196 (386,196) --
Warrants (Warrants to
purchase Pfd, Series II
Shrs, Exp 2000) -- -- 2,224 0 0 --
Ecogen Technologies I -- -- -- -- -- 1
Genomica Corp 2,574,424 7,867,903 0 1 6 27,490,021
Genomica Corp
Pfd, Series A Shrs -- -- 2,490,075 1,500,000 0 --
Pfd, Series B Shrs -- -- 1,899,865 1,367,903 0 --
Pfd, Series C Shrs 3,333,333 5,000,000 3,333,333 5,000,000 0 --
Warrants
(Exp 2003) 25,173 0 0 0 1 214,427
Warrants (Warrants to
purchase Pfd, Series B
Shrs, Exp 2003) 1,126 0 75,520 0 0 --
GenoPlex Inc
Pfd, Series A Shrs -- -- -- -- -- 610,521
Warrants (Warrants to
purchase Pfd, Series A
Shrs, Exp 2003) -- -- -- -- -- 0
Instrumentation Metrics
Conv Pfd, Series C Shrs 86,748 877,456 -- -- -- 5,934,956
<PAGE>
REALIZED
PURCHASES SALES GAIN ON
--------------------- --------------------- INVESTMENT VALUE
AFFILIATE SHARES COST SHARES COST SECURITIES AT 10/31/2000
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Orchid Biosciences 1,655,355 $ 8,973,750 133,800 $ 1,070,400 $ 472,297 $ 27,987,102
Orchid Biosciences
Conv Pfd, Series C Shrs -- -- 813,691 5,000,000 0 --
Conv Pfd, Series E Shrs 645,189 2,903,350 645,189 2,903,350 0 --
Sub Conv Bridge Notes
9.750%. 5/24/2000-- -- -- 1,800,000 1,800,000 0 --
Warrants (Exp 2004) -- -- -- -- -- $ 3,084,332
Physiome Sciences
Pfd, Series B Shrs -- -- -- -- -- 1,499,998
Xenometrix Inc -- -- -- -- -- 72,726
=======================================================================================================================
$ 87,478,500
=======================================================================================================================
</TABLE>
Interest income in the amount of $77,556 and $26,813 was received from Caresoft
Inc, Bridge Notes, 8.000%, 6/30/2000 and Orchid Biosciences, Bridge Notes,
9.750%, 5/24/2000 during the year ended October 31, 2000.
No dividend or interest income was received from any other affiliated companies.
Additional shares from stock splits were received by Caresoft Inc Pfd Series A
Shrs, Caresoft Inc Pfd Series B Shrs, Caresoft Inc Warrants (Warrants to
purchase Pfd, Series A Shrs), Orchid Biosciences Conv Pfd Series C Shrs and
Orchid Biosciences Warrants in the amount of 813,551, 119,320, 59,460, 363,241
and 89,910, respectively.
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 were 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 (the "Fund") at October 31, 2000, 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 accounting principles generally accepted in the United States of
America. 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 auditing standards generally accepted in the United States of
America, which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
<PAGE>
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, 2000 by
correspondence with the custodian and brokers, provide a reasonable basis for
our opinion.
As disclosed in the Statement of Investment Securities and the accompanying
Schedule of Restricted or Illiquid Securities, securities valued at $123,957,164
(13.21 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 5, 2000
<PAGE>
FINANCIAL HIGHLIGHTS
INVESCO Global Health Sciences Fund
(For a Fund Share Outstanding Throughout Each Period)
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31
----------------------------------------------------------------------------------------------------------
2000 1999 1998 1997 1996
<S> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value--Beginning of Period $ 17.960 $ 21.080 $ 21.250 $ 22.230 $ 18.506
==========================================================================================================
INCOME FROM INVESTMENT OPERATIONS(a)
Net Investment Loss(b) (0.129) (0.024)(c) 0.000 (0.071) (0.097)
Net Gains on Securities
(Both Realized and Unrealized) 8.827 0.989(c) 3.755 3.564 3.821
=========================================================================================================
TOTAL FROM INVESTMENT OPERATIONS 8.698 0.965 3.755 3.493 3.724
==========================================================================================================
LESS DISTRIBUTIONS
Dividends from Net Investment Income 0.070 0.000 0.000 0.000 0.000
Distributions from Capital Gains 2.338 4.085 3.925 4.473 0.000
==========================================================================================================
TOTAL DISTRIBUTIONS 2.408 4.085 3.925 4.473 0.000
==========================================================================================================
Net Asset Value--End of Period $ 24.250 $ 17.960 $ 21.080 $ 21.250 $ 22.230
=========================================================================================================
Share Price--End of Period $ 19.940 $ 16.375 $ 19.500 $ 17.313 $ 17.000
TOTAL RETURN(d) 40.75% 4.74%(c) 40.29% 32.98% 15.25%
RATIOS
Net Assets--End of Period ($000 Omitted) $ 938,494 $ 678,030 $ 586,263 $ 526,215 $ 455,842
Ratio of Expenses to Average Net Assets 1.16%(e) 1.20%(e) 1.21%(e) 1.22%(e) 1.21%
Ratio of Net Investment Loss to Average
Net Assets (0.62%) (0.13%) (0.17%) (0.15%) (0.44%)
Portfolio Turnover Rate 196% 129% 87% 145% 91%
</TABLE>
(a) The per share information was computed using average shares for the years
ended October 31, 2000 and 1999.
(b) Net Investment Loss for the year ended October 31, 1998 aggregated less than
$0.01 on a per share basis.
(c) Per share data includes an additional 7,601,529 shares attributed to the
Rights Offering at June 21, 1999.
(d) 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.
(e) Ratio is based on Total Expenses of the Fund, which is before any expense
offset arrangements (which may include custodian fees).
<PAGE>
OTHER INFORMATION
INVESCO Global Health Sciences Fund
UNAUDITED
DIVIDENDS AND CAPITAL GAINS DISTRIBUTION HISTORY
<TABLE>
<CAPTION>
NET INVESTMEN 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
February 4, 2000 February 24, 2000 -- $ 0.4845 --
May 5, 2000 May 24, 2000 -- $ 0.4455 --
August 4, 2000 August 24, 2000 -- $ 0.5385 --
November 17, 2000 December 15, 2000 -- $ 0.7491 $ 2.2648
</TABLE>
DIVIDEND REINVESTMENT PLAN
Shareholders of the Fund who have Shares registered directly in their 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, 2000. Shareholders
voted to re-elect John W. McIntyre and Charles W. Brady as Trustees 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 two Class C Trustee:
John W. McIntyre Charles W. Brady
For: 32,851,491.447 For: 32,781,415.041
Withheld Authority: 478,125.858 Withheld Authority: 548,202.264
2. Ratification of Appointment of PricewaterhouseCoopers LLP as the
Fund's Independent Accountants:
For: 32,898,014.115
Against: 184,086.194
Abstain: 247,516.996
In addition to Messrs. McIntyre and Brady, the following persons serve as
Trustees of the Fund: Fred A. Deering and Larry Soll, Ph.D.
MISCELLANEOUS
For the year ended October 31, 2000, 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.
INVESCO Global Health Sciences Fund is managed by INVESCO Senior Vice President
John R. Schroer.
Mr. Schroer joined INVESCO Funds Group, Inc. ("IFG") in 1992 and became a Senior
Vice President of IFG in 1996. Mr. Schroer became the Director of Research of
IFG in September 2000. In addition to Mr. Schroer's responsibilities as
portfolio manager of the Fund, he also manages the INVESCO Sector Health
Sciences Fund. Mr. Schroer has been an officer of the Global Health Sciences
Fund since January 1996.
Mr. Schroer received his M.B.A and B.S. 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. John is a Chartered Financial Analyst.
<PAGE>
[Rx Icon] [DNA Icon] [Wheelchair Icon] [Stethoscope Icon]
INVESCO Global Health Sciences Fund
INVESCO Funds Group, Inc.
7800 East Union Avenue, Suite 1100
Denver, Colorado 80237
AGHS 9059 12/00
