SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange
Act of 1934
(Amendment No. ___)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of Commission Only (as permitted by Rule
14a-6 (e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec.
240.14a-12
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INVESCO INTERNATIONAL FUNDS, INC.
(Name of Registrant as specified in Its Charter)
INVESCO INTERNATIONAL FUNDS, INC.
(Name of Person(s) Filing Proxy Statement)
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Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction
applies:
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2) Aggregate number of securities to which transaction
applies:
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3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth
the amount on which the filing fee is calculated and
state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[X] Fee paid previously with preliminary materials.
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[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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INVESCO INTERNATIONAL GROWTH FUND
December 18, 1995
Dear INVESCO International Growth Fund Shareholder:
We are pleased to enclose the Proxy Statement for the February 2, 1996 special
shareholders' meeting of your Fund. Please take the time to read the
accompanying Proxy Statement and cast your vote, since the matters we are
submitting for your consideration are important to the Fund and to you as a
shareholder. Your vote is important.
We are asking shareholders to approve a Sub-Advisory Agreement between the
Fund's investment adviser, INVESCO Funds Group, Inc. ("INVESCO"), and INVESCO
Asset Management Limited ("IAM"). IAM is INVESCO's primary investment management
affiliate in Europe. This new agreement will have no effect whatsoever on the
services provided to the Fund, and will not affect the Fund's fees and expenses.
The individuals who currently are managing the Fund's portfolio will not change.
We also are asking shareholders to approve an increase in the Fund's limit on
investing in companies located in developing countries from 10% to 20% of the
Fund's total assets. This change is intended to give the Fund's portfolio
managers additional investment flexibility in order to assist the Fund in
pursuing its investment objective and competing more effectively with its
competitors, without unduly increasing the investment risk presented by the
Fund's portfolio securities.
The Board of Directors believes that these proposals are in the best interests
of shareholders. Therefore, we ask that you read the enclosed material and vote
promptly. Should you have any questions, please feel free to call our client
service representatives at 1-800-525-8085. They will be happy to answer any
questions that you may have. Please note that since each of these proposals
requires the affirmative vote of a certain percentage of the Fund's outstanding
shares, an abstention on a proposal has the same effect as a negative vote. If
we do not receive sufficient affirmative votes to approve these proposals, it
may necessitate a further mailing or a telephone canvass. Thank you.
Sincerely,
Dan J. Hesser
President
INVESCO International Funds, Inc. -
INVESCO International Growth Fund
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INVESCO INTERNATIONAL FUNDS, INC.
INVESCO INTERNATIONAL GROWTH FUND
7800 East Union Avenue
Denver, Colorado 80237
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON FEBRUARY 2, 1996
Notice is hereby given that a special meeting of shareholders (the "Meeting") of
INVESCO International Funds, Inc. - INVESCO International Growth Fund (the
"Fund") will be held at the offices of the Fund, 7800 East Union Avenue, Denver,
Colorado 80237 on Friday, February 2, 1996, at 10:00 a.m., Mountain Time, for
the following purposes:
1. To approve or disapprove a Sub-Advisory Agreement between the
Fund's investment adviser, INVESCO Funds Group, Inc. and INVESCO
Asset Management Limited.
2. To approve or disapprove an increase in the Fund's limit on investing in
companies located in developing countries from 10% to 20% of the Fund's total
assets.
3. To transact such other business as may properly come before the
Meeting or any adjournment(s) thereof.
The directors of the Fund have fixed the close of business on December 12,
1995, as the record date for the determination of shareholders entitled to
notice of and to vote at the Meeting or any adjournment(s) thereof.
A complete list of the shareholders of the Fund entitled to vote at the
Meeting will be available and open to the examination of any shareholder of the
Fund for any purpose germane to the Meeting during ordinary business hours at
the offices of the Fund, 7800 East Union Avenue, Denver, Colorado 80237.
You are cordially invited to attend the Meeting. Shareholders who do not
expect to attend the Meeting in person or by proxy are requested to complete,
date and sign the enclosed form of proxy and return it promptly in the envelope
provided for that purpose. The enclosed proxy is being solicited on behalf of
the board of directors of the Fund.
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IMPORTANT
Please mark, sign, date and return the enclosed proxy in the accompanying
envelope as soon as possible in order to ensure a full representation at the
Meeting. The Meeting will have to be adjourned without conducting any business
if less than one-third of the eligible shares is represented, and the Fund, in
part at shareholders' expense, will have to continue to solicit votes until a
quorum is obtained. The Meeting also may be adjourned, if necessary, to continue
to solicit votes if less than the required shareholder vote has been obtained to
approve Proposals (1) and (2). Your vote, then, could be critical in allowing
the Fund to hold the Meeting as scheduled. By marking, signing, and promptly
returning the enclosed proxy, you may eliminate the need for additional
solicitation. Your cooperation will be appreciated.
By Order of the Board of Directors,
Glen A. Payne
Secretary
Denver, Colorado
Dated: December 18, 1995
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INVESCO INTERNATIONAL FUNDS, INC.
INVESCO INTERNATIONAL GROWTH FUND
7800 East Union Avenue
Denver, Colorado 80237
PROXY STATEMENT FOR SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD FEBRUARY 2, 1996
INTRODUCTION
The enclosed proxy is being solicited by the board of directors of INVESCO
International Funds, Inc. (the "Company") for use in connection with the special
meeting (the "Meeting") of the shareholders of the INVESCO International Growth
Fund series of the Company (the "Fund") to be held at 10:00 a.m., Mountain Time,
on Friday, February 2, 1996, at the offices of the Fund, 7800 East Union Avenue,
Denver, Colorado 80237, and at any adjournment thereof, for the purposes set
forth in the foregoing notice. An annual report, including financial statements
for the Fund for the fiscal year ended October 31, 1995, will be mailed to
shareholders on or about December 29, 1995. In addition, shareholders previously
have been sent copies of the Fund's annual report for the fiscal year ended
October 31, 1994 and its semi-annual report for the six months ended April 30,
1995. Additional copies of either annual report or the semi-annual report may be
obtained without charge by calling 1-800-525-8085 or writing the Fund at P.O.
Box 173706, Denver, CO 80217-3706. The approximate mailing date of proxies and
this Proxy Statement is December 18, 1995.
If the enclosed proxy is duly executed and returned in time to be voted at
the Meeting, and not subsequently revoked, all shares represented by the proxy
will be voted in accordance with the instructions marked thereon. If no
instructions are given, such shares will be voted FOR Proposals (1) and (2).
One-third of the shares of the Fund entitled to vote, represented in person or
by proxy, shall constitute a quorum at the Meeting. The affirmative vote of a
"majority of the outstanding voting securities" of the Fund, defined by the
Investment Company Act of 1940, as amended (the "1940 Act"), as the vote (A) of
67% or more of the shares present at the Meeting, if the holders of more than
50% of the outstanding shares of the Fund are present or represented by proxy,
or (B) of more than 50% of the outstanding shares of the Fund, whichever is
less, is required to approve Proposals (1) and (2).
Shares held by shareholders present in person or represented by proxy at
the Meeting will be counted both for the purpose of determining the presence of
a quorum and for calculating the votes cast on the issues before the Meeting. An
abstention on a particular vote by a shareholder, either by proxy or by vote in
person at the Meeting, has the same effect as a negative vote, because in order
to be approved, the proposals require the affirmative vote of 67%
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of the shares represented at the Meeting (including abstaining shares), if the
holders of more than 50% of the Fund's outstanding shares are present or
represented by proxy, or more than 50% of the outstanding shares of the Fund,
whichever is less. Shares held by a broker or other fiduciary as record owner
for the account of the beneficial owner are counted toward the required quorum
if the beneficial owner has executed and timely delivered the necessary proxy.
Where the broker or fiduciary does not receive a proxy from the beneficial
owner, and either does not have discretionary voting power or disclaims the
power to vote the shares without instructions, the shares will not be counted
toward the required quorum and will not be voted on the proposals.
Execution of the enclosed proxy will not affect a shareholder's right to
attend the Meeting and vote in person, and a shareholder giving a proxy has the
power to revoke it (by written notice to the Fund at Post Office Box 173706,
Denver, Colorado 80217-3706, execution of a subsequent proxy, or oral revocation
at the Meeting) at any time before it is exercised.
Shareholders of the Fund of record at the close of business on December
12, 1995 (the "Record Date"), are entitled to vote at the Meeting, including any
adjournment thereof, and are entitled to one vote for each share, and
corresponding fractional votes for fractional shares, on each matter to be acted
upon at the Meeting. On the Record Date, 4,979,007.104 shares of the Fund's
common stock, $.01 par value per share, were outstanding.
The following table sets forth, as of the Record Date, the beneficial
ownership of the Fund's issued and outstanding common stock by each 5% or
greater shareholder. The directors and executive officers of the Company did not
own any Fund shares as of the Record Date.
Name and Address of Amount and Nature of Percent of
Beneficial Owner Beneficial Ownership Common Stock
Commerce Bank of Kansas City 1,334,085.399(1) 26.8%
Trustee for Farmland Industries
Coop Retirement Plan
P.O. Box 13366
Kansas City, MO 64199
Resources Trust Company 298,999.051(2) 6.0%
Custodian for the Exclusive
Benefit of the Customers of
LBS Capital Management Inc.
P.O. Box 3865
Englewood, CO 80155
(1) INVESCO Capital Management, Inc. ("ICM") has been appointed as
an investment manager for this plan, and has been delegated voting
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and investment power with respect to these shares. ICM is an affiliate of
INVESCO Funds Group, Inc., the investment adviser to the Fund.
(2) LBS Capital Management Inc. shares investment power with
respect to thee shares, but its customers retain sole voting power.
In addition to the solicitation of proxies by use of the mail, proxies may
be solicited by officers of the Company, and by officers and employees of
INVESCO Funds Group, Inc. ("INVESCO"), the investment adviser to the Fund,
personally or by telephone or facsimile transmission, without special
compensation. The costs of printing and mailing proxy materials and the costs
and expenses of holding the Meeting and soliciting proxies will be paid one-half
by the Fund and one-half by INVESCO.
The board of directors may seek one or more adjournments of the Meeting to
solicit additional shareholders, if necessary, to obtain a quorum for the
Meeting, or to obtain the required shareholder vote to approve Proposals (1) and
(2). An adjournment would require the affirmative vote of the holders of a
majority of the shares present at the Meeting (or an adjournment thereof) in
person or by proxy and entitled to vote. If adjournment is proposed in order to
obtain the required shareholder vote on a particular proposal, the persons named
as proxies will vote in favor of adjournment those shares that they are entitled
to vote in favor of the proposal, and will vote against adjournment those shares
required to be voted against the proposal.
PROPOSAL 1: APPROVAL OF SUB-ADVISORY AGREEMENT
Introduction
INVESCO Funds Group, Inc. ("INVESCO"), 7800 East Union Avenue, Denver,
Colorado 80237, serves as the Fund's investment adviser, distributor and
transfer agent, and administers the business affairs of the Fund. INVESCO is an
indirect wholly-owned subsidiary of INVESCO PLC, a global firm that managed
approximately $74 billion as of June 30, 1995. INVESCO PLC is headquartered at
11 Devonshire Square, London, EC2M 4YR England, with money managers located in
Europe, North America and the Far East. The Fund is managed by a team of
portfolio managers based in London.
Under its Investment Advisory Agreement with the Company, dated April 30,
1993, INVESCO is primarily responsible for providing the Fund with portfolio
management and various administrative services, and supervising the Fund's daily
business affairs. The Investment Advisory Agreement authorizes INVESCO, at its
own expense, to retain companies affiliated with INVESCO to provide the services
required under the agreement, provided that INVESCO supervises and remains fully
responsible for all such services. With respect to all 38 mutual fund portfolios
that it manages, INVESCO has relied on this
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authority to retain other subsidiaries of INVESCO PLC to provide portfolio
management services to the funds, leaving INVESCO with the primary
responsibility for providing the funds with various administrative services and
supervising their daily business affairs. Pursuant to this authority, INVESCO
engaged INVESCO MIM International, Inc. ("IMI"), another indirect wholly-owned
subsidiary of INVESCO PLC, to act as sub-adviser to the Fund until December 31,
1993. On that date, IMI ceased doing business as a result of an internal
corporate reorganization, and the sub-advisory agreement between INVESCO and IMI
was terminated. Since that time, INVESCO has had sole legal responsibility for
managing the Fund's portfolio, and the Fund's portfolio managers have been
subject to the direction and supervision of INVESCO for this purpose.
As compensation for its advisory services to the Fund, INVESCO receives a
monthly fee calculated at an annual rate of 1.00% on the first $500 million of
the Fund's average net assets; 0.75% on the next $500 million of the Fund's
average net assets; and 0.65% on the Fund's average net assets in excess of $1
billion. During the fiscal year ended October 31, 1995, the advisory fees paid
to INVESCO by the Fund totalled $963,765. In addition, during that year the Fund
paid INVESCO transfer agency and administrative services fees of $361,657 and
$24,541, respectively. On July 1, 1993, the Financial International Growth Fund,
a series of Financial Series Trust (the "Predecessor Fund"), was reorganized
into the Fund. This reorganization was approved by the shareholders of the
Predecessor Fund on May 24, 1993 and, pursuant to the authorization of such
shareholders, the Predecessor Fund, as the sole initial shareholder of the Fund,
approved the Investment Advisory Agreement between INVESCO and the Company on
June 24, 1993 for an initial term expiring April 30, 1995. The Investment
Advisory Agreement has been continued by the Company's board of directors
through April 30, 1996.
The Proposed Sub-Advisory Agreement
At a meeting held on October 25, 1995, the Company's board of directors
approved retaining another indirect wholly-owned subsidiary of INVESCO PLC,
INVESCO Asset Management Limited ("IAM"), to serve as the investment sub-adviser
for the Fund. IAM is INVESCO PLC's primary investment management company in
Europe, and is located at 11 Devonshire Square, London, EC2M 4YR England. IAM
recently completed its registration with the Securities and Exchange Commission
as an investment adviser in the United States. The board of directors, including
a majority of the directors who are not "interested persons," as defined in the
1940 Act, of the Company, INVESCO or IAM, also approved a Sub-Advisory Agreement
between INVESCO and IAM with respect to the Fund (the "Sub-Agreement"), and
directed that the Sub-Agreement be submitted to the shareholders of the Fund for
approval. The Sub-Agreement is substantially similar to the prior sub-advisory
agreement between INVESCO and IMI that was in effect until December 31, 1993.
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The Sub-Agreement provides that IAM, subject to the supervision of INVESCO and
the board of directors of the Company, will manage the investment portfolio of
the Fund in conformity with the Fund's investment policies. These management
services include: (a) managing the investment and reinvestment of all the
assets, now or hereafter acquired, of the Fund, and executing all purchases and
sales of portfolio securities; (b) maintaining a continuous investment program
for the Fund, consistent with (i) the Fund's investment policies as set forth in
the Company's Articles of Incorporation, Bylaws and Registration Statement, and
in any prospectus and/or statement of additional information of the Fund, and
(ii) the Fund's status as a regulated investment company under the Internal
Revenue Code of 1986, as amended; (c) determining what securities are to be
purchased or sold for the Fund, unless otherwise directed by the directors of
the Company or INVESCO, and executing transactions accordingly; (d) providing
the Fund the benefit of all of the investment analysis and research, the reviews
of current economic conditions and trends, and the consideration of long-range
investment policy now or hereafter generally available to investment advisory
customers of IAM; (e) determining what portion of the Fund's portfolio should be
invested in the various types of securities authorized for purchase by the Fund;
and (f) making recommendations as to the manner in which voting rights, rights
to consent to Fund action and any other rights pertaining to the portfolio
securities of the Fund shall be exercised.
IAM is authorized to select broker-dealers for the execution of brokerage
transactions for the Fund, subject to the requirement to obtain the most
favorable execution and price. After fulfilling such requirement, IAM is
authorized to consider whether such firms furnish statistical, research and
other information or services to IAM, as well as other factors, in selecting
broker-dealers. Such information and services may be of assistance to INVESCO or
IAM in making informed investment decisions, and may be used by INVESCO and IAM
in servicing all of their respective accounts, not just the Fund.
IAM will pay for maintaining the personnel, office space, equipment and
facilities necessary to perform its obligations under the Sub- Agreement. All
other expenses in connection with the operation of the Fund are paid by the Fund
or INVESCO. The Sub-Agreement provides that, as compensation for its services,
IAM will receive from INVESCO, at the end of each month, a fee based upon the
average daily value of the Fund's net assets, computed at the following annual
rate: 0.25% on the Fund's daily net assets up to $500 million, 0.1875% on the
next $500 million of the Fund's daily net assets, and 0.1625% on the Fund's
daily net assets in excess of $1 billion. This fee schedule is identical to the
fee schedule contained in the previous sub-advisory agreement with IMI. The
sub-advisory fee is paid by INVESCO, NOT the Fund, and therefore approval of the
Sub-Agreement will not have any impact on Fund expenses.
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The Sub-Agreement will become effective on the date it is approved by the
shareholders of the Fund, and will remain in force for an initial term expiring
April 30, 1997. After the expiration of the initial term, the Sub-Agreement may
be continued from year to year as long as each such continuance is specifically
approved by the board of directors of the Company, or by a vote of the holders
of a majority, as defined in the 1940 Act, of the outstanding shares of the
Fund. Each such continuance also must be approved by a majority of the directors
of the Company who are not parties to the Sub-Agreement or interested persons
(as defined in the 1940 Act) of any such party, cast in person at a meeting
called for the purpose of voting on such continuance. The Sub-Agreement may be
terminated at any time without penalty by either party upon 60 days' written
notice, or by the Fund upon notice to INVESCO and IAM, and terminates
automatically in the event of an assignment to the extent required by the 1940
Act and the rules thereunder. Any amendments to the Sub-Agreement must be agreed
to by IAM and INVESCO; provided, however, that no material amendments can be
made unless they are approved by a majority of the directors of the Company,
including a majority of the directors who are not parties to the Sub-Agreement
or interested persons (as defined in the 1940 Act) of any such party, and a
majority of the outstanding voting securities of the Fund.
The Sub-Agreement contains various provisions related to IAM's membership in the
Investment Management Regulatory Organization in the United Kingdom and IAM's
compliance with the rules and regulations of that organization. The
Sub-Agreement provides that INVESCO will indemnify IAM against certain
liabilities arising in connection with IAM's performance of its duties under the
Sub- Agreement. The Sub-Agreement also contains a section providing that IAM
will have no liability in connection with its performance of sub-advisory
services, except for situations involving willful misfeasance, bad faith or
negligence.
Additional Information Concerning IAM and INVESCO
The Company's board of directors also has selected IAM to serve as sub-adviser
to the INVESCO European Fund and INVESCO Pacific Basin Fund series of the
Company. In addition, the board of directors of INVESCO Specialty Funds, Inc.
has selected IAM to serve as sub- adviser to INVESCO's two other international
mutual funds, INVESCO European Small Company Fund and INVESCO Latin American
Growth Fund. IAM has served as sub-adviser to all of these funds since November
10, 1995, in consideration of INVESCO's payment of the sub-advisory fees set
forth below:
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Total Net Assets Annual Sub-Advisory
Fund As of October 31, 1995 Fee Schedule
- ---- ---------------------- --------------------
INVESCO European Fund 0.45% on the first
$350 million of the
fund's average net
assets; 0.40% on the
next $350 million of
the fund's average
net assets; and
0.35% on the fund's
average net assets
in excess of $700
million.
INVESCO Pacific Basin Fund 0.45% on the first
$350 million of the
fund's average net
assets; 0.40% on the
next $350 million of
the fund's average
net assets; and
0.35% on the fund's
average net assets
in excess of $700
million.
INVESCO European Small 0.375% on the first
Company Fund $500 million of the
fund's average net
assets; 0.325% on
the next $500
million of the
fund's average net
assets; and 0.275%
on the fund's
average net assets
in excess of $1
billion.*
INVESCO Latin American $7,420,214 0.375% on the first
Growth Fund $500 million of the
fund's average net
assets; 0.325% on
the next $500
million of the
fund's average net
assets; and 0.275%
on the fund's
average net assets
in excess of $1
billion.*
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*Certain fund expenses are being absorbed voluntarily by INVESCO and IAM
pursuant to a commitment to this fund, in order to ensure that expenses for the
fund will not exceed 2.00% of the fund's average net assets. This commitment may
be changed following consultation with the fund's board of directors.
The principal executive officer of IAM is Norman M. Riddell, who is
Chairman of the company. In addition to Mr. Riddell, the directors
of IAM, and their positions with the company, are as follows:
Jeffrey C. Attfield, Chief Executive; Sarah C. Bates, Managing
Director - Investment Trust Division; Francesco Bertoni, Investment
Director - Global Equities; Anthony Broccardo, Portfolio Manager -
Asset Allocation; Ian A. Carstairs, Investment Director - U.K.
Equities; Adam D. Cooke, Director - Institutional Business Group;
Peter S. Dawson, Investment Director - Treasury/Dealing; David C.
Gillan, Director - Institutional Business Group; Peter J. Glynne-
Percy, Director, Investment Management; Tristan P. Hillgarth,
Executive Director - Investment Management; David C. Hypher,
Director - Institutional Business Group; Jeremy C. Lambourne,
Director - Finance; Rory S. Powe, Investment Director - European
Equities; Jennifer M. Prince, Project Director - Central Management;
Riccardo Ricciardi, Investment Director - Investment Management; and
Alan C. Wren, Executive Director - Management. The address of each
of these individuals is 11 Devonshire Square, London, EC2M 4YR
England.
Four of the Company's twelve directors are affiliated with INVESCO PLC and/or
its subsidiaries. Charles W. Brady, chairman of the Company, is chairman and
chief executive officer of INVESCO PLC and a director of various subsidiaries
thereof. Dan J. Hesser, president and a director of the Company, is chairman,
president and chief executive officer of INVESCO. Frank M. Bishop, a director of
the Company, is president and chief operating officer of INVESCO Inc. and a
director of INVESCO. R. Dalton Sim, a director of the Company, is chairman,
president and chief executive officer of INVESCO Trust Company, a wholly-owned
subsidiary of INVESCO, and is a director of INVESCO. Other executive officers of
the Company who are also officers of INVESCO are: Ronald L. Grooms, treasurer of
the Company and senior vice president and treasurer of INVESCO; Glen A. Payne,
secretary of the Company and senior vice president, general counsel and
secretary of INVESCO; William J. Galvin, Jr., assistant secretary of the Company
and senior vice president of INVESCO; Alan I. Watson, assistant secretary of the
Company and vice president of INVESCO; and Judy P. Wiese, assistant treasurer of
the Company and vice president of INVESCO.
Reasons for the Sub-Advisory Agreement
As discussed above, since December 31, 1993, INVESCO has managed the
Fund's portfolio using a team of portfolio managers based in London. Although
the portfolio managers have been subject to the direction and supervision of
INVESCO in performing such
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services, the portfolio managers' principal occupations are as employees of IAM.
Therefore, Fund management and the Company's board of directors has determined
that it would be desirable for INVESCO to enter into the Sub-Agreement with IAM.
As INVESCO's primary investment management affiliate in Europe, IAM is
experienced in managing international investments for pension funds, investment
trusts, unit trusts and various investment portfolios on behalf of private
clients, charities, corporations and foreign financial institutions. The board
believes that IAM will provide the Fund with high quality portfolio management
services and, as noted above, also has selected IAM to be the sub-adviser to the
Company's other international funds. The appointment of IAM as sub- adviser to
the Fund will have no effect whatsoever on the services provided to the Fund.
The individuals who currently are managing the Fund's portfolio will not change.
There will be no change in INVESCO's ultimate legal responsibility for the
performance of portfolio management services to the Fund, since the Investment
Advisory Agreement between the Company and INVESCO will continue in effect.
Finally, there will be no change in the fees or expenses paid by the Fund, since
IAM's sub-advisory fees will be paid by INVESCO, not the Fund.
For the reasons discussed above, the Company's board of directors,
including all of the independent directors, is recommending that the
shareholders approve the Sub-Agreement.
THE DIRECTORS UNANIMOUSLY RECOMMEND THAT THE SHAREHOLDERS VOTE IN
FAVOR OF PROPOSAL 1.
PROPOSAL 2: APPROVAL OF INCREASE IN THE FUND'S LIMIT ON
INVESTING IN COMPANIES LOCATED IN DEVELOPING COUNTRIES
The Company's board of directors also has approved, and authorized
submitting to the shareholders for their approval, a proposal to increase the
limit on the Fund's ability to invest in companies located in developing
countries from 10% to 20% of the Fund's total assets. In general, Fund
management considers any country that is not included in the Morgan Stanley
Capital International ("MSCI") World Index to be a developing country. The MSCI
World Index currently consists of the following countries: the United States,
Canada, Japan, Australia, New Zealand, Hong Kong, Malaysia, Singapore, and the
nations of Western Europe (other than Greece, Portugal and Turkey). In addition,
the MSCI World Index includes certain South African gold mining companies. Thus,
with the exceptions noted above, developing countries generally include the
countries located in Central and South America, Middle and Eastern Europe, Asia
and Africa.
Shareholders should recognize that, compared to the United States and
other developed countries, developing countries may have relatively unstable
governments, economies based on only a few
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industries and securities markets that trade only a small number of securities.
Prices in these markets tend to be volatile. In addition, investments in
developing countries are subject to the same risks as those involved in foreign
investments generally. These include risks of fluctuations in foreign currency
exchange rates, political and economic instability, the difficulty of predicting
international trade patterns, and the possible imposition of exchange controls.
In addition, there may be less information publicly available about foreign
companies than about domestic companies, and there is generally less government
regulation of stock exchanges, brokers and listed companies abroad than in the
United States. Moreover, with respect to certain foreign countries, there may be
a possibility of expropriation or confiscatory taxation. Nevertheless, Fund
management believes that if these risks are properly monitored, increasing the
Fund's ability to invest in companies located in developing countries could be
beneficial for the Fund and its shareholders, without unduly increasing the
investment risk presented by the Fund's portfolio securities.
While the current 10% limitation on investing in developing country
issuers may have been appropriate when the Fund commenced operations in 1987, a
number of factors have changed in relation to the Fund's current investment
environment. First, the dimension of the developing markets has changed. While
developing countries accounted for approximately 3.1% of the available non-U.S.
equity universe in 1987, they now represent over 15%. Many of these countries
have liquid markets in which large companies that are enjoying rapid rates of
growth are traded.
Second, a number of the Fund's competitors do not have similar limitations
on investments in developing countries. This has given them an advantage over
the Fund during certain market cycles when developing markets have outperformed
many more established markets. For example, the MSCI Emerging Markets Global
Index (currently consisting of 19 developing countries plus Malaysia) has
outperformed the MSCI EAFE Index (composed of developed countries in Europe and
the Far East, plus Australia) in five of the seven full calendar years since the
Fund's inception. While past performance is not a guarantee of future results,
the performance of these indices, assuming no reinvestment of dividends, for the
years 1988 through 1994, and the first nine months of 1995, is set forth below:
1995
1988 1989 1990 1991 1992 1993 1994 (9 mos.)
---- ---- ---- ---- ---- ---- ---- --------
MSCI Emerging
Markets Global 81.8% 68.8% -44.0% 33.1% 26.8% 69.4% -7.7% -9.5%
MSCI EAFE 31.5% 22.5% -37.1% 13.6% 6.4% 33.5% 0.5% 4.4%
15
<PAGE>
From January 1988 through September 1995, the MSCI Emerging Markets Global Index
is up a cumulative 245.7% versus 44.7% for the MSCI EAFE Index, assuming no
reinvestment of dividends.
Finally, while developing markets individually are more volatile than the
larger, more developed markets, taken together they provide useful
diversification characteristics. This is due to the fact that the movements in
these markets do not correlate closely to each other or, more significantly, to
their larger counterparts. Increasing the Fund's flexibility to invest in
developing country issuers would give it the ability to adjust the portfolio in
light of changing market conditions in an effort to improve the Fund's overall
performance. There can be no assurance, however, that increasing the Fund's
ability to invest in companies located in developing countries will improve the
Fund's performance.
For the reasons discussed above, the Company's board of directors,
including all of the independent directors, is recommending that the
shareholders approve increasing the limit on the Fund's ability to invest in
companies located in developing countries from 10% to 20% of the Fund's total
assets. If approved by the shareholders, this policy change will take effect as
soon as possible after any remaining legal prerequisites to implementation of
the proposal have been satisfied. If the proposal is not approved, the Fund's
current 10% of total assets limit on investments in developing country issuers
will remain unchanged.
THE DIRECTORS UNANIMOUSLY RECOMMEND THAT THE
SHAREHOLDERS VOTE IN FAVOR OF PROPOSAL 2.
16
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OTHER BUSINESS
The management of the Fund has no business to bring before the Meeting
other than the matters described above. Should any other business be presented
at the Meeting, it is the intention of the persons named in the accompanying
proxy to vote on such matters in accordance with their best judgment.
SHAREHOLDER PROPOSALS
The Fund does not hold annual meetings of shareholders. Shareholders
wishing to submit proposals for inclusion in a proxy statement and form of proxy
for a subsequent shareholders' meeting should send their written proposals to
the Secretary of the Fund, 7800 East Union Avenue, Denver, Colorado 80237.
By Order of the Board of Directors,
Glen A. Payne
Secretary
December 18, 1995
17
<PAGE>
TO BE SURE YOU ARE REPRESENTED, PLEASE SIGN, DATE AND RETURN
PROMPTLY
INVESCO INTERNATIONAL FUNDS, INC.
INVESCO INTERNATIONAL GROWTH FUND
PROXY FOR THE SPECIAL MEETING OF SHAREHOLDERS
FEBRUARY 2, 1996
The undersigned hereby appoints Fred A. Deering, Dan J. Hesser and Glen A.
Payne, and each of them, proxy for the undersigned, with the power of
substitution, to vote with the same force and effect as the undersigned at the
Special Meeting of the Shareholders of INVESCO International Funds, Inc. -
INVESCO International Growth Fund (the "Fund") to be held at the offices of the
Fund, 7800 East Union Avenue, Denver, Colorado 80237, on Friday, February 2,
1996, at 10:00 a.m. (Mountain time) and at any adjournment thereof, upon the
matters set forth below, all in accordance with and as more fully described in
the Notice of Special Meeting and Proxy Statement, dated December 18, 1995,
receipt of which is hereby acknowledged.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS, WHICH RECOMMENDS
A VOTE "FOR:"
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS [X]
Vote on Proposal
For Against Abstain
1. Proposal to approve the Sub-Advisory
Agreement between INVESCO Funds Group, Inc.
and INVESCO Asset Management Limited [ ] [ ] [ ]
2. Proposal to approve increasing the
Fund's limit on investing in companies
located in developing countries from 10%
to 20% of the Fund's total assets [ ] [ ] [ ]
In their discretion, the Proxies are authorized to vote upon such other business
as may properly come before the meeting or any adjournment thereof.
This proxy, when properly executed, will be voted in the manner directed herein
by the undersigned shareholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED "FOR" PROPOSALS 1 AND 2.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY IN THE ACCOMPANYING
ENVELOPE AS SOON AS POSSIBLE. THANK YOU.
- ---------------------- -------------------- ----------
Signature Signature Date
(Joint Owners)
Please sign exactly as name appears hereon. If stock is held in the name of
joint owners, each should sign. Attorneys-in-fact, executors, administrators,
etc. should so indicate. If shareholder is a corporation or partnership, please
sign in full corporate or partnership name by authorized person.
18
