File No. 33-63498
As filed on ^ December 22, 1995
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
Pre-Effective Amendment No.
Post-Effective Amendment No. ^ 3 X
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
Amendment No. ^ 4 X
INVESCO INTERNATIONAL FUNDS, INC.
(Exact Name of Registrant as Specified in Charter)
7800 E. Union Avenue, Denver, Colorado 80237
(Address of Principal Executive Offices)
P.O. Box 173706, Denver, Colorado 80217-3706
(Mailing Address)
Registrant's Telephone Number, including Area Code: (303) 930-6300
Glen A. Payne, Esq.
7800 E. Union Avenue
Denver, Colorado 80237
(Name and Address of Agent for Service)
------------
Copies to:
Ronald M. Feiman, Esq.
Gordon Altman Butowsky
Weitzen Shalov & Wein
114 W. 47th St.
New York, New York 10036
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Approximate Date of Proposed Public Offering: As soon as practicable
after this post-effective amendment becomes effective.
It is proposed that this filing will become effective (check
appropriate box)
immediately upon filing pursuant to paragraph (b)
^ on _________________, pursuant to paragraph (b)
60 days after filing pursuant to paragraph (a)(1)
X on February 29, 1996, pursuant to paragraph (a)(1)
75 days after filing pursuant to paragraph (a)(2)
on _________________, pursuant to paragraph (a)(2) of rule 485.
If appropriate, check the following:
this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Registrant has previously elected to register an indefinite number of shares of
its common stock pursuant to Rule 24f-2 under the Investment Company Act.
Registrant's Rule 24f-2 Notice for the fiscal year ended October 31, ^ 1995, was
filed on or about December ^ 20, 1995.
Page 1 of 127
Exhibit index is located at page 104
<PAGE>
INVESCO INTERNATIONAL FUNDS, INC.
-----------------------------------
CROSS-REFERENCE SHEET
Form N-1A
Item Caption
Part A Prospectus
1....................... Cover Page
2....................... Annual Fund Expenses
3....................... Financial Highlights
4....................... Investment Objective and
Policies; The Funds and Their
Management
5....................... The Funds and Their Management;
Additional Information
5A...................... Not Applicable
6....................... Services Provided by the Funds;
Taxes, Dividends^ and Capital
Gain Distributions ^; Additional
Information
7....................... How Shares Can Be Purchased;
Services Provided by the Funds
8....................... Services Provided by the Funds;
How to Redeem Shares
9....................... Not Applicable
Part B Statement of Additional
Information
10....................... Cover Page
11....................... Table of Contents
-i-
<PAGE>
Form N-1A
Item Caption
12....................... The Funds and Their Management
13....................... Investment Practices; Investment
Policies and Restrictions
14....................... The Funds and Their Management
15....................... The Funds and Their Management
16....................... The Funds and Their Management
17....................... Investment Practices; Investment
Policies and Restrictions
18....................... Additional Information
19....................... How Shares Can Be Purchased; How
Shares Are Valued; Services
Provided by the Funds; Tax-^
Deferred Retirement Plans; How to
Redeem Shares
20....................... Dividends, Capital Gain
Distributions and Taxes
21....................... How Shares Can Be Purchased
22....................... Calculation of Yield
23....................... Additional Information
Part C Other Information
Information required to be included in Part C is set forth under the
appropriate Item, so numbered, in Part C to this Registration Statement.
-ii-
<PAGE>
PROSPECTUS
February ^ 29, 1996
INVESCO EUROPEAN FUND
INVESCO PACIFIC BASIN FUND
INVESCO EUROPEAN FUND seeks to achieve capital ^ appreciation by investing
principally in equity securities of companies domiciled in specified European
countries.
INVESCO PACIFIC BASIN FUND seeks to achieve capital ^ appreciation by
investing principally in equity securities of companies domiciled in specified
Far Eastern or Western Pacific countries.
Each Fund is a series of INVESCO International Funds, Inc. (the
"Company"), an open-end management investment company consisting of three
separate funds, each of which represents a separate portfolio of investments.
This Prospectus relates to shares of INVESCO European Fund and INVESCO Pacific
Basin Fund (also sometimes jointly referred to as the "Funds"). A separate
Prospectus is available upon request from INVESCO Funds Group, Inc. for the
Company's third fund, INVESCO International Growth Fund. Additional funds may be
offered in the future.
Both Funds' investments may consist in part of securities ^ that
may be deemed to be speculative. (See "Investment Objectives and
Policies.")
This Prospectus provides you with the basic information you should know
before investing in either of the Funds. You should read it and keep it for
future reference. A Statement of Additional Information containing further
information about the Funds, dated February 29, 1996, has been filed with the
Securities and Exchange Commission^, and is incorporated by reference into this
Prospectus. To obtain a free copy, write to INVESCO Funds Group, Inc., ^ P. O.
Box 173706, Denver, Colorado 80217-3706; or ^ call 1-800-525-8085.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION,
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. SHARES OF THE
FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY,
ANY BANK OR OTHER FINANCIAL INSTITUTION. THE SHARES OF THE FUNDS ARE
NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY.
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^
<PAGE>
TABLE OF CONTENTS
Page
ANNUAL FUND EXPENSES................................................. 6
FINANCIAL HIGHLIGHTS................................................. 8
PERFORMANCE DATA..................................................... 10
INVESTMENT OBJECTIVES AND POLICIES................................... 10
RISK FACTORS......................................................... 13
THE FUNDS AND THEIR MANAGEMENT....................................... 17
HOW SHARES CAN BE PURCHASED.......................................... 19
SERVICES PROVIDED BY THE FUNDS....................................... 20
HOW TO REDEEM SHARES................................................. 24
TAXES, DIVIDENDS^ AND CAPITAL GAIN DISTRIBUTIONS..................... 26
ADDITIONAL INFORMATION............................................... 27
<PAGE>
ANNUAL FUND EXPENSES
The Funds whose shares are offered through this Prospectus are INVESCO
European Fund and INVESCO Pacific Basin Fund. These Funds are 100% no-load;
there are no fees to purchase, exchange or redeem shares, nor any ongoing
marketing ("12b-1") expenses. Lower expenses benefit Fund shareholders by
increasing the Fund's total return.
Shareholder Transaction Expenses European Pacific Basin
Sales load "charge" on purchases None None
Sales load "charge" on reinvested
dividends None None
Redemption fees None None
Exchange fees None None
Annual Fund Operating Expenses
(as a percentage of average net assets)
Management Fee 0.75% 0.75%
12b-1 Fees None None
Other Expenses ^ 0.65% 0.77%
Transfer Agency Fee ^(1) 0.36% 0.41%
General services, Administrative
services, Registration,
Postage^(2,3) 0.29% 0.36%
Total Portfolio Operating Expenses ^(2) 1.40% 1.52%
(1) Consists of the transfer agency fee described under "Additional
Information - Transfer and Dividend Disbursing Agent."
(2) Ratio reflects total expenses prior to any expense offset. The Funds
participate in certain arrangements that offset their expenses. Custodian fees
and expenses are reduced by credits granted by the custodian from any
temporarily uninvested cash.
^(3) Includes, but is not limited to, fees and expenses of directors,
custodian bank, legal counsel and ^ independent accountants, securities pricing
^ services, costs of administrative services furnished under an Administrative
Services Agreement, costs of registration of Fund shares under applicable laws,
and costs of printing and distributing reports to shareholders.
Example
A shareholder would pay the following expenses on a $1,000 investment for
the periods shown, assuming (1) a 5% annual return and (2) redemption at the end
of each time period:
<PAGE>
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
INVESCO European Fund ^ $14 $45 $77 $169
INVESCO Pacific Basin Fund^ $16 $48 $83 $182
The purpose of the foregoing table is to assist investors in understanding
the various costs and expenses that an investor in the Funds will bear directly
or indirectly. Such expenses are paid from the Funds' assets. (See "The Funds
and Their Management.") The Funds charge no sales load, redemption fee or
exchange fee and bear no distribution expenses. The Example should not be
considered a representation of past or future expenses, and actual expenses may
be greater or less than those shown. The assumed 5% annual return is
hypothetical and should not be considered a representation of past or future
annual returns, which may be greater or less than the assumed amount.
<PAGE>
FINANCIAL HIGHLIGHTS
^(For a Fund Share Outstanding Throughout Each Period)
The following information has been audited by Price Waterhouse LLP,
independent accountants. This information should be read in conjunction with
audited financial statements and the Report of Independent Accountants thereon
appearing in the Funds' 1995 Annual Report to Shareholders which is incorporated
by reference into the Statement of Additional Information. Both are available
without charge by contacting INVESCO Funds Group, Inc. at the address or
telephone number on the cover of this Prospectus.
<TABLE>
<CAPTION>
Period
Ended
October
Year Ended October 31 31
--------------------------------------------------------------------------- -------
1995 1994 1993 1992 1991 1990 1989 1988 1987 1986^
European Fund
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value -
Beginning of Period $12.95 $12.20 $10.14 $11.14 $11.04 $10.03 $ 9.04 $ 7.98 $ 8.31 $ 8.00
--------------------------------------------------------------------------- -------
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income 0.23 0.16 0.14 0.20 0.22 0.26 0.11 0.09 0.05 0.01
Net Gains or (Losses) on
Securities (Both Realized
and Unrealized) 1.12 0.75 2.06 (1.00) 0.26 1.01 0.99 1.05 (0.32) 0.31
--------------------------------------------------------------------------- -------
Total from Investment
Operations 1.35 0.91 2.20 (0.80) 0.48 1.27 1.10 1.14 (0.27) 0.32
--------------------------------------------------------------------------- -------
LESS DISTRIBUTIONS
Dividends from Net Investment
Income 0.21 0.16 0.14 0.20 0.21 0.26 0.11 0.08 0.05 0.01
Distributions from
Capital Gains 0.00 0.00 0.00 0.00 0.17 0.00 0.00 0.00 0.01 0.00
--------------------------------------------------------------------------- -------
Total Distributions 0.21 0.16 0.14 0.20 0.38 0.26 0.11 0.08 0.06 0.01
--------------------------------------------------------------------------- -------
Net Asset Value -
End of Period $14.09 $12.95 $12.20 $10.14 $11.14 $11.04 $10.03 $ 9.04 $ 7.98 $8.31
=========================================================================== =======
TOTAL RETURN 10.42% 7.43% 21.78% (7.22%) 4.34% 12.70% 12.12% 14.34% (3.25%) 3.91%*
RATIOS
Net Assets - End of Period
($000 Omitted) $224,200 $349,842 $270,544 $117,276 $74,497 $83,521 $10,910 $6,801 $9,537 $787
Ratio of Expenses to
Average Net Assets 1.40%@ 1.20% 1.28% 1.29% 1.43% 1.29% 1.78% 1.88% 1.50% 1.50%~
Ratio of Net Investment
Income to Average
Net Assets 1.26% 1.28% 1.76% 2.23% 1.83% 3.38% 1.57% 1.08% 1.44% 0.26%~
Portfolio Turnover Rate 96% 70% 44% 87% 61% 20% 118% 75% 131% 4%*
<FN>
^ From June 2, 1986, commencement of operations, to October 31, 1986.
* These amounts are based on operations for the period shown and, accordingly,
are not representative of a full year.
@ Ratio reflects total expenses prior to any expense offset.
~ Annualized
</FN>
</TABLE>
<PAGE>
Financial Highlights (Continued)
(For a Fund Share Outstanding Throughout Each Period)
<TABLE>
<CAPTION>
Year Ended October 31
----------------------------------------------------------------------------------
1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
Pacific Basin Fund<
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value -
Beginning of Period $17.07 $15.11 $11.02 $13.19 $11.95 $14.24 $12.24 $ 9.68 $11.52 $ 8.39
----------------------------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income (Loss) 0.06 0.04 0.04 0.07 0.11 0.05 0.02 (0.02) 0.07 0.03
Net Gains or (Losses) on
Securities (Both Realized
and Unrealized) (1.45) 2.28 4.09 (2.18) 1.23 (1.97) 2.00 2.58 1.27 4.86
----------------------------------------------------------------------------------
Total from Investment
Operations (1.39) 2.32 4.13 (2.11) 1.34 (1.92) 2.02 2.56 1.34 4.89
----------------------------------------------------------------------------------
LESS DISTRIBUTIONS
Dividends from Net
Investment Income 0.06 0.04 0.04 0.06 0.10 0.09 0.02 0.00 0.07 0.03
Distributions from
Capital Gains 1.79 0.32 0.00 0.00 0.00 0.28 0.00 0.00 3.11 1.73
----------------------------------------------------------------------------------
Total Distributions 1.85 0.36 0.04 0.06 0.10 0.37 0.02 0.00 3.18 1.76
----------------------------------------------------------------------------------
Net Asset Value -
End of Period $13.83 $17.07 $15.11 $11.02 $13.19 $11.95 $14.24 $12.24 $ 9.68 $11.52
==================================================================================
TOTAL RETURN (8.31%) 15.63% 37.51% (16.03%) 11.27% (13.47%) 16.54% 26.36% 11.72% 58.22%
RATIOS
Net Assets - End of Period
($000 Omitted) $154,374 $352,888 $299,192 $26,488 $27,683 $16,871 $23,642 $28,364 $35,953 $8,526
Ratio of Expenses to
Average Net Assets 1.52%@ 1.24% 1.22% 1.78% 1.87% 1.79% 1.62% 1.62% 1.26% 1.47%
Ratio of Net
Investment Income (Loss)
to Average Net Assets 0.37% 0.28% 0.63% 0.66% 0.99% 0.36% 0.13% (0.12%) 0.39% 0.39%
Portfolio Turnover Rate 56% 70% 30% 123% 89% 93% 86% 69% 155% 199%
<FN>
< The per share information for the Pacific Basin Fund for 1993 was computed
based on weighted average shares.
@ Ratio reflects total expenses prior to any expense offset.
</FN>
</TABLE>
Further information about the performance of the Funds is contained in the
Company's annual report to shareholders, which may be obtained without charge by
writing INVESCO Funds Group, Inc., P.O. Box 173706, Denver, Colorado 80217-3706;
or by calling 1-800-525-8085.
<PAGE>
PERFORMANCE DATA
From time to time, the Funds advertise their total return performance.
These figures are based upon historical ^ investment results and are not
intended to indicate future performance. The "total return" of a Fund refers to
the average annual rate of return of an investment in the Fund. This figure is
computed by calculating the percentage change in value of an investment of
$1,000, assuming reinvestment of all income dividends and capital gain
distributions, to the end of a specified period. Periods of one year, five years
and ten years (or the life of the Fund, whichever is shorter) are used.
Statements of the Funds' total return performance are based upon
investment results during a specified period. Thus, any given report of total
return performance should not be considered as representative of future
performance. The Funds charge no sales load, redemption fee, or exchange fee
which would affect the total return computation.
In conjunction with performance reports and/or analyses of shareholder
service for the Funds, comparative data between the Funds' performance for a
given period and recognized indices of investment results for the same period,
and/or assessments of the quality of shareholder service, may be provided to
shareholders. Such indices include indices provided by Dow Jones & Company,
Standard & Poor's, Lipper Analytical Services, Inc., Lehman Brothers, National
Association of Securities Dealers Automated Quotations, Frank Russell Company,
Value Line Investment Survey, the American Stock Exchange, Morgan Stanley
Capital International, Wilshire Associates, the Financial Times-Stock Exchange,
the New York Stock Exchange, the Nikkei Stock Average and the Deutcher
Aktienindex, all of which are unmanaged market indicators. In addition,
rankings, ratings, and comparisons of investment performance and/or assessments
of the quality of shareholder service appearing in publications such as Money,
Forbes, Kiplinger's Personal Finance, Morningstar, and similar sources which
utilize information compiled (i) internally; (ii) by Lipper Analytical Services,
Inc.; or (iii) by other recognized analytical services, may be used in
advertising. The Lipper Analytical Services, Inc. mutual fund rankings and
comparisons, which may be used by the Funds in performance reports, will be
drawn from the "European Region Funds," in the case of INVESCO European Fund,
and "Pacific Region Funds," in the case of INVESCO Pacific Basin Fund, Lipper
mutual fund groupings, in addition to the broad-based Lipper general fund
groupings.
INVESTMENT OBJECTIVES AND POLICIES
The Company consists of three separate portfolios of investments, each
represented by a different class of the Company's common stock. This Prospectus
relates to the INVESCO European Fund and INVESCO Pacific Basin Fund; a separate
Prospectus for INVESCO International Growth Fund is available.
<PAGE>
The investment objective of the INVESCO European and Pacific Basin Funds
is to seek capital appreciation. Each Fund invests primarily in the equity
securities (common stocks and securities convertible into common stocks,
including convertible debt obligations and convertible preferred stock) of
companies domiciled in a particular geographic region, which may be either
established, well-capitalized companies or newly-formed small cap companies. The
Funds have not established any minimum investment standards, such as an issuer's
asset level, earnings history, type of industry, dividend payment history, etc.,
with respect to the Funds' investments in foreign equity securities and,
therefore, investors in the Funds should consider that investments may consist
in part of securities which may be deemed to be speculative.
^
INVESCO European Fund. Under normal conditions, at least 80% of the total
assets of INVESCO European Fund are invested in the equity securities of
companies domiciled in the following European countries: England, France,
Germany, Belgium, Italy, the Netherlands, Switzerland, Denmark, Sweden, Norway,
Finland, and Spain. The economies of these countries may vary widely in their
condition, and may be subject to sudden changes that could have a positive or
negative impact on the Fund. The securities in which the Fund invests typically
will be listed on the principal stock exchanges in such countries, but also may
be traded on regional stock exchanges or on the over-the-counter market in these
countries. There are no limitations on the percentage of the Fund's assets which
may be invested in companies domiciled in any one country. ^
INVESCO Pacific Basin Fund. Under normal conditions, at least 80% of the
total assets of INVESCO Pacific Basin Fund are invested in the equity securities
of companies domiciled in the following Far Eastern or Western Pacific
countries: Japan, Australia, Hong Kong, Malaysia, Singapore and the Philippines.
The economies of these countries may vary widely in their condition, and may be
subject to sudden changes that could have a positive or negative impact on the
Fund. The equity securities in which the Fund invests typically will be listed
on the principal stock exchanges in such countries, but also may be traded on
regional stock exchanges or on the over-the-counter market in these countries.
While it is anticipated that substantial investments will be made in companies
domiciled in Japan, there are no limitations on the percentage of the Fund's
assets which may be invested in companies domiciled in any one Far Eastern or
Western Pacific country.
The balance of each Fund's total assets may be held as cash, or invested
in any securities or other instruments deemed appropriate at the time of
investment by the Funds' investment adviser and sub-adviser (collectively, "Fund
Management"), consistent with the Funds' investment policies and restrictions.
These investments include debt ^ securities ^ issued by companies ^ domiciled in
the Funds' respective geographic sectors, and debt or equity securities issued
by companies domiciled outside the
<PAGE>
Funds' respective geographic sectors. Such debt securities either will be
investment grade (rated Baa or higher by Moody's Investors Service, Inc.
("Moody's") or BBB or higher by Standard & Poor's ^("S&P")) or, if unrated, will
have been determined by ^ Fund Management to be of investment grade quality. The
Funds are not required to dispose of debt securities whose ratings are down-
graded below investment grade. ^ Such equity securities may be issued by either
established, well-capitalized companies or newly-formed, small-cap companies,
and may be traded on national or regional stock exchanges or in the
over-the-counter market. This portion of each Fund's assets also may be invested
in short-term debt obligations maturing no later than one year from the date of
purchase, which are determined by Fund Management to be of high grade.
Investments in high-quality, short-term debt securities will consist of U.S.
government and agency securities, domestic bank certificates of deposit,
commercial paper rated A-2 or higher by S&P or P-2 or higher by Moody's, and
repurchase agreements with banks and securities dealers. In addition, each Fund
may hold cash or invest temporarily in ^ such short-term securities ^ in an
amount ^ up to 100% of its total assets as a temporary defensive measure if ^
Fund Management determines it to be appropriate for purposes of enhancing
liquidity or preserving capital in light of prevailing market or economic
conditions. While a Fund is in a defensive position, the opportunity to achieve
capital growth will be limited and, to the extent that this assessment of market
conditions is incorrect, the Fund will be foregoing the opportunity to benefit
from capital growth resulting from increases in the value of equity investments.
There can be no assurance that the Funds will be able to achieve their
investment objective.
The investment objective of each Fund and its investment policies, except
where indicated to the contrary, are deemed to be fundamental policies and thus
may not be changed without prior approval by the holders of a majority of the
outstanding voting securities of the Fund, as defined in the Investment Company
Act of 1940 (the "1940 Act"). In addition, each Fund is subject to certain
investment restrictions which are set forth in the Statement of Additional
Information and which may not be altered without similar approval of the Fund's
shareholders. One of those restrictions limits each Fund's borrowing of money to
borrowings from banks for temporary or emergency purposes (but not for
investment) in an amount not to exceed 10% of net assets of the Fund. ^
Repurchase Agreements. Investments in short-term securities may include
repurchase agreements. The Funds may enter into repurchase agreements with
respect to debt instruments eligible for investment by the Funds. These
agreements are entered into with member banks of the Federal Reserve System,
registered broker-dealers and registered government securities dealers, which
are deemed creditworthy. A repurchase agreement, which may be considered a
"loan" under the ^ 1940 Act, is a means of investing monies for a short period.
In a repurchase agreement, a Fund acquires a debt instrument (generally a
security issued by the U.S.
<PAGE>
government or an agency thereof, a banker's acceptance, or a certificate of
deposit) subject to resale to the seller at an agreed upon price and date
(normally, the next business day). In the event that the original seller
defaults on its obligation to repurchase the security, a Fund could incur costs
or delays in seeking to sell such security. To minimize risk, the securities
underlying each repurchase agreement will be maintained with the Funds'
custodian in an amount at least equal to the repurchase price under the
agreement (including accrued interest), and such agreements will be effected
only with parties that meet certain creditworthiness standards established by
the Company's board of directors. A Fund will not enter into a repurchase
agreement maturing in more than seven days if as a result more than 10% of its
total assets would be invested in such repurchase agreements and other illiquid
securities. The Funds have not adopted any limit on the amount of their total
assets that may be invested in repurchase agreements maturing in seven days or
less.
^
Securities Lending. The Funds also may lend their securities to qualified
brokers, dealers, banks, or other financial institutions. This practice permits
the Funds to earn income, which, in turn, can be invested in additional
securities to pursue the Funds' investment objectives. Loans of securities by
the Funds will be collateralized by cash, letters of credit, or securities
issued or guaranteed by the U.S. government or its agencies equal to at least
100% of the current market value of the loaned securities, determined on a daily
basis. Lending securities involves certain risks, the most significant of which
is the risk that a borrower may fail to return a portfolio security. The Funds
monitor the creditworthiness of borrowers in order to minimize such risks. The
Funds will not lend any security if, as a result of such loan, the aggregate
value of securities then on loan would exceed 33-1/3% of a Fund's net assets
(taken at market value).
^
Country Funds. The Funds may invest in companies domiciled in certain
countries by purchasing common shares of closed-end investment companies
organized to invest in the securities markets of particular countries (so-called
"country funds"). They may do so, however, only where it is not possible for
non-residents to make direct investments in securities of companies in those
countries and where the investment objective of the country fund is consistent
with the Funds' objective of seeking capital appreciation. The Funds may not
purchase shares of a country fund if (a) such a purchase would cause a Fund to
own more than 3% of the total outstanding voting stock of a particular country
fund, or (b) such a purchase would cause a Fund to have more than 5% of its
total assets invested in a particular country fund or more than 10% of its total
assets invested in the securities of other investment companies. Investment in
certain country funds may involve the payment of substantial premiums above the
value of such funds' portfolio securities. Investing in shares of such country
funds presents the additional risk that the market price of the funds' shares
may fall below the funds' net asset values (i.e., that the funds will trade at a
discount from their net asset values). The
<PAGE>
Funds do not intend to invest in country funds which are trading at a premium
unless, in the judgment of ^ Fund Management, the potential benefits of such
investments justify the payment of the applicable premiums. To the extent the
Funds invest in country funds, the investment return will be reduced by the
operating expenses of such funds, including fees paid to the investment managers
of those funds, resulting in duplication of advisory fees paid on any Fund
assets invested in country funds. At such time as direct investment in a country
is allowed, the Funds will invest directly in securities of companies domiciled
in such country.
RISK FACTORS
Investors should consider the special factors associated with the policies
discussed below in determining the appropriateness of an investment in either of
the Funds. The Funds' policies regarding investments in foreign securities and
foreign currencies are not fundamental and may be changed by vote of the
Company's board of directors.
Foreign Securities. The Funds may invest in foreign securities and may do
so without limitation on the percentage of assets which may be so invested.
Investments in securities of foreign companies and in foreign markets involve
certain additional risks not associated with investments in domestic companies
and markets^. For U.S. investors, the returns on foreign securities are
influenced not only by the returns on the foreign investments themselves, but
also by currency fluctuations. That is, when the U.S. dollar generally rises
against foreign currencies, returns on foreign securities for a U.S. investor
may decrease. By contrast, in a period when the U.S. dollar generally declines,
those returns may increase.
Other aspects of international investing to consider include:
-less publicly available information than is generally
available about U.S. issuers;
-differences in accounting, auditing and financial reporting
standards;
-generally higher commission rates on foreign portfolio
transactions and longer settlement periods;
-smaller trading volumes and generally lower liquidity of foreign stock
markets, which may cause greater price volatility;
-less government regulation of stock exchanges, brokers^ and
listed companies abroad than in the United States^; and
-investments in certain countries may be subject to foreign withholding
taxes, which may reduce dividend income or capital gains payable to
shareholders.
<PAGE>
There is also the possibility of expropriation or confiscatory taxation;
adverse changes in investment or exchange control regulations; political
instability; potential restrictions on the flow of international capital; and
the possibility of the Fund experiencing difficulties in pursuing legal remedies
and collecting judgments.
When the Funds invest in foreign securities, such securities are usually
denominated in foreign currency and the Funds may temporarily hold funds in
foreign currencies. Thus, the Funds' share values are affected by changes in
currency exchange rates. Because the Funds' assets will be invested in foreign
securities and because substantially all revenues will be received in foreign
currencies, the dollar equivalent of the Funds' net assets and distributions
would be adversely affected by a reduction in the value of the foreign currency
relative to the United States dollar. The Funds will pay dividends in dollars
and in such event will incur currency conversion costs.
Forward Foreign Currency Contracts. The Funds may enter into contracts to
purchase or sell foreign currencies at a future date ("forward contracts") as a
hedge against fluctuations in foreign exchange rates pending the settlement of
transactions in foreign securities or during the time the Funds hold foreign
securities. A forward contract is an agreement between contracting parties to
exchange an amount of currency at some future time at an agreed upon rate.
Although the Funds have not adopted any limitations on their ability to use
forward contracts as a hedge against fluctuations in foreign exchange rates, the
Funds do not attempt to hedge all of their foreign investment positions and will
enter into forward contracts only to the extent, if any, deemed appropriate by ^
Fund Management. The Funds will not enter into a forward contract for a term of
more than one year or for purposes of speculation. Investors should be aware
that hedging against a decline in the value of a currency in the foregoing
manner does not eliminate fluctuations in the prices of portfolio securities or
prevent losses if the prices of such securities decline. Furthermore, such
hedging transactions preclude the opportunity for gain if the value of the
hedged currency should rise. ^ No predictions can be made with respect to
whether the total of such transactions will result in a better or a worse
position than had the Funds not entered into any forward contracts. Forward
contracts may, ^ from time to time, be considered illiquid, in which case they
would be subject to the Funds' limitation on investing in illiquid securities,
discussed below. For additional information regarding foreign securities, see
the Company's Statement of Additional Information.
Illiquid and Rule 144A Securities. The Funds are authorized to invest in
securities which are illiquid because they are subject to restrictions on ^
their resale ("restricted securities") or because, based upon their nature or
the market for such securities, they are not readily marketable. However, a Fund
will not purchase any such security if the purchase would cause the Fund to
invest more than 10% of its total assets, measured at the time of
<PAGE>
purchase, in illiquid securities. Repurchase agreements maturing in more than
seven days will be considered as illiquid for purposes of this restriction.
Investments in illiquid securities involve certain risks to the extent that the
Fund may be unable to dispose of such ^ a security at the time desired or at a
reasonable price. In addition, in order to resell a restricted security, the ^
Fund might have to bear the expense and incur the delays associated with
effecting registration.
The securities that may be purchased subject to the foregoing restriction
include restricted securities that are not registered for sale to the general
public, but that can be resold to institutional investors ("Rule 144A
Securities"). The liquidity of the Fund's investments in Rule 144A Securities
could be impaired if dealers or institutional investors become uninterested in
purchasing these securities. The Company's board of directors has delegated to
Fund Management the authority to determine the liquidity of Rule 144A Securities
pursuant to guidelines approved by the board. For more information concerning
Rule 144A Securities, see the Statement of Additional Information.
Portfolio Turnover. There are no fixed limitations regarding portfolio
turnover. Although the Funds do not trade for short-term profits, securities may
be sold without regard to the time they have been held in a Fund when, in the
opinion of ^ Fund Management, investment considerations warrant such action. As
a result, under certain market conditions, the portfolio turnover rate for each
Fund may exceed 100%, and may be higher than that of other investment companies
seeking capital appreciation. ^ Increased portfolio turnover would cause a Fund
to incur greater brokerage costs than would otherwise be the case, and may
result in the acceleration of capital gains that are taxable when distributed to
shareholders. The Funds' portfolio turnover rates are set forth under "Financial
Highlights" and, along with the Company's brokerage allocation policies, are
discussed in the Statement of Additional Information.
<PAGE>
THE FUNDS AND THEIR MANAGEMENT
The Company is a no-load mutual fund, registered with the Securities and
Exchange Commission as an open-end, diversified management investment company.
It was incorporated on April 2, 1993, under the laws of Maryland. On July 1,
1993, the Company assumed all of the assets and liabilities of the Funds'
predecessor portfolios, the European Portfolio and Pacific Basin Portfolio of
Financial Strategic Portfolios, Inc., which was incorporated under the laws of
Maryland on August 10, 1983. All financial and other information about the Funds
for periods prior to July 1, 1993 relates to such former portfolios. On July 1,
1993, the Company also assumed, through its INVESCO International Growth Fund,
all of the assets and liabilities of that fund's predecessor, the Financial
International Growth Fund of Financial Series Trust, a Massachusetts business
trust organized on July 15, 1987. The overall supervision of ^ each Fund is the
responsibility of ^ the Company's board of directors.
Pursuant to an agreement with the Company, INVESCO Funds Group, Inc.
("INVESCO"), 7800 E. Union Avenue, Denver, Colorado, serves as the Company's
investment adviser pursuant to an investment advisory agreement. Under this
agreement, INVESCO is primarily responsible for providing the Funds with various
administrative services, and supervising the Funds' daily business affairs.
These services are subject to review by the Company's board of directors.
^ Pursuant to an agreement with INVESCO, INVESCO Asset Management Limited
("IAML") serves as the sub-adviser to INVESCO European Fund ^ and ^ INVESCO
Pacific Basin Fund. In that capacity, IAML has the primary responsibility, under
the supervision of INVESCO, for providing portfolio management services to the
Funds. IAML also is an indirect wholly-owned subsidiary of ^ INVESCO ^ PLC. IAML
also acts as sub-adviser to the INVESCO International Growth Fund, the INVESCO
European Small Company Fund, and the INVESCO Latin American Growth Fund.
Although the Funds are not parties to the sub-advisory agreement, that
agreement, naming IAML's predecessor as sub-adviser, has been approved by the
shareholders of the Funds. ^
INVESCO is an indirect wholly-owned subsidiary of INVESCO PLC. INVESCO PLC
is a financial holding company ^ that, through its subsidiaries, engages in the
business of investment management on an international basis. INVESCO was
established in 1932 and, as of October 31, ^ 1995, managed ^ 14 mutual funds,
consisting of 38 separate portfolios, with combined assets of approximately ^
$11.1 billion on behalf of over ^ 784,000 shareholders.
^ Each Fund is managed by a team of portfolio managers. A senior
investment policy group determines the country-by-country allocation of each
Fund's assets, overall stock selection methodology and the ongoing
implementation and risk control policies applicable to each Fund's portfolio.
Individual country
<PAGE>
specialists are responsible for managing security selection for their assigned
country's share of the allocation within the parameters established by the
investment policy group.
Each Fund pays INVESCO a monthly advisory fee which is based upon a
percentage of the average net assets of the Fund, determined daily. The maximum
advisory fee payable under the agreement is computed at the annual rate of 0.75%
on the first $350 million of the average net assets of a Fund; 0.65% on the next
$350 million of a Fund's average net assets; and 0.55% ^ on a Fund's average net
assets in excess of $700 million. For the fiscal year ended October 31, ^ 1995,
the Funds paid fees equal to the following percentage of their net assets as
follows: European Fund, 0.75%; Pacific Basin Fund, 0.75%. While the portions of
INVESCO's fees which are equal to 0.75% of each Fund's net assets are higher
than those generally charged by investment advisers to mutual funds, they are
not higher than those charged by most other investment advisers to funds
comparable to INVESCO European Fund and INVESCO Pacific Basin Fund whose assets
are invested primarily in equity securities of companies located outside the
United States.
Out of the advisory fees which it receives from the Funds, INVESCO pays ^
IAML, as sub-adviser to these Funds, a monthly fee with respect to each Fund
computed at the following annual rates: 0.45% on the first $350 million of a
Fund's average net assets; 0.40% on the next $350 million of a Fund's average
net assets; and 0.35% ^ on a Fund's average net assets in excess of $700
million.
No fee is paid by either Fund to ^ IAML.
The Company also has entered into an Administrative Services Agreement
dated April 30, 1993 (the "Administrative Agreement") with INVESCO. Pursuant to
the Administrative Agreement, INVESCO performs certain administrative,
recordkeeping and internal sub- accounting services, including without
limitation, maintaining general ledger and capital stock accounts, preparing a
daily trial balance, calculating net asset value daily, providing selected
general ledger reports, and providing sub-accounting and recordkeeping services
for shareholder accounts in the Funds maintained by certain retirement and
employee benefit plans for the benefit of participants in such plans. For such
services, each Fund pays INVESCO a fee consisting of a base fee of $10,000 per
year, plus an additional incremental fee computed at the annual rate of 0.015%
per year of the average net assets of the Fund. INVESCO also is paid a fee by
the Company for providing transfer agent services. See "Additional Information."
Each Fund's expenses, which are accrued daily, are deducted from its total
income before dividends are paid. Total expenses of the Funds (prior to any
expense offset), including investment advisory fees (but excluding brokerage
commissions, which are a cost of acquiring securities), as a percentage of their
average net assets for the fiscal year ended October 31, ^ 1995, were ^ 1.40%
for INVESCO European Fund and ^ 1.52% for INVESCO Pacific Basin Fund.
<PAGE>
^ Fund Management places orders for the purchase and sale of portfolio
securities with brokers and dealers based upon ^ its evaluation of their
financial responsibility coupled with their ability to effect transactions at
the best available prices. ^ The Funds may place orders for portfolio
transactions with qualified broker-dealers ^ that recommend the Funds to
clients, or act as agent in the purchase of Fund shares for clients, if ^ Fund
Management believes that the quality of execution of the transaction and level
of commission are comparable to those available from other qualified brokerage
firms.
Fund Management permits investment and other personnel to purchase and
sell securities for their own accounts, subject to compliance policies governing
personal investing. These policies require Fund Management's personnel to
conduct their personal investment activities in a manner that Fund Management
believes is not detrimental to the Funds or Fund Management's other advisory
clients. See the Statement of Additional Information for more detailed
information.
HOW SHARES CAN BE PURCHASED
Shares of each Fund are sold on a continuous basis by INVESCO, as the
Funds' ^ distributor, at the net asset value per share next calculated after
receipt of a purchase order in good form. No sales charge is imposed upon the
sale of shares of a Fund. To purchase shares of one or both of the Funds, send a
check made payable to INVESCO Funds Group, Inc., together with a completed
application form, to:
INVESCO FUNDS GROUP, INC.
Post Office Box 173706
Denver, Colorado 80217-3706
Purchase orders must specify the Fund in which the investment
is to be made.
The minimum initial purchase must be at least $1,000, with subsequent
investments of not less than $50, except that: (1) those shareholders
establishing an EasiVest account, as described below in the Prospectus section
entitled "Services Provided by the Funds", may open an account without making
any initial investment if they agree to make minimum monthly purchases of $50;
(2) ^ those shareholders investing in an Individual Retirement Account (IRA), or
through omnibus accounts where individual shareholder recordkeeping and
sub-accounting are not required, may make initial minimum purchases of $250;
^(3) Fund Management may permit a lesser amount to be invested in the Funds
under a federal income tax-sheltered retirement plan (other than an IRA), or
under a group investment plan qualifying as a sophisticated investor; and (4)
Fund Management reserves the right to reduce or waive the minimum purchase
requirements in its sole discretion where it determines such action is in the
best interests of the Fund. The minimum
<PAGE>
initial purchase requirement of $1,000, as described above, does not apply to
shareholder account(s) in any of the INVESCO funds opened prior to January 1,
1993, and, thus, is not a minimum balance requirement for those existing
accounts. However, for shareholders already having accounts in any of the
INVESCO funds, all initial share purchases in a new fund account, including
those made using the exchange privilege, must meet the fund's applicable minimum
investment requirement.
The purchase of Fund shares can be expedited by placing bank wire, ^
overnight courier, or telephone orders. ^ Overnight courier orders must meet the
above minimum investment requirements. In no case can a bank wire order or a
telephone order be in an amount less than $1,000. For further information, the
purchaser may call the Company's office by using the telephone number on the
cover of this Prospectus. ^ Orders sent by overnight courier, including Express
Mail, should be sent to the street address, not Post Office Box, of INVESCO
Funds Group, Inc., at 7800 E. Union Avenue, ^ Denver, CO 80237.
Orders to purchase shares of either Fund can be placed by telephone.
Shares will be issued at the net asset value next determined after receipt of
telephone instructions. ^ Generally, payments for telephone orders must be
received by the ^ Company within ^ three business days or the transaction ^ may
be cancelled. In the event of such cancellation, the purchaser will be held
responsible for any loss resulting from a decline in the value of the shares. In
order to avoid such losses, purchasers should send payments for telephone
purchases by overnight courier or bank wire. INVESCO has agreed to indemnify the
^ Funds for any losses resulting from ^ the cancellation of telephone purchases.
If your check does not clear, or if a telephone purchase must be cancelled
due to non-payment, you will be responsible for any related loss the Company or
INVESCO incurs. If you are already a shareholder in the INVESCO funds, the
Company, on behalf of the Funds, has the option to redeem shares from any
identically registered account in the Company or any other INVESCO fund as
reimbursement for any loss incurred. You also may be prohibited or restricted
from making future purchases in any of the INVESCO funds.
Persons who invest in the Funds through a securities broker may be charged
a commission or transaction fee by the broker for the handling of the
transaction, if the broker so elects. Any investor may deal directly with the
Funds in any transaction. In that event, there is no such charge. INVESCO may
from time to time make payments from its revenues to securities dealers and
other financial institutions that provide distribution-related and/or
administrative services for the Funds.
Each Fund reserves the right in its sole discretion to reject any order
for purchase of its shares (including purchases by
<PAGE>
exchange) when, in the judgment of ^ Fund Management, such rejection is in the
best interest of the Fund.
Net asset value per share is computed once each day that the New York
Stock Exchange is open as of the close of regular trading on that Exchange
^(usually 4:00 p.m., New York time) and also may be computed on other days under
certain circumstances. Net asset value per share for each Fund is calculated by
dividing the market value of all of the Fund's securities plus the value of its
other assets (including dividends and interest accrued but not collected), less
all liabilities (including accrued expenses), by the number of outstanding
shares of that Fund. If market quotations are not readily available, a security
will be valued at fair value as determined in good faith by the board of
directors. Debt securities with remaining maturities of 60 days or less at the
time of purchase will be valued at amortized cost, absent unusual circumstances,
so long as the Company's board of directors believes that such value represents
fair value.
SERVICES PROVIDED BY THE FUNDS
Shareholder Accounts. INVESCO maintains a share account that reflects the
current holdings of each shareholder. Share certificates will be issued only
upon specific request. Since certificates must be carefully safeguarded, and
must be surrendered in order to exchange or redeem Fund shares, most
shareholders do not request share certificates in order to facilitate such
transactions. Each shareholder is sent a detailed confirmation for each
transaction in shares of the Funds. Shareholders whose only transactions are
through the EasiVest, direct payroll purchase, automatic monthly exchange or
periodic withdrawal programs, or are reinvestments of dividends or capital gains
in the same or another fund, will receive confirmations of those transactions on
their quarterly statements. These programs are discussed below. For information
regarding a shareholder's account and transactions, the shareholder may call the
Funds' office by using the telephone number on the cover of this Prospectus.
Reinvestment of Distributions. ^ Dividends and ^ other gain distributions
are automatically reinvested in additional shares of the Fund making the
distribution at the net asset value per share of that Fund in effect on the ^
ex-dividend date. A shareholder may, however, elect to reinvest dividends and ^
other distributions in certain of the other no-load mutual funds advised and
distributed by INVESCO, or to receive payment of all dividends and other
distributions in excess of ten dollars by check by giving written notice to
INVESCO at least two weeks prior to the ^ ex- dividend date on which the change
is to take effect. Further information concerning these options can be obtained
by contacting INVESCO.
Periodic Withdrawal Plan. A Periodic Withdrawal Plan is available to
shareholders who own or purchase shares of any mutual funds advised by INVESCO
having a total value of $10,000 or more;
<PAGE>
provided, however, that at the time the Plan is established, the shareholder
owns shares having a value of at least $5,000 in the fund from which withdrawals
will be made. Under the Periodic Withdrawal Plan, INVESCO, as agent, will make
specified monthly or quarterly payments of any amount selected (minimum payment
of $100) to the party designated by the shareholder. Notice of all changes
concerning the Periodic Withdrawal Plan must be received by INVESCO at least two
weeks prior to the next scheduled check. Further information regarding the
Periodic Withdrawal Plan and its requirements and tax consequences can be
obtained by contacting INVESCO.
Exchange Privilege. Shares of either Fund may be exchanged for shares of
any other Fund of the Company, as well as for shares of any of the following
other no-load mutual funds, which are also advised and distributed by INVESCO,
on the basis of their respective net asset values at the time of the exchange:
INVESCO ^ Diversified Funds, Inc., INVESCO Dynamics Fund, Inc., INVESCO Emerging
Opportunity Funds, Inc., INVESCO Growth Fund, Inc., INVESCO Income Funds, Inc.,
INVESCO Industrial Income Fund, Inc., INVESCO Money Market Funds, Inc., INVESCO
Multiple Asset Funds, Inc., INVESCO Specialty Funds, Inc., INVESCO Strategic
Portfolios, Inc.^, INVESCO Tax-Free Income Funds, Inc., and INVESCO Value
Trust^.
An exchange involves the redemption of shares in a Fund and investment of
the redemption proceeds in shares of another Fund of the Company or in one of
the funds listed above. ^ Exchanges will be made at the net asset value per
share next determined after receipt of an exchange request in proper order. ^
Any gain or loss realized on an exchange is recognizable for federal income tax
purposes by the shareholder. Exchange requests may be made either by telephone
or by written request to INVESCO Funds Group, Inc., using the telephone number
or address on the cover of this Prospectus. Exchanges made by telephone must be
in an amount of at least $250, if the exchange is being made into an existing
account of one of the INVESCO funds. All exchanges that establish a new account
must meet the Fund's applicable minimum initial investment requirements. Written
exchange requests into an existing account have no minimum requirements other
than the Fund's applicable minimum subsequent investment requirements.
The privilege of exchanging Fund shares by telephone is available to
shareholders automatically unless expressly declined. By signing the new account
Application, a Telephone Transaction Authorization Form or otherwise utilizing
telephone exchange privileges, the investor has agreed that the Funds will not
be liable for following instructions communicated by telephone that they
reasonably believe to be genuine. The Funds employ procedures, which they
believe are reasonable, designed to confirm that exchange instructions are
genuine. These may include recording telephone instructions and providing
written confirmations of exchange transactions. As a result of this policy, the
investor may bear the risk of any loss due to
<PAGE>
unauthorized or fraudulent instructions; provided, however, that if a Fund
fails to follow these or other reasonable procedures, the Fund may be liable.
In order to prevent abuse of this privilege to the disadvantage of other
shareholders, the Funds reserve the right to terminate the exchange privilege of
any shareholder who requests more than four exchanges a year. The Funds will
determine whether to do so based on a consideration of both the number of
exchanges any particular shareholder, or group of shareholders, has requested
and the time period over which those exchange requests have been made, together
with the level of expense to the Fund which will result from effecting
additional exchange requests. The exchange privilege also may be modified or
terminated at any time. Except for those limited instances where redemptions of
the exchanged security are suspended under Section 22(e) of the ^ 1940 Act, or
where sales of the fund into which the shareholder is exchanging are temporarily
stopped, notice of all such modifications or termination of the exchange
privilege will be given at least 60 days prior to the date of termination or the
effective date of the modification.
Before making an exchange, the shareholder should review the prospectuses
of the funds involved and consider their differences, and should be aware that
the exchange privilege may only be available in those states where exchanges may
legally be made, which will require that the shares being acquired are
registered for sale in the shareholder's state of residence. Shareholders
interested in exercising the exchange privilege may contact INVESCO for
information concerning their particular exchanges.
Automatic Monthly Exchange. Shareholders who have accounts in ^ one or
more of the mutual funds distributed by INVESCO may arrange for a fixed dollar
amount of their fund shares to be automatically exchanged for shares of any
other INVESCO mutual fund listed under "Exchange Privilege" on a monthly basis.
The minimum monthly exchange in this program is $50.00. This automatic exchange
program can be changed by the shareholder at any time by ^ notifying INVESCO at
least two weeks prior to the date the change is to be made. Further information
regarding this service can be obtained by contacting INVESCO.
EasiVest. For shareholders who want to maintain a schedule of monthly
investments, EasiVest uses various methods to draw a preauthorized amount from
the shareholder's bank account to purchase Fund shares. This automatic
investment program can be changed by the shareholder at any time by writing to
INVESCO at least two weeks prior to the date the change is to be made. Further
information regarding this service can be obtained by contacting INVESCO.
Direct Payroll Purchase. Shareholders may elect to have their employers
make automatic purchases of Fund shares for them by deducting a specified amount
from their regular paychecks. This
<PAGE>
automatic investment program can be modified or terminated at any time by the
shareholder, by notifying the employer. Further information regarding this
service can be obtained by contacting INVESCO.
Tax-^ Deferred Retirement Plans. Shares of either Fund may be purchased
for self-employed individual retirement plans, ^ IRAs, simplified employee
pension plans, and corporate retirement plans. In addition, shares can be used
to fund tax qualified plans established under Section 403(b) of the Internal
Revenue Code of 1986 by educational institutions, including public school
systems and private schools, and certain kinds of non-profit organizations,
which provide deferred compensation arrangements for their employees.
Prototype forms for the establishment of these various plans, including,
where applicable, disclosure statements required by the Internal Revenue
Service, are available from INVESCO. INVESCO Trust Company, a subsidiary of
INVESCO, is qualified to serve as trustee or custodian under these plans and
provides the required services at competitive rates. Retirement plans (other
than IRAs) receive monthly statements reflecting all transactions in their Fund
accounts. IRAs receive the confirmations and quarterly statements described
under "Shareholder Accounts." For complete information, including prototype
forms and service charges, call INVESCO at the telephone number listed on the
cover of this Prospectus or send a written request to: Retirement Services,
INVESCO Funds Group, Inc., Post Office Box 173706, Denver, Colorado 80217-3706.
HOW TO REDEEM SHARES
Shares of either Fund may be redeemed at any time at their current net
asset value next determined after a request in proper form is received at the
Funds' office. (See "How Shares Can Be Purchased.") Net asset value per share at
the time of the redemption may be more or less than the price you paid to
purchase your shares, depending primarily upon the Fund's investment
performance.
If the shares to be redeemed are represented by stock certificates, a
written request for redemption signed by the registered shareholder(s) and the
certificates must be forwarded to INVESCO Funds Group, Inc., Post Office Box
173706, Denver, Colorado 80217-3706. ^ Redemption requests sent by overnight
courier, including Express Mail, should be sent to the street address, not Post
Office Box, of INVESCO Funds Group, Inc. at 7800 E. Union Avenue, ^ Denver, CO
80237. If no certificates have been issued, a written redemption request signed
by each registered owner of the account may be submitted to INVESCO at the
address noted above. If shares are held in the name of a corporation, additional
documentation may be necessary. Call or write for specifics. If payment for the
redeemed shares is to be made to someone other than the registered owner(s), the
signature(s) must be guaranteed by a
<PAGE>
financial institution which qualifies as an eligible guarantor institution.
Redemption procedures with respect to accounts registered in the names of
broker-dealers may differ from those applicable to other shareholders.
Be careful to specify the account from which the redemption is to be made.
Shareholders have a separate account for each Fund in which they invest.
^ Payment of redemption proceeds will be mailed within seven days
following receipt of the required documents. However, payment may be postponed
under unusual circumstances, such as when normal trading is not taking place on
the New York Stock Exchange^ or an emergency as defined by the Securities and
Exchange Commission exists^. If the shares to be redeemed were purchased by
check and that check has not yet cleared^, payment will be made promptly upon
clearance of the purchase check (which may take up to 15 days).
If a shareholder participates in EasiVest, the Funds' automatic monthly
investment program, and redeems all of the shares in a Fund account, INVESCO
will terminate any further EasiVest purchases unless otherwise instructed by the
shareholder.
Because of the high relative costs of handling small accounts, should the
value of any shareholder's account fall below $250 as a result of shareholder
action, the Company reserves the right to effect the involuntary redemption of
all shares in such account, in which case the account would be liquidated and
the proceeds forwarded to the shareholder. Prior to any such redemption, a
shareholder will be notified and given 60 days to increase the value of the
account to $250 or more.
Fund shareholders (other than shareholders holding Fund shares in accounts
of IRA plans) may request expedited redemption of shares having a minimum value
of $250 (or redemption of all shares if their value is less than $250), held in
accounts maintained in their name by telephoning redemption instructions to
INVESCO, using the telephone number on the cover of this Prospectus. For INVESCO
Trust Company-sponsored federal income tax-^ deferred retirement plans, the term
"shareholders" is defined to mean plan trustees that file a written request to
be able to redeem Fund shares by telephone. Unless ^ Fund Management permits a
larger redemption request to be placed by telephone, a shareholder may not place
a redemption request by telephone in excess of $25,000. The redemption proceeds,
at the shareholder's option, either will be mailed to the address listed for the
shareholder on its Fund account or wired (minimum of $1,000) or mailed to the
bank which the shareholder has designated to receive the proceeds of telephone
redemptions. The Funds charge no fee for effecting such telephone redemptions.
These telephone redemption privileges may be modified or terminated in the
future at the discretion of ^ Fund Management. Shareholders should understand
that, while the Funds will attempt to process all telephone redemption requests
on an expedited basis, there may be times, particularly in periods of severe
economic or
<PAGE>
market disruption, when (a) they may encounter difficulty in placing a
telephone redemption request, and (b) processing telephone redemptions may
require up to seven days following receipt of the redemption request, or
additional time because of the unusual circumstances set forth above.
The privilege of redeeming Fund shares by telephone is available to
shareholders automatically unless expressly declined. By signing a new account
Application, a Telephone Transaction Authorization Form or otherwise utilizing
telephone redemption privileges, the shareholder has agreed that the Funds will
not be liable for following instructions communicated by telephone that they
reasonably believe to be genuine. The Funds employ procedures, which they
believe are reasonable, designed to confirm that telephone instructions are
genuine. These may include recording telephone instructions and providing
written confirmation of transactions initiated by telephone. As a result of this
policy, the investor may bear the risk of any loss due to unauthorized or
fraudulent instructions; provided, however, that if a Fund fails to follow these
or other reasonable procedures, the Fund may be liable.
TAXES, DIVIDENDS^ AND CAPITAL GAIN DISTRIBUTIONS
^
Taxes. Each Fund intends to distribute to shareholders substantially all
of its net investment income, net capital gains and net gains from foreign
currency transactions, if any, in order to qualify for tax treatment as a
regulated investment company. Thus, the Funds do not expect to pay any federal
income or excise taxes.
Unless shareholders are exempt from income taxes, they must include all
dividends and capital gain distributions in taxable income for federal, state,
and local income tax purposes. Dividends and other distributions are taxable
whether they are received in cash or automatically invested in shares of a Fund
or another fund in the INVESCO group.
Each Fund may be subject to the withholding of foreign taxes on dividends
or interest it receives on foreign securities. Foreign taxes withheld will be
treated as an expense of the Fund unless the Fund qualifies and elects to pass
these taxes through to shareholders for use by them as a foreign tax credit or
deduction.
Shareholders may be subject to backup withholding of 31% on dividends,
capital gain distributions and redemption proceeds. Unless a shareholder is
subject to backup withholding for other reasons, the shareholder can avoid
backup withholding on a Fund account by ensuring that INVESCO has a correct,
certified tax identification number.
Dividends and Capital Gain Distributions. The Funds earn ordinary or net
investment ^ income in the form of dividends and interest on ^ their
investments. The Funds' policy is to
<PAGE>
distribute substantially all of this income, less Fund expenses, to
shareholders ^ annually, at the discretion of the Company's board of directors^.
^ In addition, each Fund realizes capital gains and losses when it sells
securities for more or less than it paid. If total gains on sales exceed total
losses (including losses carried forward from ^ previous years) ^, the Fund has
a net realized capital ^ gain. Net realized capital gains, if any, are
distributed to ^ shareholders at least annually, usually in December.
^ Dividends and capital gain distributions are paid to shareholders who
hold shares on the record date of the distribution regardless of how long the
shares have been held. The Fund's share price will then drop by the amount of
the distribution on the day the distribution is made. If a shareholder purchases
shares immediately prior to the distribution, the shareholder will, in effect,
have "bought" the distribution by paying full purchase price, a portion of which
is then returned in the form of a taxable distribution. ^
At the end of each ^ year, information regarding the tax status of
dividends and capital gain distributions^ is provided to shareholders. Net
realized capital gains are divided into short-term and long-term gains depending
on how long a Fund held the security which gave rise to the gains. The capital
gain distribution consists of long-term capital gains which are taxed at the
capital gains rate. Short-term capital gains are included with income from
dividends and interest as ordinary income and are paid to shareholders as
dividends.
Shareholders also may realize capital gains or losses when they sell Fund
shares at more or less than the price originally paid.
Shareholders are encouraged to consult their tax advisers with respect to
these matters. For further information see "Dividends, Capital Gain
Distributions and Taxes" in the Statement of Additional Information.
ADDITIONAL INFORMATION
Voting Rights. All shares of the Company's Funds have equal voting rights.
When shareholders are entitled to vote upon a matter, each shareholder is
entitled to one vote for each share owned and a corresponding fractional vote
for each fractional share owned. Voting with respect to certain matters, such as
ratification of independent accountants and the election of directors, will be
by all ^ funds of the Company voting together. In other cases, such as voting
upon ^ the investment advisory contract for the individual funds, voting is on a
^ fund-by-^ fund basis. To the extent permitted by law, when not all ^ funds are
affected by a matter to be voted upon, only shareholders of the ^
<PAGE>
fund or ^ funds affected by the matter will be entitled to vote thereon. The
Company is not generally required and does not expect to hold regular annual
meetings of shareholders. However, the board of directors will call special
meetings of shareholders for the purpose, among other reasons, of voting upon
the question of removal of a director or directors when requested to do so in
writing by the holders of 10% or more of the outstanding shares of the Company
or as may be required by applicable law or the Company's Articles of
Incorporation. The Company will assist shareholders in communicating with other
shareholders as required by the ^ 1940 Act. Directors may be removed by action
of the holders of a majority of the outstanding shares of the Company.
Shareholder Inquiries. All inquiries regarding the Funds should be
directed to the Funds at the telephone number or mailing address set forth on
the cover page of this Prospectus.
Transfer and Dividend Disbursing Agent. INVESCO Funds Group, Inc., 7800 E.
Union ^ Ave., Denver, Colorado 80237, acts as registrar, transfer agent, and
dividend disbursing agent for ^ each Fund pursuant to a Transfer Agency
Agreement which provides that ^ the Fund ^ will pay ^ an annual fee of $14.00
per shareholder account ^ or omnibus account participant. The transfer agency
fee is not charged to each shareholder's or participant's account, but is an
expense of the Fund to be paid from the Fund's assets. Registered
broker-dealers, third party administrators of tax-qualified retirement plans and
other entities, including affiliates of INVESCO, may provide sub-transfer agency
services to the Fund which reduce or eliminate the need for identical services
to be provided by INVESCO. In such cases, INVESCO may pay the third party an
annual sub-transfer agency or record-keeping fee of up to $14.00 per participant
in the third party's omnibus account out of the transfer agency fee which is
paid to INVESCO by the Fund.
<PAGE>
INVESCO EUROPEAN FUND
INVESCO PACIFIC BASIN FUND
Two no-load mutual funds seeking capital
appreciation through investments in designated
geographical sectors
PROSPECTUS
February ^ 29, 1996
To receive general information and prospectuses on any of INVESCO's funds or
retirement plans, or to obtain current account or price information, call
toll-free:
1-800-525-8085
To reach PAL, your 24-hour Personal Account Line, call:
1-800-424-8085
Or write to:
INVESCO Funds Group, Inc., Distributor
Post Office Box 173706
Denver, Colorado 80217-3706
If you're in Denver, visit ^ one of our convenient Investor Centers:
Cherry Creek
155-B Fillmore Street
Denver Tech Center^
7800 E. Union Avenue
^ Lobby ^ Level
<PAGE>
PROSPECTUS
February ^ 29, 1996
INVESCO INTERNATIONAL GROWTH FUND
INVESCO INTERNATIONAL GROWTH FUND (the "Fund"), seeks to achieve a high
total return through capital appreciation and current income by investing
substantially all of its assets in foreign securities. This Fund invests
principally in equity securities. The term "foreign securities" refers to
securities of issuers, wherever organized, which in the judgment of management
have their principal business activities outside of the United States. In
determining whether an issuer's principal activities are outside of the United
States, consideration is given to such factors as the location of the issuer's
assets, personnel, sales and earnings. The Fund's investments may consist in
part of securities which may be deemed to be speculative. (See "Investment
Objective and Policies.")
The Fund is a series of INVESCO International Funds, Inc. (the "Company"),
an open-end management investment company consisting of three separate funds,
each of which represents a separate portfolio of investments. This Prospectus
relates to shares of INVESCO International Growth Fund. A separate Prospectus is
available upon request from INVESCO Funds Group, Inc. for the Company's other
funds, INVESCO European Fund and INVESCO Pacific Basin Fund. Additional funds
may be offered in the future.
This Prospectus provides you with the basic information you should know
before investing in the Fund. You should read it and keep it for future
reference. A Statement of Additional Information containing further information
about the Fund, dated February 29, 1996, has been filed with the Securities and
Exchange Commission^, and is incorporated by reference into this Prospectus. To
obtain a free copy write to INVESCO Funds Group, Inc., ^ P.O. Box 173706,
Denver, Colorado 80217-3706; or ^ call 1-800-525-8085.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE. SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, ANY BANK OR OTHER FINANCIAL INSTITUTION.
THE SHARES OF THE FUND ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY
OTHER AGENCY.
----------
^
<PAGE>
TABLE OF CONTENTS
Page
ANNUAL FUND EXPENSES............................................ 32
FINANCIAL HIGHLIGHTS............................................ 34
PERFORMANCE DATA................................................ 35
INVESTMENT OBJECTIVE AND POLICIES............................... 35
RISK FACTORS.................................................... 38
THE FUND AND ITS MANAGEMENT..................................... 41
HOW SHARES CAN BE PURCHASED..................................... 43
SERVICES PROVIDED BY THE FUND................................... 45
HOW TO REDEEM SHARES............................................ 48
TAXES, DIVIDENDS^ AND CAPITAL GAIN DISTRIBUTIONS................ 50
ADDITIONAL INFORMATION.......................................... 52
<PAGE>
ANNUAL FUND EXPENSES
The Fund is 100% no-load; there are no fees to purchase, exchange or
redeem shares, nor any ongoing marketing ("12b-1") expenses. Lower expenses
benefit Fund shareholders by increasing the Fund's total return.
Shareholder Transaction Expenses
Sales load "charge" on purchases None
Sales load "charge" on reinvested dividends None
Redemption fees None
Exchange fees None
Annual Fund Operating Expenses^(1)
(as a percentage of average net assets)
Management Fee 1.00%
12b-1 Fees None
Other Expenses ^ 0.81%
Transfer Agency Fee ^(1) 0.38%
General Services, Administrative
Services, Registration, Postage^(2,3) 0.43%
Total Fund Operating Expenses ^(2) 1.81%
(1) ^ Consists of the transfer agency fee described under "Additional
Information - Transfer and Dividend Disbursing Agent."
(2) Ratio reflects total expenses prior to any expense offset. The Fund
participates in certain arrangements that offset its expenses. Custodian fees
and expenses are reduced by credits granted by the custodian from any
temporarily univested cash.
^(3) Includes, but is not limited to, fees and expenses of directors,
custodian bank, legal counsel and ^ independent accountants, securities pricing
^ services, costs of administrative services furnished under an Administrative
Services Agreement, costs of registration of Fund shares under applicable laws,
and costs of printing and distributing reports to shareholders.
Example
A shareholder would pay the following expenses on a $1,000 investment for
the periods shown, assuming (1) a 5% annual return and (2) redemption at the end
of each time period:
1 Year 3 Years 5 Years 10 Years
^ $19 $57 $99 $214
The purpose of the foregoing table is to assist investors in understanding
the various costs and expenses that an investor in this Fund will bear directly
or indirectly. Such expenses are paid from this Fund's assets. (See "The Fund
and Its Management.") This Fund charges no sales load, redemption fee or
exchange fee and
<PAGE>
bears no distribution expenses. The Example should not be considered a
representation of past or future expenses, and actual expenses may be greater or
less than those shown. The assumed 5% annual return is hypothetical and should
not be considered a representation of past or future annual returns, which may
be
greater or less than the assumed amount.
<PAGE>
FINANCIAL HIGHLIGHTS
(For a Fund Share Outstanding Throughout Each Period)
The following information for each of the two years ended October 31,
1995, the period January 1, 1993 to October 31, 1993, and each of the four years
ended December 31, 1992 has been audited by Price Waterhouse LLP, independent
accountants^. Prior years' information was audited by another independent
accounting firm. This information should be read in conjunction with the audited
financial statements and the Report of Independent Accountants thereon appearing
in the Fund's ^ 1995 Annual Report to Shareholders which is incorporated by
reference into the Statement of Additional Information^. Both are available
without charge by contacting INVESCO Funds Group, Inc. at the address or
telephone number ^ on the cover of this Prospectus. All per share data has been
adjusted to reflect an 80 to 1 stock split which was effected on January 2,
1991.
<TABLE>
<CAPTION>
Period Period
Year Ended Ended
Ended October December
October 31 31 Year Ended December 31 31
---------------- -------- ---------------------------------------- ------
1995 1994 1993> 1992 1991 1990 1989 1988 1987^
International Growth Fund<
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value -
Beginning of Period $17.29 $15.75 $12.57 $14.51 $13.69 $16.16 $14.49 $12.51 $12.50
---------------- -------- ---------------------------------------- ------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.08 0.04 0.08 0.12 0.17 0.26 0.18 0.08 0.15
Net Gains or (Losses) on
Securities (Both Realized
and Unrealized) (0.61) 1.57 3.16 (1.94) 0.82 (2.65) 2.16 1.98 0.00
---------------- -------- ---------------------------------------- ------
Total from Investment
Operations (0.53) 1.61 3.24 (1.82) 0.99 (2.39) 2.34 2.06 0.15
---------------- -------- ---------------------------------------- ------
LESS DISTRIBUTIONS
Dividends from Net Investment
Income 0.09 0.07 0.06 0.11 0.17 0.02 0.17 0.08 0.14
In Excess of Net Investment
Income 0.03 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Distributions from Capital Gains 0.86 0.00 0.00 0.01 0.00 0.06 0.50 0.00 0.00
---------------- -------- ---------------------------------------- ------
Total Distributions 0.98 0.07 0.06 0.12 0.17 0.08 0.67 0.08 0.14
---------------- -------- ---------------------------------------- ------
Net Asset Value - End of Period $15.78 $17.29 $15.75 $12.57 $14.51 $13.69 $16.16 $14.49 $12.51
================ ======== ======================================== ======
TOTAL RETURN (2.84%) 10.21% 29.08%* (12.52%) 7.19% (14.62%) 16.07% 16.61% 1.20%*
RATIOS
Net Assets - End of Period
($000 Omitted) $75,391 $161,884 $108,677 $35,192 $42,039 $39,237 $41,456 $12,099 $102
Ratio of Expenses to Average
Net Assets# 1.81%@ 1.50% 1.43%~ 1.36% 1.48% 1.48% 1.24% 1.26% 0.99%~
Ratio of Net Investment Income
to Average Net Assets# 0.41% 0.46% 0.94%~ 0.83% 1.17% 1.85% 1.18% 1.14% 4.32%~
Portfolio Turnover Rate 62% 87% 46%* 50% 71% 78% 35% 73% 0%*
<FN>
> From January 1, 1993 to October 31, 1993.
^ From September 22, 1987, commencement of operations, to December 31, 1987.
< The per share information for the International Growth Fund for 1994 and 1993
was computed based on weighted average shares.
* These amounts are based on operations for the period shown and, accordingly,
are not representative of a full year.
# Various expenses of the Fund were voluntarily absorbed by IFG for the years
ended December 31, 1990, 1989, 1988 and the period ended December 31, 1987.
If such expenses had not been voluntarily absorbed, ratio of expenses to
average net assets would have been 1.49%, 1.71%, 2.00% and 2.00%,
respectively, and ratio of net investment income to average net assets
would have been 1.84%, 0.71%, 0.40% and 3.31%, respectively.
@ Ratio reflects total expenses prior to any expense offset.
~ Annualized
</FN>
</TABLE>
Further information about the performance of the Fund is contained in the
Company's annual report to shareholders, which may be obtained without charge by
writing INVESCO Funds Group, Inc., P.O. Box 173706, Denver, Colorado 80217-3706;
or by calling 1-800-525-8085.
<PAGE>
PERFORMANCE DATA
From time to time, the Fund will advertise its total return performance.
These figures are based upon historical ^ investment results and are not
intended to indicate future performance. The "total return" of the Fund refers
to the average annual rate of return of an investment in the Fund. This figure
is computed by calculating the percentage change in value of an investment of
$1,000, assuming reinvestment of all income dividends and capital gain
distributions, to the end of a specified period. Since the Fund has not been in
existence as long as ten years, periods of one year, five years and life of the
Fund are used.
Statements of the Fund's total return performance are based upon
investment results during a specified period. Thus, any given report of total
return performance should not be considered as representative of future
performance. The Fund charges no sales load, redemption fee, or exchange fee
which would affect the total return computation.
In conjunction with performance reports and/or analyses of shareholder
service for the Fund, comparative data between the Fund's performance for a
given period and recognized bond indices and indices of investment results for
the same period, and/or assessments of the quality of shareholder service, may
be provided to shareholders. Such indices include indices provided by Dow Jones
& Company, Standard & Poor's, Lipper Analytical Services, Inc., Lehman Brothers,
National Association of Securities Dealers Automated Quotations, Frank Russell
Company, Value Line Investment Survey, the American Stock Exchange, Morgan
Stanley Capital International, Wilshire Associates, the Financial Times-Stock
Exchange, the New York Stock Exchange, the Nikkei Stock Average and the Deutcher
Aktienindex, all of which are unmanaged market indicators. In addition,
rankings, ratings, and comparisons of investment performance and/or assessments
of the quality of shareholder service appearing in publications such as Money,
Forbes, Kiplinger's Personal Finance, Morningstar, and similar sources which
utilize information compiled (i) internally; (ii) by Lipper Analytical Services,
Inc.; or (iii) by other recognized analytical services, may be used in
advertising. The Lipper Analytical Services, Inc. mutual fund ranking and
comparisons, which may be used by the Fund in performance reports, will be drawn
from the "International Funds" Lipper mutual fund groupings, in addition to the
broad-based Lipper general fund groupings.
INVESTMENT OBJECTIVE AND POLICIES
The Company consists of three separate portfolios of investments, each
represented by a different class of the Company's common stock. This Prospectus
relates to INVESCO International Growth Fund; a separate Prospectus for INVESCO
European Fund and INVESCO Pacific Basin Fund is available.
<PAGE>
The investment objective of the INVESCO International Growth Fund is to
seek a high total return on investment through capital appreciation and current
income. Funds having an investment objective of seeking a high total return may
be limited in their ability to obtain their objective by the limitations on the
types of securities in which they may invest. Therefore, no assurance can be
given that the Fund will be able to achieve its investment objective.
The Fund intends to accomplish its objective by investing substantially
all of its assets in foreign securities. The term "foreign securities" refers to
securities of issuers, wherever organized, which in the judgment of ^ the Fund's
investment adviser or sub-adviser (collectively, "Fund Management") have their
principal business activities outside of the United States. The determination of
whether an issuer's principal activities are outside of the United States will
be based on the location of the issuer's assets, personnel, sales and earnings,
and specifically whether more than 50% of the issuer's assets are located, or
more than 50% of the issuer's gross income is earned, outside of the United
States. During normal market conditions, at least 65% of the Fund's total assets
will be invested in foreign securities representing at least three different
countries outside of the United States.
The Fund invests principally in equity securities (common stocks and
securities convertible into common stocks, including convertible debt
obligations and convertible preferred stock), although it also may purchase debt
securities. Such debt securities either will be investment grade (rated Baa or
higher by Moody's Investors Service, Inc. ("Moody's") or BBB or higher by
Standard & Poor's ^("S&P")) or, if unrated, will have been determined by ^ Fund
Management to be of investment grade quality. The Fund is not required to
dispose of debt securities whose ratings are downgraded below investment grade.
The Fund has not established any minimum investment standards, such as an
issuer's asset level, earnings history, type of industry, dividend payment
history, etc., with respect to the Fund's equity investments in foreign
securities and, therefore, investors in this Fund should consider that
investments may consist in part of securities which may be deemed to be
speculative. When market, business or economic conditions indicate, in the
judgment of ^ Fund Management, that a different investment stance should be
assumed, ^ up to 100% of the assets of the Fund may be invested temporarily in
domestic securities, consisting of obligations issued or guaranteed by the
United States or any instrumentality thereof, domestic bank certificates of
deposit, commercial paper rated A-2 or higher by ^ S&P, or P-2 or higher by
Moody's ^, and repurchase agreements with banks and securities dealers. While
the Fund is in such a defensive position, the opportunity to achieve a high
total return will be limited and, to the extent that this assessment of market
conditions is incorrect, the Fund will be foregoing the opportunity
<PAGE>
to benefit from capital appreciation resulting from increases in the value of
equity investments.
It is presently anticipated that the Fund may invest in companies based in
(or governments of or within) various areas of the world, including the Far East
(Japan, Hong Kong, Korea, Singapore and Malaysia), Western Europe (United
Kingdom, Germany, France, Italy and Switzerland), Australia and Canada. The
economies of these countries may vary widely in their condition, and may be
subject to sudden changes that could have a positive or negative impact on the
Fund. Of course, the Fund may invest in such other areas and countries as ^ Fund
Management may determine from time to time. The securities in which the Fund
invests typically will be traded on the principal stock exchanges in such
countries, but also may be traded on regional stock exchanges or on the
over-the-counter market in such countries.
The Fund also may invest in companies located in developing countries. 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. As of the date of this Prospectus, the MSCI World Index consists of 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, although Fund Management considers South Africa to be a
developing country.) 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. Investors 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 industries, and
securities markets which trade 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. See "Risk Factors." The Fund will limit its investments in developing
countries to no more than ^ 20% of its total assets.
When the Fund invests in foreign securities, such securities are usually
denominated in foreign currency and the Fund may temporarily hold funds in
foreign currencies. Thus, the Fund's share value is affected by changes in
currency exchange rates. Because the Fund's assets will be invested in foreign
securities and because substantially all revenues will be received in foreign
currencies, the dollar equivalent of the Fund's net assets and distributions
would be adversely affected by a reduction in the value of the foreign currency
relative to the United States dollar. The Fund will pay dividends in dollars and
in such event will incur currency conversion costs. As one way of managing
exchange rate risk, the Fund may enter into forward foreign currency exchange
contracts (i.e., purchasing or selling foreign currencies at a future date).
<PAGE>
The investment objective of the Fund and its investment policies, except
where indicated to the contrary, are deemed to be fundamental policies and thus
may not be changed without prior approval by the holders of a majority of ^ the
outstanding voting securities, as defined in the Investment Company Act of 1940
(the "1940 Act"). In addition, the Fund is subject to certain investment
restrictions which are set forth in the Statement of Additional Information and
which may not be altered without approval of shareholders. One of those
restrictions limits the Fund's borrowing of money to borrowings from banks for
temporary or emergency purposes (but not for investment) in an amount not to
exceed 5% of total assets of the Fund.
For additional information concerning the investment objectives and
operation of the INVESCO International Growth Fund, see "Investment Objectives
and Policies" in the Statement of Additional Information.
RISK FACTORS
Investors should consider the special factors associated with the policies
discussed below in determining the appropriateness of an investment in the Fund.
The Fund's policies regarding investments in foreign securities and foreign
currencies are not fundamental and may be changed by vote of the Company's board
of directors.
Foreign Securities. The Fund may invest in foreign securities and may do so
without limitation on the percentage of assets which may be so invested.
Investments in securities of foreign companies and in foreign markets involve
certain additional risks not associated with investments in domestic companies
and markets^. For U.S. investors, the returns on foreign securities are
influenced not only by the returns on the foreign investments themselves, but
also by currency fluctuations. That is, when the U.S. dollar generally rises
against foreign currencies, returns on foreign securities for a U.S. investor
may decrease. By contrast, in a period when the U.S. dollar generally declines,
those returns may increase.
Other aspects of international investing to consider include:
-less publicly available information than is generally
available about U.S. issuers;
-differences in accounting, auditing and financial reporting
standards;
-generally higher commission rates on foreign portfolio
transactions and longer settlement periods;
<PAGE>
-smaller trading volumes and generally lower liquidity of foreign stock
markets, which may cause greater price volatility;
-less government regulation of stock exchanges, brokers^ and
listed companies abroad than in the United States^; and
-investments in certain countries may be subject to foreign withholding
taxes, which may reduce dividend income or capital gains payable to
shareholders.
There is also the possibility of expropriation or confiscatory taxation;
adverse changes in investment or exchange control regulations; political
instability; potential restrictions on the flow of international capital; and
the possibility of the Fund experiencing difficulties in pursuing legal remedies
and collecting judgments.^
Repurchase Agreements. The Fund may enter into repurchase agreements with
respect to debt instruments eligible for investment by the Fund with member
banks of the Federal Reserve System, registered broker-dealers and registered
government securities dealers, which are deemed creditworthy. A repurchase
agreement, which may be considered a "loan" under the ^ 1940 Act, is a means of
investing monies for a short period. In a repurchase agreement, the Fund
acquires a debt instrument (generally a security issued by the U.S. government
or an agency thereof, a banker's acceptance, or a certificate of deposit),
subject to resale to the seller at an agreed upon price and date (normally, the
next business day). In the event that the original seller defaults on its
obligation to repurchase the security, the Fund could incur costs or delays in
seeking to sell such security. To minimize risk, the securities underlying each
repurchase agreement will be maintained with the Fund's custodian in an amount
at least equal to the repurchase price under the agreement (including accrued
interest), and such agreements will be effected only with parties that meet
certain creditworthiness standards established by the Company's board of
directors. Although the Fund has not adopted any limit on the amount of its
total assets that may be invested in repurchase agreements, the Fund intends
that at no time will the market value of its securities subject to repurchase
agreements exceed 20% of the total assets of the Fund. ^
Restricted Securities. The Fund may invest from time to time in securities
subject to legal or contractual restrictions on resale ("restricted
securities"), or securities without readily available market quotations or
illiquid securities (those which cannot be sold in the ordinary course of
business within seven days at approximately the valuation given to them by the
Fund). However, on the date of purchase, no such investment may increase the
Fund's holdings of restricted securities to more than 2% of the Fund's total
assets or its holdings of illiquid securities or those without readily available
market quotations to more than 5% of the value of the Fund's total assets. The
restricted securities that
<PAGE>
may be purchased subject to the foregoing 2% limitation include securities that
can be resold to institutional investors pursuant to Rule 144A under the
Securities Act of 1933. The Fund is not required to receive registration rights
in connection with the purchase of restricted securities and, in the absence of
such rights, marketability and value can be adversely affected because the Fund
may be unable to dispose of such securities at the time desired or at a
reasonable price. In addition, in order to resell a restricted security, the
Fund might have to bear the expense and incur delays associated with effecting
registration.
Forward Foreign Currency Contracts. The Fund may enter into contracts to
purchase or sell foreign currencies at a future date ("forward contracts") as a
hedge against fluctuations in foreign exchange rates pending the settlement of
transactions in foreign securities or during the time the Fund holds foreign
securities. A forward contract is an agreement between contracting parties to
exchange an amount of currency at some future time at an agreed upon rate.
Although the Fund has not adopted any limitations on its ability to use forward
contracts as a hedge against fluctuations in foreign exchange rates, it does not
attempt to hedge all of its foreign investment positions, and will enter into
forward contracts only to the extent, if any, deemed appropriate by ^ Fund
Management. The Fund will not enter into a forward contract for a term of more
than one year or for purposes of speculation. Investors should be aware that
hedging against a decline in the value of a currency in the foregoing manner
does not eliminate fluctuations in the prices of portfolio securities or prevent
losses if the prices of such securities decline. Furthermore, such hedging
transactions preclude the opportunity for gain if the value of the hedged
currency should rise. ^ No predictions can be made with respect to whether the
total of such transactions will result in a better or a worse position than had
the Fund not entered into any forward contracts. ^ Forward contracts may, from
time to time, be considered illiquid, in which case they would be subject to the
Fund's limitation on investing in illiquid securities, discussed above. For
additional information regarding forward contracts, see the Company's Statement
of Additional Information.
Securities Lending. The Fund also may lend its securities to qualified
brokers, dealers, banks, or other financial institutions. This practice permits
the Fund to earn income, which, in turn, can be invested in additional
securities to pursue the Fund's investment objective. Loans of securities by the
Fund will be collateralized by cash, letters of credit, or securities issued or
guaranteed by the U.S. government or its agencies equal to at least 100% of the
current market value of the loaned securities, determined on a daily basis.
Lending securities involves certain risks, the most significant of which is the
risk that a borrower may fail to return a portfolio security. The Fund monitors
the creditworthiness of borrowers in order to minimize such risks. The Fund will
not lend any security if, as a result of such loan, the aggregate value of
securities then on loan would exceed 10% of the Fund's total assets (taken at
market value).
<PAGE>
Portfolio Turnover. There are no fixed limitations regarding portfolio
turnover for the Fund. Although the Fund does not trade for short-term profits,
securities may be sold without regard to the time they have been held in the
Fund when, in the opinion of ^ Fund Management, investment considerations
warrant such action. As a result, under certain market conditions, the portfolio
turnover rate for the Fund may exceed 100%. ^ Increased portfolio turnover would
cause the Fund to incur greater brokerage costs than would otherwise be the
case, and may result in the acceleration of capital gains that are taxable when
distributed to shareholders. The Fund's portfolio turnover rate is set forth
under ^"Financial Highlights^" and, along with the Company's brokerage
allocation policies, ^ is discussed in the Statement of Additional Information.
THE FUND AND ITS MANAGEMENT
The Company is a no-load mutual fund, registered with the Securities and
Exchange Commission as an open-end, diversified management investment company.
It was incorporated on April 2, 1993, under the laws of Maryland. On July 1,
1993, the Company assumed all of the assets and liabilities of the Fund's
predecessor portfolio, the Financial International Growth Fund of Financial
Series Trust, a Massachusetts business trust organized on July 15, 1987. All
financial and other information about the Fund for periods prior to July 1, 1993
relates to such former fund. On July 1, 1993, the Company also assumed, through
its INVESCO European and Pacific Basin Funds, all of the assets and liabilities
of those funds' predecessors, the European and Pacific Basin Portfolios of
Financial Strategic Portfolios, Inc., which was incorporated under the laws of
Maryland on August 10, 1983. The overall supervision of the ^ Fund is the
responsibility of ^ the Company's board of directors.
Pursuant to an agreement with the Company, INVESCO Funds Group, Inc.
("INVESCO"), 7800 E. Union Avenue, Denver, Colorado, serves as the Company's
investment adviser. Under this agreement, INVESCO is primarily responsible for
providing the Fund with portfolio management and various administrative
services, and supervising the Fund's daily business affairs. These services are
subject to review by the Fund's board of directors.
^ Pursuant to an agreement with INVESCO,^ INVESCO Asset Management
Limited^ ("IAML") serves as the sub-adviser to the Fund. In that capacity, IAML
has the primary responsibility, under the supervision of INVESCO ^, for
providing portfolio management services to the ^ Fund. IAML also is an indirect
wholly-owned subsidiary of ^ INVESCO PLC. IAML also acts as sub-adviser to the
INVESCO European Fund, the INVESCO Pacific Basin Fund, the INVESCO European
Small Company Fund, and the INVESCO Latin American Growth Fund. Although the
Fund is not a party to the sub-advisory
<PAGE>
agreement, that agreement has been approved by the shareholders of
the Fund.
INVESCO is an indirect wholly-owned subsidiary of INVESCO PLC. INVESCO PLC
is a financial holding company ^ that, through its subsidiaries, engages in the
business of investment management on an international basis. INVESCO was
established in 1932 and, as of October 31, ^ 1995, managed ^ 14 mutual funds,
consisting of 38 separate portfolios, with combined assets of approximately ^
$11.1 billion on behalf of over ^ 784,000 shareholders.
^ The Fund is managed by a team of portfolio managers. A senior investment
policy group determines the country-by-country allocation of the Fund's assets,
overall stock selection methodology and the ongoing implementation and risk
control policies applicable to the Fund's portfolio. Individual country
specialists are responsible for managing security selection for their assigned
country's share of the allocation within the parameters established by the
investment policy group.
The Fund pays INVESCO a monthly advisory fee which is based upon a
percentage of the average net assets of the Fund, determined daily. The maximum
advisory fee payable under the agreement is computed 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 average net
assets of the Fund in excess of $1 billion. For the fiscal period ended October
31, ^ 1995, the advisory fees paid to INVESCO Funds Group, Inc., amounted to an
annual rate of 1.00% of the average net assets of the Fund. While the portions
of INVESCO's fees which are equal to or higher than 0.75% of the Fund's net
assets are higher than those generally charged by investment advisers to mutual
funds, they are not higher than those charged by most other investment advisers
to funds of comparable asset levels to the INVESCO International Growth Fund
whose assets are invested primarily in equity securities of companies located
outside the United States.
^ Out of the advisory fees which it receives from the Fund, INVESCO pays
IAML, as sub-adviser to the Fund, a monthly fee, which is computed at the annual
rates of 0.25% on the first $500 million of the Fund's average net assets,
0.1875% on the next $500 million of the Fund's average net assets and 0.1625% on
the Fund's average net assets in excess of $1 billion. No fee is paid by the
Fund to IAML.
The Company also has entered into an Administrative Services Agreement
dated April 30, 1993 (the "Administrative Agreement") with INVESCO. Pursuant to
the Administrative Agreement, INVESCO performs certain administrative,
recordkeeping, and internal accounting services, including without limitation,
maintaining general ledger and capital stock accounts, preparing a daily trial
balance, calculating net asset value daily, providing selected general ledger
reports, and providing sub-accounting and
<PAGE>
recordkeeping services for shareholder accounts in the Fund
maintained by certain retirement and employee benefit plans for the
benefit of participants of such plans. For such services, the Fund
pays INVESCO a fee consisting of a base fee of $10,000 per year,
plus an additional incremental fee computed at an annual rate of
0.015% per annum of the average net assets of the Fund. INVESCO
also is paid a fee by the Company for providing transfer agent
services. See "Additional Information."
^ The Fund's expenses, which are accrued daily, are deducted from its
total income before dividends are paid. Total expenses of the Fund (prior to any
expense offset), including investment advisory fees (but excluding brokerage
commissions, which are a cost of acquiring securities), as a percentage of its
average net assets for the fiscal period ended October 31, 1995, were 1.81%.
Fund^ Management places orders for the purchase and sale of portfolio
securities with brokers and dealers based upon its evaluation of broker-dealer
financial responsibility coupled with broker-dealer ability to effect
transactions at the best available prices. ^ The Fund may place orders for
portfolio transactions with qualified broker-dealers which recommend the Fund to
clients, or act as agent in the purchase of Fund shares for clients, if ^ Fund
Management believes that the quality of execution of the transaction and level
of commission are comparable to those available from other qualified brokerage
firms.
Fund Management permits investment and other personnel to purchase and
sell securities for their own accounts, subject to compliance policies governing
personal investing. These policies require Fund Management's personnel to
conduct their personal investment activities in a manner that Fund Management
believes is not detrimental to the Fund or Fund Management's other advisory
clients. See the Statement of Additional Information for more detailed
information.
HOW SHARES CAN BE PURCHASED
The Fund's shares are sold on a continuous basis by INVESCO, as the Fund's
Distributor, at the net asset value per share next calculated after receipt of a
purchase order in good form. No sales charge is imposed upon the sale of shares
of the Fund. To purchase shares of the Fund, send a check made payable to
INVESCO Funds Group, Inc., together with a completed application form, to:
INVESCO FUNDS GROUP, INC.
Post Office Box 173706
Denver, Colorado 80217-3706
Purchase orders must specify the Fund in which the investment
is to be made.
The minimum initial purchase must be at least $1,000, with
subsequent investments of not less than $50, except that: (1)
<PAGE>
those shareholders establishing an EasiVest account, as described below in the
Prospectus section entitled "Services Provided by the Fund," may open an account
without making any initial investment if they agree to make minimum monthly
purchases of $50; (2) ^ those shareholders investing in an Individual Retirement
Account ^("IRA"), or through omnibus accounts where individual shareholder
recordkeeping and sub-accounting are not required may make initial minimum
purchases of $250; ^(3) Fund Management may permit a lesser amount to be
invested in the Fund under a federal income tax-sheltered retirement plan (other
than an IRA), or under a group investment plan qualifying as a sophisticated
investor; and (4) Fund Management reserves the right to reduce or waive the
minimum purchase requirements in its sole discretion where it determines such
action is in the best interests of the Fund. The minimum initial purchase
requirement of $1,000, as described above, does not apply to shareholder
account(s) in any of the INVESCO funds opened prior to January 1, 1993, and,
thus, is not a minimum balance requirement for those existing accounts. However,
for shareholders already having accounts in any of the INVESCO funds, all
initial share purchases in a new fund account, including those made using the
exchange privilege, must meet the fund's applicable minimum investment
requirement.
The purchase of Fund shares can be expedited by placing bank wire, ^
overnight courier, or telephone orders. ^ Overnight courier orders must meet the
above minimum investment requirements. In no case can a bank wire order or a
telephone order be in an amount less than $1,000. For further information, the
purchaser may call the Company's office by using the telephone number on the
cover of this Prospectus. ^ Order sent by overnight courier, including Express
Mail, should be sent to the street address, not Post Office Box, of INVESCO
Funds Group, Inc., 7800 E. Union Avenue, ^ Denver, Colorado 80237.
Orders to purchase shares of the Fund can be placed by telephone. Shares
will be issued at the net asset value next determined after receipt of telephone
instructions. ^ Generally, payments for telephone orders must be received by the
Fund within ^ three business days or the transaction ^ may be cancelled. In the
event of such cancellation, the purchaser will be held responsible for any loss
resulting from a decline in the value of the shares. In order to avoid such
losses, purchasers should send payments for telephone purchases by overnight
courier or bank wire. INVESCO has agreed to indemnify the Fund for any losses
resulting from ^ the cancellation of telephone purchases.
If your check does not clear, or if a telephone purchase must be cancelled
due to nonpayment, you will be responsible for any related loss the Company or
INVESCO incurs. If you are already a shareholder in the INVESCO funds, the
Company, on behalf of the Fund, has the option to redeem shares from any
identically registered account in the Company or any other INVESCO fund as
reimbursement for any loss incurred. You also may be prohibited or
<PAGE>
restricted from making future purchases in any of the INVESCO
funds.
Persons who invest in this Fund through a securities broker may be charged
a commission or transaction fee by the broker for the handling of the
transaction, if the broker so elects. Any investor may deal directly with the
Company in any transaction. In that event, there is no such charge. INVESCO may
from time to time make payments from its revenues to securities dealers and
other financial institutions that provide distribution-related and/or
administrative services for the Fund.
The Company reserves the right in its sole discretion to reject any order
for purchase of its shares (including purchases by exchange) when, in the
judgment of ^ Fund Management, such rejection is in the best interest of the
Company.
Net asset value per share is computed once each day that the New York
Stock Exchange is open as of the close of regular trading on that Exchange
^(usually 4:00 p.m., New York time) and also may be computed on other days under
certain circumstances. Net asset value per share for the Fund is calculated by
dividing the market value of all of this Fund's securities plus the value of its
other assets (including dividends and interest accrued but not collected), less
all liabilities (including accrued expenses), by the number of outstanding
shares of the Fund. If market quotations are not readily available, a security
will be valued at fair value as determined in good faith by the board of
directors. Debt securities with remaining maturities of 60 days or less at the
time of purchase will be valued at amortized cost, absent unusual circumstances,
so long as the Company's board of directors believes that such value represents
fair value.
SERVICES PROVIDED BY THE FUND
Shareholder Accounts. INVESCO maintains a share account that reflects the
current holdings of each shareholder. Share certificates will be issued only
upon specific request. Since certificates must be carefully safeguarded, and
must be surrendered in order to exchange or redeem Fund shares, most
shareholders do not request share certificates in order to facilitate such
transactions. Each shareholder is sent a detailed confirmation for each
transaction in shares of the Fund. Shareholders whose only transactions are
through the EasiVest, direct payroll purchase, automatic monthly exchange or
periodic withdrawal programs, or are reinvestments of dividends or capital gains
in the same or another fund, will receive confirmations of those transactions on
their quarterly statements. These programs are discussed below. For information
regarding a shareholder's account and transactions, the shareholder may call the
Fund's office by using the telephone number on the cover of this Prospectus.
Reinvestment of Distributions. ^ Dividends and ^ other gain
distributions are automatically reinvested in additional shares of
<PAGE>
the Fund ^ at the net asset value per share ^ in effect on the ^ ex-dividend
date. A shareholder may, however, elect to reinvest dividends and ^ other
distributions in certain of the other no-load mutual funds advised and
distributed by INVESCO, or to receive payment of all dividends and other
distributions in excess of ten dollars by check by giving written notice to
INVESCO at least two weeks prior to the record date on which the change is to
take effect. Further information concerning these options can be obtained by
contacting INVESCO.
Periodic Withdrawal Plan. A Periodic Withdrawal Plan is available to
shareholders who own or purchase shares of any mutual funds advised by INVESCO
having a total value of $10,000 or more; provided, however, that at the time the
Plan is established, the shareholder owns shares having a value of at least
$5,000 in the fund from which the withdrawals will be made. Under the Periodic
Withdrawal Plan, INVESCO, as agent, will make specified monthly or quarterly
payments of any amount selected (minimum payment of $100) to the party
designated by the shareholder. Notice of all changes concerning the Periodic
Withdrawal Plan must be received by INVESCO at least two weeks prior to the next
scheduled check. Further information regarding the Periodic Withdrawal Plan and
its requirements and tax consequences can be obtained by contacting INVESCO.
Exchange Privilege. Shares of this Fund may be exchanged for shares of any
other Fund of the Company, as well as for shares of any of the following other
no-load mutual funds, which are also advised and distributed by INVESCO, on the
basis of their respective net asset values at the time of the exchange: INVESCO
^ Diversified Funds, Inc., INVESCO Dynamics Fund, Inc., INVESCO Emerging
Opportunity Funds, Inc., INVESCO Growth Fund, Inc., INVESCO Income Funds, Inc.,
INVESCO Industrial Income Fund, Inc., INVESCO Money Market Funds, Inc., INVESCO
Multiple Asset Funds, Inc., INVESCO Specialty Funds, Inc., INVESCO Strategic
Portfolios, Inc.^, INVESCO Tax-Free Income Funds, Inc., and INVESCO Value
Trust^.
An exchange involves the redemption of shares in ^ the Fund and investment
of the redemption proceeds in shares of another ^ fund of the Company or in one
of the funds listed above. ^ Exchanges will be made at the net asset value per
share next determined after receipt of an exchange request in proper order. ^
Any gain or loss realized on an exchange is recognizable for federal income tax
purposes by the shareholder. Exchange requests may be made either by telephone
or by written request to INVESCO Funds Group, Inc., using the telephone number
or address on the cover of this Prospectus. Exchanges made by telephone must be
in the amount of at least $250, if the exchange is being made into an existing
account of one of the INVESCO funds. All exchanges that establish a new account
must meet the Fund's applicable minimum initial investment requirements. Written
exchange requests into an existing account have no minimum requirements other
than the Fund's applicable minimum subsequent investment requirements.
<PAGE>
The privilege of exchanging Fund shares by telephone is available to
shareholders automatically unless expressly declined. By signing the new account
Application, a Telephone Transaction Authorization Form or otherwise utilizing
telephone exchange privileges, the investor has agreed that the Fund will not be
liable for following instructions communicated by telephone that it reasonably
believes to be genuine. The Fund employs procedures, which it believes are
reasonable, designed to confirm that exchange instructions are genuine. These
may include recording telephone instructions and providing written confirmations
of exchange transactions. As a result of this policy, the investor may bear the
risk of any loss due to unauthorized or fraudulent instructions; provided,
however, that if the Fund fails to follow these or other reasonable procedures,
the Fund may be liable.
In order to prevent abuse of this privilege to the disadvantage of other
shareholders, the Fund reserves the right to terminate the exchange privilege of
any shareholder who requests more than four exchanges a year. The Fund will
determine whether to do so based on a consideration of both the number of
exchanges any particular shareholder, or group of shareholders, has requested
and the time period over which those exchange requests have been made, together
with the level of expense to the Fund which will result from effecting
additional exchange requests. The exchange privilege also may be modified or
terminated at any time. Except for those limited instances where redemptions of
the exchanged security are suspended under Section 22(e) of the ^ 1940 Act, or
where sales of the fund into which the shareholder is exchanging are temporarily
stopped, notice of all such modifications or termination of the exchange
privilege will be given at least 60 days prior to the date of termination or the
effective date of the modification.
Before making an exchange, the shareholder should review the prospectuses
of the funds involved and consider their differences, and should be aware that
the exchange privilege may only be available in those states where exchanges may
legally be made, which will require that the shares being acquired are
registered for sale in the shareholder's state of residence. Shareholders
interested in exercising the exchange privilege may contact INVESCO for
information concerning their particular exchanges.
Automatic Monthly Exchange. Shareholders who have accounts in any one or
more of the mutual funds distributed by INVESCO may arrange for a fixed dollar
amount of their fund shares to be automatically exchanged for shares of any
other INVESCO mutual fund listed under "Exchange Privilege" on a monthly basis.
The minimum monthly exchange in this program is $50.00. This automatic exchange
program can be changed by the shareholder at any time by ^ notifying INVESCO at
least two weeks prior to the date the change is to be made. Further information
regarding this service can be obtained by contacting INVESCO.
<PAGE>
EasiVest. For shareholders who want to maintain a schedule of monthly
investments, EasiVest uses various methods to draw a preauthorized amount from
the shareholder's bank account to purchase Fund shares. This automatic
investment program can be changed by the shareholder at any time by writing to
INVESCO at least two weeks prior to the date the change is to be made. Further
information regarding this service can be obtained by contacting INVESCO.
Direct Payroll Purchase. Shareholders may elect to have their employers
make automatic purchases of Fund shares for them by deducting a specified amount
from their regular paychecks. This automatic investment program can be modified
or terminated at any time by the shareholder, by notifying the employer. Further
information regarding this service can be obtained by contacting INVESCO.
Tax-^ Deferred Retirement Plans. Shares of this Fund may be purchased for
self-employed individual retirement plans, ^ IRAs, simplified employee pension
plans, and corporate retirement plans. In addition, shares can be used to fund
tax qualified plans established under Section 403(b) of the Internal Revenue
Code by educational institutions, including public school systems and private
schools, and certain kinds of non-profit organizations, which provide deferred
compensation arrangements for their employees.
Prototype forms for the establishment of these various plans, including
where applicable, disclosure statements required by the Internal Revenue
Service, are available from INVESCO. INVESCO Trust Company, a subsidiary of
INVESCO, is qualified to serve as trustee or custodian under these plans and
provides the required services at competitive rates. Retirement plans (other
than IRAs) receive monthly statements reflecting all transactions in their Fund
accounts. IRAs receive the confirmations and quarterly statements described
under "Shareholder Accounts." For complete information, including prototype
forms and service charges, call INVESCO at the telephone number listed on the
cover of this Prospectus or send a written request to: Retirement Services,
INVESCO Funds Group, Inc., Post Office Box 173706, Denver, Colorado 80217-3706.
HOW TO REDEEM SHARES
Shares of this Fund may be redeemed at any time at its current net asset
value next determined after a request in proper form is received at the Fund's
office. (See "How Shares Can Be Purchased.") Net asset value per share of ^ the
Fund at the time of the redemption may be more or less than the price originally
paid to purchase shares, depending primarily upon the Fund's investment
performance.
<PAGE>
If the shares to be redeemed are represented by stock certificates, a
written request for redemption signed by the registered shareholder(s) and the
certificates must be forwarded to INVESCO Funds Group, Inc., Post Office Box
173706, Denver, Colorado 80217-3706. ^ Redemption requests sent by overnight
courier, including Express Mail, should be sent to the street address, not Post
Office Box, of INVESCO Funds Group, Inc., at 7800 E. Union Avenue, ^ Denver, CO
80237. If no certificates have been issued, a written redemption request signed
by each registered owner of the account may be submitted to INVESCO at the
address noted above. If shares are held in the name of a corporation, additional
documentation may be necessary. Call or write for specifics. If payment for the
redeemed shares is to be made to someone other than the registered owner(s), the
signature(s) must be guaranteed by a financial institution which qualifies as an
eligible guarantor institution. Redemption procedures with respect to accounts
registered in the names of broker-dealers may differ from those applicable to
other shareholders.
Be careful to specify the account from which the redemption is to be made.
Shareholders have a separate account for each Fund in which they invest.
^ Payment of redemption proceeds will be mailed within seven days
following receipt of the required documents. However, payment may be postponed
under unusual circumstances, such as when normal trading is not taking place on
the New York Stock Exchange^ or an emergency as defined by the Securities and
Exchange Commission exists^. If the shares to be redeemed were purchased by
check and that check has not yet cleared^, payment will be made promptly upon
clearance of the purchase check (which may take up to 15 days).
If a shareholder participates in EasiVest, the Fund's automatic monthly
investment program, and redeems all of the shares in a Fund account, INVESCO
will terminate any further EasiVest purchases unless otherwise instructed by the
shareholder.
Because of the high relative costs of handling small accounts, should the
value of any shareholder's account fall below $250 as a result of shareholder
action, the Company reserves the right to effect the involuntary redemption of
all shares in such account, in which case the account would be liquidated and
the proceeds forwarded to the shareholder. Prior to any such redemption, a
shareholder will be notified and given 60 days to increase the value of the
account to $250 or more.
Fund shareholders (other than shareholders holding Fund shares in accounts
of IRA plans) may request expedited redemption of shares having a minimum value
of $250 (or redemption of all shares if their value is less than $250), held in
accounts maintained in their name by telephoning redemption instructions to
INVESCO, using the telephone number on the cover of this Prospectus. For INVESCO
Trust Company sponsored federal income tax-^ deferred retirement
<PAGE>
plans, the term "shareholders" is defined to mean plan trustees that file a
written request to be able to redeem Fund shares by telephone. Unless ^ Fund
Management permits a larger redemption request to be placed by telephone, a
shareholder may not place a redemption request by telephone in excess of
$25,000. The redemption proceeds, at the shareholder's option, either will be
mailed to the address listed for the shareholder on its Fund account, or wired
(minimum $1,000) or mailed to the bank which the shareholder has designated to
receive the proceeds of telephone redemptions. The Fund charges no fee for
effecting such telephone redemptions. These telephone redemption privileges may
be modified or terminated in the future at the discretion of ^ Fund Management.
Shareholders should understand that, while the Fund will attempt to process all
telephone redemption requests on an expedited basis, there may be times,
particularly in periods of severe economic or market disruption, when (a) they
may encounter difficulty in placing a telephone redemption request, and (b)
processing telephone redemptions will require up to seven days following receipt
of the redemption request, or additional time because of the unusual
circumstances set forth above.
The privilege of redeeming Fund shares by telephone is available to
shareholders automatically unless expressly declined. By signing a new account
Application, a Telephone Transaction Authorization Form or otherwise utilizing
telephone redemption privileges, the shareholder has agreed that the Fund will
not be liable for following instructions communicated by telephone that it
reasonably believes to be genuine. The Fund employs procedures, which it
believes are reasonable, designed to confirm that telephone instructions are
genuine. These may include recording telephone instructions and providing
written confirmation of transactions initiated by telephone. As a result of this
policy, the investor may bear the risk of any loss due to unauthorized or
fraudulent instructions; provided, however, that if the Fund fails to follow
these or other reasonable procedures, the Fund may be liable.
TAXES, DIVIDENDS^ AND CAPITAL GAIN DISTRIBUTIONS
^
Taxes. The Fund intends to distribute to shareholders substantially all of
its net investment income, net capital gains and net gains from foreign currency
transactions, if any, in order to qualify for tax treatment as a regulated
investment company. Thus, the Fund does not expect to pay any federal income or
excise taxes.
Unless shareholders are exempt from income taxes, they must include all
dividends and capital gain distributions in taxable income for federal, state,
and local income tax purposes. Dividends and other distributions are taxable
whether they are received in cash or automatically invested in shares of the
Fund or another fund in the INVESCO group.
<PAGE>
The Fund may be subject to the withholding of foreign taxes on dividends
or interest it receives on foreign securities. Foreign taxes withheld will be
treated as an expense of the Fund unless the Fund qualifies and elects to pass
these taxes through to shareholders for use by them as a foreign tax credit or
deduction.
Shareholders may be subject to backup withholding of 31% on dividends,
capital gain distributions and redemption proceeds. Unless a shareholder is
subject to backup withholding for other reasons, the shareholder can avoid
backup withholding on a Fund account by ensuring that INVESCO has a correct,
certified tax identification number.
Dividends and Capital Gain Distributions. The Fund earns ordinary or net
investment ^ income in the form of dividends and interest on its investments. ^
The Fund's policy is to distribute substantially all of this income, less Fund
expenses, to shareholders ^ annually, at the discretion of the Company's board
of directors.
^ In addition, the Fund realizes capital gains and losses when it sells
securities for more or less than it paid. If total gains on sales exceed total
losses (including losses carried forward from ^ previous years) ^, the Fund has
a net realized capital ^ gain. Net realized capital gains, if any, are
distributed to ^ shareholders at least annually, usually in December.
^ Dividends and capital gain distributions are paid to shareholders who
hold shares on the record date of the distribution regardless of how long the
shares have been held. The Fund's share price will then drop by the amount of
the distribution on the day the distribution is made. If a shareholder purchases
shares immediately prior to the distribution, the shareholder will, in effect,
have "bought" the distribution by paying full purchase price, a portion of which
is then returned in the form of a taxable distribution. ^
At the end of each ^ year, information regarding the tax status of
dividends and capital gain distributions^ is provided to shareholders. Net
realized capital gains are divided into short-term and long-term gains depending
on how long the Fund held the security which gave rise to the gains. The capital
gain distribution consists of long-term capital gains which are taxed at the
capital gains rate. Short-term capital gains are included with income from
dividends and interest as ordinary income and are paid to shareholders as
dividends.
Shareholders also may realize capital gains or losses when they sell Fund
shares at more or less than the price originally paid.
Shareholders are encouraged to consult their tax advisers with
respect to these matters. For further information see
<PAGE>
"Dividends, Capital Gain Distributions and Taxes" in the Statement
of Additional Information.
ADDITIONAL INFORMATION
Voting Rights. All shares of the ^ Company's Funds have equal voting
rights. When shareholders are entitled to vote upon a matter, each shareholder
is entitled to one vote for each share owned and a corresponding fractional vote
for each fractional share owned. Voting with respect to certain matters, such as
ratification of independent accountants and the election of directors, will be
by all funds of the Company voting together. In other cases, such as voting upon
^ the investment advisory contract for an individual fund, voting is on a
fund-by-fund basis. To the extent permitted by law, when not all funds are
affected by a matter to be voted upon, only the shareholders of the fund or
funds affected by the matter will be entitled to vote. The Company is not
generally required and does not expect to hold regular annual meetings of
shareholders. However, the board of directors will call special meetings of
shareholders for the purpose, among other reasons, of voting upon the question
of removal of a director or directors when requested to do so in writing by the
holders of 10% or more of the outstanding shares of the Company or as may be
required by applicable law or the Company's Articles of Incorporation. The
Company will assist shareholders in communicating with other shareholders as
required by the ^ 1940 Act. Directors may be removed by action of the holders of
a majority of the outstanding shares of the Company.
Shareholder Inquiries. All inquiries regarding ^ the Fund should be
directed to the Fund at the telephone number or mailing address set forth on the
cover page of this Prospectus.
Transfer and Dividend Disbursing Agent. INVESCO Funds Group, Inc., 7800 E.
Union ^ Ave., Denver, Colorado 80237, acts as registrar, transfer agent, and
dividend disbursing agent for the ^ Fund pursuant to a Transfer Agency Agreement
which provides that the Fund ^ will pay ^ an annual fee of $14.00 per
shareholder account ^ or omnibus account participant. The transfer agency fee is
not charged to each shareholder's or participant's account, but is an expense of
the Fund to be paid from the Fund's assets. Registered broker-dealers, third
party administrators of tax-qualified retirement plans and other entities,
including affiliates of INVESCO, may provide sub-transfer agency services to the
Fund which reduce or eliminate the need for identical services to be provided by
INVESCO. In such cases, INVESCO may pay the third party an annual sub-transfer
agency or record-keeping fee of up to $14.00 per participant in the third
party's omnibus account out of the transfer agency fee which is paid to INVESCO
by the Fund.
<PAGE>
INVESCO INTERNATIONAL GROWTH FUND
A no-load mutual fund seeking capital
appreciation through investment in designated
geographical sectors.
PROSPECTUS
February ^ 29, 1996
To receive general information and prospectuses on any of INVESCO's funds, or
retirement plans, or to obtain current account or price information, call
toll-free:
1-800-525-8085
To reach PAL, your 24-hour Personal Account Line, call:
1-800-424-8085
Or write to:
INVESCO Funds Group, Inc., Distributor
Post Office Box 173706
Denver, Colorado 80217-3706
If you're in Denver, visit ^ one of our convenient Investor Centers:
Cherry Creek
155-B Fillmore Street
Denver Tech Center
^
7800 E. Union Avenue
^ Lobby ^ Level
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
February ^ 29, 1996
INVESCO INTERNATIONAL FUNDS, INC.
A no-load mutual fund seeking capital appreciation through
investment in designated geographical sectors.
Address: Mailing Address:
7800 E. Union Avenue Post Office Box 173706
^ Denver, Colorado 80237 Denver, Colorado 80217-3706
^
Telephone:
In continental U.S., 1-^ 800-525-8085
^
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INVESCO INTERNATIONAL FUNDS, INC. (the "Company") is an open-end
management investment company organized in series form ^ consisting of three ^
funds^: the INVESCO European Fund, the INVESCO Pacific Basin Fund and the
INVESCO International Growth Fund (the "Funds")^. The INVESCO European Fund and
INVESCO Pacific Basin Fund seek to provide investors with capital appreciation
^. The INVESCO International Growth Fund seeks to achieve a high total return on
investment through capital appreciation and current income. Each of the Funds
invests primarily in equity securities. Investors may purchase shares of any or
all Funds. The following are available:
The INVESCO EUROPEAN FUND seeks to achieve its investment objective by
investing ^ primarily in equity securities of companies domiciled in specific
European countries.
The INVESCO PACIFIC BASIN FUND seeks to achieve its investment objective
by investing primarily in equity securities of companies domiciled in specific
Far Eastern or Western Pacific countries
The INVESCO INTERNATIONAL GROWTH FUND seeks to achieve its investment
objective by investing substantially all of its assets in foreign securities.
This Fund invests principally in equity securities. The term "foreign
securities" refers to securities of issuers, wherever organized, which in the
judgment of management have their principal business activities outside of the
United States. In determining whether an issuer's principal activities are
outside of the United States, consideration is given to such factors as the
location of the issuer's assets, personnel, sales and earnings.
Additional funds may be offered in the future.
<PAGE>
Separate Prospectuses for the Funds dated February ^ 29, 1996, which
provide the basic information you should know before investing in the Funds, may
be obtained without charge from INVESCO Funds Group, Inc., Post Office Box
173706, Denver, Colorado 80217- 3706. This Statement of Additional Information
is not a Prospectus, but contains information in addition to and more detailed
than that set forth in each Prospectus. It is intended to provide you additional
information regarding the activities and operations of the Funds and should be
read in conjunction with the Prospectus.
Investment Adviser and Distributor: INVESCO Funds Group, Inc.
<PAGE>
TABLE OF CONTENTS
Page
INVESTMENT POLICIES AND RESTRICTIONS............................ 57
THE FUNDS AND THEIR MANAGEMENT.................................. 65
HOW SHARES CAN BE PURCHASED..................................... 79
HOW SHARES ARE VALUED........................................... 79
FUND PERFORMANCE................................................ 80
SERVICES PROVIDED BY THE FUND................................... 82
TAX-^ DEFERRED RETIREMENT PLANS................................. 83
HOW TO REDEEM SHARES............................................ 83
DIVIDENDS, CAPITAL GAIN DISTRIBUTIONS, AND TAXES................ 84
INVESTMENT PRACTICES............................................ 86
ADDITIONAL INFORMATION.......................................... 89
^
<PAGE>
INVESTMENT POLICIES AND RESTRICTIONS
The investment objectives and policies of the Funds are discussed in their
respective Prospectuses under the heading "Investment Objectives and Policies."
Further information about the Funds' respective investment policies and
restrictions is set
forth below.
Foreign Securities. The Funds invest primarily in foreign securities.
Investments in non-U.S. securities involve certain risks not associated with
investment in U.S. companies. Non-U.S. companies generally are not subject to
uniform accounting, auditing and financial reporting standards comparable to
those applicable to domestic companies, and there may be less publicly available
information about a foreign company. Although the volume of trading in foreign
securities markets is growing, securities of many non-U.S. companies may be less
liquid and more volatile than securities of comparable U.S. companies.
Transaction costs on foreign securities exchanges are generally higher than in
the United States and there is generally less government supervision and
regulation of exchanges, brokers and issuers in foreign countries than there is
in the United States. Investment in non- U.S. securities may also be subject to
other risks different from those affecting U.S. investments, including local
political or economic developments, expropriation or nationalization of assets,
confiscatory taxation, and imposition of withholding taxes on dividends or
interest payments. Securities denominated in non-U.S. currencies, whether issued
by a non-U.S. or a U.S. issuer, may be affected favorably or unfavorably by
changes in currency rates and exchange control regulations, and costs will be
incurred in connection with conversions from one currency to another. Foreign
currency exchange rates are determined by forces of supply and demand on the
foreign exchange markets. These forces are, in turn, affected by the
international balance of payments and other economic and financial conditions,
government intervention, speculation and other factors. Generally, the foreign
currency exchange transactions of the Funds will be conducted on a spot basis
(i.e., cash basis) at the spot rate for purchasing or selling currency
prevailing in the foreign currency exchange market.
Forward Foreign Currency Contracts. The Funds may enter into forward
currency contracts to purchase or sell foreign currencies (i.e., non-U.S.
currencies) as a hedge against possible variations in foreign exchange rates. A
forward foreign currency exchange contract is an agreement between the
contracting parties to exchange an amount of currency at some future time at an
agreed upon rate. The rate can be higher or lower than the spot rate between the
currencies that are the subject of the contract. A forward contract generally
has no deposit requirement, and such transactions do not involve commissions. By
entering into a forward contract for the purchase or sale of the amount of
foreign currency invested in a foreign security transaction, a Fund can hedge
against possible variations in the value of the dollar versus the subject
currency either between the date the foreign security
<PAGE>
is purchased or sold and the date on which payment is made or received or
during the time the Fund holds the foreign security. Hedging against a decline
in the value of a currency in the foregoing manner does not eliminate
fluctuations in the prices of portfolio securities or prevent losses if the
prices of such securities decline. Furthermore, such hedging transactions
preclude the opportunity for gain if the value of the hedged currency should
rise. The Funds will not speculate in forward currency contracts. ^ The Funds
will not attempt to hedge all of their non-U.S. portfolio positions and will
enter into such transactions only to the extent, if any, deemed appropriate by
their investment adviser and sub-adviser (collectively, "Fund Management"). The
Funds will not enter into forward contracts for a term of more than one year.
Forward contracts may, from time to time, be considered illiquid, in which case
they would be subject to the Funds' limitations on investing in illiquid
securities, discussed in the Prospectuses.
Restricted/144A Securities. In recent years, a large institutional market
has developed for certain securities that are not registered under the
Securities Act of 1933 (the "1933 Act"). Institutional investors generally will
not seek to sell these instruments to the general public, but instead will often
depend on an efficient institutional market in which such unregistered
securities can readily be resold or on an issuer's ability to honor a demand for
repayment. Therefore, the fact that there are contractual or legal restrictions
on resale to the general public or certain institutions is not dispositive of
the liquidity of such investments.
Rule 144A under the 1933 Act establishes a "safe harbor" from the
registration requirements of the 1933 Act for resales of certain securities to
qualified institutional buyers. Institutional markets for restricted securities
that might develop as a result of Rule 144A could provide both readily
ascertainable values for restricted securities and the ability to liquidate an
investment in order to satisfy share redemption orders. An insufficient number
of qualified institutional buyers interested in purchasing Rule 144A-eligible
securities held by a Fund, however, could affect adversely the marketability of
such portfolio securities and the Fund might be unable to dispose of such
securities promptly or at reasonable prices.
Loans of Portfolio Securities. All of the Funds may lend their portfolio
securities to brokers, dealers, and other financial institutions, provided that
such loans are callable at any time by the Funds and are at all times secured by
collateral consisting of cash, letters of credit or securities issued or
guaranteed by the United States Government or its agencies, or any combination
thereof, equal to at least the market value, determined daily, of the loaned
securities. The advantage of such loans is that the Fund continues to earn
income on the loaned securities, while at the same time receiving interest from
the borrower of the securities. Loans will be made only to firms deemed by ^
Fund
<PAGE>
Management under procedures established by the board of directors^, to be
creditworthy and when the amount of interest to be received justifies the
inherent risks. A loan may be terminated by the borrower on one business day's
notice, or by the Fund at any time. If at any time the borrower fails to
maintain the required amount of collateral (at least 100% of the market value of
the borrowed securities), the Fund will require the deposit of additional
collateral not later than the business day following the day on which a
collateral deficiency occurs or the collateral appears inadequate. If the
deficiency is not remedied by the end of that period, the Fund will use the
collateral to replace the securities while holding the borrower liable for any
excess of replacement cost over collateral. Upon termination of the loan, the
borrower is required to return the securities to the Fund. Any gain or loss
during the loan period would inure to the Fund.
Repurchase Agreements. All of the Funds may enter into repurchase
agreements with respect to debt instruments eligible for investment by the Funds
with member banks of the Federal Reserve System, registered broker-dealers, and
registered government securities dealers, which are deemed creditworthy. A
repurchase agreement^ is a means of investing monies for a short period. The
resale price reflects an agreed upon interest rate effective for the period the
instrument is held by a Fund and is unrelated to the interest rate on the
underlying instrument. In these transactions, the collateral securities acquired
by a Fund (including accrued interest earned thereon) must have a total value in
excess of the value of the repurchase agreement, and are held as collateral by
the Company's custodian bank until ^ the repurchase agreement is completed.
Investment Restrictions. As described in the section of each Fund's
Prospectus entitled "Investment Objectives and Policies," the Funds operate
under certain investment restrictions. These policies are fundamental and may
not be changed with respect to a particular Fund without the prior approval of
the holders of a majority of the outstanding voting securities of that Fund, as
defined in the Investment Company Act of 1940, ^ as amended (the "1940 Act").
For purposes of the following limitations, all percentage limitations apply
immediately after a purchase or initial investment. Any subsequent change in a
particular percentage resulting from fluctuations in value does not require
elimination of any security from the Fund.
INVESCO Pacific Basin and European Funds
Under these restrictions, neither the INVESCO Pacific Basin or European
Funds, nor the Company on behalf of such Funds, will:
(1) issue senior securities as defined in the ^ 1940 Act (except insofar
as the Company may be deemed to have issued a senior security by
reason of entering into a repurchase agreement, or borrowing money,
in accordance with the restrictions described below, and in
accordance
<PAGE>
with the position of the staff of the Securities and Exchange
Commission set forth in Investment Company Act Release No. 10666);
(2) mortgage, pledge or hypothecate portfolio securities or borrow money,
except borrowings from banks for temporary or emergency purposes (but
not for investment) are permitted in an amount not exceeding 10% of
total net assets. A Fund will not purchase additional securities
while any borrowings on behalf of that Fund exist;
(3) buy or sell commodities, commodity contracts, oil, gas or other
mineral interests or exploration programs (however, the Fund may
purchase securities of companies which invest in the foregoing and
may enter into forward contracts for the purchase or sale of foreign
currencies);
(4) purchase the securities of any company if as a result of
such purchase more than 10% of total assets would be
invested in securities which are subject to legal or
contractual restrictions on resale ("restricted
securities") and in securities for which there are no
readily available market quotations; or enter into a
repurchase agreement maturing in more than seven days, if
as a result, such repurchase agreements, together with
restricted securities and securities for which there are
not readily available market quotations, would constitute
more than 10% of total assets;
(5) sell short or buy on margin, or write, purchase or sell
puts or calls or combinations thereof;
(6) buy or sell real estate or interests therein (however, securities
issued by companies which invest in real estate or interests therein
may be purchased and sold);
(7) invest in the securities of any other investment company
except for a purchase or acquisition in accordance with
a plan of reorganization, merger or consolidation, and
except that not more than 10% of the INVESCO Pacific
Basin Fund's and the INVESCO European Fund's total assets
may be invested in shares of closed-end investment
companies within the limits of Section 12(d)(1) of the
^ 1940 Act;
(8) invest in any company for the purpose of exercising
control or management;
(9) engage in the underwriting of any securities, except insofar as the
Company may be deemed an underwriter under the ^ 1933 Act in
disposing of a portfolio security;
(10) make loans to any person, except through the purchase of
debt securities in accordance with the investment
<PAGE>
policies of the Funds, or the lending of portfolio securities to broker-dealers
or other institutional investors, or the entering into of repurchase agreements
with member banks of the Federal Reserve System, registered broker-dealers and
registered government securities dealers. The aggregate value of all portfolio
securities loaned may not exceed 33-1/3% of a Fund's total net assets (taken at
current value). No more than 10% of a Fund's total net assets may be invested in
repurchase agreements maturing in more than seven days;
(11) purchase securities of any company in which any officer or director
of the Company or its investment adviser owns more than 1/2 of 1% of
the outstanding securities of such company and in which the officers
and directors of the Company and its investment adviser, as a group,
own more than 5% of such securities;
(12) purchase securities (except obligations issued or guaranteed by the
U.S. Government, its agencies or instrumentalities) if the purchase
would cause a Fund at the time to have more than 5% of the value of
its total assets invested in the securities of any one issuer or to
own more than 10% of the outstanding voting securities of any one
issuer;
(13) invest more than 5% of its total assets in an issuer having a record,
together with predecessors, of less than three years' continuous
operation.
In addition to the above restrictions, a fundamental policy of the INVESCO
Pacific Basin Fund and the INVESCO European Fund is not to invest more than 25%
of their respective total assets (taken at market value at the time of each
investment) in the securities of issuers in any one industry.
In applying restriction (1) above, the INVESCO Pacific Basin and European
Funds will enter into repurchase agreements only if such agreements are in
accordance with all applicable positions of the staff of the Securities and
Exchange Commission, including Investment Company Act Release No. 10666. ^
<PAGE>
INVESCO International Growth Fund
Under these restrictions, neither INVESCO International Growth Fund, nor
the Company on behalf of such Fund, will:
(1) other than investments by the Fund in obligations issued
or guaranteed by the U.S. Government, its agencies or
instrumentalities, invest in the securities of issuers
conducting their principal business activities in the
same industry (investments in obligations issued by a
foreign government, including the agencies or
instrumentalities of a foreign government, are considered
to be investments in a single industry), if immediately
after such investment the value of the Fund's investments
in such industry would exceed 25% of the value of the
Fund's total assets;
(2) invest in the securities of any one issuer, other than the United
States Government, if immediately after such investment more than 5%
of the value of the Fund's total assets, taken at market value, would
be invested in such issuer or more than 10% of such issuer's
outstanding voting securities would be owned by the Fund;
(3) underwrite securities of other issuers, except insofar as it may
technically be deemed an "underwriter" under the ^ 1933 Act, as
amended, in connection with the disposition of the Fund's portfolio
securities;
(4) invest in companies for the purpose of exercising control
or management;
(5) issue any class of senior securities or borrow money, except
borrowings from banks for temporary or emergency purposes not in
excess of 5% of the value of the Fund's total assets at the time the
borrowing is made;
(6) mortgage, pledge, hypothecate or in any manner transfer as security
for indebtedness any securities owned or held except to an extent not
greater than 5% of the value of the Fund's total assets;
(7) make short sales of securities or maintain a short
position;
(8) purchase securities on margin, except that the Fund may obtain such
short-term credit as may be necessary for the clearance of purchases
and sales of portfolio securities;
(9) purchase or sell real estate or interests in real estate. The Fund
may invest in securities secured by real estate or interests therein
or issued by companies, including real estate investment trusts,
which invest in real estate or interests therein;
<PAGE>
(10) purchase or sell commodities or commodity contracts;
(11) make loans to other persons, provided that the Fund may purchase debt
obligations consistent with its investment objectives and policies
and may lend limited amounts (not to exceed 10% of its total assets)
of its portfolio securities to broker-dealers or other institutional
investors;
(12) purchase securities of other investment companies except (i) in
connection with a merger, consolidation, acquisition or
reorganization, or (ii) by purchase in the open market of securities
of other investment companies involving only customary brokers'
commissions and only if immediately thereafter (i) no more than 3% of
the voting securities of any one investment company are owned by the
Fund, (ii) no more than 5% of the value of the total assets of the
Fund would be invested in any one investment company, and (iii) no
more than 10% of the value of the total assets of the Fund would be
invested in the securities of such investment companies. The Company
may invest from time to time a portion of the Fund's cash in
investment companies to which the Adviser serves as investment
adviser; provided that no management or distribution fee will be
charged by the Adviser with respect to any such assets so invested
and provided further that at no time will more than 3% of the Fund's
assets be so invested. Should the Fund purchase securities of other
investment companies, shareholders may incur additional management
and distribution fees;
(13) invest in securities for which there are legal or contractual
restrictions on resale, except that the Fund may invest no more than
2% of the value of the Fund's total assets in such securities, or
invest in securities for which there is no readily available market,
except that the Fund may invest no more than 5% of the value of the
Fund's total assets in such securities.
In applying restriction (13) above, the INVESCO International Growth Fund
also includes illiquid securities (those which cannot be sold in the ordinary
course of business within seven days at approximately the valuation given to
them by the Fund) among the securities subject to the 5% of total assets limit.
With respect to investment restriction (4) applicable to the INVESCO
Pacific Basin and European Funds, and restriction (13) applicable to the INVESCO
International Growth Fund, the board of directors has delegated to Fund
Management the authority to determine that a liquid market exists for securities
eligible for resale pursuant to Rule 144A under the Securities Act of 1933, or
any successor to such rule, and that such securities are not
<PAGE>
subject to the Funds' limitations on investing in illiquid securities,
securities that are not readily marketable or securities which do not have
readily available market quotations. Under guidelines established by the board
of directors, Fund Management will consider the following factors, among others,
in making this determination: (1) the unregistered nature of a Rule 144A
security, (2) the frequency of trades and quotes for the security; (3) the
number of dealers willing to purchase or sell the security and the number of
other potential purchasers; (4) dealer undertakings to make a market in the
security; and (5) the nature of the security and the nature of marketplace
trades (e.g., the time needed to dispose of the security, the method of
soliciting offers and the mechanics of transfer). However, Rule 144A Securities
are still subject to the Funds' respective limitations on investments in
restricted securities (securities for which there are legal or contractual
restrictions on resale).
In applying the industry concentration investment restrictions applicable
to the Funds, the Company uses an industry classification system for
international securities based on information obtained from ^ Bloomberg L.P.,
Moody's International and the O'Neil Database published by William O'Neil & Co.,
Inc.
In addition, the Company has adopted the following additional investment
restrictions for the Funds in order to qualify the Funds' shares for sale in
certain states. These restrictions are not fundamental and may be changed by the
Company's board of directors without shareholder approval. ^
The Company ^ has given an undertaking to the State of Arizona regarding
the Funds' investments in warrants. A Fund's investment in warrants, valued at
the lower of cost or market, will not exceed 5% of the value of the Fund's net
assets and will be limited to warrants listed on the principal securities
exchange of the country in which the issuer is domiciled.
The Company also has given the following undertakings to the State of
Texas. A Fund's investment in warrants, valued at the lower of cost or market,
will not exceed 5% of the value of such Fund's net assets, of which amount not
more than 2% of the value of the Fund's net assets may be warrants which are not
listed on the New York or American Stock Exchange. No Fund will buy or sell any
oil, gas, or other mineral interests (including mineral leases) or exploration
programs. No Fund will buy or sell real property (including limited partnership
interests therein), but may buy or sell readily marketable interests in real
estate investment trusts or readily marketable securities of companies which
invest in real estate.
The Company also has given undertakings to the State of Arkansas that (1)
a Fund may purchase or write put and call options on securities, or straddles,
spreads, or combinations thereof, only if by reason thereof the value of the
Fund's aggregate investment in such classes of securities will be 5% or less of
its total
<PAGE>
assets; and (2) no Fund will purchase any interests in oil, gas or other
mineral exploration or development programs.
The Company has given an undertaking to the State of Missouri that the
Funds will limit investments in securities which are secured by real estate or
real estate interests only to those securities which are readily marketable.
The Company also has given the following undertaking to the State of
California: The Funds will not engage in the purchase or sale of shares of any
open-end investment companies, as long as such purchases are not permitted by
California regulations.
THE FUNDS AND THEIR MANAGEMENT
The Company. The Company was incorporated on April 2, 1993, under the laws
of Maryland. On July 1, 1993, the Company, through the INVESCO European Fund and
INVESCO Pacific Basin Fund, assumed all of the assets and liabilities of the
European Portfolio and Pacific Basin Portfolio, respectively, of Financial
Strategic Portfolios, Inc., which was incorporated under the laws of Maryland on
August 10, 1983. In addition, on July 1, 1993, the Company, through the INVESCO
International Growth Fund, assumed all of the assets and liabilities of the
Financial International Growth Fund, a series of Financial Series Trust, a
Massachusetts business trust organized on July 15, 1987. All financial and other
information about the Funds for periods prior to July 1, 1993, relates to such
former portfolios and series (collectively, the "Predecessor Funds").
The Investment Adviser. INVESCO Funds Group, Inc., a Delaware corporation
("INVESCO"), is employed as the Company's investment adviser. INVESCO was
established in 1932 and also serves as an investment adviser to INVESCO ^
Diversified Funds, Inc., INVESCO Dynamics Fund, Inc., INVESCO Emerging
Opportunity Funds, Inc., INVESCO Growth Fund, Inc., INVESCO Income Funds, Inc.,
INVESCO Industrial Income Fund, Inc., INVESCO Money Market Funds, Inc., INVESCO
^ Multiple Asset Funds, Inc., INVESCO Specialty Funds, Inc., INVESCO Strategic
Portfolios, Inc., INVESCO Tax-Free Income Funds, Inc., INVESCO Value Trust, ^
and INVESCO Variable Investment Funds, Inc.
The Sub^-Adviser. INVESCO, as investment adviser, has contracted with ^
INVESCO Asset Management Limited ("IAML") to provide investment advisory and
research services on behalf of INVESCO European Fund ^, INVESCO Pacific Basin
Fund^ and INVESCO International Growth Fund. IAML has the primary responsibility
for providing portfolio investment management services to ^ these Funds. ^ IAML
is an indirect wholly^-owned subsidiary of INVESCO PLC^.
INVESCO is ^ an indirect, wholly^-owned subsidiary of INVESCO
PLC^, a publicly-traded holding company organized in 1935. ^
Through subsidiaries located in London, Denver, Atlanta, Boston,
<PAGE>
Louisville, Dallas, Tokyo, Hong Kong, and the Channel Islands, INVESCO PLC ^
provides investment services around the world. INVESCO was acquired by ^ INVESCO
PLC in 1982 and as of ^ October 31, ^ 1995, managed ^ 14 mutual funds,
consisting of ^ 38 separate portfolios, on behalf of over ^ 784,000
shareholders. INVESCO ^ PLC's other North American subsidiaries include the
following:
^--INVESCO Capital Management, Inc. ^ of Atlanta, Georgia,
manages institutional investment portfolios, consisting primarily
of discretionary employee benefit plans for corporations and state
and local governments, and endowment funds. INVESCO Capital
Management, Inc. is the sole shareholder of INVESCO Services, Inc.,
a registered broker^-dealer whose primary business is the
distribution of shares of ^ two registered investment companies.
--INVESCO Management & Research, Inc. of Boston,
Massachusetts, primarily manages pension and endowment accounts.
--^ PRIMCO Capital Management, Inc. ^ of Louisville, Kentucky,
specializes in managing stable return investments, principally on
behalf of Section 401(k) retirement plans.
^--INVESCO Realty Advisors of Dallas, Texas, ^ is responsible for
providing advisory services in the U.S. real estate markets for INVESCO PLC's
clients worldwide. ^ Clients include corporate plans, public pension funds as
well as endowment and foundation accounts.
The corporate headquarters of INVESCO PLC are located at 11 Devonshire
Square, London, EC2M 4YR, England.
^ As indicated in the Prospectuses, INVESCO and IAML permit investment and
other personnel to purchase and sell securities for their own accounts in
accordance with compliance policies governing personal investing by directors,
officers and employees of INVESCO and IAML. These policies require officers,
inside directors, investment and other personnel of INVESCO and IAML to
pre-clear all transactions in securities not otherwise exempt under the
policies. Requests for trading authority will be denied when, among other
reasons, the proposed personal transaction would be contrary to the provisions
of the applicable policy or would be deemed to adversely affect any transaction
then known to be under consideration for or to have been effected on behalf of
any client account, including the Funds.
In addition to the pre-clearance requirement described above, the policies
subject officers, inside directors, investment and other personnel of INVESCO
and IAML to various trading restrictions and reporting obligations. All
reportable transactions are reviewed for compliance with the policies. The
provisions of these policies are administered by and subject to exceptions
authorized by INVESCO or IAML.
<PAGE>
Investment Advisory Agreement. INVESCO serves as investment adviser
pursuant to an investment advisory agreement (the "Agreement") with the Company
which was approved on April 21, 1993, by a vote cast in person by a majority of
the directors of the Company, including a majority of the directors who are not
"interested persons" of the Company or INVESCO at a meeting called for such
purpose. Pursuant to authorizations granted by the public shareholders of the
Predecessor Funds at meetings held on May 24, 1993, the Predecessor Funds, as
the initial shareholders of the Company, approved the Agreement on June 24, 1993
for an initial term expiring April 30, 1995. ^ The Agreement has been continued
by action of the board of directors until April 30, 1996, and thereafter may be
continued from year to year as to each Fund as long as each such continuance is
specifically approved at least annually 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. Any such continuance must also be
approved by a majority of the Company's directors who are not parties to the
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 Agreement may be terminated at any time without penalty by
either party upon sixty (60) days' written notice and terminates automatically
in the event of an assignment to the extent required by the ^ 1940 Act and the
rules thereunder.
The Agreement provides that INVESCO shall manage the investment portfolios
of the Funds in conformity with each Fund's investment policies (either directly
or by delegation to a sub- adviser which may be a company affiliated with
INVESCO). Further, INVESCO shall perform all administrative, internal accounting
(including computation of net asset value), clerical, statistical, secretarial
and all other services necessary or incidental to the administration of the
affairs of the Funds excluding, however, those services that are the subject of
separate agreement between the Company and INVESCO or any affiliate thereof,
including the distribution and sale of Fund shares and provision of transfer
agency, dividend disbursing agency, and registrar services, and services
furnished under an Administrative Services Agreement with INVESCO ^ discussed
below. Services provided under the Agreement include, but are not limited to:
supplying the Company with officers, clerical staff and other employees, if any,
who are necessary in connection with the Funds' operations; furnishing office
space, facilities, equipment, and supplies; providing personnel and facilities
required to respond to inquiries related to shareholder accounts; conducting
periodic compliance reviews of the Funds' operations; preparation and review of
required documents, reports and filings by INVESCO's in-house legal and
accounting staff (including the prospectuses, statement of additional
information, proxy statements, shareholder reports, tax returns, reports to the
SEC, and other corporate documents of the Funds), except insofar as the
assistance of independent accountants or attorneys is necessary or desirable;
supplying basic telephone
<PAGE>
service and other utilities; and preparing and maintaining certain of the books
and records required to be prepared and maintained by the Funds under the ^ 1940
Act. Expenses not assumed by INVESCO are borne by the Funds.
As full compensation for its advisory services to the Company, INVESCO
receives a monthly fee. The fee is calculated daily at an annual rate of:
(a) INVESCO Pacific Basin and European Funds: 0.75% on the first $350
million of each Fund's average net assets; 0.65% on the next $350
million of each Fund's average net assets; and 0.55% ^ on each Fund's
average net assets in excess of $700 million;
(b) INVESCO International Growth Fund: 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.
The advisory fee is calculated daily at the applicable annual rate and
paid monthly. While the portions of INVESCO's fees which are equal to or greater
than 0.75% of the net assets are higher than those generally charged by
investment advisers to mutual funds, they are not higher than those charged by
most other investment advisers to funds comparable to the Funds, whose assets
are invested primarily in equity securities of companies located outside the
United States.
Certain states in which the shares of each of the Funds are qualified for
sale currently impose limitations on the expenses of each of the Funds. At the
date of this Statement of Additional Information, the most restrictive
state-imposed annual expense limitation requires that INVESCO absorb any amount
necessary to prevent any Fund's aggregate ordinary operating expenses (excluding
interest, taxes, brokerage fees and commissions, and extraordinary charges such
as litigation costs) from exceeding in any fiscal year 2.5% of that Fund's first
$30,000,000 of average net assets, 2.0% of the next $70,000,000 of average net
assets and 1.5% of the remaining average net assets. No payment of the
investment advisory fee will be made to the investment adviser which would
result in any of the Funds' expenses exceeding, on a cumulative annualized
basis, this state limitation. During the past year, INVESCO did not absorb any
amounts under this provision.
Sub-Advisory Agreement. IAML ^ serves as sub^-adviser to the INVESCO
European and Pacific Basin Funds^ pursuant to a sub^- advisory agreement (the
^"European-Pacific Basin Sub-Agreement") with INVESCO ^ that was assumed by IAML
from MIM International Limited ("MIL"), another indirect wholly-owned subsidiary
of INVESCO PLC, on November 10, 1995. The European-Pacific Basin Sub- Agreement
was approved on April 21, 1993, by a vote cast in person by a majority of the
directors of the Company, including a majority
<PAGE>
of the directors who are not "interested persons" of the Company, INVESCO, IAML
or MIL at a meeting called for such purpose. Pursuant to authorizations granted
by the public shareholders of the respective Predecessor Funds at meetings held
on May 24, 1993, the respective Predecessor Funds, as the initial shareholders
of the INVESCO European and Pacific Basin Funds, approved the ^ European-Pacific
Basin Sub-Agreement on June 24, 1993, for an initial term expiring April 30,
1995. ^ The European-Pacific Basin Sub-Agreement has been continued by action of
the board of directors until April 30, 1996. Thereafter, the European-Pacific
Basin Sub-Agreement may be continued from year to year as to each Fund 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^ of the outstanding
shares of the Fund, as defined in the 1940 Act. Each such continuance also must
be approved by a majority of the directors who are not parties to the ^
European- Pacific Basin 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 ^ European-Pacific Basin Sub- Agreement may
be terminated at any time without penalty by either party or the Company upon
sixty (60) days' written notice, and ^ terminates automatically in the event of
an assignment to the extent required by the ^ 1940 Act and the rules thereunder.
IAML serves as sub-adviser to the INVESCO International Growth Fund
pursuant to a sub-advisory agreement (the "International Growth Sub-Agreement")
with INVESCO that was approved on October 25, 1995 by a vote cast in person by a
majority of the directors of the Company, including a majority of the directors
who are not "interested persons" of the Company, INVESCO or IAML at a meeting
called for such purpose. The International Growth Sub-Agreement became effective
on February 2, 1996 when it was approved by a majority of the shareholders of
the Fund at a meeting called for such purpose, and will remain in force for an
initial term expiring April 30, 1997. After the expiration of the initial term,
the International Growth 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 of the outstanding
shares of the Fund, as defined in the 1940 Act. Each such continuance also must
be approved by a majority of the directors who are not parties to the
International Growth 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 International Growth Sub-Agreement may be
terminated at any time without penalty by either party or the Company upon sixty
(60) days' written notice, and terminates automatically in the event of an
assignment to the extent required by the 1940 Act and the rules thereunder.
The ^ European-Pacific Basin Sub-Agreement and the International Growth
Sub-Agreement (collectively, the "Sub- Agreements") provide that IAML, subject
to the supervision of INVESCO, shall manage the investment portfolios of the ^
Funds in
<PAGE>
conformity with each such Fund's investment policies. These management services
would include: (a) managing the investment and reinvestment of all the assets,
now or hereafter acquired, of each Fund, and executing all purchases and sales
of portfolio securities; (b) maintaining a continuous investment program for the
Funds, consistent with (i) each Fund's investment policies as set forth in the
Company's Articles of Incorporation, Bylaws, and Registration Statement, as from
time to time amended, under the ^ 1940 Act, as amended, and in any prospectus
and/or statement of additional information of the Company, as from time to time
amended and in use under the ^ 1933 Act and (ii) the Company'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 each
Fund, unless otherwise directed by the directors of the Company or INVESCO, and
executing transactions accordingly; (d) providing the Funds 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 ^ IAML; (e)
determining what portion of each applicable Fund should be invested in the
various types of securities authorized for purchase by such Fund; and (f) making
recommendations as to the manner in which voting rights, rights to consent to
Company action and any other rights pertaining to the portfolio securities of
each applicable Fund shall be exercised.
The Sub-^ Agreements provide that, as compensation for its services, ^
IAML shall receive from INVESCO, at the end of each month, a fee based upon the
average daily value of the applicable Fund's net assets. With respect to the
INVESCO European and Pacific Basin ^ Funds, the fee is calculated at the annual
rate of: 0.45% on the first $350 million of each Fund's average net assets;
0.40% on the next $350 million of each Fund's average net assets; and 0.35% ^ on
each Fund's average net assets in excess of $700 million. ^ With respect to the
INVESCO International Growth Fund, the fee is computed at the annual rate of:
0.25% on the first $500 million of the Fund's average net assets, 0.1875% on the
next $500 million of the Fund's average net assets and 0.1625% on the Fund's
average net assets in excess of $1 billion. The sub-advisory fees are paid by
INVESCO, NOT the Funds.
Administrative Services Agreement. INVESCO, either directly or through
affiliated companies, also provides certain administrative, sub-accounting, and
recordkeeping services to the Company pursuant to an Administrative Services
Agreement dated April 30, 1993 (the "Administrative Agreement"). The
Administrative Agreement was approved on April 21, 1993, by a vote cast in
person by all of the directors of the Company, including all of the directors
who are not "interested persons" of the Company or INVESCO at a meeting called
for such purpose. The Administrative Agreement ^ was for an initial term
expiring April 30, 1994, and has been renewed through April 30, 1996. The
Administrative Agreement may be continued from year to year as long
<PAGE>
as each such continuance is specifically approved by the board of directors of
the Company, including a majority of the directors who are not parties to the
Administrative 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 Administrative Agreement may be terminated at any time
without penalty by INVESCO on sixty (60) days' written notice, or by the Company
upon thirty (30) days' written notice, and terminates automatically in the event
of an assignment unless the Company's board of directors approves such
assignment.
The Administrative Agreement provides that INVESCO shall provide the
following services to the Funds: (A) such sub- accounting and recordkeeping
services and functions as are reasonably necessary for the operation of the
Fund; and (B) such sub-accounting, recordkeeping, and administrative services
and functions, which may be provided by affiliates of INVESCO, as are reasonably
necessary for the operation of Fund shareholder accounts maintained by certain
retirement plans and employee benefit plans for the benefit of participants of
such plans. As full compensation for services provided under the Administrative
Agreement, the Company pays a monthly fee to INVESCO consisting of a base fee of
$10,000 per year per Fund, plus an additional incremental fee computed daily and
paid monthly at an annual rate of 0.015% per year of the average net assets of
each Fund of the Company.
Transfer Agency Agreement. INVESCO also performs transfer agent, dividend
disbursing agent, and registrar services for the Company pursuant to a Transfer
Agency Agreement, which was approved by the board of directors of the Company,
including a majority of the Company's directors who are not parties to the
Transfer Agency Agreement or "interested persons" of any such party, on April
21, 1993, for an initial term expiring April 30, 1994. The Transfer Agency
Agreement has been continued by action of the board of directors until April 30,
1996, and thereafter may be continued from year to year as to each Fund as long
as such continuance is specifically approved at least annually by the board of
directors of the Company, or by a vote of the holders of a majority of the
outstanding shares of the Fund. Any such continuance also must be approved by a
majority of the Company's directors who are not parties to the Transfer Agency
Agreement or interested persons (as defined by the ^ 1940 Act) of any such
party, cast in person at a meeting called for the purpose of voting on such
continuance. The Transfer Agency Agreement may be terminated at any time without
penalty by either party upon sixty (60) days' written notice and terminates
automatically in the event of assignment.
^
The Transfer Agency Agreement provides that the Company shall pay to
INVESCO ^ an annual fee of $14.00 per shareholder account ^ or omnibus account
participant. This fee is paid monthly at 1/12 of the annual fee and is based
upon the actual number of shareholder accounts and omnibus account participants
in existence ^ during each month.
<PAGE>
For the fiscal years ended October 31, 1995, 1994 and 1993, ^ the INVESCO
European and Pacific Basin Funds paid the following advisory fees,
administrative services fees and transfer agency fees:
INVESCO European Fund
Fiscal Year
Ended Advisory Administrative Transfer
^ October 31 Fee Services Fee Agency ^ Fee
- ------------ -------- -------------- ------------
^ 1995 $1,815,386 $46,308 $869,684
1994 2,503,180 60,180 698,202
1993 1,235,975 34,720 324,579 ^
INVESCO Pacific Basin Fund
Fiscal Year
Ended Advisory Administrative Transfer
^ October 31 Fee Services Fee Agency ^ Fee
- ------------ -------- -------------- ------------
^ 1995 $1,571,623 $41,483 $852,343
1994 2,255,967 55,169 615,420
1993 945,962 28,919 193,283 ^
INVESCO International Growth Fund
For the fiscal years ended October 31, 1995 and 1994, and the period
January 1, 1993 to October 31, 1993 ^, the INVESCO International Growth Fund
paid the following advisory fees, administrative services fees and transfer
agency fees:
<PAGE>
Fiscal Year
Ended Advisory Administrative Transfer
^ October 31 Fee Services Fee Agency ^ Fee
- ------------ -------- -------------- ------------
^ 1995 $ 963,765 $24,541 $361,657
1994 1,307,707 29,616 242,814
1993 614,331 17,548 52,761 ^
Officers and Directors of the Company. The overall direction and
supervision of the Company is the responsibility of the board of directors,
which has the primary duty of seeing that the general investment policies and
programs of each of the Funds are carried out and that the Funds' portfolios are
properly administered. The officers of the Company, all of whom are officers and
employees of, and are paid by, INVESCO, are responsible for the day-to-day
administration of the Company and each of the Funds. The investment adviser for
the Company has the primary responsibility for making investment decisions on
behalf of the Company. These investment decisions are reviewed by the investment
committee of INVESCO.
All of the officers and directors of the Company hold comparable positions
with INVESCO ^ Diversified Funds, Inc., INVESCO Dynamics Fund, Inc., INVESCO
Emerging Opportunity Funds, Inc., INVESCO Growth Fund, Inc., INVESCO Income
Funds, Inc., INVESCO Industrial Income Fund, Inc., INVESCO Money Market Funds,
Inc., INVESCO Multiple Asset Funds, Inc., INVESCO Specialty Funds, Inc., INVESCO
Strategic Portfolios, Inc.^, INVESCO Tax-Free Income Funds, Inc.^, and INVESCO
Variable Investment Funds, Inc. All of the directors of the Company also serve
as trustees of INVESCO Value Trust. In addition, all of the directors of the
Fund ^, with the exception of Messrs. Hesser and Sim, ^ also are trustees of
INVESCO Treasurer's Series Trust and directors of INVESCO Advisor Funds, Inc.
All of the officers of the Company also hold comparable positions with INVESCO
Value Trust. Set forth below is information with respect to each of the
Company's officers and directors. Unless otherwise indicated, the address of the
directors and officers is Post Office Box 173706, Denver, Colorado 80217-3706.
Their affiliations represent their principal occupations during the past five
years.
CHARLES W. BRADY,*+ Chairman of the Board. Chief Executive
Officer and Director of INVESCO PLC, London, England, and of
subsidiaries thereof; Chairman of the Board of ^ INVESCO Advisor
Funds, Inc., INVESCO Treasurer's Series Trust, and The Global Heath
Sciences Fund. Address: 1315 Peachtree Street, NE, Atlanta,
Georgia. Born: May 11, 1935.
FRED A. DEERING,+# Vice Chairman of the Board. Vice Chairman
of ^ INVESCO Advisor Funds, Inc., and INVESCO Treasurer's Series
Trust. Trustee of The Global Health Sciences Fund. Formerly,
Chairman of the Executive Committee and Chairman of the Board of
Security Life of Denver Insurance Company, Denver, Colorado ^;
<PAGE>
Director of NN Financial, Toronto, Ontario, Canada; ^ Director and
Chairman of the Executive Committee of ING America Life, Life
Insurance Co. of Georgia and Southland Life Insurance Company.
Address: Security Life Center, 1290 Broadway, Denver, Colorado.
Born: January 12, 1928.
DAN J. HESSER,+* President and Director. Chairman of the
Board, President, and Chief Executive Officer of INVESCO Funds
Group, Inc., and Director of INVESCO Trust Company. Trustee of The
Global Health Sciences Fund. Born: December 27, 1939.
VICTOR L. ANDREWS,** Director. Mills Bee Lane Professor of
Banking and Finance and Chairman of the Department of Finance at
Georgia State University, Atlanta, Georgia, since 1968; since
October 1984, Director of the Center for the Study of Regulated
Industry at Georgia State University; formerly, member of the
faculties of the Harvard Business School and the Sloan School of
Management of MIT. Dr. Andrews is also a director of the
Southeastern Thrift and Bank Fund, Inc. and The Sheffield Funds,
Inc. Address: Department of Finance, Georgia State University,
University Plaza, Atlanta, Georgia. Born: June 23, 1930.
BOB R. BAKER,+** Director. President and Chief Executive
Officer of AMC Cancer Research Center, Denver, Colorado, since
January 1989; until mid-December 1988, Vice Chairman of the Board
of First Columbia Financial Corporation (a financial institution),
Englewood, Colorado. Formerly, Chairman of the Board and Chief
Executive Officer of First Columbia Financial Corporation.^
Address: 1775 Sherman Street, #1000, Denver, Colorado. Born:
August 7, 1936.
FRANK M. BISHOP*, Director. President and Chief Operating
Officer of INVESCO Inc. since February, 1993; Director of INVESCO
Funds Group, Inc. since March 1993; Director (since February 1993),
Vice President (since December 1991), and Portfolio Manager (since
February 1987), of INVESCO Capital Management, Inc. (and
predecessor firms), Atlanta, Georgia. Address: 1315 Peachtree
Street, N.E., Atlanta, Georgia. Born: December 7, 1943.
LAWRENCE H. BUDNER,# Director. Trust Consultant; prior to
June 30, 1987, Senior Vice President and Senior Trust Officer of
InterFirst Bank, Dallas, Texas. Address: 7608 Glen Albens,
Dallas, Texas. Born: July 25, 1930.
DANIEL D. CHABRIS,+# Director. Financial Consultant;
Assistant Treasurer of Colt Industries Inc., New York, New York,
from 1966 to 1988. Address: 15 Sterling Road, Armonk, New York.
Born: August 1, 1923.
A.D. FRAZIER, JR.,** Director. Chief Operating Officer of the
Atlanta Committee for the Olympic Games. From 1982 to 1991, Mr.
Frazier was employed in various capacities by First Chicago Bank,
most recently as Executive Vice President of the North American
Banking Group. Trustee of The Global Health Sciences Fund.
<PAGE>
Address: 250 Williams Street, Suite 6000, Atlanta, Georgia. Born:
June 29, 1944.
KENNETH T. KING,** Director. Formerly, Chairman of the Board
of The Capitol Life Insurance Company, Providence Washington
Insurance Company, and Director of numerous subsidiaries thereof in
the U.S. Formerly, Chairman of the Board of The Providence Capitol
Companies in the United Kingdom and Guernsey. Chairman of the
Board of the Symbion Corporation (a high technology company) until
1987. Address: 4080 North Circulo Manzanillo, Tucson, Arizona.
Born: November 16, 1925.
JOHN W. MC INTYRE,# Director. Retired. Formerly, Vice
Chairman of the Board of Directors of The Citizens and Southern
Corporation and Chairman of the Board and Chief Executive Officer
of The Citizens and Southern Georgia Corp. and Citizens and
Southern National Bank. Director of Golden Poultry Co., Inc.
Trustee of The Global Health Sciences Fund and Gables Residential
Company. Address: 7 Piedmont Center, Suite 100, Atlanta, GA.
Born: September 14, 1930.
R. DALTON SIM*, Director. Chairman of the Board (since March
1993) and President (since January 1991) of INVESCO Trust Company;
Director since June 1987 and, formerly, Executive Vice President
and Chief Investment Officer (June 1987 to January 1991) of INVESCO
Funds Group, Inc.; President (since 1994) and Trustee (since 1991)
of The Global Health Sciences Fund. Born: July 18, 1939.
^
GLEN A. PAYNE, Secretary. Senior Vice President, General
Counsel and Secretary of INVESCO Funds Group, Inc. and INVESCO
Trust Company ^; formerly, employee of a U.S. regulatory agency,
Washington, D.C., ^(June 1973 through May 1989). Born: September
25, 1947.
RONALD L. GROOMS, Treasurer. Senior Vice President and
Treasurer of INVESCO Funds Group, Inc. and INVESCO Trust Company
^. Born: October 1, 1946.
WILLIAM J. GALVIN, JR., Assistant Secretary. Senior Vice
President of INVESCO Funds Group, Inc. and Trust Officer of INVESCO
Trust Company since August 1992; Formerly, Vice President of 440
Financial Group from June 1990 to August 1992; Assistant Vice
President of Putnam Companies from November 1986 to June 1990.
Born: August 21, 1956.
ALAN I. WATSON, Assistant Secretary. Vice President of
INVESCO Funds Group, Inc. and Trust Officer of INVESCO Trust
Company. Born: September 14, 1941.
JUDY P. WIESE, Assistant Treasurer. Vice President of INVESCO
Funds Group, Inc. and Trust Officer of INVESCO Trust Company.
Born: February 3, 1948.
<PAGE>
#Member of the audit committee of the Company.
+Member of the executive committee of the Company. On occasion, the
executive committee acts upon the current and ordinary business of the Company
between meetings of the board of directors. Except for certain powers which,
under applicable law, may only be exercised by the full board of directors, the
executive committee may exercise all powers and authority of the board of
directors in the management of the business of the Company. All decisions are
subsequently submitted for ratification by the board of directors.
*These directors are "interested persons" of the Company as defined in the
Investment Company Act of 1940.
**Member of the management liaison committee of the Company.
As of ^ December 30, 1995, officers and directors of the Company, as a
group, beneficially owned less than 1% of each Fund's outstanding shares.
Director Compensation
The following table sets forth, for the fiscal year ended October 31,
1995: the compensation paid by the Company to its eight independent directors
for services rendered in their capacities as directors of the Company; the
benefits accrued as Company expenses with respect to the Defined Benefit
Deferred Compensation Plan discussed below; and the estimated annual benefits to
be received by these directors upon retirement as a result of their service to
the Company. In addition, the table sets forth the total compensation paid by
all of the mutual funds distributed by INVESCO Funds Group, Inc. (including the
Company), INVESCO Advisor Funds, Inc., INVESCO Treasurer's Series Trust and The
Global Health Sciences Fund (collectively, the "INVESCO Complex") to these
directors for services rendered in their capacities as directors or trustees
during the year ended December 31, 1995. As of December 31, 1995, there were 48
funds in the INVESCO Complex.
<PAGE>
Total
Compensa-
Benefits Estimated tion From
Aggregate Accrued As Annual INVESCO
Compensa- Part of Benefits Complex
Name of Person, tion From Company Upon Paid To
Position Company1 Expenses2 Retirement3 Directors1
Fred A.Deering, $ 5,158 $ 1,725 $ 1,518 $ 87,000
Vice Chairman of
the Board
Victor L. Andrews 4,661 1,630 1,757 68,000
Bob R. Baker 4,989 1,456 2,355 73,000
Lawrence H. Budner 4,661 1,630 1,757 68,000
Daniel D. Chabris 4,989 1,860 1,249 73,000
A. D. Frazier, Jr.4 1,962 0 0 63,500
Kenneth T. King 4,771 1,792 1,377 70,000
John W. McIntyre4 2,099 0 0 67,500
Total $33,290 $10,093 $10,013 $570,000
% of Net Assets .0073%5 .0022%5 .____%6
1The vice chairman of the board, the chairmen of the audit, management
liaison and compensation committees, and the members of the executive and
valuation committees each receive compensation for serving in such capacities in
addition to the compensation paid to all independent directors.
2Represents benefits accrued with respect to the Defined Benefit Deferred
Compensation Plan discussed below, and not compensation deferred at the election
of the directors.
3These figures represent the Company's share of the estimated annual
benefits payable by the INVESCO Complex (excluding the Global Health Sciences
Fund which does not participate in any retirement plan) upon the directors'
retirement, calculated using the current method of allocating director
compensation among the funds in the INVESCO Complex. These estimated benefits
assume retirement at age 72 and that the basic retainer payable to the directors
will be adjusted periodically for inflation, for increases in the number of
funds in the INVESCO Complex, and for other reasons during the period in which
retirement benefits are accrued on behalf of the respective directors. This
results in lower estimated benefits for directors who are closer to retirement
and higher estimated benefits for directors who are further from retirement.
With the exception of Messrs. Frazier and McIntyre,
<PAGE>
each of these directors has served as a director/trustee of one or more of the
funds in the INVESCO Complex for the minimum five-year period required to be
eligible to participate in the Defined Benefit Deferred Compensation Plan.
4Messrs. Frazier and McIntyre began serving as directors of
the Company on April 19, 1995.
5Totals as a percentage of the Company's net assets as of
October 31, 1995.
6Total as a percentage of the net assets of the INVESCO
Complex as of December 31, 1995.
Messrs. Bishop, Brady, Hesser, and Sim, as "interested persons" of the
Company and other funds in the INVESCO Complex, receive compensation as officers
or employees of INVESCO or its affiliated companies, and do not receive any
director's fees or other compensation ^ from the Company or other funds in the
INVESCO Complex for their services as directors.
The ^ boards of directors/trustees of the mutual funds managed by INVESCO,
^ INVESCO Advisor Funds, Inc. and INVESCO ^ Treasurer's Series Trust have
adopted a Defined Benefit Deferred Compensation Plan for the non-interested
directors and trustees of the funds. Under this plan, each director or trustee
who is not an interested person of the funds (as defined in the ^ 1940 Act) and
who has served for at least five years (a "qualified director") is entitled to
receive, upon retiring from the boards at the ^ retirement age of 72 ^(or the
retirement age of 73 to 74, if the retirement date is extended by the boards for
one or two years, but less than three years) continuation of payment for one
year (the "first year retirement benefit") of the annual basic retainer payable
by the funds to the qualified director at the time of his retirement ^(the
"basic retainer"). Commencing with any such director's second year of
retirement, and commencing with the first year of retirement of a director whose
retirement has been extended by the board for three years, a qualified director
shall receive quarterly payments at an annual rate equal to 25% of the basic
retainer. These payments will continue for the remainder of the qualified
director's life or ten years, whichever is longer (the "reduced retainer
payments"). If a qualified director dies ^ or becomes disabled after age 72 and
before age 74 while still a director of the funds, the first year retirement
benefit and the reduced retainer payments will be made ^ to him or to his
beneficiary or estate. If a qualified director becomes disabled or dies either
prior to age 72 or during his/her 74th year while still a director of the funds,
the director will not be entitled to receive the first year retirement benefit;
however, the reduced retainer payments will be made to his beneficiary or
estate. The plan is administered by a committee of three directors who are also
participants in the plan and one director who is not a plan participant. The
cost of the plan will be allocated among the INVESCO, INVESCO Advisor and
Treasurer's Series funds in a manner
<PAGE>
determined to be fair and equitable by the committee. ^ The Company is not
making any payments to directors under the plan as of the date of this Statement
of Additional Information^. The Company has no stock options or other pension or
retirement plans for management or other personnel and pays no salary or
compensation to any of its officers.
The Company has an audit committee which is comprised of ^ four of the
directors who are not interested persons of the Company. The committee meets
periodically with the Company's independent accountants and officers to review
accounting principles used by the Funds, the adequacy of internal controls, the
responsibilities and fees of the independent accountants, and other matters.
The Company also has a management liaison committee which meets quarterly
with various management personnel of INVESCO in order (a) to facilitate better
understanding of management and operations of the Company, and (b) to review
legal and operational matters which have been assigned to the committee by the
board of directors, in furtherance of the board of directors' overall duty of
supervision.
HOW SHARES CAN BE PURCHASED
The shares of each Fund are sold on a continuous basis at the net asset
value per share next calculated after receipt of a purchase order in good form.
The net asset value for each Fund is computed once each day that the New York
Stock Exchange is open as of the close of regular trading on that Exchange, but
may also be computed at other times. See "How Shares Are Valued." INVESCO acts
as the Funds' ^ distributor under a distribution agreement with the Company
under which it receives no compensation and bears all expenses, including the
costs of printing and distribution of prospectuses incident to direct sales and
distribution of each of the Fund's shares on a no-load basis.
HOW SHARES ARE VALUED
As described in the section of each Fund's Prospectus entitled "How Shares
Can Be Purchased," the net asset value of shares of each Fund is computed once
each day that the New York Stock Exchange is open as of the close of regular
trading on that Exchange ^(usually 4:00 p.m., New York time) and applies to
purchase and redemption orders received prior to that time. Net asset value per
share is also computed on any other day on which there is a sufficient degree of
trading in the securities held by a Fund that the current net asset value per
share might be materially affected by changes in the value of the securities
held, but only if on such day the Fund receives a request to purchase or redeem
shares of that Fund. Net asset value per share is not calculated on days the New
York Stock Exchange is closed, such as federal holidays including New Year's
Day, Presidents' Day, Good
<PAGE>
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving,
and Christmas.
The net asset value per share of each Fund is calculated by dividing the
value of all securities held by ^ the Fund and its other assets (including
dividends and interest accrued but not collected), less the Fund's liabilities
(including accrued expenses), by the number of outstanding shares of that Fund.
Securities traded on national securities exchanges, the NASDAQ National Market
System, the NASDAQ Small Cap market and foreign markets are valued at their last
sale prices on the exchanges or markets where such securities are primarily
traded. Securities traded in the over the-counter market for which last sale
prices are not available, and listed securities for which no sales were reported
on a particular date, are valued at their highest closing bid prices (or, for
debt securities, yield equivalents thereof) obtained from one or more dealers
making markets for such securities. If market quotations are not readily
available, securities will be valued at their fair values as determined in good
faith by the Company's board of directors or pursuant to procedures adopted by
the board of directors. The above procedures may include the use of valuations
furnished by a pricing service which employs a matrix to determine valuations
for normal institutional-size trading units of debt securities. Prior to
utilizing a pricing service, the Fund's board of directors reviews the methods
used by such service to assure itself that securities will be valued at their
fair values. The Fund's board of directors also periodically monitors the
methods used by such pricing services. Debt securities with remaining maturities
of 60 days or less at the time of purchase are normally valued at amortized
cost.
The values of securities held by the Funds, and other assets used in
computing net asset value, generally are determined as of the time regular
trading in such securities or assets is completed each day. Since regular
trading in most foreign securities markets is completed simultaneously with, or
prior to, the close of regular trading on the New York Stock Exchange, closing
prices for foreign securities usually are available for purposes of computing
the Funds' net asset values. However, in the event that the closing price of a
foreign security is not available in time to calculate a Fund's net asset value
on a particular day, the Company's board of directors has authorized the use of
the market price for the security obtained from an approved pricing service at
an established time during the day which may be prior to the close of regular
trading in the security. The value of all assets and liabilities initially
expressed in foreign currencies will be converted into U.S. dollars at the ^
spot rate of such currencies against U.S. dollars provided by an approved
pricing service. ^
FUND PERFORMANCE
As discussed in the section of each Fund's Prospectus entitled
"Performance Data," the Company advertises the total return
<PAGE>
performance of its Funds. Average annual total return performance for each Fund
for the indicated periods ended October 31, ^ 1995, was as follows:
10 Years/
Life of
Fund 1 Year 5 Years Fund
- --------- ------ ------- ---------
European ^ 10.42% 6.94% 7.82%(1)
Pacific Basin ^(8.31)% 6.37% 11.86%
International Growth ^(2.84)% 4.02% 4.89%(2)
- -----------------
^
^(1) 113 months (9.42 yrs.)
^(2) 97 months ^(8.08 yrs.)
Average annual total return performance for each of the periods indicated was
computed by finding the average annual compounded rates of return that would
equate the initial amount invested to the ending redeemable value, according to
the following formula:
P(1 + T)n = ERV
where: P = initial payment of $1000
T = average annual total return
n = number of years
ERV = ending redeemable value of initial payment
The average annual total return performance figures shown above were
determined by solving the above formula for "T" for each time period and Fund
indicated.
From time to time, evaluations of performance made by independent sources
may also be used in advertisements, sales literature or shareholder reports,
including reprints of, or selections from, editorials or articles about the
Funds. Sources for Fund performance information and articles about the Funds
include, but are not limited to, the following:
American Association of Individual Investors' Journal
Banxquote
Barron's
Business Week
CDA Investment Technologies
CNBC
CNN
Consumer Digest
Financial Times
Financial World
Forbes
Fortune
Ibbotson Associates, Inc.
Institutional Investor
Investment Company Data, Inc.
Investor's Business Daily
Kiplinger's Personal Finance
<PAGE>
Lipper Analytical Services, Inc.'s Mutual Fund Performance ^
Analysis
Money
Morningstar
Mutual Fund Forecaster
No-Load Analyst
No-Load Fund X
Personal Investor
Smart Money
The New York Times
The No-Load Fund Investor
U.S. News and World Report
United Mutual Fund Selector
USA Today
Wall Street Journal
Wiesenberger Investment Companies Services
Working Woman
Worth
SERVICES PROVIDED BY THE FUND
Periodic Withdrawal Plan. As described in the section of each Fund's
Prospectus entitled "Services Provided By the Funds" each Fund offers a Periodic
Withdrawal Plan. All dividends and distributions on shares owned by shareholders
participating in this Plan are reinvested in additional shares. Since withdrawal
payments represent the proceeds from sales of shares, the amount of
shareholders' investments in that Fund will be reduced to the extent that
withdrawal payments exceed dividends and other distributions paid and
reinvested. Any gain or loss on such redemptions must be reported for tax
purposes. In each case, shares will be redeemed at the close of business on or
about the 20th day of each month preceding payment and payments will be mailed
within five business days thereafter.
The Periodic Withdrawal Plan involves the use of principal and is not a
guaranteed annuity. Payments under such a Plan do not represent income or a
return on investment.
A Periodic Withdrawal Plan may be terminated at any time by sending a
written request to INVESCO. Upon termination, all future dividends and capital
gain distributions will be reinvested in additional shares unless a shareholder
requests otherwise.
Exchange Privilege. As discussed in the section of each Fund's Prospectus
entitled "Services Provided by the Funds," the Funds offer shareholders the
privilege of exchanging shares of the Funds for shares of ^ certain other ^
mutual funds advised by INVESCO. Exchange requests may be made either by
telephone or by written request to INVESCO Funds Group, Inc., using the
telephone number or address on the cover of this Statement of Additional
Information. Exchanges made by telephone must be in an amount of at least $250,
if the exchange is being made into an existing
<PAGE>
account of one of the INVESCO funds. All exchanges that establish a new account
must meet the fund's applicable minimum initial investment requirements. Written
exchange requests into an existing account have no minimum requirements other
than the fund's applicable minimum subsequent investment requirements. Any gain
or loss realized on such an exchange is recognized for federal income tax
purposes. This privilege is not an option or right to purchase securities, but
is a revocable privilege permitted under the present policies of each of the
funds and is not available in any state or other jurisdiction where the shares
of the mutual fund into which transfer is to be made are not qualified for sale,
or when the net asset value of the shares presented for exchange is less than
the minimum dollar purchase required by the appropriate prospectus.
TAX-^ DEFERRED RETIREMENT PLANS
As described in the section of each Fund's Prospectus entitled "Services
Provided by the Funds," shares of the Funds may be purchased as the investment
medium for various tax-^ deferred retirement plans. Persons who request
information regarding these plans from INVESCO will be provided with prototype
documents and other supporting information regarding the type of plan requested.
Each of these plans involves a long-term commitment of assets and is subject to
possible regulatory penalties for excess contributions, premature distributions
or for insufficient distributions after age 70-1/2. The legal and tax
implications may vary according to the circumstances of the individual investor.
Therefore, the investor is urged to consult with an attorney or tax adviser
prior to the establishment of such a plan.
HOW TO REDEEM SHARES
Normally, payments for shares redeemed will be mailed within seven days
following receipt of the required documents as described in the section of each
Fund's Prospectus entitled "How to Redeem Shares." The right of redemption may
be suspended and payment postponed when: (a) the New York Stock Exchange is
closed for other than customary weekends and holidays; (b) trading on that
exchange is restricted; (c) an emergency exists as a result of which disposal by
a particular Fund of securities owned by it is not reasonably practicable, or it
is not reasonably practicable for a particular Fund fairly to determine the
value of its net assets; or (d) the Securities and Exchange Commission ("SEC")
by order so permits.
It is possible that in the future conditions may exist which would, in the
opinion of the Company's investment adviser, make it undesirable for a Fund to
pay for redeemed shares in cash. In such cases, the investment adviser may
authorize payment to be made in portfolio securities or other property of the
Fund. However, the Company has obligated itself under the ^ 1940 Act to redeem
for cash all shares of a Fund presented for redemption by any one shareholder up
to $250,000 (or 1% of the Fund's net assets if that
<PAGE>
is less) in any 90-day period. Securities delivered in payment of redemptions
are selected entirely by the investment adviser based on what is in the best
interests of the Fund and its shareholders, and are valued at the value assigned
to them in computing the Fund's net asset value per share. Shareholders
receiving such securities are likely to incur brokerage costs on their
subsequent sales of the securities.
DIVIDENDS, CAPITAL GAIN DISTRIBUTIONS, AND TAXES
The Company intends to continue to conduct its business and ^ satisfy the
^ applicable diversification of assets and source of income requirements to
qualify as a regulated investment company under Subchapter M of the Internal
Revenue Code of 1986, as amended. The Company so qualified in the fiscal year
ended October 31, ^ 1995, and intends to continue to qualify during its ^
current fiscal year. As a result, it is anticipated that the Funds will pay no
federal income or excise taxes and will be accorded conduit or "pass through"
treatment for federal income tax purposes.
Dividends paid by each Fund from net investment income ^, as well as
distributions of net realized short-term capital gains and net realized gains
from certain foreign currency transactions, are, for federal income tax
purposes, taxable as ordinary income to shareholders. After the end of each
calendar year, each Fund sends shareholders information regarding the amount and
character of dividends paid in the year, information on foreign source income
and foreign taxes, and the dividends eligible for the dividends-received
deduction for corporations. Such amounts will be limited to the aggregate amount
of qualifying dividends which each Fund derives from its portfolio investments.
Distributions by each Fund of net ^ capital gains (the excess of net
long-term capital ^ gain over net short-term capital loss) are, for federal
income tax purposes, taxable to the shareholder as long-term capital gains
regardless of how long a shareholder has held shares of the Fund. Such
distributions are identified as such and are not eligible for the
dividends-received deduction.
All dividends and other distributions are regarded as taxable to the
investor, whether or not such dividends and distributions are reinvested in
additional shares. If the net asset value of Fund shares should be reduced below
a shareholder's cost as a result of a distribution ^, such distribution would be
taxable to the shareholder although a portion would be, in effect, a return of
invested capital. The net asset value of each Fund's shares reflects accrued net
investment income and undistributed realized capital and foreign currency gains;
therefore, when a distribution is made, the net asset value is reduced by the
amount of the distribution. If shares are purchased shortly before a
distribution, the full price for the shares will be paid and some portion of the
price may then be returned to the shareholder as a taxable dividend or capital
gain. However, the net asset value per share will be reduced by the amount of
the distribution, which
<PAGE>
would reduce any gain (or increase any loss) for tax purposes on
any subsequent redemption of shares.
INVESCO may provide Fund shareholders with information concerning the
average cost basis of their shares in order to help them prepare their tax
returns. This information is intended as a convenience to shareholders, and will
not be reported to the Internal Revenue Service (the "IRS"). The IRS permits the
use of several methods to determine the cost basis of mutual fund shares. The
cost basis information provided by INVESCO will be computed using the
single-category average cost method, although neither INVESCO nor the Company
recommends any particular method of determining cost basis. Other methods may
result in different tax consequences. If a shareholder has reported gains or
losses for a Fund in past years, the shareholder must continue to use the method
previously used, unless the shareholder applies to the IRS for permission to
change methods.
If Fund shares are sold at a loss after being held for six months or less,
the loss will be treated as long-term, instead of short-term, capital loss to
the extent of any capital gain distributions received on those shares.
Each Fund will be subject to a nondeductible 4% excise tax to the extent
it fails to distribute by the end of any calendar year substantially all of its
ordinary income for that year and capital gain net income for the one-year
period ending on October 31 of that year, plus certain other amounts.
Dividends and interest received by each Fund may ^ be subject to income,
withholding ^ or other taxes imposed by foreign countries and U.S. possessions
that would reduce the yield on its securities. Tax conventions between certain
countries and the United States may reduce or eliminate ^ these foreign taxes,
however, and many foreign countries do not impose taxes on capital gains in
respect of investments by foreign investors. If more than 50% of the value of a
Fund's total assets at the close of any taxable year consists of securities of
foreign corporations, the Fund will be eligible to, and may, file an election
with the IRS that will enable its shareholders, in effect, to receive the
benefit of the foreign tax credit with respect to any foreign and U.S.
possessions income taxes paid by it. Each Fund will report to its shareholders
shortly after each taxable year their respective shares of the Fund's income
from sources within, and taxes paid to, foreign countries and U.S. possessions
if it makes this election.
The Funds may invest in the stock of "passive foreign investment
companies" (PFICs"). A PFIC is a foreign corporation that, in general, meets
either of the following tests: (1) at least 75% of its gross income is passive
or (2) an average of at least 50% of its assets produce, or are held for the
production of, passive income. Under certain circumstances, a Fund will be
subject to federal income tax on a portion of any "excess distribution" received
on the stock of a PFIC or of any gain on
<PAGE>
disposition of the stock (collectively "PFIC income"), plus interest thereon,
even if the Fund distributes the PFIC income as a taxable dividend to its
shareholders. The balance of the PFIC income will be included in the Fund's
investment company taxable income and, accordingly, will not be taxable to it to
the extent that income is distributed to its shareholders.
Gains or losses (1) from the disposition of foreign currencies, (2) from
the disposition of debt securities denominated in foreign currency that are
attributable to fluctuations in the value of the foreign currency between the
date of acquisition of each security and the date of disposition, and (3) that
are attributable to fluctuations in exchange rates that occur between the time a
Fund accrues interest, dividends or other receivables or accrues expenses or
other liabilities denominated in a foreign currency and the time the Fund
actually collects the receivables or pays the liabilities, generally will be
treated as ordinary income or loss. These gains or losses may increase or
decrease the amount of a Fund's investment company taxable income to be
distributed to its shareholders.
Shareholders should consult their own tax advisers regarding specific
questions as to federal, state and local taxes. Dividends and capital gains
distributions will generally be subject to applicable state and local taxes.
Qualification as a regulated investment company under the Internal Revenue Code
of 1986, as amended, for income tax purposes does not entail government
supervision of management or investment policies.
INVESTMENT PRACTICES
Portfolio Turnover. There are no fixed limitations regarding portfolio
turnover for any of the Funds. Brokerage costs to each Fund are commensurate
with the rate of portfolio activity. During the fiscal years ended October 31, ^
1995 and ^ 1994, the INVESCO European Fund's portfolio turnover rates were ^ 96%
and ^ 70%, respectively^; the INVESCO Pacific Basin Fund's portfolio turnover
rates were ^ 56% and 70%, respectively; and the INVESCO International Growth
Fund's portfolio turnover rates were 62% and 87%, respectively. ^
In computing the portfolio turnover rate, all investments with maturities
or expiration dates at the time of acquisition of one year or less are excluded.
Subject to this exclusion, the turnover rate is calculated by dividing (A) the
lesser of purchases or sales of portfolio securities for the fiscal year by (B)
the monthly average of the value of portfolio securities owned by the Fund
during the fiscal year.
Placement of Portfolio Brokerage. Either INVESCO or ^ IAML, as the
Company's investment adviser or sub-adviser, places orders for the purchase and
sale of securities with brokers and dealers based upon ^ their evaluation of
their financial responsibility, subject to their ability to effect transactions
at the best
<PAGE>
available prices. ^ Fund Management evaluates the overall reasonableness of
brokerage commissions paid by reviewing the quality of executions obtained on
portfolio transactions of each Fund, viewed in terms of the size of
transactions, prevailing market conditions in the security purchased or sold,
and general economic and market conditions. In seeking to ensure that the
commissions charged the Fund are consistent with prevailing and reasonable
commissions^ or discounts, Fund Management also endeavors to monitor brokerage
industry practices with regard to the commissions or discounts charged by
brokers/dealers on transactions effected for other comparable institutional
investors. While ^ Fund Management seeks reasonably competitive rates, the Funds
do not necessarily pay the lowest commission ^, spread, or discount available.
Consistent with the standard of seeking to obtain the best execution on
portfolio transactions, ^ Fund Management may select brokers that provide
research services to effect such transactions. Research services consist of
statistical and analytical reports relating to issuers, industries, securities
and economic factors and trends, which may be of assistance or value to ^ Fund
Management in making informed investment decisions. Research services prepared
and furnished by brokers through which the Funds effect securities transactions
may be used by ^ Fund Management in servicing all of their respective accounts
and not all such services may be used by ^ Fund Management in connection with
the Funds.
In recognition of the value of the above-described brokerage and research
services provided by certain brokers, ^ Fund Management, consistent with the
standard of seeking to obtain the best execution on portfolio transactions, may
place orders with such brokers for the execution of transactions for the Funds
on which the commissions or discounts are in excess of those which other brokers
might have charged for effecting the same transactions.
Portfolio transactions may be effected through qualified broker/dealers
who recommend the Funds to their clients, or who act as agent in the purchase
any of the Funds' shares for their clients. When a number of brokers and dealers
can provide comparable best price and execution on a particular transaction, the
Company's adviser may consider the sale of Fund shares by a broker or dealer in
selecting among qualified broker/dealers.
The aggregate dollar ^ amounts of brokerage commissions paid by the
INVESCO European and Pacific Basin Funds for the fiscal years ended October 31,
^ 1995, 1994, and 1993, were $51,678, $486,571, and $103,126, respectively, for
the European Fund and $18,451, $24,970, and $311, ^ respectively, for the
INVESCO Pacific Basin Fund. For the fiscal year ended October 31, ^ 1995 ,
brokers providing research services received ^ $0 in commissions on portfolio
transactions effected for the INVESCO European Fund and INVESCO Pacific Basin
Fund^ on aggregate portfolio transactions of
<PAGE>
^ $0^. The INVESCO Pacific Basin and European Funds each paid ^ $0 in
compensation to brokers for the sale of shares of these Funds during the fiscal
year ended October 31, ^ 1995.
The aggregate dollar amount of brokerage commissions paid by the INVESCO
International Growth Fund for the fiscal years ended October 31, 1995 and 1994
and the period January 1, 1993 to October 31, 1993 were $35,623, $561,639 and ^
$355,739 ^, respectively. During the ^ year ended October 31, ^ 1995, no
commissions were paid to brokers in connection with their provision of research
services to the Fund.
The increased brokerage commissions paid by ^ the Funds in fiscal 1994
versus the other fiscal years were primarily the result of the increased ^
volume of purchases and sales of Fund shares by investors, which resulted in
higher levels of purchases and sales of portfolio securities and corresponding
increases in the amounts of brokerage commissions.
At October 31, ^ 1995, each of the Funds held securities of its regular
brokers or dealers, or their parents, as follows:
<PAGE>
Value of
Securities
Fund Broker or Dealer at ^ 10/31/95
- --------------- -------------------------------- -------------
Pacific Basin Nomura Securities Co., Ltd. $2,743,290
Fund
European Fund Associates Corp. ^ of North ^ 2,849,000
America
^ Prudential Corp. PLC 437,394
International ^ State Street Bank and Trust Co. 5,990,000
Growth Fund
Nomura Securities ^ Co., Ltd. 640,101
Neither INVESCO nor ^ IAML receives any brokerage commissions on portfolio
transactions effected on behalf of any of the Funds, and there is no affiliation
between INVESCO, ^ IAML or any person affiliated with INVESCO, ^ IAML or the
Funds and any broker or dealer that executes transactions for the Funds.
ADDITIONAL INFORMATION
Common Stock. The Company has 500,000,000 authorized shares of common
stock with a par value of $0.01 per share. As of October 31, ^ 1995, 31,849,814
of such shares were outstanding. Of the Company's authorized shares, 100,000,000
shares have been allocated to each of the Company's three Funds. The board of
directors has the authority to designate additional classes of Common Stock
without seeking the approval of shareholders and may classify and reclassify any
authorized but unissued shares.
Shares of each class represent the interests of the shareholders of such
class in a particular portfolio of investments of the Company. Each class of the
Company's shares is preferred over all other classes in respect of the assets
specifically allocated to that class, and all income, earnings, profits and
proceeds from such assets, subject only to the rights of creditors, are
allocated to shares of that class. The assets of each class are segregated on
the books of account and are charged with the liabilities of that class and with
a share of the Company's general liabilities. The board of directors determines
those assets and liabilities deemed to be general assets or liabilities of the
Company, and these items are allocated among classes in a manner deemed by the
board of directors to be fair and equitable. Generally, such allocation will be
made based upon the relative total net assets of each class. In the unlikely
event that a liability allocable to one class exceeds the assets belonging to
the class, all or a portion of such liability may have to be borne by the
holders of shares of the Company's other classes.
All shares, regardless of class, have equal voting rights.
Voting with respect to certain matters, such as ratification of
<PAGE>
independent accountants or election of directors, will be by all classes of the
Company. When not all classes are affected by a matter to be voted upon, such as
approval of an investment advisory contract or changes in a Fund's investment
policies, only shareholders of the class affected by the matter may be entitled
to vote. Company shares have noncumulative voting rights, which means that the
holders of a majority of the shares voting for the election of directors can
elect 100% of the directors if they choose to do so. In such event, the holders
of the remaining shares voting for the election of directors will not be able to
elect any person or persons to the board of directors. After they have been
elected by shareholders, the directors will continue to serve until their
successors are elected and have qualified or they are removed from office, in
either case by a shareholder vote, or until death, resignation, or retirement. ^
Directors may appoint their own successors, provided that always at least a
majority of the directors have been elected the Company's shareholders. It is
the intention of the Company not to hold annual meetings of shareholders. The
directors will call annual or special meetings of shareholders for action by
shareholder vote as may be required by the ^ 1940 Act or the Company's Articles
of Incorporation, or at their discretion.
Principal Shareholders. As of ^ November 30, 1995, the
following entities held more than 5% of the Funds' outstanding
equity securities.
Amount and Nature Percent
Name and Address of Ownership of Class
- ---------------- ----------------- --------
INVESCO Pacific Basin Fund
- --------------------------
Charles Schwab & Co., Inc. ^ 6,147,590.33 sh. ^ 38.20%
Reinvestment ^ Account Record^
101 Montgomery St.
San Francisco, CA 94104
INVESCO European Fund
- ---------------------
Charles Schwab & Co., Inc. ^ 6,408,539.62 sh. ^ 35.73%
Reinvestment ^ Account Record^
101 Montgomery St.
San Francisco, CA 94104
<PAGE>
INVESCO International Growth Fund
- ---------------------------------
^
Commerce Bank of Kansas ^ 1,922,569.59 sh. ^ 29.13%
City Trustee for Record and
Farmland Industries Beneficial
Coop Retirement Plan
P.O. Box 419248
Kansas City, MO 64141
Charles Schwab & Co., Inc. 1,134,355.22 sh. 17.19%
Reinvestment Account Record
101 Montgomery St.
San Francisco, CA 94104
Independent Accountants. Price Waterhouse LLP, 950 Seventeenth Street,
Denver, Colorado, has been selected as the independent accountants of the
Company. The independent accountants are responsible for auditing the financial
statements of the Company.
Custodian. State Street Bank and Trust Company, P.O. Box 351, Boston,
Massachusetts, has been designated as custodian of the cash and investment
securities of the Company. The bank is also responsible for, among other things,
receipt and delivery of each Fund's investment securities in accordance with
procedures and conditions specified in the custody agreement. Under its contract
with the Company, the custodian is authorized to establish separate accounts in
foreign currencies and to cause foreign securities owned by the Company to be
held outside the United States in branches of U.S. banks and, to the extent
permitted by applicable regulations, in certain foreign banks and securities
depositories.
Transfer Agent. The Company is provided with transfer agent, registrar,
and dividend disbursing agent services by INVESCO Funds Group, Inc., 7800 E.
Union Avenue, Denver, Colorado 80237, pursuant to the Transfer Agency Agreement
described herein. Such services include the issuance, cancellation and transfer
of shares of each of the Funds, and the maintenance of records regarding the
ownership of such shares.
Reports to Shareholders. The Company's fiscal year ends on October 31. The
Fund distributes reports at least semiannually to its shareholders. Financial
statements regarding the Company, audited by the independent accountants, are
sent to shareholders annually.
Legal Counsel. The firm of Kirkpatrick & Lockhart,
Washington, D.C., is legal counsel for the Company. The firm of
Moye, Giles, O'Keefe, Vermeire & Gorrell, Denver, Colorado, ^ acts
as special ^ counsel to the Funds.
Financial Statements. The Company's audited financial
statements and ^ the notes thereto for the fiscal year ended
October 31, ^ 1995 and the report of Price Waterhouse LLP with
<PAGE>
respect to such financial statements are incorporated herein by reference from
the Company's Annual Report to Shareholders for the fiscal year ended October
31, 1995.
Prospectuses. The Company will furnish, without charge, a copy of the
Prospectus for each of its Funds, upon request. Such requests should be made to
the Company at the mailing address or telephone number set forth on the first
page of this Statement of Additional Information.
Registration Statement. This Statement of Additional Information and the
Prospectuses do not contain all of the information set forth in the Registration
Statement the Company has filed with the ^ SEC. The complete Registration
Statement may be obtained from the ^ SEC upon payment of the fee prescribed by
the rules and regulations of the SEC.
<PAGE>
^PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements:
Page in
Prospectus
(1) Financial statements and schedules
included in Prospectuses (Part A):
Financial Highlights for each of the ^
ten years in the period ended October
31, ^ 1995 with respect to the INVESCO 8
Pacific Basin Fund; for each of the ^
nine years in the period ended October
31, ^ 1995 and for the period from
commencement of operations (June 2,
1986) to October 31, 1986 with respect
to the INVESCO European Fund; and for 9
the two years ended October 31, 1995,
for the period from January 1, 1993 to
October 31, 1993, for each of the five
years in the period ended December 31, ^
1992 and for the period from September
22, 1987 (commencement of operations) top
December 31, 1987 with respect to the
INVESCO International Growth Fund. 34
Page in
Statement
of Addi-
tional In-
formation
(2) The following audited financial
statements of the INVESCO European Fund,
the INVESCO Pacific Basin Fund and the
INVESCO International Growth Fund and
the notes thereto for the fiscal ^ year
ended October 31, 1995, and the report
of Price Waterhouse LLP with respect to
such financial statements, are
incorporated in the Statement of
Additional Information by reference from
the Company's Annual Report to
Shareholders for the fiscal year ended
October 31, 1995: Statement of
Investment Securities as of October 31,
1995; Statement of Assets and
Liabilities as of October 31, 1995;
Statement of Operations for the year
ended October 31, 1995; ^ Statement of
Changes in Net Assets for ^ the two
<PAGE>
years ended October 31, 1995; Financial Highlights for the INVESCO European
Fund and INVESCO Pacific Basin Fund for the five years ended October 31, 1995,
and for the INVESCO International Growth Fund for the two years ended October
31, 1995, the eight-month fiscal period ended October 31, 1993, and the two
years ended December 31, 1992.^
(3) Financial statements and schedules
included in Part C:
None: Schedules have been omitted as
all information has been presented in
the financial statements.
(b) Exhibits:
(1) Articles of Incorporation (Charter)--
dated April 2, ^ 1993.1
(2) Bylaws, as amended July 21, ^ 1993.3
(3) Not applicable.
(4) Specimen stock certificates for each of the INVESCO Pacific
Basin Fund, INVESCO European Fund, and INVESCO International
Growth ^ Fund.1
(5) (a) Investment Advisory Agreement--
between the Company and INVESCO Funds
Group, Inc. dated April 30, ^ 1993.2
(b) Sub-Advisory Agreement between
INVESCO Funds Group, Inc. and ^ INVESCO
Asset Management Limited with respect to
INVESCO European Fund and INVESCO
Pacific Basin Fund dated November 10,
1995.
(c) Form of Sub-Advisory Agreement
between INVESCO Funds Group, Inc. and
INVESCO Asset Management Limited with
respect to INVESCO International Growth
Fund dated February 2, 1996.
(6) General Distribution Agreement, dated
April 30, ^ 1993.2
(7) Defined Benefit Deferred Compensation
Plan for Non-Interested Directors and ^
Trustees.3
(8) Custody Agreement ^ Between Registrant
and State Street Bank and Trust Company
<PAGE>
dated July 1, 1993.2 Amendment to Custody Agreement dated October 25, 1995.
(9) (a) Transfer Agency Agreement dated
April 30, ^ 1993.2
(b) Amended Fee Schedule to Transfer
Agency Agreement dated April 1, 1994.4
(c) Administrative Services Agreement
between the Company and INVESCO Funds
Group, Inc. dated April 30, ^ 1993.2
(10) Opinion and consent of counsel as to each of the three Funds as
to the legality of the securities being registered, indicating
whether they will, when sold, be legally issued, fully paid and
non-assessable ^, dated May 21, 1993.1
(11) Consent of Independent Accountants.
(12) Not applicable.
(13) Not applicable.
(14) Copies of model plans used in the establishment of retirement
plans as follows: Non-standardized Profit Sharing Plan;
Non-standardized Money Purchase Pension Plan; Standardized
Profit Sharing Plan Adoption Agreement; Standardized Money
Purchase Pension Plan; Non-standardized 401(k) Plan Adoption
Agreement; Standardized 401(k) Paired Profit Sharing Plan;
Standardized Simplified Profit Sharing Plan; Standardized
Simplified Money Purchase Plan; Defined Contribution Master Plan
& Trust Agreement; and Financial 403(b) Retirement ^ Plan.1
(15) Not applicable.
(16) Schedule for computation of performance
data for the Pacific Basin and European
Portfolios--previously filed with Post-
Effective Amendment No. 8 to
Registration Statement No. 2-85905 of
Financial Strategic Portfolios, Inc.,
dated December 20, 1988, and herein
incorporated by reference.
<PAGE>
Schedule for computation of performance
data for the Financial International
Growth Fund--previously filed with Post-
Effective Amendment No. 7 to
Registration Statement No. 33-3429 of
Financial Series Trust, dated April 27,
1988, and herein incorporated by
reference.
(17) (a) Financial Data Schedule for the period ended October 31,
1995 for INVESCO European Fund.
(b) Financial Data Schedule for the period ended October 31,
1995 for INVESCO Pacific Basin Fund.
(c) Financial Data Schedule for the period ended October 31,
1995 for INVESCO International Growth Fund.
(18) Not applicable.
- ----------------
1Previously filed with Registrant's original Registration Statement on Form N-1A
on May 27, 1993, and herein incorporated by reference.
2Previously filed with Pre-Effective Amendment No. 1 to
Registrant's Registration Statement on Form N-1A on June 29, 1993,
and herein incorporated by reference.
3Previously filed with Post-Effective Amendment No. 1 to
Registrant's Registration Statement on Form N-1A on February 24,
1994, and herein incorporated by reference.
4Previously filed with Post-Effective Amendment No. 2 to
Registrant's Registration Statement on Form N-1A on February 21,
1995, and herein incorporated by reference.^
<PAGE>
Item 25. Persons Controlled by or Under Common Control with
Registrant
No person is presently controlled by or under common control
with Registrant.
Item 26. Number of Holders of Securities
Number of
Record Holders
Title of Class ^ November 30, 1995
-------------- -------------------
^ INVESCO European Fund 21,840
Common stock
^ INVESCO Pacific Basin Fund 8,688
Common stock
INVESCO International Growth Fund ^ 18,032
^ Common Stock
Item 27. Indemnification
Indemnification provisions for officers, directors and employees of
Registrant are set forth in Article VII, Section 2 of the Articles of
Incorporation, and are hereby incorporated by reference. See Item 24(b)(1)
above. Under this Article, officers and directors will be indemnified to the
fullest extent permitted to directors by the Maryland General Corporation Law,
subject only to such limitations as may be required by the Investment Company
Act of 1940, as amended, and the rules thereunder. Under the Investment Company
Act of 1940, Fund directors and officers cannot be protected against liability
to the Company or its shareholders to which they would be subject because of
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties of their office. The Company also intends to maintain liability insurance
policies covering its directors and officers.
Item 28. Business and Other Connections of Investment Adviser
See "The Funds and Their Management" in the Funds' respective
Prospectuses and in the Statement of Additional Information for information
regarding the business of the investment ^ adviser and sub-^ adviser. For
information as to the business, profession, vocation or employment of a
substantial nature of each of the officers and directors of INVESCO Funds Group,
Inc., reference is made to the Schedule Ds to the Form ADV filed under the
Investment Advisers Act of 1940 by INVESCO Funds Group, Inc., which schedules
are herein incorporated by reference.
<PAGE>
Item 29. Principal Underwriters
(a) INVESCO ^ Diversified Funds, Inc.^
INVESCO Dynamics Fund, Inc.
INVESCO Emerging Opportunity Funds, Inc.
INVESCO Growth Fund, Inc.
INVESCO Income Funds, Inc.
INVESCO Industrial Income Fund, Inc.
INVESCO Money Market Funds, Inc.
INVESCO ^ Multiple Asset Funds, Inc.
INVESCO Specialty Funds, Inc.
INVESCO Strategic Portfolios, Inc.
INVESCO Tax-Free Income Funds, Inc.
^ INVESCO Value Trust
^ INVESCO Variable Investment Funds, Inc.
<PAGE>
^(b)
Positions and Positions and
Name and Principal Offices with Offices with
Business Address Underwriter Registrant
^
David D. Barrett Vice President
7800 E. Union Avenue
Denver, CO 80237
Frank M. Bishop Director Director
1315 Peachtree Street, N.E.
Atlanta, GA 30309
Charles W. Brady Chairman of ^
1315 Peachtree Street, N.E. the Board
Atlanta, GA 30309
Kenneth R. Christoffersen ^ Vice President
7800 E. Union Avenue Asst. General Counsel
Denver, CO 80237
^
M. Anthony Cox Senior Vice
^ 1315 Peachtree Street, N.E. President
^ Atlanta, GA 30309
Steven T. Cox, Jr. Regional Vice
7800 E. Union Avenue President
Denver, CO 80237
Robert D. Cromwell Asst. Vice President
7800 E. Union Avenue
Denver, CO 80237
Philip J. Crosley Vice President
7800 E. Union Avenue
Denver, CO 80237
Samuel T. DeKinder Director
1315 Peachtree Street, N.E.
Atlanta, GA 30309
<PAGE>
Positions and Positions and
Name and Principal Offices with Offices with
Business Address Underwriter Registrant
^
William ^ J. Galvin, Jr. Senior Vice Asst. Sec.
7800 E. Union Avenue President
Denver, CO 80237
^ Linda J. ^ Gieger Vice President ^
7800 E. Union Avenue
Denver, CO 80237
Ronald L. Grooms Senior Vice Treasurer
7800 E. Union Avenue President Chief Fin'l
Denver, CO 80237 & Treasurer Officer & ^
Chief
Acctg. Officer
Wylie G. Hairgrove Vice President
7800 E. Union Avenue
Denver, CO 80237
^ David S. Harris Regional Vice
1315 Peachtree Street, N.E. President
Atlanta, GA 30309
^
Dan J. Hesser Chairman of the President &
7800 E. Union Avenue Board, President, Director
Denver, CO 80237 Chief Executive
Officer, Director
^
Mark A. Jones Regional Vice
7800 E. Union Avenue President
Denver, CO 80237
Jeraldine E. Kraus Assistant Secretary
7800 E. Union Avenue
Denver, CO 80237
Michael D. Legoski Asst. Vice President
7800 E. Union Avenue
Denver, CO 80237
<PAGE>
Positions and Positions and
Name and Principal Offices with Offices with
Business Address Underwriter Registrant
Walter R. Lewis, Jr. Regional Vice
1315 Peachtree Street NE President
Atlanta, GA 30309
^ Brian N. Minturn Executive Vice
7800 E. Union Avenue President
Denver, CO 80237
^ Robert J. O'Connor Director
1315 Peachtree Street NE ^
Atlanta, GA 30309
^
Laura M. Parsons Vice President
7800 E. Union Avenue
Denver, CO 80237
Glen A. Payne Senior Vice ^ Secretary
7800 E. Union Avenue President, Secretary ^
Denver, CO 80237 & General Counsel
^
R. Dalton Sim Director Director
7800 E. Union Avenue
Denver, CO 80237
James S. Skesavage Regional Vice
1315 Peachtree Street NE President
Atlanta, GA 30309
Terri Berg Smith Vice President
7800 E. Union Avenue
Denver, CO 80237
Alan I. Watson Vice President Asst. Sec.
7800 E. Union Avenue
Denver, CO 80237
Judy P. Wiese Vice President Asst. Treas.
7800 E. Union Avenue
Denver, CO 80237
<PAGE>
Positions and Positions and
Name and Principal Offices with Offices with
Business Address Underwriter Registrant
^ Allyson B. Zoellner Vice President ^
7800 E. Union Avenue
Denver, CO 80237
^
(c) Not applicable.
Item 30. Location of Accounts and Records
Dan J. Hesser
7800 E. Union Avenue
Denver, CO 80237
Item 31. Management Services
Not applicable.
Item 32. Undertakings
The Registrant shall furnish each person to whom a prospectus is
delivered with a copy of the Registrant's latest annual report to shareholders,
upon request and without charge.
The Registrant hereby undertakes that the board of directors will
call a special shareholders meeting for the purpose of voting on the question of
removal of a director or directors of the Company if requested to do so in
writing by the holders of at least 10% of the outstanding shares of the Company,
and to assist the shareholders in communicating with other shareholders as
required by the Investment Company Act of 1940.
<PAGE>
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the registrant has duly caused this
post-effective amendment to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Denver, County of Denver, and State of
Colorado, on the 22nd day of December, 1995.
Attest: INVESCO International Funds, Inc.
/s/ Glen A. Payne /s/ Dan J. Hesser
- ------------------------------- -------------------------------
Glen A. Payne, Secretary Dan J. Hesser, President
Pursuant to the requirements of the Securities Act of 1933, this
post-effective amendment to Registrant's Registration Statement has been signed
by the following persons in the capacities indicated on this 22nd day of
December, 1995.
/s/ Dan J. Hesser /s/ Lawrence H. Budner
- ------------------------------- -------------------------------
Dan J. Hesser, President & Lawrence H. Budner, Director
Director (Chief Executive Officer)
/s/ Ronald L. Grooms /s/ Daniel D. Chabris
- ------------------------------- -------------------------------
Ronald L. Grooms, Treasurer Daniel D. Chabris, Director
(Chief Financial and Accounting
Officer)
/s/ Victor L. Andrews /s/ Fred A. Deering
- ------------------------------- -------------------------------
Victor L. Andrews, Director Fred A. Deering, Director
/s/ Bob R. Baker /s/ A. D. Frazier, Jr.
- ------------------------------ -------------------------------
Bob R. Baker, Director A. D. Frazier, Jr., Director
/s/ Frank M. Bishop /s/ Kenneth T. King
- ------------------------------- -------------------------------
Frank M. Bishop, Director Kenneth T. King, Director
/s/ Charles W. Brady /s/ John W. McIntyre
- ----------------------------- -------------------------------
Charles W. Brady, Director John W. McIntyre, Director
/s/ R. Dalton Sim
-------------------------------
R. Dalton Sim, Director
By* By*
/s/ Glen A. Payne
- ----------------------------- -----------------------------
Edward F. O'Keefe Glen A. Payne
Attorney in Fact Attorney in Fact
* Original Powers of Attorney authorizing Edward F. O'Keefe and Glen A. Payne,
and each of them, to execute this post-effective amendment to the Registration
Statement of the Registrant on behalf of the above-named directors and officers
of the Registrant have been filed with the Securities and Exchange Commission on
June 29, 1993, February 24, 1994, February 17, 1995 and December 22, 1995.
<PAGE>
Exhibit Index
Page in
Exhibit Number Registration Statement
5(b) 105
5(c) ^ 111
^ 8 119
11 120
17(a) 121
17(b) 122
17(c) ^ 123
SUB-ADVISORY AGREEMENT
AGREEMENT made this 10th day of November, 1995, by and between INVESCO
Funds Group, Inc. ("INVESCO"), a Delaware corporation, and INVESCO Asset
Management Limited, a United Kingdom corporation ("the Sub-Adviser").
W I T N E S S E T H:
WHEREAS, INVESCO INTERNATIONAL FUNDS, INC. (the "Company") is engaged in
business as a diversified, open-end management investment company registered
under the Investment Company Act of 1940, as amended (hereinafter referred to as
the "Investment Company Act") and has one class of shares (the "Shares"), which
is divided into series, each representing an interest in a separate portfolio of
investments, with two such series being designated the INVESCO European Fund and
the INVESCO Pacific Basin Fund (collectively, the "Funds"); and
WHEREAS, INVESCO and the Sub-Adviser are engaged in rendering investment
advisory services and are registered as investment advisers under the Investment
Advisers Act of 1940; and
WHEREAS, the Sub-Adviser is a member of the Investment Management
Regulatory Organization ("IMRO") in the United Kingdom and as such is regulated
by IMRO in the conduct of its business; further the Sub-Adviser shall provide
services to INVESCO as a "Business Investor" as defined under the Rules of IMRO
and as such certain rules designed for the protection of private customers shall
not apply; and
WHEREAS, INVESCO has entered into an Investment Advisory Agreement with
the Company (the "INVESCO Investment Advisory Agreement"), pursuant to which
INVESCO is required to provide investment advisory services to the Company, and,
upon receipt of written approval of the Company, is authorized to retain
companies which are affiliated with INVESCO to provide such services; and
WHEREAS, the Sub-Adviser is willing to provide investment advisory
services to the Company on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, INVESCO and the Sub-Adviser hereby agree as follows:
ARTICLE I
DUTIES OF THE SUB-ADVISER
INVESCO hereby employs the Sub-Adviser to act as investment adviser to the
Company and to furnish the investment advisory services described below, subject
to the broad supervision of INVESCO and Board of Directors of the Company, for
the period and on the terms and conditions set forth in this Agreement. The
Sub-Adviser hereby accepts such assignment and agrees during such period, at its
own expense, to render such services and to assume the obligations herein set
forth for the compensation provided for herein. The Sub-Adviser shall for all
purposes herein be deemed to be an independent contractor and, unless otherwise
expressly provided or authorized herein, shall have no authority to act for or
represent the Company in any way or otherwise be deemed an agent of the Company.
The Sub-Adviser hereby agrees to manage the investment operations of the
Funds, subject to the supervision of the Company's directors (the "Directors")
and INVESCO. Specifically, the Sub-Adviser agrees to perform the following
services:
(a) to manage the investment and reinvestment of all the assets, now or
hereafter acquired, of the Funds, and to execute all purchases and
sales of portfolio securities;
<PAGE>
(b) to maintain a continuous investment program for the Funds,
consistent with (i) the Funds' investment policies as set forth in
the Company's Articles of Incorporation, Bylaws, and Registration
Statement, as from time to time amended, under the Investment
Company Act of 1940, as amended (the "1940 Act"), and in any
prospectus and/or statement of additional information of the Funds,
as from time to time amended and in use under the Securities Act of
1933, as amended, and (ii) the Company's status as a regulated
investment company under the Internal Revenue Code of 1986, as
amended;
(c) to determine what securities are to be purchased or sold for the
Funds, unless otherwise directed by the Directors of the Company or
INVESCO, and to execute transactions accordingly;
(d) to provide to the Funds 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 the Sub-Adviser;
(e) to determine what portion of the Funds should be invested in the
various types of securities authorized for purchase by the Funds;
and
(f) to make recommendations as to the manner in which voting rights,
rights to consent to Funds action and any other rights pertaining to
the Funds' portfolio securities shall be exercised.
With respect to execution of transactions for the Funds, the Sub-Adviser
is authorized to employ such brokers or dealers as may, in the Sub-Adviser's
best judgment, implement the policy of the Funds to obtain prompt and reliable
execution at the most favorable price obtainable. In assigning an execution or
negotiating the commission to be paid therefor, the Sub-Adviser is authorized to
consider the full range and quality of a broker's services which benefit the
Funds, including but not limited to research and analytical capabilities,
reliability of performance, and financial soundness and responsibility. Research
services prepared and furnished by brokers through which the Sub-Adviser effects
securities transactions on behalf of the Funds may be used by the Sub-Adviser in
servicing all of its accounts, and not all such services may be used by the
Sub-Adviser in connection with the Funds. In the selection of a broker or dealer
for execution of any negotiated transaction, the Sub-Adviser shall have no duty
or obligation to seek advance competitive bidding for the most favorable
negotiated commission rate for such transaction, or to select any broker solely
on the basis of its purported or "posted" commission rate for such transaction,
provided, however, that the Sub-Adviser shall consider such "posted" commission
rates, if any, together with any other information available at the time as to
the level of commissions known to be charged on comparable transactions by other
qualified brokerage firms, as well as all other relevant factors and
circumstances, including the size of any contemporaneous market in such
securities, the importance to the Funds of speed, efficiency, and
confidentiality of execution, the execution capabilities required by the
circumstances of the particular transactions, and the apparent knowledge or
familiarity with sources from or to whom such securities may be purchased or
sold. Where the commission rate reflects services, reliability and other
relevant factors in addition to the cost of execution, the Sub-Adviser shall
have the burden of demonstrating that such expenditures were bona fide and for
the benefit of the Funds.
The Sub-Adviser may recommend transactions in which it has directly or
indirectly a material interest, in unregulated collective investment schemes
including any operated or advised by the Sub-Adviser or in margined
transactions. Advice on investments may extend to investments not traded or
exchanges recognized or designated by the Securities and Investments Board.
<PAGE>
Both parties acknowledge that the advice given under this Agreement may
involve liabilities in one currency matched by assets in another currency and
that accordingly movements in rates of exchange may have a separate effect,
unfavorable as well as favorable on the gain or loss experienced on an
investment.
In carrying out its duties hereunder, the Sub-Adviser shall comply with
all instructions of INVESCO in connection therewith such instructions may be
given by letter, telex, telephone or facsimile by any Director or Officer of
INVESCO or by any other person authorized by INVESCO.
Any instructions which appear to conflict with the terms of this Agreement
may be confirmed by the Sub-Adviser with INVESCO prior to execution.
ARTICLE II
ALLOCATION OF CHARGES AND EXPENSES
The Sub-Adviser assumes and shall pay for maintaining the staff and
personnel necessary to perform its obligations under this Agreement, and shall,
at its own expense, provide the office space, equipment and facilities necessary
to perform its obligations under this Agreement. Except to the extent expressly
assumed by the Sub-Adviser herein and except to the extent required by law to be
paid by the Sub-Adviser, INVESCO and/or the Company shall pay all costs and
expenses in connection with the operations of the Funds.
ARTICLE III
COMPENSATION OF THE SUB-ADVISER
For the services rendered, facilities furnished, and expenses assumed by
the Sub-Adviser, INVESCO shall pay to the Sub-Adviser a fee, computed daily and
paid as of the last day of each month, using for each daily calculation the most
recently determined net asset value of the Funds, as determined by a valuation
made in accordance with the Fund's procedures for calculating its net asset
value as described in the Fund's Prospectus and/or Statement of Additional
Information. The advisory fee to the Sub-Adviser shall be computed at the annual
rate of 0.45% of each Fund's daily net assets up to $350 million; 0.40% of each
Fund's daily net assets in excess of $350 million but not more than $700
million; and 0.35% of each Fund's daily net assets in excess of $700 million.
During any period when the determination of the Funds' net asset value is
suspended by the Directors of the Funds, the net asset value of a share of the
Funds as of the last business day prior to such suspension shall, for the
purpose of this Article III, be deemed to be the net asset value at the close of
each succeeding business day until it is again determined. However, no such fee
shall be paid to the Sub-Adviser with respect to any assets of the Funds which
may be invested in any other investment company for which the Sub-Adviser serves
as investment adviser or sub-adviser. The fee provided for hereunder shall be
prorated in any month in which this Agreement is not in effect for the entire
month. The Sub-Adviser shall be entitled to receive fees hereunder only for such
periods as the INVESCO Investment Advisory Agreement remains in effect.
<PAGE>
ARTICLE IV
ACTIVITIES OF THE SUB-ADVISER
The services of the Sub-Adviser to the Funds are not to be deemed to be
exclusive, the Sub-Adviser and any person controlled by or under common control
with the Sub-Adviser (for purposes of this Article IV referred to as
"affiliates") being free to render services to others. It is understood that
directors, officers, employees and shareholders of the Funds are or may become
interested in the Sub-Adviser and its affiliates, as directors, officers,
employees and shareholders or otherwise and that directors, officers, employees
and shareholders of the Sub-Adviser, INVESCO and their affiliates are or may
become interested in the Funds as directors, officers and employees.
ARTICLE V
AVOIDANCE OF INCONSISTENT POSITIONS AND COMPLIANCE WITH APPLICABLE LAWS
In connection with purchases or sales of securities for the investment
portfolios of the Funds, neither the Sub-Adviser nor any of its directors,
officers or employees will act as a principal or agent for any party other than
the Funds or receive any commissions. The Sub-Adviser will comply with all
applicable laws in acting hereunder including, without limitation, the 1940 Act;
the Investment Advisers Act of 1940, as amended; the Rules and Regulations of
IMRO; and all rules and regulations duly promulgated under the foregoing.
ARTICLE VI
DURATION AND TERMINATION OF THIS AGREEMENT
This Agreement shall become effective as of the effective date of the
reorganization of the Pacific Basin Portfolio and European Portfolio of
Financial Strategic Portfolios, Inc. into the Funds of the Company designated
the INVESCO Pacific Basin Fund and INVESCO European Fund, respectively.
Thereafter, this Agreement shall remain in force for an initial term of two
years from the date of execution, and from year to year thereafter until its
termination in accordance with this Article VI, but only so long as such
continuance is specifically approved at least annually by (i) the Directors of
the Company, or by the vote of a majority of the outstanding voting securities
of the Funds, and (ii) a majority of those Directors who are not parties to this
Agreement or interested persons of any such party cast in person at a meeting
called for the purpose of voting on such approval.
This Agreement may be terminated at any time, without the payment of any
penalty, by INVESCO, the Funds by vote of the Directors of the Company, or by
vote of a majority of the outstanding voting securities of the Funds, or by the
Sub-Adviser. A termination by INVESCO or the Sub-Adviser shall require sixty
days' written notice to the other party and to the Company, and a termination by
the Company shall require such notice to each of the parties. This Agreement
shall automatically terminate in the event of its assignment to the extent
required by the Investment Company Act of 1940 and the Rules thereunder.
The Sub-Adviser agrees to furnish to the Directors of the Company such
information on an annual basis as may reasonably be necessary to evaluate the
terms of this Agreement.
Termination of this Agreement shall not affect the right of the
Sub-Adviser to receive payments on any unpaid balance of the compensation
described in Article III hereof earned prior to such termination.
<PAGE>
ARTICLE VII
LIABILITY
The Sub-Adviser agrees to use its best efforts and judgement and due care
in carrying out its duties under this Agreement provided however that the Sub-
Adviser shall not be liable to INVESCO for any loss suffered by INVESCO or the
funds advised in connection with the subject matter of this Agreement unless
such loss arises from the willful misfeasance, bad faith or negligence in the
performance of the Sub-Adviser's duties and subject and without prejudice to the
foregoing. INVESCO hereby undertakes to indemnify and to keep indemnified the
Sub-Adviser from and against any and all liabilities, obligations, losses,
damages, suits and expenses which may be incurred by or asserted against the
Sub- Adviser for which it is responsible pursuant to Article I hereof provided
always that the Sub-Adviser shall send to INVESCO as soon as possible all
claims, letters, summonses, writs or documents which it receives from third
parties and provide whatever information and assistance INVESCO may require and
no liability of any sort shall be admitted and no undertaking shall be given nor
shall any offer, promise or payment be made or legal expenses incurred by the
Sub-Adviser without written consent of INVESCO who shall be entitled if it so
desires to take over and conduct in the name of the Sub-Adviser the defense of
any action or to prosecute any claim for indemnity or damages or otherwise
against any third party.
ARTICLE VIII
AMENDMENTS OF THIS AGREEMENT
No provision of this Agreement may be orally changed or discharged, but
may only be modified by an instrument in writing signed by the Sub-Adviser and
INVESCO. In addition, no amendment to this Agreement shall be effective unless
approved by (1) the vote of a majority of the Directors of the Company,
including a majority of the Directors who are not parties to this Agreement or
interested persons of any such party cast in person at a meeting called for the
purpose of voting on such amendment and (2) the vote of a majority of the
outstanding voting securities of the Funds (other than an amendment which can be
effective without shareholder approval under applicable law).
ARTICLE IX
DEFINITIONS OF CERTAIN TERMS
In interpreting the provisions of this Agreement, the terms "vote of a
majority of the outstanding voting securities," "assignments," "affiliated
person" and "interested person," when used in this Agreement, shall have the
respective meanings specified in the Investment Company Act and the Rules and
Regulations thereunder, subject, however, to such exemptions as may be granted
by the Securities and Exchange Commission under said Act.
ARTICLE X
GOVERNING LAW
This Agreement shall be construed in accordance with the laws of the State
of Colorado and the applicable provisions of the Investment Company Act. To the
extent that the applicable laws of the State of Colorado, or any of the
provisions herein, conflict with the applicable provisions of the Investment
Company Act, the latter shall control.
<PAGE>
ARTICLE XI
MISCELLANEOUS
Advice. Any recommendation or advice given by the Sub-Adviser to INVESCO
hereunder shall be given in writing or by mail, telex, telefacsimile or by
telephone, such telephone advice to be confirmed by mail, telex, telefacsimile
or in writing to such place as INVESCO shall from time to time require; further
the Sub-Adviser shall be free to telephone INVESCO as it sees fit in the
performance of its duties.
Complaints. The Sub-Adviser has in operation a written procedure for the
proper handling of complaints from clients; if the matter of complaint cannot be
resolved to INVESCO's satisfaction, INVESCO has the right of recourse to IMRO.
Notice. Any notice under this Agreement shall be in writing, addressed and
delivered or mailed, postage prepaid, to the other party at such address as such
other party may designate for the receipt of such notice.
Severability. Each provision of this Agreement is intended to be
severable. If any provision of this Agreement shall be held illegal or made
invalid by a court decision, statute, rule or otherwise, such illegality or
invalidity shall not affect the validity or enforceability of the remainder of
this Agreement.
Headings. The headings in this Agreement are inserted for convenience and
identification only and are in no way intended to describe, interpret, define or
limit the size, extent or intent of this Agreement or any provision hereof.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
INVESCO FUNDS GROUP, INC.
ATTEST: By:/s/ Dan J. Hesser
---------------------------
Dan J. Hesser
/s/ Glen A. Payne President
- --------------------
Glen A. Payne
Secretary
INVESCO ASSET MANAGEMENT LIMITED
ATTEST:
By:/s/ Norman Riddell
----------------------------
Norman Riddell
/s/ Graeme J. Proudfoot Chairman
- -----------------------
Graeme J. Proudfoot
FORM OF SUB-ADVISORY AGREEMENT
AGREEMENT made this 2nd day of February, 1996, by and between INVESCO
Funds Group, Inc. ("INVESCO"), a Delaware corporation, and INVESCO Asset
Management Limited, a United Kingdom corporation ("the Sub-Adviser").
W I T N E S S E T H:
WHEREAS, INVESCO INTERNATIONAL FUNDS, INC. (the "Company") is engaged in
business as a diversified, open-end management investment company registered
under the Investment Company Act of 1940, as amended (hereinafter referred to as
the "Investment Company Act") and has one class of shares (the "Shares"), which
is divided into series, each representing an interest in a separate portfolio of
investments, with one such series being designated the INVESCO International
Growth Fund (the "Fund"); and
WHEREAS, INVESCO and the Sub-Adviser are engaged in rendering investment
advisory services and are registered as investment advisers under the Investment
Advisers Act of 1940; and
WHEREAS, the Sub-Adviser is a member of the Investment Management
Regulatory Organization ("IMRO") in the United Kingdom and as such is regulated
by IMRO in the conduct of its business; further the Sub-Adviser shall provide
services to INVESCO as a "Business Investor" as defined under the Rules of IMRO
and as such certain rules designed for the protection of private customers shall
not apply; and
WHEREAS, INVESCO has entered into an Investment Advisory Agreement with
the Company (the "INVESCO Investment Advisory Agreement"), pursuant to which
INVESCO is required to provide investment advisory services to the Company, and,
upon receipt of written approval of the Company, is authorized to retain
companies which are affiliated with INVESCO to provide such services; and
WHEREAS, the Sub-Adviser is willing to provide investment advisory
services to the Company on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, INVESCO and the Sub-Adviser hereby agree as follows:
ARTICLE I
DUTIES OF THE SUB-ADVISER
INVESCO hereby employs the Sub-Adviser to act as investment adviser to the
Company and to furnish the investment advisory services described below, subject
to the broad supervision of INVESCO and Board of Directors of the Company, for
the period and
<PAGE>
on the terms and conditions set forth in this Agreement. The Sub-Adviser hereby
accepts such assignment and agrees during such period, at its own expense, to
render such services and to assume the obligations herein set forth for the
compensation provided for herein. The Sub-Adviser shall for all purposes herein
be deemed to be an independent contractor and, unless otherwise expressly
provided or authorized herein, shall have no authority to act for or represent
the Company in any way or otherwise be deemed an agent of the Company.
The Sub-Adviser hereby agrees to manage the investment operations of the
Fund, subject to the supervision of the Company's directors (the "Directors")
and INVESCO. Specifically, the Sub-Adviser agrees to perform the following
services:
(a) to manage the investment and reinvestment of all the
assets, now or hereafter acquired, of the Fund, and to
execute all purchases and sales of portfolio securities;
(b) to maintain 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, as from time to time amended,
under the Investment Company Act of 1940, as amended (the
"1940 Act"), and in any prospectus and/or statement of
additional information of the Fund, as from time to time
amended and in use under the Securities Act of 1933, as
amended, and (ii) the Company's status as a regulated
investment company under the Internal Revenue Code of
1986, as amended;
(c) to determine what securities are to be purchased or sold for the
Fund, unless otherwise directed by the Directors of the Company or
INVESCO, and to execute transactions accordingly;
(d) to provide to 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
the Sub-Adviser;
(e) to determine what portion of the Fund should be invested
in the various types of securities authorized for
purchase by the Funds; and
(f) to make recommendations as to the manner in which voting rights,
rights to consent to Fund action and any other rights pertaining to
the Fund's portfolio securities shall be exercised.
With respect to execution of transactions for the Fund, the Sub-Adviser is
authorized to employ such brokers or dealers as may,
<PAGE>
in the Sub-Adviser's best judgment, implement the policy of the Fund to obtain
prompt and reliable execution at the most favorable price obtainable. In
assigning an execution or negotiating the commission to be paid therefor, the
Sub-Adviser is authorized to consider the full range and quality of a broker's
services which benefit the Fund, including but not limited to research and
analytical capabilities, reliability of performance, and financial soundness and
responsibility. Research services prepared and furnished by brokers through
which the Sub-Adviser effects securities transactions on behalf of the Fund may
be used by the Sub-Adviser in servicing all of its accounts, and not all such
services may be used by the Sub-Adviser in connection with the Fund. In the
selection of a broker or dealer for execution of any negotiated transaction, the
Sub-Adviser shall have no duty or obligation to seek advance competitive bidding
for the most favorable negotiated commission rate for such transaction, or to
select any broker solely on the basis of its purported or "posted" commission
rate for such transaction, provided, however, that the Sub-Adviser shall
consider such "posted" commission rates, if any, together with any other
information available at the time as to the level of commissions known to be
charged on comparable transactions by other qualified brokerage firms, as well
as all other relevant factors and circumstances, including the size of any
contemporaneous market in such securities, the importance to the Fund of speed,
efficiency, and confidentiality of execution, the execution capabilities
required by the circumstances of the particular transactions, and the apparent
knowledge or familiarity with sources from or to whom such securities may be
purchased or sold. Where the commission rate reflects services, reliability and
other relevant factors in addition to the cost of execution, the Sub-Adviser
shall have the burden of demonstrating that such expenditures were bona fide and
for the benefit of the Fund.
Advice on investments may extend to investments not traded or exchanges
recognized or designated by the Securities and Investments Board.
Both parties acknowledge that the advice given under this Agreement may
involve liabilities in one currency matched by assets in another currency and
that accordingly movements in rates of exchange may have a separate effect,
unfavorable as well as favorable on the gain or loss experienced on an
investment.
In carrying out its duties hereunder, the Sub-Adviser shall comply with
all instructions of INVESCO in connection therewith such instructions may be
given by letter, telex, telephone or facsimile by any Director or Officer of
INVESCO or by any other person authorized by INVESCO.
Any instructions which appear to conflict with the terms of this Agreement
may be confirmed by the Sub-Adviser with INVESCO prior to execution.
<PAGE>
ARTICLE II
ALLOCATION OF CHARGES AND EXPENSES
The Sub-Adviser assumes and shall pay for maintaining the staff and
personnel necessary to perform its obligations under this Agreement, and shall,
at its own expense, provide the office space, equipment and facilities necessary
to perform its obligations under this Agreement. Except to the extent expressly
assumed by the Sub-Adviser herein and except to the extent required by law to be
paid by the Sub-Adviser, INVESCO and/or the Company shall pay all costs and
expenses in connection with the operations of the Fund.
ARTICLE III
COMPENSATION OF THE SUB-ADVISER
For the services rendered, facilities furnished, and expenses assumed by
the Sub-Adviser, INVESCO shall pay to the Sub-Adviser a fee, computed daily and
paid as of the last day of each month, using for each daily calculation the most
recently determined net asset value of the Fund, as determined by a valuation
made in accordance with the Fund's procedures for calculating its net asset
value as described in the Fund's Prospectus and/or Statement of Additional
Information. The advisory fee to the Sub-Adviser shall be computed at the annual
rate of 0.25% of the Fund's daily net assets up to $500 million; 0.1875% of the
Fund's daily net assets in excess of $500 million but not more than $1 billion;
and 0.1625% of the Fund's daily net assets in excess of $1 billion. During any
period when the determination of the Fund's net asset value is suspended by the
Directors of the Fund, the net asset value of a share of the Fund as of the last
business day prior to such suspension shall, for the purpose of this Article
III, be deemed to be the net asset value at the close of each succeeding
business day until it is again determined. However, no such fee shall be paid to
the Sub-Adviser with respect to any assets of the Fund which may be invested in
any other investment company for which the Sub-Adviser serves as investment
adviser or sub-adviser. The fee provided for hereunder shall be prorated in any
month in which this Agreement is not in effect for the entire month. The
Sub-Adviser shall be entitled to receive fees hereunder only for such periods as
the INVESCO Investment Advisory Agreement remains in effect.
ARTICLE IV
ACTIVITIES OF THE SUB-ADVISER
The services of the Sub-Adviser to the Fund are not to be deemed to be
exclusive, the Sub-Adviser and any person controlled by or under common control
with the Sub-Adviser (for purposes of this Article IV referred to as
"affiliates") being free to render services to others. It is understood that
directors, officers, employees and shareholders of the Fund are or may become
interested in the Sub-Adviser and its affiliates, as directors, officers,
employees and shareholders or otherwise and that directors, officers, employees
<PAGE>
and shareholders of the Sub-Adviser, INVESCO and their affiliates are or may
become interested in the Fund as directors, officers and employees.
ARTICLE V
AVOIDANCE OF INCONSISTENT POSITIONS AND COMPLIANCE WITH
APPLICABLE LAWS
In connection with purchases or sales of securities for the investment
portfolio of the Fund, neither the Sub-Adviser nor any of its directors,
officers or employees will act as an agent for any party other than the Fund or
receive any commissions. The Sub-Adviser will comply with all applicable laws in
acting hereunder including, without limitation, the 1940 Act; the Investment
Advisers Act of 1940, as amended; the Rules and Regulations of IMRO; and all
rules and regulations duly promulgated under the foregoing.
ARTICLE VI
DURATION AND TERMINATION OF THIS AGREEMENT
This Agreement shall become effective as of the date it is approved by a
majority of the outstanding voting securities of the Fund. Thereafter, this
Agreement shall remain in force for an initial term expiring April 30, 1997, and
from year to year thereafter until its termination in accordance with this
Article VI, but only so long as such continuance is specifically approved at
least annually by (i) the Directors of the Company, or by the vote of a majority
of the outstanding voting securities of the Fund, and (ii) a majority of those
Directors who are not parties to this Agreement or interested persons of any
such party cast in person at a meeting called for the purpose of voting on such
approval.
This Agreement may be terminated at any time, without the payment of any
penalty, by INVESCO, the Fund by vote of the Directors of the Company, or by
vote of a majority of the outstanding voting securities of the Fund, or by the
Sub-Adviser. A termination by INVESCO or the Sub-Adviser shall require sixty
days' written notice to the other party and to the Company, and a termination by
the Company shall require such notice to each of the parties. This Agreement
shall automatically terminate in the event of its assignment to the extent
required by the Investment Company Act of 1940 and the Rules thereunder.
The Sub-Adviser agrees to furnish to the Directors of the Company such
information on an annual basis as may reasonably be necessary to evaluate the
terms of this Agreement.
Termination of this Agreement shall not affect the right of the
Sub-Adviser to receive payments on any unpaid balance of the compensation
described in Article III hereof earned prior to such termination.
<PAGE>
ARTICLE VII
LIABILITY
The Sub-Adviser agrees to use its best efforts and judgement and due care
in carrying out its duties under this Agreement provided however that the
Sub-Adviser shall not be liable to INVESCO for any loss suffered by INVESCO or
the Fund advised in connection with the subject matter of this Agreement unless
such loss arises from the willful misfeasance, bad faith or negligence in the
performance of the Sub-Adviser's duties and subject and without prejudice to the
foregoing. INVESCO hereby undertakes to indemnify and to keep indemnified the
Sub-Adviser from and against any and all liabilities, obligations, losses,
damages, suits and expenses (collectively, "Losses") which may be incurred by or
asserted against the Sub-Adviser for which it is responsible pursuant to Article
I hereof; provided, that INVESCO shall not be required to indemnify the
Sub-Adviser for any Losses arising from the willful misfeasance, bad faith or
negligence of Sub-Adviser and, provided further, that the Sub-Adviser shall send
to INVESCO as soon as possible all claims, letters, summonses, writs or
documents which it receives from third parties and provide whatever information
and assistance INVESCO may require and no liability of any sort shall be
admitted and no undertaking shall be given nor shall any offer, promise or
payment be made or legal expenses incurred by the Sub- Adviser without written
consent of INVESCO which shall be entitled if it so desires to take over and
conduct in the name of the Sub- Adviser the defense of any action or to
prosecute any claim for indemnity or damages or otherwise against any third
party.
ARTICLE VIII
AMENDMENTS OF THIS AGREEMENT
No provision of this Agreement may be orally changed or discharged, but
may only be modified by an instrument in writing signed by the Sub-Adviser and
INVESCO. In addition, no amendment to this Agreement shall be effective unless
approved by (1) the vote of a majority of the Directors of the Company,
including a majority of the Directors who are not parties to this Agreement or
interested persons of any such party cast in person at a meeting called for the
purpose of voting on such amendment and (2) the vote of a majority of the
outstanding voting securities of the Fund (other than an amendment which can be
effective without shareholder approval under applicable law).
ARTICLE IX
DEFINITIONS OF CERTAIN TERMS
In interpreting the provisions of this Agreement, the terms "vote of a
majority of the outstanding voting securities," "assignments," "affiliated
person" and "interested person," when used in this Agreement, shall have the
respective meanings specified in the Investment Company Act and the Rules and
Regulations thereunder, subject, however, to such exemptions as may be granted
<PAGE>
by the Securities and Exchange Commission under said Act.
ARTICLE X
GOVERNING LAW
This Agreement shall be construed in accordance with the laws of the State
of Colorado and the applicable provisions of the Investment Company Act. To the
extent that the applicable laws of the State of Colorado, or any of the
provisions herein, conflict with the applicable provisions of the Investment
Company Act, the latter shall control.
ARTICLE XI
MISCELLANEOUS
Advice. Any recommendation or advice given by the Sub-Adviser to INVESCO
hereunder shall be given in writing or by mail, telex, telefacsimile or by
telephone, such telephone advice to be confirmed by mail, telex, telefacsimile
or in writing to such place as INVESCO shall from time to time require; further
the Sub-Adviser shall be free to telephone INVESCO as it sees fit in the
performance of its duties.
Complaints. The Sub-Adviser has in operation a written procedure for the
proper handling of complaints from clients; if the matter of complaint cannot be
resolved to INVESCO's satisfaction, INVESCO has the right of recourse to IMRO.
Notice. Any notice under this Agreement shall be in writing, addressed and
delivered or mailed, postage prepaid, to the other party at such address as such
other party may designate for the receipt of such notice.
Severability. Each provision of this Agreement is intended to be
severable. If any provision of this Agreement shall be held illegal or made
invalid by a court decision, statute, rule or otherwise, such illegality or
invalidity shall not affect the validity or enforceability of the remainder of
this Agreement.
Headings. The headings in this Agreement are inserted for convenience and
identification only and are in no way intended to describe, interpret, define or
limit the size, extent or intent of this Agreement or any provision hereof.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
INVESCO FUNDS GROUP, INC.
ATTEST: By:_____________________________
Dan J. Hesser
__________________________ President
Glen A. Payne
Secretary
INVESCO ASSET MANAGEMENT LIMITED
ATTEST: By:_____________________________
Title:__________________________
__________________________
Graeme J. Proudfoot
AMENDMENT TO CUSTODIAN CONTRACT
Agreement made by and between State Street Bank and Trust Company (the
"Custodian") and INVESCO International Funds, Inc.
(the "Fund").
WHEREAS, the Custodian and the Fund are parties to a custodian contract
dated July 1, 1993 (the "Custodian Contract") governing the terms and conditions
under which the Custodian maintains custody of the securities and other assets
of the Fund; and
WHEREAS, the Custodian and the Fund desire to amend the terms and
conditions under which the Custodian maintains the Fund's securities and other
non-cash property in the custody of certain foreign sub-custodians in conformity
with the requirements of Rule 17f-5 under the Investment Company Act of 1940, as
amended;
NOW THEREFORE, in consideration of the premises and covenants contained
herein, the Custodian and the Fund hereby amend the Custodian Contract by the
addition of the following terms and provisions;
1. Notwithstanding any provisions to the contrary set forth in the
Custodian Contract, the Custodian may hold securities and other non-cash
property for all of its customers, including the Fund, with a foreign
sub-custodian in a single account that is identified as belonging to the
Custodian for the benefit of its customers, provided however, that (i) the
records of the Custodian with respect to securities and other non-cash property
of the Fund which are maintained in such account shall identify by bookentry
those securities and other non-cash property belonging to the Fund and (ii) the
Custodian shall require that securities and other non-cash property so held by
the foreign sub-custodian be held separately from any assets of the foreign
sub-custodian or of others.
2. Except as specifically superseded or modified herein, the terms and
provisions of the Custodian Contract shall continue to apply with full force and
effect.
IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed as a sealed instrument in its name and behalf by its duly authorized
representative this 25th day of October, 1995.
INVESCO INTERNATIONAL FUNDS, INC.
By: /s/ Glen A. Payne
------------------------------
Title: Secretary
STATE STREET BANK AND TRUST COMPANY
By: /s/ Charles R. Whittemore, Jr.
------------------------------
Title: Vice President
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the Prospectus and
Statement of Additional Information constituting parts of this Post-Effective
Amendment No. 3 to the registration statement on Form N-1A (the "Registration
Statement") of our report dated December 4, 1995, relating to the financial
statements and financial highlights appearing in the October 31, 1995 Annual
Report to Shareholders of INVESCO International Funds, Inc., which is also
incorporated by reference into the Registration Statement. We also consent to
the references to us under the heading "Financial Highlights" in the Prospectus
and under the headings "Independent Accountants" and "Financial Statements" in
the Statement of Additional Information.
PRICE WATERHOUSE LLP
Denver, Colorado
December 21, 1995
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<NUMBER-OF-SHARES-SOLD> 21836397
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POWER OF ATTORNEY
The person executing this Power of Attorney hereby appoints Edward F.
O'Keefe and Glen A. Payne, or either of them, as his attorney-in-fact to execute
and to file such Registration Statements under federal and state securities laws
and such Post-Effective Amendments to such Registration Statements of the
hereinafter described entities as such attorney-in-fact, or either of them, may
deem appropriate:
INVESCO Diversified Funds, Inc.
INVESCO Dynamics Fund, Inc.
INVESCO Emerging Opportunity Funds, Inc.
INVESCO Growth Fund, Inc.
INVESCO Income Funds, Inc.
INVESCO Industrial Income Fund, Inc.
INVESCO International Funds, Inc.
INVESCO Money Market Funds, Inc.
INVESCO Multiple Asset Funds, Inc.
INVESCO Specialty Funds, Inc.
INVESCO Strategic Portfolios, Inc.
INVESCO Tax-Free Income Funds, Inc.
INVESCO Value Trust
INVESCO Variable Investment Funds, Inc.
This Power of Attorney, which shall not be affected by the disability of
the undersigned, is executed and effective as of the 9th day of June, 1995.
/s/ John W. McIntyre
--------------------------
John W. McIntyre
STATE OF GEORGIA )
)
COUNTY OF Gwinett )
SUBSCRIBED, SWORN TO AND ACKNOWLEDGED before me by John W. McIntyre, as a
director or trustee of each of the above-described entities, this 9th day of
June, 1995.
/s/ Sue S. Shore
--------------------------
Notary Public,
Gwinett County Georgia.
My Commission Expires December 15, 1995
POWER OF ATTORNEY
The person executing this Power of Attorney hereby appoints Edward F.
O'Keefe and Glen A. Payne, or either of them, as his attorney-in-fact to execute
and to file such Registration Statements under federal and state securities laws
and such Post-Effective Amendments to such Registration Statements of the
hereinafter described entities as such attorney-in-fact, or either of them, may
deem appropriate:
INVESCO Diversified Funds, Inc.
INVESCO Dynamics Fund, Inc.
INVESCO Emerging Opportunity Funds, Inc.
INVESCO Growth Fund, Inc.
INVESCO Income Funds, Inc.
INVESCO Industrial Income Fund, Inc.
INVESCO International Funds, Inc.
INVESCO Money Market Funds, Inc.
INVESCO Multiple Asset Funds, Inc.
INVESCO Specialty Funds, Inc.
INVESCO Strategic Portfolios, Inc.
INVESCO Tax-Free Income Funds, Inc.
INVESCO Value Trust
INVESCO Variable Investment Funds, Inc.
This Power of Attorney, which shall not be affected by the disability of
the undersigned, is executed and effective as of the 10th a day of June, 1995.
/s/ A. D. Frazier, Jr.
--------------------------
A. D. Frazier, Jr.
STATE OF GEORGIA )
)
COUNTY OF Cobb )
SUBSCRIBED, SWORN TO AND ACKNOWLEDGED before me by A. D.
Frazier, Jr., as a director or trustee of each of the
above-described entities, this 12th day of June, 1995.
/s/ B. Sharron Smith
--------------------------
Notary Public,
Cobb County Georgia.
My Commission Expires January 21, 1997
