ANNUAL REPORT
October 31, 1997
INVESCO
INTERNATIONAL
FUNDS, INC.
European
International Growth
Pacific Basin
No-load mutual funds
seeking opportunities
overseas.
INVESCO FUNDS
<PAGE>
Market Overview November 1997
Global stock markets raced to record highs this year. Improving economic
fundamentals along with decreasing interest rates and benign inflation provided
a near-perfect investment environment for many of the world's financial markets.
However, an appreciating U.S. dollar mitigated some of the returns for U.S.
investors. The lone exception to the interantional party was the Asia/Pacific
Rim region, where currency problems recently created panic in the financial
markets.
Europe: Much like U.S. companies of the 1980s, European firms are presently
in a period of transition. Through corporate restructuring, downsizing, and
improved worker productivity, companies are becoming more efficient and
profitable. An added bonus to European financial markets is that many
state-owned industries -- which enjoyed preferential treatment and were often
poorly run -- are in the process of privatizing. This should increase
competition within certain industries, improve the profitability of selected
companies, and have a positive affect on the financial markets.
Not only are more efficient companies helping European financial markets,
but the constraints of the Maastricht Treaty continue to produce lower interest
rates and much-needed fiscal and monetary discipline for European governments.
These factors have produced an ideal investment environment, and all major
European markets have posted positive returns (as measured in U.S. dollars) this
year. However, one lingering problem for some European economies is persistent
unemployment, with some countries experiencing double-digit unemployment rates.
Latin America: Sometimes short-term losses can be healthy for financial
markets -- this was especially true for Latin American markets a few years ago.
In 1994, the Mexican currency crisis had a devastating effect. However, this
turned out to be a blessing in disguise, as the crisis forced many Latin
American governments to address structural problems in their economies. Over the
last three years, many governments have reduced frivolous government spending,
restructured foreign debt, toughened banking standards, and opened up their
economies to foreign trade. These actions continue to improve the economic
fundamentals across the region, and most financial markets posted strong returns
in 1997.
In fact, for much of the year, the strongest returns in the world were
produced in markets like Brazil and Mexico. However, the Asian currency crisis
has had a negative effect on most emerging and developing markets, and reined in
some of the gains produced earlier this year.
Asia/Pacific Rim: 1997 proved to be a disastrous year for investors in the
Asia/Pacific Rim region. Early this year in Japan, a continuing recession and an
ill-timed increase in the consumption tax caused the Nikkei (an unmanaged index
of common stocks indicative of the broad Japanese equity market) to experience a
steep decline.
Then, on July 2, Thailand's government abandoned a fixed-exchange rate
currency policy, which was expensive to maintain, and chose instead to "free
<PAGE>
float" the baht. Many ASEAN (Association of South East Asian Nations) countries
also decided to abandon their own "managed float" currency systems. This
triggered a steep sell-off in currencies like the Indonesian rupiah, Malaysian
ringgit, Philippino peso; to a lesser extent, the New Taiwan dollar, Singaporean
dollar, and Korean won also depreciated.
Asian financial markets reacted to the currency turmoil instantly, with
many financial markets losing 20% to 40% of their value in less than a month.
Panic selling dominated stock trading as investors were concerned about higher
interest rates and the potential impact on slowing economies, an overvalued
property sector, and corporate earnings. The Hong Kong market, historically
considered the relative safe haven for Asian investors, suffered the inevitable
"knock-on effect" -- the Hang Seng Index lost over 25% in less than two weeks.
(The Hang Seng is an unmanaged index indicative of common stock performance in
Hong Kong.) Investors may experience continued short-term volatility as this
situation gradually resolves.
INVESCO International Funds, Inc.
Each of the funds is managed by a team of investment professionals
specializing in various countries. A senior investment policy group determines
the country-by-country allocation of the funds' assets, overall stock selection
methodology, and risk control policies.
The line graphs on the following pages illustrate the value of a $10,000
investment in each of the INVESCO International Funds, plus reinvested dividends
and capital gain distributions, for the 10-year period ended 10/31/97. The
charts and other total return figures cited reflect the funds' operating
expenses, but the indexes do not have expenses, which would, of course, have
lowered their performance.(1,2)
European Fund
Average Annualized Total Return
as of 10/31/97 (2)
1 Year 18.07%
-------------------------------
5 Years 16.07%
-------------------------------
10 Years 11.41%
-------------------------------
European Fund
INVESCO European Fund received the prestigious five-star rating for
risk-adjusted performance by Morningstar for the three-year period ended
10/31/97. For the five-year and 10-year periods, the fund received four stars.
As of 10/31/97, European Fund received 5 stars among 637 funds in the
international equity fund category for the three-year period, 4 stars among 261
for the five-year, and 4 stars among 92 for the 10-year.(3)
For the one-year period ended 10/31/97, INVESCO European Fund had a total
return of 18.07%, compared to 23.68% for the Morgan Stanley Capital Index-AC
Europe. (The MSCI-AC Europe is an unmanaged, weighted index of European stock
markets. Because this index does not extend back a full 10 years, the line graph
compares the fund to the geographically broader MSCI-Europe/Australia/Far East.
Of course, past performance is not a guarantee of future results.)(1,2)
Graph:
This line graph represents a comparison of a $10,000 investment in INVESCO
European Fund to the value of a $10,000 investment in the Morgan Stanley
Capital Index-Europe/Australia/Far East, assuming in each case reinvestment
of all dividends and capital gain distributions, for the ten year period
ended 10/31/97.
<PAGE>
Last year was a good year for European financial markets. The fund's best
returns were produced by those markets with a high degree of correlation to the
strong U.S. dollar and economy -- namely Switzerland, Germany, and Holland. Many
of the stocks in these markets are "international companies" which benefited
from expanding economies worldwide. Declining interest rates across many
European countries also produced an equity culture in which growth firms
thrived, which enhanced the fund's returns.
Stock selection continues to drive portfolio construction and performance.
Two stocks that produced strong returns for the fund over the last year were SAP
AG Non-Voting Pfd and Tomra Systems A/S A. SAP AG is a German company and the
world leader in ERP (Enterprise Resource Planning) client service software. Its
shares have more than doubled in U.S. dollars as it increased its sales and
geographical growth, producing exceptionally strong growth rates. Tomra Systems
A/S A is a company based in Norway which is the world's dominant supplier of
reverse vending machines, with over 95% of the market share in the U.S and
Europe.
Looking forward, the macro-economic environment in Europe continues to
support non-inflationary growth, and we remain positive on Europe's long-term
fundamentals. We are presently intrigued by the possibilities in Italy, France,
and the United Kingdom. As we get closer to the European convergence, we expect
Italian short- and long-term interest rates to decline, which may support gains
for the stock market. Within France and the United Kingdom, we continue to find
reasonably valued securities with strong growth potential.
International Growth Fund
For the one-year period ended 10/31/97, INVESCO International Growth Fund
had a total return of 2.65%. The Morgan Stanley Capital
Index-Europe/Australia/Far East had a total return of 4.92% for the same period.
(The MSCI-EAFE is a weighted index of international stock market performance. Of
course, past performance is not a guarantee of future results.)(1,2)
Over the last 12 months, the fund has favored emerging markets in Europe and
Latin America as well as developed markets in continental Europe. Many of the
nascent markets produced superior results as their economies continue to expand
and benefit from increased international trade. During this time period, some of
the strongest returns were produced in Brazil, where President Cardoso's
economic and political reforms benefited the economy. In particular,
Telecomunicacoes Brasileira SA Sponsored ADR Representing Pfd -- a holding
company for the Brazilian telecommunications sector -- experienced a significant
appreciation in share price as next year's privatization plan for the industry
comes closer to reality.
International Growth Fund
Average Annualized Total Return
as of 10/31/97 (2)
1 Year 2.65%
-------------------------------
5 Years 9.70%
-------------------------------
10 Years 5.38%
-------------------------------
Graph:
This line graph represents a comparison of a $10,000 investment in INVESCO
International Growth Fund to the value of a $10,000 investment in the
Morgan Stanley Capital Index-Europe/Australia/Far East, assuming in each
case reinvestment of all dividends and capital gain distributions, for the
ten year period ended 10/31/97.
<PAGE>
In continental Europe, strong returns were produced in Holland and
Switzerland. Fiscal constraints produced by the Maastricht Treaty have led to
declining interest rates and an improved "equity culture" in many European
countries. A strong U.S. dollar also stimulated demand for cheaper European
products. One stock that benefited from this climate was the German software
company SAP AG Non-Voting Pfd; we believe that SAP AG is one of the most
attractive growth companies in all of Europe.
On the other hand, disappointments for the fund were produced by our
exposure to Asia/Pacific Rim financial markets. These financial markets were
devastated when slowing economic growth and the currency crisis produced
negative investor sentiment for the region as whole.
Looking forward, the economic outlook for the world remains favorable, but
regional imbalances may increase volatility in financial markets in the coming
months. Within this environment we continue to favor continental Europe and
Latin America -- especially Brazil and Mexico.
Pacific Basin Fund
Average Annualized Total Return
as of 10/31/97 (2)
1 Year -26.65%
-------------------------------
5 Years 2.06%
-------------------------------
10 Years 2.80%
-------------------------------
Pacific Basin Fund
For the one-year period ended 10/31/97, INVESCO Pacific Basin Fund had a
total return of -26.65%, compared to a total return of -19.53% for the Morgan
Stanley Capital Index-Pacific. (The MSCI-Pacific is an unmanaged, weighted index
of Far Eastern stock markets. Of course, past performance is not a guarantee of
future results.)(1,2)
To say that it was a disappointing year for investors in the Asia/Pacific
Rim region would be an understatement. Negative results were produced throughout
the region, as markets experienced pullbacks and corrections across the board.
The high degree of interdependent trade among Asia/Pacific Rim economies fueled
the decline in financial markets. As one country experienced a slowdown in its
economic growth rate, it had a direct impact on the growth rates of its
surrounding trade partners -- thus producing a domino effect for the region when
the currency crisis occurred in the fall.
Graph:
This line graph represents a comparison of a $10,000 investment in INVESCO
Pacific Basin Fund to the value of a $10,000 investment in the Morgan
Stanley Capital Index-Europe/Australia/Far East, assuming in each case
reinvestment of all dividends and capital gain distributions, for the ten
year period ended 10/31/97.
However, as dismal as the returns for the financial markets were over the
last 12 months, positive structural changes have occurred. First, the reversion
of Hong Kong to Chinese control earlier this year should be mutually beneficial
for both the Chinese and Hong Kong economies over the long run. Second, the
currency crisis -- although producing short-term pain for investors -- caused
many Asia/Pacific Rim countries to regain export competitiveness and strengthen
their banking sectors. This should prove positive for each country's long-term
economic health.
<PAGE>
In this difficult environment, strong returns were still produced by stocks
like HSBC Holdings PLC and Ka Wah Bank Ltd. HSBC Holdings PLC is a banking giant
in Hong Kong which improved shareholder value by streamlining its operations and
growing its earnings. Ka Wah Bank Ltd is a fundamentally sound bank with limited
exposure to the Hong Kong property market, and has ample room for growth in the
future.
Looking forward, the stock declines experienced by most Asia/Pacific Rim
financial markets this year were probably somewhat overdone. However, short-term
volatility will most likely continue as the shake-out of the currency crisis
will take a while to work through most economies and financial markets. For
investors with fortitude, it may be an excellent time to be a contrarian, as
these markets have suffered severe financial pain recently and appear
out-of-favor with investors. Although short-term volatility may continue, the
long-term fundamentals of the region remain bright for the patient investor.
(1)The MSCI-EAFE, MSCI-AC Europe, and MSCI-Pacific are unmanaged indexes of
common stocks considered to be representative of the overall international,
European, and Pacific Basin securities markets, respectively.
(2)Total return assumes reinvestment of dividends and capital gain distributions
for the periods indicated. Past performance is not a guarantee of future
results. Investment return and principal value will fluctuate so that, when
redeemed, an investor's shares may be worth more or less than when purchased.
(3)Morningstar proprietary rankings reflect historical risk-adjusted performance
and are subject to change every month. Ratings are calculated for the fund's
three-, five-, and 10-year average annual returns (based on available track
records) in excess of 90 day Treasury bill returns. The top 10% of funds in an
investment category receive 5 stars; the next 22.5%, 4 stars.
<PAGE>
INVESCO International Funds, Inc.
Ten Largest Common Stock Holdings
October 31, 1997
Description Value
- --------------------------------------------------------------------------------
EUROPEAN Fund
Novartis AG Registered Shrs $10,208,032
Tomra Systems A/S A 9,292,301
Accor SA 7,463,527
Baan Co NV 7,012,500
Istituto Bancario San Paolo
di Torino 6,463,604
Glaxo Wellcome PLC 6,429,649
Sage Group PLC 6,339,090
William Demant Holding A/S 6,016,403
Bank of Ireland 5,697,635
Nokia OYJ Series A Shrs 5,685,764
INTERNATIONAL GROWTH Fund
Alcatel Alsthom $1,862,129
Elf Aquitaine SA 1,600,176
Telecom Italia Mobile SpA 1,542,870
Telefonaktiebolaget Ericsson (L M)
Series B Shrs 1,499,160
Novartis AG Registered Shrs 1,429,125
Lloyds TSB Group PLC 1,374,308
Philips Electronics NV 1,323,646
Adidas AG 1,246,630
Roche Holdings AG Ltd Genusscheine
NonVoting Shrs 1,233,672
Banco Bilbao Vizcaya S/A Registered Shrs 1,233,604
PACIFIC BASIN Fund
Australia & New Zealand
Banking Group Ltd $1,957,850
National Australia Bank Ltd 1,919,364
CITIC Pacific Ltd 1,818,998
Hutchison Whampoa Ltd 1,799,592
Brambles Industries Ltd 1,734,406
HSBC Holdings PLC 1,714,244
Cheung Kong Holdings Ltd 1,390,771
Sun Hung Kai Properties Ltd 1,253,634
Development Bank of Singapore Ltd 1,214,876
Hong Kong Telecommunications Ltd 1,148,841
Composition of holdings is subject to change.
<PAGE>
INVESCO International Funds, Inc.
Statement of Investment Securities
October 31, 1997
<TABLE>
<CAPTION>
Shares or
Industry Principal
Description Code Amount Value
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
EUROPEAN Fund
COMMON STOCKS, RIGHTS &
WARRANTS 92.87%
AUSTRALIA 0.23%
Cortecs International Ltd
London Shrs* HD 231,554 691,206
-----------
AUSTRIA 0.99%
Scala Business Solutions NV
Registered Shrs* SV 48,000 372,461
Warrants (Exp 1999)* SV 24,000 45,567
Warrants (Exp 2001)* SV 24,000 39,623
Wolford AG Bearer Shrs TA 34,130 2,479,310
-----------
2,936,961
-----------
DENMARK 4.00%s
Den Danske Bank BK 27,000 3,049,967
Falck A/S AF 60,000 2,778,859
William Demant Holding A/S HC 128,800 6,016,403
-----------
11,845,229
-----------
FINLAND 4.26%
KCI Konecranes International
PLC MY 90,000 3,396,364
Nokia OYJ Series A Shrs CM 65,000 5,685,764
Raisio Group PLC FD 32,500 3,522,155
-----------
12,604,283
-----------
FRANCE 13.80%
Accor SA LH 40,000 7,463,527
Alcatel Alsthom CM 35,000 4,232,111
Altran Technologies SA EC 10,840 2,900,213
Banque Nationale de Paris BK 100,000 4,430,166
CIPE-France SA SV 3,805 95,522
Credit Commercial de France BK 55,000 3,122,659
Dassault Systemes SA CO 142,100 4,270,906
<PAGE>
France Telecom SA* TN 11,263 427,157
L'Oreal SA PL 10,000 3,551,082
PSA Peugeot Citroen AM 14,000 1,588,258
Penauille Polyservices SV 4,248 858,310
Rhone-Poulenc Series A Shrs PL 80,000 3,495,488
TOTAL SA Series B Shrs OG 40,000 4,447,539
-----------
40,882,938
-----------
GERMANY 5.73%
Adidas AG FT 23,000 3,334,011
BZW/Deutsche Bank
Call Warrants (Exp 1999)* BK 50,000 647,804
Bayerische Vereinsbank AG BK 65,000 3,776,435
Commerzbank AG Warrants (Exp 1998)* FN 199,428 1,210,796
Deutsche Bank AG BK 50,000 3,276,784
Eurobike AG RT 75,000 1,677,609
Hoechst AG CH 80,000 3,049,035
-----------
16,972,474
-----------
IRELAND 1.92%
Bank of Ireland BK 450,000 5,697,635
-----------
ITALY 7.28%
Bulgari SpA CJ 700,000 3,812,480
Ente Nazionale Idrocarburi SpA
Registered Shrs OG 1,000,000 5,635,840
Istituto Bancario San Paolo
di Torino BK 850,000 6,463,604
Telecom Italia SpA TL 225,000 1,413,252
Telecom Italia SpA Savings Shrs* TL 1,050,000 4,251,744
-----------
21,576,920
-----------
NETHERLANDS 5.91%
Akzo Nobel NV HD 20,000 3,525,532
Baan Co NV* CO 100,000 7,012,500
ING Groep NV IN 72,500 3,044,649
Philips Electronics NV EL 50,000 3,916,113
-----------
17,498,794
-----------
NORWAY 3.14%
Tomra Systems A/S A MY 361,398 9,292,301
-----------
PORTUGAL 1.22%
Telecel-Comunicacoes
Pessoais SA* TL 40,000 3,618,840
-----------
SPAIN 1.24%
Banco Bilbao Vizcaya SA
Registered Shrs BK 60,000 1,605,559
Banco Central Hispano
Americano SA Registered Shrs BK 110,000 2,058,197
-----------
3,663,756
-----------
<PAGE>
SWEDEN 2.83%
Assa Abloy AB Series B Shrs MG 208,190 4,756,759
Autoliv Inc SDR AP 90,000 3,613,618
-----------
8,370,377
-----------
SWITZERLAND 6.76%
Disetronic Holding AG HC 1,250 2,493,017
Novartis AG Registered Shrs HD 6,500 10,208,032
Roche Holdings AG Ltd
Genusscheine Non-Voting Shrs HD 400 3,524,777
Warrants (Exp 2000)* HD 50,000 2,309,509
SEZ Holding AG Registered A Shrs ES 868 1,473,188
-----------
20,008,523
-----------
UNITED KINGDOM 32.85%
Abbey National PLC FN 240,000 3,815,529
Arsenal Football Club PLC* ET 226 1,023,310
Barclays PLC BK 50,000 1,251,886
Bass PLC BV 175,000 2,429,985
British Aerospace PLC AE 130,000 3,448,935
British Petroleum PLC OG 312,668 4,593,277
British Telecommunications PLC TN 275,000 2,089,133
Chiroscience Group PLC* HC 322,856 1,384,009
Compass Group PLC SV 450,000 4,795,824
General Electric PLC MG 600,000 3,831,125
Glaxo Wellcome PLC HD 300,000 6,429,649
Hays PLC SV 170,000 1,995,639
Imperial Chemical Industries
PLC CH 110,000 1,623,344
Kingfisher PLC RT 275,000 3,956,900
Lloyds TSB Group PLC BK 400,000 4,997,484
Misys (Jersey) Ltd* CO 57,142 1,420,644
Misys PLC CO 200,000 5,039,409
National Westminster Bank PLC BK 260,000 3,736,709
Norwich Union PLC* IB 150,000 855,274
Royal & Sun Alliance Insurance
Group PLC IN 350,000 3,354,435
Sage Group PLC CO 525,000 6,339,090
SEMA Group PLC CO 138,428 3,108,420
Shell Transport & Trading
PLC Registered Shrs OG 650,000 4,608,208
Siebe PLC EL 200,000 3,840,348
SmithKline Beecham PLC HD 500,000 4,737,548
Tesco PLC RT 250,000 2,000,880
Tottenham Hotspur PLC ET 572,059 791,462
Unilever PLC HP 500,000 3,722,958
Vodafone Group PLC TC 650,000 3,542,679
Zeneca Group PLC HD 80,000 2,523,562
-----------
97,287,655
-----------
UNITED STATES 0.71%
OXiGENE Inc* HD 100,000 2,100,000
TOTAL COMMON STOCKS, RIGHTS &
<PAGE>
WARRANTS
(Cost $229,187,340) 275,047,892
-----------
PREFERRED STOCKS 7.13%
GERMANY 7.13%
Fresenius AG Non-Voting Pfd HC 58,333 9,862,249
Porsche AG Non-Voting Pfd AM 4,000 5,891,239
SAP AG Non-Voting Pfd CO 18,000 5,370,090
-----------
TOTAL PREFERRED STOCKS
(Cost $13,806,860) 21,123,578
-----------
TOTAL INVESTMENT SECURITIES AT VALUE 100.00%
(Cost $242,994,200)
(Cost for Income Tax Purposes
$243,408,817) 296,171,470
===========
INTERNATIONAL GROWTH Fund
COMMON STOCKS 92.06%
ARGENTINA 0.10%
Perez Companc SA Sponsored
ADR Representing 2 ClassB Shrs OG 5,859 73,164
-----------
AUSTRALIA 3.25%
Aberfoyle Ltd GP 125,000 251,110
CSR Ltd BD 85,000 296,035
National Australia Bank Ltd BK 56,300 771,858
News Corp Ltd PB 95,000 456,016
Pacific Dunlop Ltd MG 150,000 321,104
WMC Ltd GP 86,000 306,125
-----------
2,402,248
-----------
BRAZIL 0.54%
Light Participacoes SA EU 1,600,000 399,093
-----------
CHILE 0.65%
Sociedad Quimica y Minera de
Chile SA Sponsored ADR CH 9,300 482,438
-----------
CHINA 0.80%
China Southern Airlines Ltd
Group Hong Kong Shrs* AR 780,000 345,623
Guangshen Railway Ltd
Sponsored ADR RR 16,750 244,969
-----------
590,592
-----------
DENMARK 0.81%
Den Danske Bank BK 5,300 598,697
-----------
FRANCE 9.27%
<PAGE>
Accor SA LH 4,200 783,670
Alcatel Alsthom CM 15,400 1,862,129
Banque Nationale de Paris BK 21,100 934,765
Carrefour SA RT 1,700 888,987
Elf Aquitaine SA OG 12,900 1,600,176
SGS-Thomson Microelectronics NV* ES 11,000 784,487
-----------
6,854,214
-----------
GERMANY 5.60%
Adidas AG FT 8,600 1,246,630
Bayerische Motoren Werke AG AM 1,100 796,944
Deutsche Bank AG BK 15,100 989,589
Hoechst AG CH 29,100 1,109,087
-----------
4,142,250
-----------
HONG KONG 4.48%
Beijing Datang Power
Generation Ltd Hong Kong Shrs* EU 980,000 494,467
CITIC Pacific Ltd CG 192,000 919,073
China Telecom* TL 100,000 159,777
Hutchison Whampoa Ltd CG 166,000 1,148,970
New World Infrastructure Ltd* EC 298,800 591,451
-----------
3,313,738
-----------
INDIA 1.00%
EIH Ltd Sponsored GDR* LH 11,150 164,462
Larson & Toubro Ltd
Regulation S Sponsored GDR ~ MY 19,000 194,750
Videsh Sanchar Nigam Ltd* TL 30,000 382,500
-----------
741,712
-----------
INDONESIA 0.89%
PT Indosat Sponsored ADR TL 21,300 504,544
PT Sierad Produca FD 1,400,000 116,340
PT Wicaksana Overseas International RT 210,000 33,448
-----------
654,332
-----------
ISRAEL 1.23%
Blue Square-Israel Ltd Sponsored ADR* RT 22,000 255,750
Teva Pharmaceutical Industries
Ltd ADR HD 14,000 654,500
-----------
910,250
-----------
ITALY 4.40%
Credito Italiano SpA* BK 239,700 640,689
Ente Nazionale Idrocarburi SpA
Registered Shrs OG 190,000 1,070,810
Telecom Italia Mobile SpA TN 415,000 1,542,870
-----------
3,254,369
-----------
<PAGE>
3,254,369
-----------
JAPAN 16.87%
Bank of Tokyo-Mitsubishi Ltd BK 26,850 350,515
Canon Inc OE 12,000 291,358
Chugai Pharmaceutical Ltd HD 40,000 321,624
Dai Nippon Printing Ltd PB 22,000 439,032
Daiwa Bank Ltd BK 52,000 193,706
Ebara Corp MY 25,000 301,419
Fanuc Ltd EL 9,000 363,698
Fuji Machine Manufacturing Ltd MY 5,000 145,097
Fujitsu Ltd CO 27,000 296,347
Hitachi Metals Ltd EL 32,000 246,124
Industrial Bank of Japan Ltd BK 25,000 247,371
JUSCO Co Ltd RT 15,000 335,510
Kaneka Corp CH 51,000 297,279
Kawasaki Steel IS 163,000 285,978
Kitagawa Industries Ltd MG 50 582
Kyocera Corp EL 4,000 229,161
Meitec Corp CO 11,000 324,701
Mitsubishi Estate Ltd RE 27,000 341,248
Mitsubishi Heavy Industries Ltd MY 52,000 255,537
Mitsubishi Materials MG 79,000 223,341
NSK Ltd MY 50,000 207,875
NTT Data CO 11 525,924
Nintendo Co Ltd TY 2,700 233,485
Nippon COMSYS EC 23,000 279,220
Nippon Soda Ltd CH 33,000 310,066
Nippon Telegraph & Telephone TL 35 296,846
Nippon Television Network BR 830 295,382
Nomura Securities Ltd IV 13,000 151,333
Onward Kashiyama Ltd TA 26,000 402,113
Oriental Land Ltd LT 4,700 244,253
ORIX Corp FN 8,000 546,794
Rohm Co Ltd EL 5,000 494,742
Sanwa Bank Ltd BK 27,000 271,651
Shizuoka Bank Ltd BK 26,000 263,752
Sony Corp ET 3,000 249,201
Sumitomo Chemical Ltd CH 76,000 271,102
Toho Titanium* GP 15,000 167,131
Tokyo Electric Power EU 14,200 271,568
Tokyo Electron Ltd ES 6,000 299,340
Toray Industries TA 45,000 250,697
Toyota Motor AM 16,000 445,680
Yamato Transport Ltd DB 23,000 292,605
Yamazaki Baking Ltd FD 15,000 207,044
-----------
12,467,432
-----------
MEXICO 1.49%
Cemex SA de CV Series B Shrs BD 70,000 304,276
Cifra SA de CV Series B ADR RT 36,937 71,942
Panamerican Beverages Class A BV 23,400 725,400
-----------
1,101,618
-----------
<PAGE>
NETHERLANDS 5.10%
Baan Co NV* CO 7,500 531,380
Getronics NV CO 14,900 492,137
ING Groep NV IN 24,200 1,016,283
IS Himalayan Fund NV* IC 36,696 403,656
Philips Electronics NV EL 16,900 1,323,646
-----------
3,767,102
-----------
PERU 0.65%
Cia de Minas Buenaventura SA
Sponsored ADR Representing
Series B Shrs GP 26,750 479,828
-----------
PORTUGAL 0.79%
Cimpor-Cimentos de Portugal SA
Registered Shrs BD 23,000 582,371
-----------
SINGAPORE 1.49%
DBS Land Ltd RL 124,000 211,265
Oversea-Chinese Banking Ltd
Foreign Shrs BK 112,600 626,351
Singapore Press Holdings Ltd
Foreign Shrs PB 19,200 264,870
-----------
1,102,486
-----------
SOUTH AFRICA 0.56%
ABSA Group Ltd BK 71,600 413,490
-----------
SOUTH KOREA 0.15%
Samsung Electronics Ltd GDR^* EL 10,654 108,511
-----------
SPAIN 3.01%
Banco Bilbao Vizcaya S/A
Registered Shrs BK 46,100 1,233,604
Telefonica de Espana S/A TN 36,400 994,071
-----------
2,227,675
-----------
SWEDEN 4.39%
Astra AB Series A Shrs HD 59,133 956,028
Atlas Copco AB Series B Shrs MY 26,500 787,827
Telefonaktiebolaget Ericsson
(L M) Series B Shrs CM 34,000 1,499,160
-----------
3,243,015
-----------
SWITZERLAND 9.30%
Adecco SA Bearer Shrs SV 1,700 541,750
Clariant AG Registered Shrs CH 1,100 848,396
<PAGE>
Credit Suisse Group Registered Shrs BK 7,510 1,060,833
Novartis AG Registered Shrs HD 910 1,429,125
Roche Holdings AG Ltd
Genusscheine Non-Voting Shr HD 140 1,233,672
Swiss Re Group Registered Shrs IN 625 943,945
Union Bank of Switzerland
Bearer Shrs BK 710 819,622
-----------
6,877,343
-----------
UNITED KINGDOM 15.24%
BOC Group PLC CH 18,400 309,495
BTR PLC MY 63,000 212,624
British Airways PLC AR 35,560 347,072
British Petroleum PLC OG 69,200 1,016,589
British Telecommunications PLC TN 47,000 357,052
Croda International PLC CH 35,000 218,346
General Accident PLC IN 44,400 755,388
Granada Group PLC ET 34,900 481,097
Grand Metropolitan PLC FD 45,000 406,004
HSBC Holdings PLC BK 30,200 715,425
Hays PLC SV 50,400 591,648
Legal & General Group PLC* FN 51,600 428,341
Lloyds TSB Group PLC BK 110,000 1,374,308
MFI Furniture Group PLC HF 80,900 162,804
Marks & Spencer PLC RT 80,000 811,672
Sainsbury (J) PLC RT 40,000 333,725
Siebe PLC EL 30,000 576,052
SmithKline Beecham PLC HD 108,000 1,023,310
TI Group PLC EC 34,600 317,684
Vodafone Group PLC TC 61,000 332,467
Wolseley PLC BD 58,800 489,836
-----------
11,260,939
-----------
TOTAL COMMON STOCKS
(Cost $60,371,261) 68,048,907
-----------
PREFERRED STOCKS 6.77%
BRAZIL 3.52%
Cia Brasileira de Distribuicao
Grupo Pao de Acucar Pfd RT 22,000,000 419,047
Cia Brasileira de Distribuicao
Grupo Pao de Acucar
Sponsored GDR Representing
Regulation S Pfd~ RT 2,730 50,505
Cia Energetica de Minas
Gerais Sponsored ADR
Representing Non-Voting Pfd^ EU 3,000 119,760
Representing Pfd ^ EU 13,000 518,962
Cia Paranaense de Energia-Copel
Series B Pfd EU 20,000,000 246,712
Petroleo Brasileiro SA ADR
Representing Pfd OG 22,000 437,026
<PAGE>
Telecomunicacoes Brasileiras
SA Sponsored ADR
Representing Pfd TN 7,955 807,433
-----------
2,599,445
-----------
GERMANY 3.25%
Fresenius AG Non-Voting Pfd HC 3,455 584,130
SAP AG Non-Voting Pfd CO 6,100 1,819,864
-----------
2,403,994
-----------
TOTAL PREFERRED STOCKS
(Cost $3,659,972) 5,003,439
-----------
FIXED INCOME SECURITIES 0.78%
HONG KONG 0.78%
New World Infrastructure Ltd
Conv, Regulation S~
5.000%, 7/15/2001
(Cost $698,786) EC 585,000 576,225
-----------
SHORT-TERM INVESTMENTS -
REPURCHASE AGREEMENTS 0.39%
UNITED STATES 0.39%
Repurchase Agreement with
State Street Bank & Trust Co
dated 10/31/1997 due 11/3/1997
at 5.550%, repurchased
at $289,134 (Collateralized by
US Treasury Notes due
7/31/2001 at 6.625%
value $289,168)
(Cost $289,000) RA 289,000 289,000
-----------
TOTAL INVESTMENT
SECURITIES AT VALUE 100.00%
(Cost $65,019,019)
(Cost for Income Tax Purposes
$65,627,405) 73,917,571
===========
PACIFIC BASIN Fund
COMMON STOCKS 91.84%
AUSTRALIA 13.87%
Australia & New Zealand
Banking Group Ltd BK 280,000 1,957,850
Brambles Industries Ltd CT 90,000 1,734,406
Broken Hill Proprietary Ltd IS 85,000 844,788
Comalco Ltd GP 150,000 615,352
MIM Holdings Ltd MM 850,000 748,925
National Australia Bank Ltd BK 140,000 1,919,364
News Corp Ltd PB 863 4,143
WMC Ltd GP 220,000 783,112
<PAGE>
Woodside Petroleum Ltd OG 120,000 1,015,860
-----------
9,623,800
-----------
HONG KONG 17.58%
Cheung Kong Holdings Ltd RL 200,000 1,390,771
China Light & Power Ltd EU 150,000 789,828
China Merchants Holdings
International Ltd BD 400,000 579,596
China Resources Enterprise Ltd RL 370,000 1,014,810
CITIC Pacific Ltd CG 380,000 1,818,998
Hang Seng Bank Ltd BK 120,000 1,044,048
Hong Kong
Telecommunications Ltd TL 600,000 1,148,841
Hutchison Whampoa Ltd CG 260,000 1,799,592
Ka Wah Bank Ltd BK 500,000 727,729
New World Development Ltd RL 180,000 633,415
Sun Hung Kai Properties Ltd RL 170,000 1,253,634
-----------
12,201,262
-----------
JAPAN 47.89%
Bank of Tokyo-Mitsubishi Ltd BK 62,500 815,909
Canon Inc OE 20,000 364,197
Chubu Electric Power EU 60,000 1,017,756
Credit Saison Ltd RT 40,000 1,074,298
Dai Nippon Printing Ltd PB 50,000 997,800
Daicel Chemical Industries Ltd CH 200,000 548,790
Daiwa Bank Ltd BK 170,000 633,270
Deodeo Corp RT 34,000 390,140
Ebara Corp MY 50,000 602,837
Eisai Co Ltd HD 40,000 628,614
Fujitsu Ltd CO 90,000 987,822
HIS Co Ltd SV 22,000 715,256
Hitachi Metals Ltd EL 130,000 999,879
Hitachi Software Engineering Ltd CO 10,000 271,900
Industrial Bank of Japan Ltd BK 60,000 593,691
Itochu Corp DB 260,000 892,865
JUSCO Co Ltd RT 50,000 1,118,367
Kao Corp PL 50,000 698,460
Kirin Brewery Ltd BV 100,000 839,815
Kitagawa Industries Ltd MG 38,525 448,470
Mitsubishi Chemical CH 230,000 518,274
Mitsubishi Heavy Industries Ltd MY 190,000 933,691
Mitsubishi Materials MG 250,000 706,775
Mitsui Fudosan Ltd RE 50,000 565,420
NEC Corp CO 90,000 987,822
NKK Corp IS 700,000 972,023
NSK Ltd MY 170,000 706,775
NTT Data CO 20 956,225
Nippon COMSYS EC 90,000 1,092,591
Nippon Densetsu Kogyo Ltd EC 100,000 473,955
Nippon Express Ltd TK 150,000 808,218
Nippon Telegraph & Telephone TL 110 932,943
<PAGE>
Nomura Securities Ltd IV 60,000 698,460
Rohm Co Ltd EL 5,000 494,742
Royal Co Ltd RS 27,000 471,460
Secom Co Ltd EL 10,000 646,907
Sony Corp ET 10,000 830,669
Sumitomo Bank Ltd BK 80,000 851,456
Tobu Railway Ltd TR 250,000 956,225
Tokai Bank Ltd BK 120,000 700,456
Tokio Marine & Fire Insurance Ltd IN 80,000 798,240
Tokyo Broadcasting System BR 54,000 924,961
Toray Industries TA 150,000 835,658
Toyota Motor AM 26,000 724,237
-----------
33,228,319
-----------
MALAYSIA 3.12%
Berjaya Group Berhad CG 650,000 281,343
Malayan Banking Berhad BK 100,000 385,074
Malaysian Industrial
Development Finance Berhad FN 280,000 157,134
Sime Darby Berhad MY 380,000 544,477
Tenaga Nasional Berhad EU 196,000 421,253
United Engineers Berhad EC 160,000 377,313
-----------
2,166,594
-----------
NEW ZEALAND 1.18%
Fletcher Challenge Building BD 270,000 816,803
-----------
SINGAPORE 5.73%
City Developments Ltd RL 150,000 629,371
DBS Land Ltd RL 270,000 460,013
Development Bank of Singapore
Ltd Foreign Shrs BK 130,000 1,214,876
Keppel Land Ltd BD 280,000 391,608
Oversea-Chinese Banking Ltd
Foreign Shrs BK 80,020 445,121
United Overseas Bank Ltd BK 150,325 831,423
-----------
3,972,412
-----------
UNITED KINGDOM 2.47%
HSBC Holdings PLC BK 75,716 1,714,244
-----------
TOTAL COMMON STOCKS
(Cost $76,123,765) 63,723,434
-----------
SHORT-TERM INVESTMENTS -
REPURCHASE AGREEMENTS 8.16%
UNITED STATES 8.16%
Repurchase Agreement with
State Street Bank & Trust Co
dated 10/31/1997 due 11/3/1997
<PAGE>
at 5.550%,repurchased at
$5,663,618 (Collaterized
by US Treasurt Notes
due 3/31/2002 at 6.625%
value $5,797,624)
(Cost $5,661,000) RA 5,661,000 5,661,000
-----------
TOTAL INVESTMENT
SECURITIES AT VALUE 100.00%
(Cost $81,784,765) (Cost for
Income Tax Purposes $82,065,978) 69,384,434
-----------
* Security is non-income producing.
^ Securities are registered pursuant to Rule 144A and may be deemed to be
restriced for resale to institutional investors.
~ The following are restricted securities at October 31, 1997:
</TABLE>
<TABLE>
<CAPTION>
Value as
Acquisition Acquisition % of
Description Date(s) Cost Net Assets
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
International Growth Fund
Cia Brasileira
de Distribuicao
Grupo Pao de
Acucar Sponsored
GDR Representing
Regulation S Pfd 6/3/97 $54,600 0.06%
Larsen & Toubro Ltd
Regulation S
Sponsored GDR 3/25/96-
3/26/96 298,072 0.23
New World
Infrastructure Ltd
Conv, Regulation S
5.000%, 7/15/2001 2/14/97-
6/4/97 698,786 0.68
-------
0.97%
=======
<PAGE>
Summary of Investments by Industry
% of
Industry Investment
Industry Code Securities Value
- ---------------------------------------------------------------------------------------------
European Fund
Aerospace & Defense AE 1.16% $3,448,935
Air Freight AF 0.94 2,778,859
Automobiles AM 2.52 7,479,497
Auto Parts AP 1.22 3,613,618
Banks BK 14.89 44,114,889
Beverages BV 0.82 2,429,985
Chemicals CH 1.58 4,672,379
Communications - Equipment
& Manufacturing CM 3.35 9,917,875
Computer Related CO 10.99 32,561,059
Consumer - Jewelry, Novelties
& Gifts CJ 1.29 3,812,480
Electronics EL 2.62 7,756,461
Electronics - Semiconductor ES 0.50 1,473,188
Engineering & Construction EC 0.98 2,900,213
Entertainment ET 0.61 1,814,772
Financial FN 1.70 5,026,325
Foods FD 1.19 3,522,155
Footwear FT 1.13 3,334,011
Health Care Drugs -
Pharmaceuticals HD 12.17 36,049,815
Health Care Related HC 6.67 19,755,678
Household Products HP 1.26 3,722,958
Insurance IN 2.16 6,399,084
Insurance Brokers IB 0.29 855,274
Lodging - Hotels LH 2.52 7,463,527
Machinery MY 4.28 12,688,665
Manufacturing MG 2.90 8,587,884
Oil & Gas Related OG 6.51 19,284,864
Personal Care PL 2.38 7,046,570
Retail RT 2.58 7,635,389
Services SV 2.77 8,202,946
Telecommunications -
Cellular & Wireless TC 1.20 3,542,679
Telecommunications -
Long Distance TL 3.13 9,283,836
Telephone TN 0.85 2,516,290
Textile -
Apparel Manufacturing TA 0.84 2,479,310
--------------------------
100.00% $296,171,470
==========================
International Growth Fund
Airlines AR 0.94% $692,695
Automobiles AM 1.68 1,242,624
<PAGE>
Banks BK 15.57 11,506,226
Beverages BV 0.98 725,400
Broadcasting BR 0.40 295,382
Building Materials BD 2.26 1,672,518
Chemicals CH 5.20 3,846,209
Communications - Equiment &
Manufacturing CM 4.55 3,361,289
Computer Related CO 5.40 3,990,353
Conglomerates CG 2.80 2,068,043
Distribution DB 0.40 292,605
Electric Utilities EU 2.77 2,050,562
Electronics EL 4.52 3,341,934
Electronics - Semiconducter ES 1.47 1,083,827
Engineering & Construction EC 2.39 1,764,580
Entertainment ET 0.99 730,298
Financial FN 1.32 975,135
Foods FD 0.99 729,388
Footwear FT 1.69 1,246,630
Gold & Precious Metals Mining GP 1.63 1,204,194
Health Care Drugs -
Pharmaceuticals HD 7.60 5,618,259
Health Care Related HC 0.79 584,130
Household Furniture
& Appliances HF 0.22 162,804
Insurance IN 3.67 2,715,616
Investment Bank/Broker Firm IV 0.20 151,333
Investment Cos IC 0.55 403,656
Iron & Steel IS 0.39 285,978
Leisure Time LT 0.33 244,253
Lodging - Hotels LH 1.28 948,132
Machinery MY 2.85 2,105,129
Manufacturing MG 0.73 545,027
Office Equipment & Supplies OE 0.39 291,358
Oil & Gas Related OG 5.68 4,197,765
Publishing PB 1.57 1,159,918
Railroads RR 0.33 244,969
Real Estate Investment Trust RE 0.46 341,248
Real Estate Related RL 0.28 211,265
Repurchase Agreements RA 0.39 289,000
Retail RT 4.33 3,200,586
Services SV 1.53 1,133,398
Telecommunications -
Cellular & Wireless TC 0.45% 332,467
Telecommunications -
Long Distance TL 1.82 1,343,667
Telephone TN 5.01 3,701,426
Textile - Apparel Manufacturing TA 0.88 652,810
Toys TY 0.32 233,485
--------------------------
100.00% $73,917,571
==========================
Pacific Basin Fund
Automobiles AM 1.04% $724,237
<PAGE>
Banks BK 19.94 13,834,511
Beverages BV 1.21 839,815
Broadcasting BR 1.33 924,961
Building Materials BD 2.58 1,788,007
Chemicals CH 1.54 1,067,064
Computer Related CO 4.62 3,203,769
Conglomerates CG 5.62 3,899,933
Containers CT 2.50 1,734,406
Distribution DB 1.29 892,865
Electric Utilities EU 3.21 2,228,837
Electronics EL 3.09 2,141,528
Engineering & Construction EC 2.80 1,943,859
Entertainment ET 1.20 830,669
Financial FN 0.23 157,134
Gold & Precious Metals Mining GP 2.02 1,398,464
Health Care Drugs -
Pharmaceuticals HD 0.91 628,614
Insurance IN 1.15 798,240
Investment Bank/Broker Firm IV 1.01 698,460
Iron & Steel IS 2.62 1,816,811
Machinery MY 4.02 2,787,780
Manufacturing MG 1.66 1,155,245
Metals Mining MM 1.08 748,925
Office Equipment & Supplies OE 0.52 364,197
Oil & Gas Related OG 1.46 1,015,860
Personal Care PL 1.01 698,460
Publishing PB 1.44 1,001,943
Real Estate Investment Trust RE 0.81 565,420
Real Estate Related RL 7.76 5,382,014
Repurchase Agreements RA 8.16 5,661,000
Restaurants RS 0.68 471,460
Retail RT 3.72 2,582,805
Services SV 1.03 715,256
Telecommunications -
Long Distance TL 3.00 2,081,784
Textile -
Apparel Manufacturing TA 1.20% 835,658
Transportation TR 1.38 956,225
Truckers TK 1.16 808,218
--------------------------
100.00% $69,384,434
==========================
See Notes to Financial Statements.
</TABLE>
<PAGE>
INVESCO International Funds, Inc.
Statement of Assets and Liabilities
October 31, 1997
<TABLE>
<CAPTION>
International Pacific
European Growth Basin
Fund Fund Fund
-------------------------------------------------
<S> <C> <C> <C>
ASSETS
Investment Securities:
At Cost~ $242,994,200 $65,019,019 $81,784,765
=================================================
At Value~ 296,171,470 73,917,571 69,384,434
Cash 0 0 827
Foreign Currency
(Cost $7,742,569,
$33,970 and $32,433,
respectively) 7,743,288 34,556 31,823
Receivables:
Investment Securities Sold 52,647,349 5,707,575 68,936
Fund Shares Sold 16,604,774 5,408,026 5,480,547
Dividends and Interest 815,363 246,670 140,473
Prepaid Expenses and Other
Assets 90,232 63,148 108,624
-------------------------------------------------
TOTAL ASSETS 374,072,476 85,377,546 75,215,664
-------------------------------------------------
LIABILITIES
Payables:
Custodian 17,733,604 15,333 0
Distributions to Shareholders 49,517 3,780 0
Investment Securities Purchased 9,263,262 486,878 9,013,506
Fund Shares Repurchased 1,801,005 63,969 2,204,406
Depreciation on Forward Foreign
Currency Contracts 343,639 12,508 22,307
Borrowings on Line of Credit 20,014,167 0 0
Accrued Expenses and Other
Payables 47,972 15,823 32,418
-------------------------------------------------
TOTAL LIABILITIES 49,253,166 598,291 11,272,637
-------------------------------------------------
Net Assets at Value 324,819,310 84,779,255 63,943,027
=================================================
NET ASSETS
Paid-in Capital* 212,249,369 68,781,401 74,964,442
Accumulated Undistributed
Net Investment Income 543,861 675,691 523,439
Accumulated Undistributed Net
Realized Gain on Investment
Securities and Foreign
Currency Transactions 58,883,886 6,420,735 856,554
Net Appreciation (Depreciation)
of Investment Securities and
<PAGE>
Foreign Currency Transactions 53,142,194 8,901,428 (12,401,408)
-------------------------------------------------
Net Assets at Value 324,819,310 84,779,255 63,943,027
=================================================
Shares Outstanding 18,729,780 5,149,447 6,565,265
Net Asset Value, Offering
and Redemption
Price per Share 17.34 16.46 9.74
=================================================
~ Investment securities at cost and value at October 31, 1997 include repurchase
agreements of $289,000 and $5,661,000 for International Growth and Pacific
Basin Funds, respectively.
* The Fund has 500 million authorized shares of common stock, par value of $0.01
per share. Of such shares, 100 million have been allocated to each individual
Fund.
See Notes to Financial Statements
</TABLE>
<PAGE>
INVESCO International Funds, Inc.
Statement of Operations
Year Ended October 31, 1997
<TABLE>
<CAPTION>
International Pacific
European Growth Basin
Fund Fund Fund
--------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME
INCOME
Dividends $5,860,880 $1,722,522 $1,552,416
Interest 499,363 388,090 153,741
Foreign Taxes Withheld (842,962) (206,607) (169,488)
-------------------------------------------------
TOTAL INCOME 5,517,281 1,904,005 1,536,669
-------------------------------------------------
EXPENSES
Investment Advisory Fees 2,679,462 987,897 939,420
Transfer Agent Fees 985,603 377,527 677,811
Administrative Fees 63,965 24,818 28,788
Custodian Fees and Expenses 446,087 135,507 256,970
Directors' Fees and Expenses 26,849 13,653 16,064
Professional Fees and Expenses 38,222 26,501 28,301
Registration Fees and Expenses 95,820 60,416 99,208
Reports to Shareholders 111,998 47,580 78,751
Other Expenses 32,556 19,119 26,504
-------------------------------------------------
TOTAL EXPENSES 4,480,562 1,693,018 2,151,817
Fees and Expenses Paid
Indirectly (153,683) (49,580) (59,088)
-------------------------------------------------
NET EXPENSES 4,326,879 1,643,438 2,092,729
-------------------------------------------------
NET INVESTMENT INCOME (LOSS) 1,190,402 260,567 (556,060)
-------------------------------------------------
REALIZED AND UNREALIZED
GAIN (LOSS)
ON INVESTMENT SECURITIES
Net Realized Gain on Investment
Securities and Foreign
Currency Transactions 60,622,016 7,485,092 2,050,539
Change in Net Appreciation
(Depreciation) of Investment
Securities and Foreign
Currency Transactions 1,427,595 (891,853) (20,975,739)
-------------------------------------------------
NET GAIN (LOSS) ON INVESTMENT
SECURITIES 62,049,611 6,593,239 (18,925,200)
-------------------------------------------------
Net Increase (Decrease) in
Net Assets from Operations 63,240,013 6,853,806 (19,481,260)
=================================================
See Notes to Financial Statements
</TABLE>
<PAGE>
INVESCO International Funds, Inc.
Statement of Changes in Net Assets
Year Ended October 31
<TABLE>
<CAPTION>
European International Growth Pacific Basin
Fund Fund Fund
----------------------------- ----------------------------- ---------------------------
1997 1996 1997 1996 1997 1996
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS
Net Investment Income
(Loss) $ 1,190,402 $ 876,030 $ 260,567 $ 387,079 $ (556,060) $ (72,366)
Net Realized Gain on
Investment Securities
and Foreign Currency
Transactions 60,622,016 19,780,096 7,485,092 4,498,297 2,050,539 10,089,266
Change in Net Appreciation
(Depreciation) of
Investment Securities
and Foreign Currency
Transactions 1,427,595 29,753,509 (891,853) 5,988,409 (20,975,739) (1,230,912)
----------------------------- ------------------------------- -------------------------
NET INCREASE (DECREASE)
IN NET ASSETS FROM
OPERATIONS 63,240,013 50,409,635 6,853,806 10,873,785 (19,481,260) 8,785,988
----------------------------- ------------------------------- -------------------------
DISTRIBUTIONS
TO SHAREHOLDERS
Net Investment Income (1,288,400) (876,030) (392,350) (387,079) 0 0
In Excess of Net
Investment Income 0 (516,756) (2,889) (394,151) (52,110) (432,102)
Net Realized Gain on
Investment Securities
and Foreign Currency
Transactions (20,402,793) (18,669,435) (4,053,525) (2,897,940) (8,942,331) (2,389,197)
----------------------------- -------------------------------- -------------------------
TOTAL DISTRIBUTIONS (21,691,193) (20,062,221) (4,448,764) (3,679,170) (8,994,441) (2,821,299)
----------------------------- -------------------------------- -------------------------
FUND SHARE TRANSACTIONS
Proceeds from Sales
<PAGE>
of Shares 1,120,633,773 466,074,093 471,306,125 349,892,500 602,143,991 667,157,615
Reinvestment of
Distributions 20,975,036 19,468,999 4,405,427 3,657,292 8,700,080 2,720,245
----------------------------- ------------------------------ -------------------------
1,141,608,809 485,543,092 475,711,552 353,549,792 610,844,071 669,877,860
Amounts Paid for
Repurchases of
Shares (1,158,926,547) (439,501,864) (487,923,735) (341,548,549) (668,295,262)(680,346,294)
============================== =============================== =========================
NET INCREASE (DECREASE)
IN NET ASSETS FROM
FUND SHARE
TRANSACTIONS (17,317,738) 46,041,228 (12,212,183) 12,001,243 (57,451,191) (10,468,434)
----------------------------- ------------------------------- -------------------------
Total Increase (Decrease)
in Net Assets 24,231,082 76,388,642 (9,807,141) 19,195,858 (85,926,892) (4,503,745)
NET ASSETS
Beginning of Period 300,588,228 224,199,586 94,586,396 75,390,538 149,869,919 154,373,664
----------------------------- ------------------------------ ------------------------
End of Period 324,819,310 300,588,228 84,779,255 94,586,396 63,943,027 149,869,919
============================= ============================== =========================
Accumulated Undistributed
Net Investment Income
Included in Net Assets
at End of Period 543,861 113,293 675,691 131,783 523,439 39,834
FUND SHARE TRANSACTIONS
Shares Sold 66,508,158 31,746,297 27,110,962 21,434,516 46,222,901 45,840,305
Shares Issued from
Reinvestment
of Distributions 1,370,609 1,465,160 272,241 231,481 657,603 188,387
----------------------------- ------------------------------ --------------------------
67,878,767 33,211,457 27,383,203 21,665,997 46,880,504 46,028,692
Shares Repurchased (68,118,819) (30,152,989) (27,828,343) (20,850,135) (50,934,920) (46,568,736)
----------------------------- ------------------------------ -------------------------
Net Increase (Decrease)
in Fund Shares (240,052) 3,058,468 (445,140) 815,862 (4,054,416) (540,044)
============================= ============================== ==========================
</TABLE>
See Notes to Financial Statements
<PAGE>
INVESCO International Funds, Inc.
Notes to Financial Statements
NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES. INVESCO
International Funds, Inc. (the "Fund") is incorporated in Maryland and presently
consists of three separate Funds: European Fund, International Growth Fund and
Pacific Basin Fund. The investment objectives are: to seek capital appreciation
through investments in designated geographical sectors for European and Pacific
Basin Funds; and to seek a high total return through investments in designated
geographical sectors for International Growth Fund. The Fund is registered under
the Investment Company Act of 1940 (the "Act") as a diversified, open-end
management investment company.
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of income and expenses during the reporting period. Actual
results could differ from those estimates.
A. SECURITY VALUATION - Equity securities traded on national securities
exchanges or in the over-the-counter market are valued at the last sales
price in the market where such securities are primarily traded. If last
sales prices are not available, securities are valued at the highest
closing bid price obtained from one or more dealers making a market for
such securities or by a pricing service approved by the Fund's board of
directors.
Foreign securities are valued at the closing price on the principal stock
exchange on which they are traded. In the event that closing prices are not
available for foreign securities, prices will be obtained from the
principal stock exchange at or prior to the close of the New York Stock
Exchange. Foreign currency exchange rates are determined daily prior to the
close of the New York Stock Exchange.
Debt securities are valued at evaluated bid prices as determined by a
pricing service approved by the Fund's board of directors. If evaluated
bid prices are not available, debt securities are valued by averaging the
bid prices obtained from one or more dealers making a market for such
securities.
If market quotations or pricing service valuations are not readily
available, securities are valued at fair value as determined in good faith
by the Fund's board of directors. Restricted securities are valued in
accordance with procedures established by the Fund's board of directors.
Short-term securities are stated at amortized cost (which approximates
market value) if maturity is 60 days or less at the time of purchase, or
market value if maturity is greater than 60 days.
Assets and liabilities initially expressed in terms of foreign currencies
are translated into U.S. dollars at the prevailing market rates as quoted
by one or more banks or dealers on the date of valuation. The cost of
securities is translated into U.S. dollars at the rates of exchange
prevailing when such securities are acquired. Income and expenses are
translated into U.S. dollars at rates of exchange prevailing when accrued.
B. REPURCHASE AGREEMENTS - Repurchase agreements held by the Fund are fully
collateralized by U.S. Government securities and such collateral is in the
possession of the Fund's custodian. The collateral is evaluated daily to
ensure its market value exceeds the current market value of the repurchase
agreements including accrued interest. In the event of default on the
obligation to repurchase, the Fund has the right to liquidate the
<PAGE>
collateral and apply the proceeds in satisfaction of the obligation.
In the event of default or bankruptcy by the other party to the agreement,
realization and/or retention of the collateral or proceeds may be subject
to legal proceedings.
C. SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME - Security transactions
are accounted for on the trade date and dividend income is recorded on the
ex dividend date. Certain dividends from foreign securities will be
recorded as soon as the Fund is informed of the dividend if such
information is obtained subsequent to the ex dividend date. Interest
income, which may be comprised of stated coupon rate, market discount,
original issue discount and amortized premium, is recorded on the accrual
basis. Discounts and premiums on debt securities purchased are amortized
over the life of the respective security as adjustments to interest income.
Cost is determined on the specific identification basis.
The Fund may have elements of risk due to concentrated investments in
foreign issuers located in a specific country. Such concentrations may
subject the Fund to additional risks resulting from future political
or economic conditions and/or possible impositions of adverse foreign
governmental laws or currency exchange restrictions. Net realized and
unrealized gain or loss from investments includes fluctuations from
currency exchange rates and fluctuations in market value.
The Fund's use of short-term forward foreign currency contracts may
subject it to certain risks as a result of unanticipated movements in
foreign exchange rates. The Fund does not hold short-term forward foreign
currency contracts for trading purposes. The Fund may hold foreign
currency in anticipation of settling foreign security transactions and not
for investment purposes.
Restricted securities held by the Fund may not be sold except in exempt
transactions or in a public offering registered under the Securities Act of
1933. The risk of investing in such securities is generally greater than
the risk of investing in the securities of widely held, publicly traded
companies. Lack of a secondary market and resale restrictions may result in
the inability of each Fund to sell a security at a fair price and may
substantially delay the sale of the security which each Fund seeks to sell.
In addition, these securities may exhibit greater price volatility than
securities for which secondary markets exist.
D. FEDERAL AND STATE TAXES - The Fund has complied, and continues to comply,
with the provisions of the Internal Revenue Code applicable to regulated
investment companies and, accordingly, has made or intends to make
sufficient distributions of net investment income and net realized capital
gains, if any, to relieve it from all federal and state income taxes and
federal excise taxes.
To the extent future capital gains are offset by capital loss
carryovers, such gains will not be distributed to shareholders.
Dividends paid by the Fund from net investment income and distributions
of net realized short-term capital gains are, for federal income tax
purposes, taxable as ordinary income to shareholders. Each Fund has
elected to treat a portion of distributions of both realized and unrealized
gains on forward foreign currency contracts as capital gain distributions.
Investment income received from foreign sources may be subject to foreign
withholding taxes. Dividend and interest income is shown gross of foreign
withholding taxes in the accompanying financial statements.
E. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS - Dividends and distributions
to shareholders are recorded by the Fund on the ex dividend/distribution
date. The Fund distributes net realized capital gains, if any, to its
<PAGE>
shareholders at least annually, if not offset by capital loss carryovers.
Income distributions and capital gain distributions are determined in
accordance with income tax regulations which may differ from generally
accepted accounting principles. These differences are primarily due to
differing treatments for foreign currency transactions, market discounts,
amortized premiums, nontaxable dividends, net operating losses and
expired capital loss carryforwards.
For the year ended October 31, 1997, the effects of such differences
were as follows:
<TABLE>
<CAPTION>
Accumulated
Accumulated Undistributed
Undistributed Net Realized
Net Gain on
Investment Investment Paid In
Fund Income Securities Capital
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
European Fund $528,566 $(529,785) $1,219
International Growth Fund 678,580 (794,731) 116,151
Pacific Basin Fund 1,091,775 (1,091,775) 0
Net investment income, net realized gains and net assets were not affected.
</TABLE>
F. FORWARD FOREIGN CURRENCY CONTRACTS - The Fund enters into short-term
forward foreign currency contracts in connection with planned purchases or
sales of securities as a hedge against fluctuations in foreign exchange
rates pending the settlement of transactions in foreign securities. A
forward foreign currency contract is an agreement between contracting
parties to exchange an amount of currency at some future time at an agreed
upon rate. These contracts are marked-to-market daily and the related
appreciation or depreciation of the contracts is presented in the Statement
of Assets and Liabilities.
G. EXPENSES - Each of the Funds bears expenses incurred specifically on its
behalf and, in addition, each Fund bears a portion of general expenses,
based on the relative net assets of each Fund.
Under an agreement between each Fund and the Fund's Custodian, agreed
upon Custodian Fees and Expenses are reduced by credits granted by the
Custodian from any temporarily uninvested cash. Similarly, Transfer Agent
Fees are reduced by credits earned by each Fund from security brokerage
transactions under certain broker/service arrangements with third parties.
Such credits are included in Fees and Expenses Paid Indirectly in the
Statement of Operations.
For the year ended October 31, 1997, Fees and Expenses Paid Indirectly
consisted of the following:
Custodian Fees Transfer
Fund and Expenses Agent Fees
- --------------------------------------------------------------------------------
European Fund $151,342 $2,341
International Growth Fund 49,540 40
Pacific Basin Fund 58,525 563
NOTE 2 - INVESTMENT ADVISORY AND OTHER AGREEMENTS. INVESCO Funds Group,
Inc. ("IFG") serves as the Fund's investment adviser. As compensation for its
services to the Fund, IFG receives an investment advisory fee which is accrued
daily at the applicable rate and paid monthly. The fee is based on the annual
<PAGE>
rate of each Fund's average net assets as follows:
<TABLE>
<CAPTION>
AVERAGE NET ASSETS
--------------------------------------------------------------------
$0 to $0 to $350 to $500 Million Over Over
$350 $500 $700 to $1 $700 $1
Fund Million Million Million Billion Million Billion
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
European Fund 0.75% - 0.65% - 0.55% -
International
Growth Fund - 1.00% - 0.75% - 0.65%
Pacific Basin Fund 0.75% - 0.65% - 0.55% -
</TABLE>
In accordance with a Sub-Advisory Agreement between IFG and INVESCO Asset
Management Limited ("IAM"), an affiliate of IFG, investment decisions of the
Fund are made by IAM. Fees for such sub-advisory services are paid by IFG.
In accordance with an Administrative Agreement, each Fund pays IFG an annual
fee of $10,000, plus an additional amount computed at an annual rate of 0.015%
of average net assets to provide administrative, accounting and clerical
services. The fee is accrued daily and paid monthly.
IFG receives a transfer agent fee at an annual rate of $20.00 per
shareholder account, or, where applicable, per participant in an omnibus
account, per year.
IFG may pay such fee for participants in omnibus accounts to affiliates or
third parties. The fee is paid monthly at one-twelfth of the annual fee and is
based upon the actual number of accounts in existence during each month.
A plan of distribution pursuant to Rule 12b-1 of the Act (the "Plan") became
effective November 1, 1997 for European and International Growth Funds, and
December 1, 1997 for Pacific Basin Fund. The Plan provides for compensation of
marketing and advertising expenditures to INVESCO Distributors, Inc. to a
maximum of 0.25% of new assets.
NOTE 3 - PURCHASES AND SALES OF INVESTMENT SECURITIES. For the year ended
October 31, 1997, the aggregate cost of purchases and proceeds from sales of
investment securities (excluding all U.S. Government securities and short-term
securities) were as follows:
Fund Purchases Sales
- --------------------------------------------------------------------------------
European Fund $307,228,731 $349,987,120
International Growth Fund 50,848,466 70,199,636
Pacific Basin Fund 102,944,882 167,971,433
There were no purchases or sales of U.S. Government securities.
<PAGE>
NOTE 4 - APPRECIATION AND DEPRECIATION. At October 31, 1997, the gross
appreciation of securities in which there was an excess of value over tax cost,
the gross depreciation of securities in which there was an excess of tax cost
over value and the resulting net appreciation (depreciation) by Fund were as
follows:
Net
Gross Gross Appreciation
Fund Appreciation Depreciation (Depreciation)
- ------------------------------------------------------------------------------
European Fund $61,184,376 $8,421,723 $52,762,653
International Growth Fund 14,682,525 6,392,359 8,290,166
Pacific Basin Fund 2,961,530 15,643,074 (12,681,544)
NOTE 5 - TRANSACTIONS WITH AFFILIATES. Certain of the Fund's officers and
directors are also officers and directors of IFG or IAM.
The Fund has adopted an unfunded deferred compensation plan covering all
independent directors of the Fund who will have served as an independent
director for at least five years at the time of retirement. Benefits under this
plan are based on an annual rate equal to 40% of the retainer fee at the time of
retirement.
Pension expenses for the year ended October 31, 1997, included in Directors'
Fees and Expenses in the Statement of Operations, and unfunded accrued pension
costs and pension liability included in Prepaid Expenses and Accrued Expenses,
respectively, in the Statement of Assets and Liabilities were as follows:
Unfunded
Pension Accrued Pension
Fund Expenses Pension Costs Liability
- --------------------------------------------------------------------------------
European Fund $3,842 $14,034 $28,562
International Growth Fund 1,369 6,290 12,247
Pacific Basin Fund 2,373 13,363 25,905
NOTE 6 - LINE OF CREDIT. The Fund has available a Redemption Line of Credit
Facility ("LOC"), from a consortium of national banks, to be used for temporary
or emergency purposes to fund redemptions of investor shares. The LOC permits
borrowings to a maximum of 10% of the Net Assets at Value of each respective
Fund. Each Fund agrees to pay annual fees and interest on the unpaid principal
balance based on prevailing market rates as defined in the agreement. At October
31, 1997, European Fund had an outstanding bank line of credit at an interest
rate of 8.50%. The amount of the borrowing and the related interest is presented
in the Statement of Assets and Liabilities. On November 4, 1997, European Fund
paid the line of credit in full, including interest. There were no such
borrowings in any other Fund.
<PAGE>
Other Information
UNAUDITED
On October 28, 1997, a special meeting of the shareholders of European and
International Growth Funds was held at which the approval of a Plan and
Agreement of Distribution for each Fund was ratified. The following is a report
of votes cast:
<TABLE>
<CAPTION>
Fund For Against Abstain Total
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
European Fund 6,983,021 2,445,838 657,402 10,086,261
International
Growth Fund 3,370,668 549,890 107,786 4,028,344
On November 25, 1997, a special meeting of the shareholders of Pacific Basin
Fund was held at which the approval of a Plan and Agreement of Distribution was
ratified. The following is a report of votes cast:
Fund For Against Abstain Total
- --------------------------------------------------------------------------------------------
Pacific Basin Fund 2,525,504 748,745 264,745 3,538,994
</TABLE>
<PAGE>
INVESCO International Funds, Inc.
Financial Highlights
(For a Fund Share Outstanding Throughout Each Period)
<TABLE>
<CAPTION>
Year Ended October 31
-------------------------------------------------------------
1997 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C>
European Fund
PER SHARE DATA
Net Asset Value -
Beginning of Period $15.85 $14.09 $12.95 $12.20 $10.14
-------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income 0.07 0.05 0.23 0.16 0.14
Net Gains on Securities
(Both Realized and
Unrealized) 2.63 3.00 1.12 0.75 2.06
-------------------------------------------------------------
Total from Investment
Operations 2.70 3.05 1.35 0.91 2.20
-------------------------------------------------------------
LESS DISTRIBUTIONS
Dividends from Net
Investment Income 0.07 0.08 0.21 0.16 0.14
Distributions from Capital
Gains 1.14 1.21 0.00 0.00 0.00
-------------------------------------------------------------
Total Distributions 1.21 1.29 0.21 0.16 0.14
-------------------------------------------------------------
Net Asset Value -
End of Period $17.34 $15.85 $14.09 $12.95 $12.20
=============================================================
TOTAL RETURN 18.07% 23.47% 10.42% 7.43% 21.78%
RATIOS
Net Assets - End of Period
($000 Omitted) $324,819 $300,588 $224,200 $349,842 $270,544
Ratio of Expenses to
Average Net Assets 1.25%@ 1.36%@ 1.40%@ 1.20% 1.28%
Ratio of Net Investment
Income to Average
Net Assets 0.33% 0.37% 1.26% 1.28% 1.76%
Portfolio Turnover Rate 90% 91% 96% 70% 44%
Average Commission Rate Paid^^ $0.0414 $0.0367 - - -
<PAGE>
@ Ratio is based on Total Expenses of the Fund, which is before any expense
offset arrangements.
^^ The average commission rate paid is the total brokerage commissions paid on
applicable purchases and sales of securities for the period divided by the
total number of related shares purchased or sold which is required to be
disclosed for fiscal years beginning September 1, 1995 and thereafter.
</TABLE>
INVESCO International Funds, Inc.
Financial Highlights (Continued)
(For a Fund Share Outstanding Throughout Each Period)
<TABLE>
<CAPTION>
Year Ended October 31
-------------------------------------------------------------
1997 1996 1995 1994 1993<
<S> <C> <C> <C> <C> <C>
Pacific Basin Fund
PER SHARE DATA
Net Asset Value -
Beginning of Period $14.11 $13.83 $17.07 $15.11 $11.02
-------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income
(Loss) (0.09) (0.02) 0.06 0.04 0.04
Net Gains or (Losses)
on Securities
(Both Realized and
Unrealized) (3.45) 0.51 (1.45) 2.28 4.09
-------------------------------------------------------------
Total from Investment
Operations (3.54) 0.49 (1.39) 2.32 4.13
-------------------------------------------------------------
LESS DISTRIBUTIONS
Dividends from Net
Investment Income+ 0.00 0.03 0.06 0.04 0.04
Distributions from
Capital Gains 0.83 0.18 1.79 0.32 0.00
-------------------------------------------------------------
Total Distributions 0.83 0.21 1.85 0.36 0.04
-------------------------------------------------------------
Net Asset Value -
End of Period $9.74 $14.11 $13.83 $17.07 $15.11
=============================================================
TOTAL RETURN (26.65%) 3.55% (8.31%) 15.63% 37.51%
RATIOS
Net Assets - End of Period
($000 Omitted) $63,943 $149,870 $154,374 $352,888 $299,192
Ratio of Expenses to
Average Net Assets 1.72%@ 1.60%@ 1.52%@ 1.24% 1.22%
Ratio of Net Investment
Income (Loss) to Average
Net Assets (0.44%) (0.04%) 0.37% 0.28% 0.63%
Portfolio Turnover Rate 86% 70% 56% 70% 30%
Average Commission Rate Paid^^ $0.0093 $0.0148 - - -
< The per share information was computed based on weighted average shares.
@ Ratio is based on Total Expenses of the Fund, which is before any expense
offset arrangements.
<PAGE>
^^ The average commission rate paid is the total brokerage commissions paid on
applicable purchases and sales of securities for the period divided by the
total number of related shares purchased or sold which is required to be
disclosed for fiscal years beginning September 1, 1995 and thereafter.
+ Distributions in excess of net investment income for the year ended October
31, 1997 and 1996 aggregated less than $0.01 on a per share basis.
</TABLE>
<PAGE>
INVESCO International Funds, Inc.
Financial Highlights (Continued)
(For a Fund Share Outstanding Throughout Each Period)
<TABLE>
<CAPTION>
Period Year
Ended Ended
Year Ended October 31 October 31 December 31
------------------------------------------ ----------- ------------
1997 1996 1995 1994< 1993^< 1992
<S> <C> <C> <C> <C> <C> <C>
International Growth Fund
PER SHARE DATA
Net Asset Value -
Beginning of Period $16.91 $15.78 $17.29 $15.75 $12.57 $14.51
------------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income 0.06 0.07 0.08 0.04 0.08 0.12
Net Gains or (Losses)
on Securities (Both
Realized and
Unrealized) 0.37 1.77 (0.61) 1.57 3.16 (1.94)
------------------------------------------------------------------
Total from Investment
Operations 0.43 1.84 (0.53) 1.61 3.24 (1.82)
------------------------------------------------------------------
LESS DISTRIBUTIONS
Dividends from Net
Investment Income+ 0.08 0.15 0.09 0.07 0.06 0.11
In Excess of Net
Investment Income 0.00 0.00 0.03 0.00 0.00 0.00
Distributions from
Capital Gains 0.80 0.56 0.86 0.00 0.00 0.01
------------------------------------------------------------------
Total Distributions 0.88 0.71 0.98 0.07 0.06 0.12
------------------------------------------------------------------
Net Asset Value -
End of Period $16.46 $16.91 $15.78 $17.29 $15.75 $12.57
==================================================================
TOTAL RETURN 2.65% 12.01% (2.84%) 10.21% 29.08%* (12.52%)
RATIOS
Net Assets - End of
Period
($000 Omitted) $84,779 $94,586 $75,391 $161,884 $108,677 $35,192
Ratio of Expenses to
Average Net Assets 1.71%@ 1.80%@ 1.81%@ 1.50% 1.43%~ 1.36%
Ratio of Net Investment
Income to Average
Net Assets 0.26% 0.43% 0.41% 0.46% 0.94%~ 0.83%
Portfolio Turnover
Rate 57% 64% 62% 87% 46%* 50%
Average Commission
<PAGE>
Rate Paid^^ $0.0042 $0.0329 - - - -
^ From January 1, 1993 to October 31, 1993.
< The per share information for 1994 and 1993 was computed based on weighted
average shares.
+ Distributions in excess of net investment income for the year ended October
31, 1997 and 1996 aggregated less than $0.01 on a per share basis.
* Based on operations for the period shown and, accordingly, are not
representative of a full year.
@ Ratio is based on Total Expenses of the Fund, which is before any expense
offset arrangements.
~ Annualized
^^ The average commission rate paid is the total brokerage commissions paid on
applicable purchases and sales of securities for the period divided by the total
number of related shares purchased or sold which is required to be disclosed for
fiscal years beginning September 1, 1995 and thereafter.
</TABLE>
<PAGE>
Report of Independent Accountants
To the Board of Directors and Shareholders of
INVESCO International Funds, Inc.
In our opinion, the accompanying statement of assets and liabilities, including
the statement of investment securities, and the related statements of operations
and of changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of INVESCO European Fund, INVESCO
International Growth Fund and INVESCO Pacific Basin Fund (constituting INVESCO
International Funds, Inc., hereafter referred to as the "Fund") at October 31,
1997, the results of each of their operations for the year then ended, the
changes in each of their net assets for each of the two years in the period then
ended and the financial highlights for each of the five years in the period then
ended, in conformity with generally accepted accounting principles. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at October
31, 1997 by correspondence with the custodian and the application of alternative
auditing procedures where securities purchased had not been received, provide a
reasonable basis for the opinion expressed above.
Price Waterhouse LLP
Denver, Colorado
December 9, 1997
<PAGE>
INVESCO FUNDS
INVESCO Distributors, Inc.(SM)
Distributor
Post Office Box 173706
Denver, Coloado 80217-3706
1-800-525-8085
PAL(R): 1-800-424-8085
http://www.invesco.com
In Denver, visit one of our
convenient Investor Centers:
Cherry Creek,
155-B Fillmore Street
Denver Tech Center,
7800 East Union Avenue,
Lobby level
This information must be
preceded or accompanied
by a current prospectus.
