ANNUAL REPORT
October 31, 1998
INVESCO INTERNATIONAL
FUNDS, INC.
Emerging Markets
European
International Growth
Pacific Basin
International Blue Chip
No-load mutual funds
seeking opportunities
overseas.
INVESCO
YOU SHOULD KNOW WHAT INVESCO KNOWS (TM)
<PAGE>
MARKET OVERVIEW November 1998
As the global currency crisis spread from the Asian/Pacific Rim region to
Russia and Latin America, many international investors favored world equity
markets which were large and liquid, while avoiding most emerging markets. This
created a huge disparity in performance between established markets in Europe
and the U.S., and emerging markets around the world -- which have suffered
severe capital losses over the last 12 months.
Europe: With the planned launch of the EMU (European Economic and Monetary
Union) on January 1, 1999, 11 participating countries will have a common
currency called the "euro" and a single official interest rate. Those 11
countries are Austria, Belgium, Finland, France, Germany, Ireland, Italy,
Luxembourg, the Netherlands, Portugal, and Spain. In anticipation of a single
uniform interest rate, commonly expected to be close to German levels, many
participating nations have had to lower their interest rates as January 1, 1999,
approaches. This has created a positive environment for equities, and many
European stock markets have experienced significant appreciation in the last
year.
As positive as the economic environment is in Europe, there are some
incipient problems on the horizon. First, unemployment in many European
countries is at double-digit rates. With the prospect of slower economic growth
in 1999, high unemployment may lead to social tension in many nations. Second,
when Russia devalued its currency, it effectively defaulted on its external
debt. European banks carried much of this debt, and, as a result of the
devaluation, the financial condition of many European banks have deteriorated.
However, because of the general strength in most European economies, in our
estimation the overall outlook for Europe remains bright.
Latin America: Even though there are positive signs starting to radiate out
of Latin America, most of these financial markets experienced significant losses
this year. With Russia devaluing the ruble, Latin American currencies have been
under intense pressure. In an effort to protect their currencies, many Latin
American markets implemented extreme austerity measures. Government actions
included raising short-term interest rates and reducing fiscal spending, which
in turn slowed economic growth. The prospects of slower growth, combined with
uncertain currency markets, led many foreign investors to pull their money out
of this region. Consequently, those markets suffered severe corrections.
This was most noticeable in Brazil, which accounts for approximately 43% of
Latin America's economy. Being one of the region's largest and most liquid
markets, Brazil has attracted investors' attention as President Cardoso has
implemented a massive privatization program -- converting public companies which
enjoyed monopoly status to private, more efficient corporations. As speculation
increased that Brazil's currency, the real, may be devalued, investments flowed
out of Brazil, devastating the financial markets. However, with the re-election
of President Cardoso, the chances of a devaluation of the real have been
reduced, and we are starting to see money begin to flow back into Brazil. If
Latin America can weather this storm, it has the potential for significant
appreciation in the next couple of years.
<PAGE>
Asia/Pacific Rim: Although many Asian/Pacific Rim countries are presently
in a recession, it appears that, for many of these economies, the worst of the
financial crisis may be over. However, those nations that have refused to
implement necessary reforms -- like Malaysia and Indonesia -- will likely
continue to struggle. In fact, the Malaysian government has implemented currency
controls and restrictions on foreign investments, which may hinder market growth
for years.
We are starting to see some positive signs out of this region, but Japan
remains problematic. Last spring, the Japanese government passed a 16 trillion
yen economic-stimulus package. But bureaucratic red tape has delayed the
implementation, and the Japanese economy continues to slip deeper into a severe
recession. In addition, the government's inability to properly address
non-performing loans within the banking system continues to put pressure on the
financial sector, limiting the chances for an economic recovery. Japan needs to
find a creative way to stimulate consumer spending and corporate investment.
Without meaningful reforms, the likelihood of economic growth is slim.
NEW INVESTMENT OPPORTUNITIES
INVESCO is proud to announce the addition of a new investment opportunity
for its shareholders. INVESCO International Blue Chip Fund (introduced 10/98)
has joined INVESCO International Funds, Inc. (See page 6 for more detailed
information on the fund.) If you have questions regarding the new fund, please
feel free to call an INVESCO representative at 1-800-525-8085.
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 10/31/98, or from
inception through 10/31/98. 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)
EMERGING MARKETS FUND
INVESCO Emerging Markets Fund had a total return of -24.60% from inception
(2/98) through 10/31/98, compared to -24.11% for the Morgan Stanley Capital
Index-Emerging Markets Index. (Of course, past performance is not a guarantee of
future results.)(1)(2)
REVIEW & OUTLOOK
A Conversation with Lead Portfolio Manager Francesco Bertoni
The last year has been a difficult time for all emerging markets. What regions
or areas do you prefer?
We have favored Latin America and Europe at the expense of Asia. The
combination of low valuations and a positive earnings growth outlook have
brought us to countries like Brazil and Mexico in Latin America, and Hungary,
Greece, Israel, and Egypt in the European region.
<PAGE>
When will the emerging markets start to recover?
Although absolute tops and bottoms are difficult to predict, we believe
that these markets hit bottom in the early part of September. The Russian crisis
in August with the devaluation of the ruble and the default on its debt
increased the risk associated with all emerging markets. This was especially
true in Latin America, where Brazil's financial markets were devastated due to
the perceived vulnerability of its economy -- as a result of its large deficit.
However, it appears that Brazil will not devalue its currency (the real), and
international assistance, through the International Monetary Fund and the U.S.
government, is ready to help. If Brazil survives this crisis, it may boost all
emerging markets.
EMERGING MARKETS FUND
CUMULATIVE TOTAL RETURN
AS OF 10/31/98(2)
Since inception (2/98) -24.60%
------------------------------------------
Graph:
This line graph represents a comparison of the value of a $10,000
investment in the INVESCO Emerging Markets Fund to the value of a $10,000
investment in the MSCI-Emerging Markets Index, assuming in each case
reinvestment of all dividends and capital gain distributions, for the ten
year period ended 10/31/98.
What's your near-term outlook for emerging markets?
We believe that growth in emerging markets will slow down in 1999. However,
it appears that financial markets have already priced in this scenario, and
valuations are on the low end of historical measures. Presently, the risk/reward
ratio favors investments in Europe and Latin America. We'll avoid Asia until
more positive structural changes occur. For the patient investor with a long
time horizon, emerging markets may offer significant investment potential when
these economies recover.
EUROPEAN FUND
INVESCO European Fund received the prestigious five-star rating for
risk-adjusted performance by Morningstar for the overall, three-year, and
five-year periods ended 10/31/98. For the 10-year period ended 10/31/98, the
fund received four stars.(3)
For the one-year period ended 10/31/98, INVESCO European Fund achieved a
total return of 24.92%, compared to 19.63% for the Morgan Stanley Capital
Index-AC Europe. (Of course, past performance is not a guarantee of future
results.)(1)(2)
<PAGE>
REVIEW & OUTLOOK
A Conversation with Lead Portfolio Manager Steven Chamberlain
European markets have experienced strong performance during the last year,
but witnessed extreme volatility in the last six months. Has the economic
environment changed in Europe?
Weakness in the Asian markets has resulted in higher interest rates and
slower global demand, with many emerging markets entering recessions. This
caused a reduction of expected GDP (Gross Domestic Product) growth for Europe in
1999. As a result, equity prices have contracted, and some of the gains produced
earlier in the year have been lost. However, over the longer-term, structural
changes are taking place in Europe which should create a positive backdrop for
equities.
Are you still positive on the European Union and its potential?
Yes, there are many encouraging aspects about the European Union. Although
the launch of the euro will intensify competition, those companies that are
versatile and can adapt will do well. Overall, the potential for accelerating
earnings in Continental Europe is good, which may lead to increased share prices
for selected companies.
EUROPEAN FUND
AVERAGE ANNUALIZED TOTAL RETURN
AS OF 10/31/98(2)
1 year 24.92%
-------------------------------------------------
5 years 16.66%
-------------------------------------------------
10 years 12.40%
-------------------------------------------------
Graph:
This line graph represents a comparison of the value of a $10,000
investment in the INVESCO European Fund to the value of a $10,000
investment in the MSCI-AC Europe Index, assuming in each case reinvestment
of all dividends and capital gain distributions, for the ten year period
ended 10/31/98.
What regions have performed well?
Individual stock selection drives the performance of the fund, so country
allocation is primarily a by-product of the stock selection process. During the
last year, we have favored investments in Continental Europe, while being
underweighted in the U.K. Many companies in Continental Europe are pursuing
fast-growth strategies or focusing on increasing shareholder value -- which is a
positive for security prices. In addition, countries such as Spain, Portugal,
and Ireland are benefiting from robust domestic demand and falling interest
rates in anticipation of the launch of the euro on January 1, 1999.
<PAGE>
What is one of your favorite stocks for the fund?
One stock that remains a core holding is Spain's leading fast food
operator, TelePizza SA. Spanish consumption per capita for fast food is still
only 6% of what per capita spending is for fast food in the U.S. -- even though
Spanish demand has already increased over 150% in the last five years. With
changing lifestyles, employment patterns, and demographics, we believe that this
market has enormous growth potential over the next three to five years. As the
market-leading fast food company in Spain, TelePizza SA is not only increasing
its market share, but is also opening stores in Portugal, Poland, Mexico, and
Chile.
Did the fund experience any disappointments?
Holdings in economically sensitive sectors, such as chemicals, oils, paper,
and metal stocks, were under pressure in the last six months, as economic growth
rates around the world declined. But the fund had a limited exposure to these
types of securities and will continue to avoid these firms until their growth
prospects improve.
What's your near-term outlook?
The world remains a difficult place for companies to operate in,
competition in the market place is intensifying, and the overall outlook for
global growth is uncertain. Yet there are positive factors still in place in
Europe which favor equity investments:
European companies are becoming more efficient and focusing on shareholder
value.
The chances for lower interest rates are good.
Equity ownership in Europe is increasing as companies move away from
defined compensation retirement plans to defined benefit retirement plans.
<PAGE>
INTERNATIONAL GROWTH FUND
For the one-year period ended 10/31/98, INVESCO International Growth Fund had
a total return of -2.75%. The Morgan Stanley Capital Index-Europe/Australia/Far
East had a total return of 9.95% 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)
REVIEW & OUTLOOK
A Conversation with Lead Portfolio Manager Richard Beggs
Many foreign equity markets experienced significant losses in the last 12
months. What areas has the fund favored?
The fund's returns were enhanced by securities in Continental Europe and
the U.K., and we remain optimistic about both. In Continental Europe, positive
structural changes are taking place as countries prepare for the introduction of
the euro on January 1, 1999. This should create a more competitive environment
and lead to accelerating earnings for selected firms. Furthermore, we believe
that interest rates in Continental Europe will continue to decline, creating a
positive backdrop for equities.
We have become more positive on the U.K. equity markets in the last six
months. It appears that the U.K. economy will avoid a recession in 1999, given
improvements in domestic demand. In addition, the prospect for lower interest
rates and weaker sterling should help the manufacturing sector, which is the
backbone of the U.K. economy.
What areas have been disappointments?
The Asian/Pacific Rim markets remain problematic, and have hindered fund
performance during the last year. In fact, our view has become incrementally
more negative as the year has progressed; and currently we are avoiding all
Asian markets except for Australia and New Zealand. We believe that Japan has
not yet implemented the necessary reforms to stimulate their economy, and the
prospects for a weaker Japanese yen are good -- a weaker yen hurts
dollar-denominated investments.
Furthermore, the depth and severity of the banking crisis in the
Asian/Pacific Rim region has not been fully realized. In our opinion, it will be
a long and tedious process to re-capitalize these banks, and prospects for
growth in these economies in the next one to two years are minimal.
INTERNATIONAL GROWTH FUND
AVERAGE ANNUALIZED TOTAL RETURN
AS OF 10/31/98(2)
1 year -2.75%
-------------------------------------------------
5 years 3.67%
-------------------------------------------------
10 years 3.87%
-------------------------------------------------
<PAGE>
Graph:
This line graph represents a comparison of the value of a $10,000
investment in the INVESCO International Growth Fund to the value of a
$10,000 investment in the MSCI-Europe/Australia/Far East Index, assuming in
each case reinvestment of all dividends and capital gain distributions, for
the ten year period ended 10/31/98.
What's one of the your favorite stocks?
I like Mannesmann AG. It's a leading fully integrated telecom operator in
Europe, focusing on three of the largest markets in Europe -- Germany, France,
and Italy. This market still has low penetration by European standards, and
subscriber growth remains robust. We believe there is considerable upside to
analyst forecasts, as penetration growth will be higher than expected, which may
lead to accelerating revenues and earnings. What's your near-term outlook?
We believe that we are not through the woods yet, and that the global
credit crunch remains a problem in most markets. Emerging market debt still
needs to be restructured, and the losses suffered at hedge funds need to be
realized on many balance sheets. This could lead to still more volatility in the
world financial markets, and we will remain cautious with our investment
approach until some of these issues are worked out.
PACIFIC BASIN FUND
For the one-year period ended 10/31/98, INVESCO Pacific Basin Fund had a
total return of -28.68%, compared to a total return of -13.70% 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)
<PAGE>
PACIFIC BASIN FUND
AVERAGE ANNUALIZED TOTAL RETURN
AS OF 10/31/98(2)
1 year -28.68%
-------------------------------------------------
5 years -10.50%
-------------------------------------------------
10 years -2.91%
-------------------------------------------------
REVIEW & OUTLOOK
A Conversation with Managing Director & Chief Investment Officer of INVESCO Asia
Limited, Anna Tong
What regions or countries have you favored in the last 12 months?
During the last year, the fund has increased its weighting towards
countries that are the least directly affected by the problems associated with
the on-going financial crisis, with Australia being our favorite country.
Although we have seen some deterioration in Australia's trade balance, its
economy is still benefiting from strong domestic demand and a sound banking
sector. Furthermore, the Reserve Bank of Australia has been accommodative in
growing the money supply, and inflation remains benign. However, during the last
12 months, there have been limited places to hide during the financial crisis,
and all Asian/Pacific Rim financial markets have suffered.
Are we starting to see some positive signs out of the Asian/Pacific Rim region?
Asian economies are starting to make progress on many fronts, although the
global economic and capital markets are probably not constructive for a
sustained recovery at the present time. However, there are bright spots:
First, we are witnessing a rebuilding of savings and current account
surpluses. This has begun to add liquidity to these economies and enhances their
ability to pay down the external debt, supporting their currencies.
Second, necessary banking reforms are being implemented in some countries,
which will eventually support capital formation and improve the chances for a
sustained recovery.
Graph:
This line graph represents a comparison of the value of a $10,000
investment in the INVESCO Pacific Basin Fund to the value of a $10,000
investment in the MSCI-Pacific Index, assuming in each case reinvestment of
all dividends and capital gain distributions, for the ten year period ended
10/31/98.
<PAGE>
What country has produced the biggest disappointment?
Without a doubt, Malaysia has been the greatest disappointment in the
region. Malaysia entered the financial crisis with some of the most credible
economic policies and lower exposure to foreign debt compared to its neighbors.
However, the inability of the Malaysian government to accept the severity of the
financial crisis caused misguided responses and eventually the implementation of
currency controls. Malaysia is now in desperate need of monetary discipline and
a substantive solution to its bad loan problems. In addition, it appears that
Prime Minister Mahathir Mohamad is unwilling to make the necessary structural
changes to Malaysia's economy, and social unrest is increasing.
What effect does Japan have?
Being the largest capital provider in the Asian/Pacific Rim region, a
strong Japan would definitely be beneficial to the recovery of Asian economies.
If Japan can stimulate domestic spending and ignite its economy, then other
countries in the region would respond to improved external demand and more
available credit. However, Japan has been slow with necessary reforms, and their
financial markets remain in a severe bear market, which has lasted the better
part of seven years.
What's your outlook and strategy for the near future?
We will remain cautious with the fund's investments for the near future.
There are two things that remain a concern for us, and most likely will take
some time to reverse:
Although the banking industry has made some progress, there still remains the
enormous problem of bad loans and under-capitalized balance sheets. The process
of re-capitalizing the banking sector will be a long and tedious one, and
liquidity within the region will remain scarce.
Decreased external demand for Asian products remains problematic due to an
expected slowdown in the industrial countries, and the relative strength of the
yen is compounding Japan's deflationary problems. Japan needs to jump-start its
economy before any meaningful recovery will take place in Asian economies.
With these thoughts in mind, we're still conservative in our investment
approach. However, when these economies start to recover, Asian financial
markets will have significant upside potential because security prices are at
incredibly depressed levels compared to historical valuations.
INTERNATIONAL BLUE CHIP FUND
REVIEW & OUTLOOK
A Conversation with Co-Portfolio Manager John Rogers
International Blue Chip Fund commenced investment operations on October 28,
1998. What is the fund's investment discipline?
We use a bottom-up approach to stock picking, with a strong emphasis on
risk control. Our investment team screens approximately 2,000 international
stocks on a quantitative basis, reducing the number of attractive securities to
roughly 350. Then we leverage our international expertise by using INVESCO's
global network of portfolio managers and analysts to help with the fundamental
research. From this research, we find the most attractive 150 securities, and
select approximately 50 stocks that we believe are the most attractive.
<PAGE>
We favor companies with solid management teams, consistent financial
performance, conservative balance sheets, and companies which produce a strong
return on equity.
What is an international blue chip company?
These are large, well-established companies, with proven track records,
that are primarily located overseas. Over half the world's capitalization is
found outside the U.S., so there are significant opportunities for investment in
foreign markets. Many have significantly outperformed the U.S. market over long
periods of time.
Where can the fund invest?
The fund will seek companies with proven track records whose primary
markets are outside the U.S. For the most part, the fund will primarily invest
in the larger, more liquid foreign financial markets.
What's your near-term outlook?
The volatility in the global financial markets last summer reduced much of
the speculative excess in international markets seen earlier this year. With
prospects for lower interest rates globally, the outlook for equities in foreign
markets appear bright. However, day-to-day volatility may remain extreme over
the next three to six months.
(1) The MSCI-EAFE, MSCI-AC Europe, MSCI-Pacific, and MSCI-Emerging Markets
are unmanaged indexes of common stocks considered to be representative
of the overall international, European, Pacific Basin, and emerging
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. As of 10/31/98, European
Fund received 5 stars among 839 funds in the international equity fund
category for the 3-year period, 5 stars among 373 for the 5-year, and
4 stars among 109 for the 10-year.
<PAGE>
<TABLE>
<CAPTION>
Ten Largest Common Stock Holdings
October 31, 1998
Description Value
- ----------------------------------------------------------------------------------------------------------------
Emerging Markets Fund
<S> <C>
Formosa Fund IDR Representing Registered Shrs $ 36,000
New Taipei Fund Ltd 33,308
Telefonica de Argentina SA Sponsored ADR Representing 10 Class B Shrs 28,103
Telefonos de Mexico SA de CV Sponsored ADR Representing 20 Series L Shrs 26,406
Magyar Tavkozlesi Rt Sponsored ADR Representing 5 Ord Shrs 24,187
MOL Magyar Olaj-es Gazipari Rt Regulation S Sponsored GDR Representing Ord Shrs 23,730
Huaneng Power International Sponsored ADR Representing 40 Ord Shrs 22,000
Videsh Sanchar Nigam Ltd Regulation S GDR Representing 1/2 Ord Shr 21,945
South African Breweries Ltd 21,333
Liberty Life Association of Africa Ltd 19,320
European Fund
Mannesmann AG $ 23,620,336
TNT Post Group NV 20,078,171
TelePizza SA 19,476,332
MobilCom AG 17,638,893
Banca di Roma SpA 17,457,653
Vodafone Group PLC 16,077,120
Orange PLC 14,785,062
Glaxo Wellcome PLC 13,831,682
Telefonica SA 11,758,654
Roche Holding AG Non-Voting Shrs 11,667,405
International Blue Chip Fund
Portugal Telecom SA Sponsored ADR Representing Ord Shrs $ 94,500
Louis Vuitton Moet Hennessy 92,676
HSBC Holdings PLC 91,104
Novartis AG Registered Shrs 90,090
Kyocera Corp 88,389
Norsk Hydro A/S Sponsored ADR Representing Ord Shrs 86,875
Yacimientos Petroliferos Fiscades SA Sponsored ADR Representing Class D Shrs 86,812
Nintendo Co Ltd 84,613
BASF AG 84,410
Philips Electronics NV New York Registered Shrs Representing Ord Shrs 82,312
<PAGE>
Description Value
- ----------------------------------------------------------------------------------------------------------------
International Growth Fund
SmithKline Beecham PLC $ 1,356,085
Lloyds TSB Group PLC 1,047,357
Nestle SA Registered Shrs 957,023
Novartis AG Registered Shrs 900,901
National Australia Bank Ltd 870,722
Telecom Italia Mobile SpA 860,750
Mannesmann AG 803,780
TNT Post Group NV 779,033
Vodafone Group PLC 704,714
Unicredito Italiano SpA 703,678
Pacific Basin Fund
Telstra Corp Ltd Installment Receipts $ 1,896,770
Brambles Industries Ltd 1,419,373
National Australia Bank Ltd 1,319,276
Australia & New Zealand Banking Group Ltd 1,252,690
Toyota Motor 1,201,407
Bridgestone Corp 1,100,575
AMP Ltd 1,006,760
NTT Mobile Communication Network 975,457
Toshiba Corp 938,814
Commonwealth Bank of Australia 928,316
Composition of holdings is subject to change.
</TABLE>
<TABLE>
<CAPTION>
Statement of Investment Securities
October 31, 1998
- ----------------------------------------------------------------------------------------------------------------
Shares, Units
Industry or Principal
% Description Code Amount Value
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Emerging Markets Fund
63.30 COMMON STOCKS
4.26 ARGENTINA
Banco de Galicia y Buenos Aires SA de CV BK 4,400 $ 18,926
Telefonica de Argentina SA Sponsored ADR Representing 10 Class B Shrs TN 850 28,103
- ----------------------------------------------------------------------------------------------------------------
47,029
- ----------------------------------------------------------------------------------------------------------------
1.74 BRAZIL
Cia de Saneamento Basico do Estado de Sao Paulo UW 170,392 13,572
Cia Paranaense de Energia-Copel EU 900,000 5,583
- ----------------------------------------------------------------------------------------------------------------
19,155
- ----------------------------------------------------------------------------------------------------------------
3.02 CAYMAN ISLANDS
New Taipei Fund Ltd(a) FN 1,800 33,308
- ----------------------------------------------------------------------------------------------------------------
<PAGE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
Shares, Units
Industry or Principal
% Description Code Amount Value
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
2.11 CHILE
Enersis SA Sponsored ADR Representing 50 Ord Shrs EU 400 $ 8,350
Sociedad Quimica y Minera de Chile SA Sponsored ADR
Representing 10 Series B Shrs CH 450 14,962
- ----------------------------------------------------------------------------------------------------------------
23,312
- ----------------------------------------------------------------------------------------------------------------
1.99 CHINA
Huaneng Power International Sponsored ADR Representing 40 Ord Shr(a) EU 1,600 22,000
- ----------------------------------------------------------------------------------------------------------------
5.33 EGYPT
Al-Ahram Beverages SAE Regulation S GDR Representing 1/2 Ord Shr(h) BV 600 16,560
Misr International Bank Regulation S GDR Representing 1/2 Ord Shr(h) BK 1,800 16,830
Paints & Chemical Industries SAE Regulation S GDR Representing
1/3 Ord Shr(a)(h) CH 1,200 10,920
Suez Cement Regulation S Sponsored GDR Representing Ord Shrs(h) BD 1,000 14,550
- ----------------------------------------------------------------------------------------------------------------
58,860
- ----------------------------------------------------------------------------------------------------------------
3.94 GREECE
Alpha Credit Bank BK 180 14,383
Hellenic Telecommunication Organization SA TL 700 15,913
STET-Hellas Telecommunications SA ADR Representing Ord Shrs(a) TL 500 13,125
- ----------------------------------------------------------------------------------------------------------------
43,421
- ----------------------------------------------------------------------------------------------------------------
1.03 HONG KONG
Road King Infrastructure Ltd EC 16,000 11,361
- ----------------------------------------------------------------------------------------------------------------
4.34 HUNGARY
MOL Magyar Olaj-es Gazipari Rt Regulation S Sponsored GDR
Representing Ord Shrs(h) OG 1,050 23,730
Magyar Tavkozlesi Rt Sponsored ADR Representing 5 Ord Shrs TN 900 24,187
- ----------------------------------------------------------------------------------------------------------------
47,917
- ----------------------------------------------------------------------------------------------------------------
5.94 INDIA
Bajaj Auto Ltd Sponsored GDR Representing Ord Shrs AM 800 13,200
Hindalco Industries Ltd Sponsored GDR Representing Ord Shrs AL 1,250 14,656
ITC Ltd GDR Representing Ord Shrs TO 425 8,309
Mahanagar Telephone Nigam Ltd Sponsored GDR Representing 2 Ord Shrs TL 700 7,420
Videsh Sanchar Nigam Ltd Regulation S Sponsored GDR Representing
1/2 Ord Shr(h) TL 2,100 21,945
- ----------------------------------------------------------------------------------------------------------------
65,530
- ----------------------------------------------------------------------------------------------------------------
3.12 ISRAEL
Bank Leumi Le-Israel BK 5,000 6,368
Blue Square-Israel Ltd Sponsored ADR Representing Ord Shrs RT 1,100 14,162
Makhteshim-Agan Industries(a) CH 7,854 13,895
- ----------------------------------------------------------------------------------------------------------------
34,425
<PAGE>
- ----------------------------------------------------------------------------------------------------------------
9.73 MEXICO
Cemex SA de CV Series B Shrs BD 6,000 16,300
Corporacion Geo SA de CV Series B Shrs(a) HB 2,300 4,022
Grupo Carso SA de CV Series A-1 Shrs CG 4,300 14,825
Grupo Financiero Banamex Accival SA de CV Series B Shrs(a) BK 12,200 12,269
Panamerican Beverages Class A BV 900 18,225
Telefonos de Mexico SA Class L Sponsored ADR Representing
20 Series L Shrs TN 500 26,406
Tubos de Acero de Mexico SA Sponsored ADR Representing Cmn Shrs IS 1,800 15,300
- ----------------------------------------------------------------------------------------------------------------
107,347
- ----------------------------------------------------------------------------------------------------------------
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
Shares, Units
Industry or Principal
% Description Code Amount Value
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1.06 PERU
Telefonica del Peru SA Sponsored ADR Representing 10 Class B Shrs TN 900 $ 11,700
- ----------------------------------------------------------------------------------------------------------------
1.38 POLAND
BIG Bank Gdanski SA Regulation S GDR Representing 15 Ord Shrs(h) BK 400 6,320
Kredyt Bank SA Regulation S Sponsored GDR Representing
5 Ord Shrs(a)(h) BK 450 8,887
- ----------------------------------------------------------------------------------------------------------------
15,207
- ----------------------------------------------------------------------------------------------------------------
0.77 RUSSIA
Surgutneftegaz Sponsored ADR Representing 50 Ord Shrs OG 4,500 8,437
- ----------------------------------------------------------------------------------------------------------------
6.56 SOUTH AFRICA
Anglo American Platinum Ltd GP 1,000 15,152
Liberty Life Association of Africa Ltd IN 1,129 19,320
Rembrandt Group Ltd FN 2,500 16,622
South African Breweries Ltd BV 1,100 21,333
- ----------------------------------------------------------------------------------------------------------------
72,427
- ----------------------------------------------------------------------------------------------------------------
1.62 SOUTH KOREA
Samsung Electronics Regulation S Sponsored GDR Representing
1/2 Ord Shr(h) EE 800 17,880
- ----------------------------------------------------------------------------------------------------------------
3.26 TAIWAN
Formosa Fund IDR Representing Registered Shrs(a) IC 4 36,000
- ----------------------------------------------------------------------------------------------------------------
2.10 TURKEY
KOC Holding AS MY 140,000 12,882
Turkiye Is Bankasi Series C Shrs BK 375,000 10,286
- ----------------------------------------------------------------------------------------------------------------
23,168
- ----------------------------------------------------------------------------------------------------------------
TOTAL COMMON STOCKS (Cost $878,037) 698,484
- ----------------------------------------------------------------------------------------------------------------
<PAGE>
12.87 PREFERRED STOCKS
12.87 BRAZIL
Centrais Eletricas de Santa Catarina SA, Series B, Pfd EU 13,000 7,084
Cia Brasileira de Distribuicao Grupo Pao de Acucar Sponsored
ADR Representing 1,000 Pfd Shrs RT 700 11,287
Cia Energetica de Minas Gerais Sponsored ADR
Representing 1,000 Non-Voting Pfd Shrs EU 819 15,929
Representing 1,000 Pfd Shrs EU 400 7,780
Cia Energetica do Ceara Coelce, Series A, Pfd EU 5,500,000 9,452
Cia Paranaense de Energia-Copel Sponsored ADR Representing
1,000 Series B, Pfd Shrs EU 1,000 7,750
Petroleo Brasileiro SA, Pfd OG 172,000 21,629
Telecomunicacoes Brasileiras SA, Sponsored ADR Representing
1,000 Pfd Shrs TN 680 51,638
Telecomunicacoes de Sao Paulo SA, Pfd TN 57,000 9,461
- ----------------------------------------------------------------------------------------------------------------
TOTAL PREFERRED STOCKS (Cost $221,201) 142,010
- ----------------------------------------------------------------------------------------------------------------
4.89 OTHER SECURITIES
2.74 KOREA
Merrill Lynch International & Co DV KOSPI 200 Index Low Exercise Price
Call Warrants (Expires 9/9/1999)(g) SV 9,000 30,242
- ----------------------------------------------------------------------------------------------------------------
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
Shares, Units
Industry or Principal
% Description Code Amount Value
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
2.15 MEXICO
Controladora Comercial Mexicana SA de CV GDR Representing 20 Linked
BC Units (Each unit consists of 3 Series B shrs and one
Series C Shr) RT 850 $ 10,625
Fomento Economico Mexicano SA de CV Sponsored ADR Representing 10
Units (Each unit consists of 10 Series B shrs, 20 Series D-B shrs
and 20 Series D-L shrs) BV 500 13,031
- ----------------------------------------------------------------------------------------------------------------
23,656
- ----------------------------------------------------------------------------------------------------------------
TOTAL OTHER SECURITIES (Cost $63,594) 53,898
- ----------------------------------------------------------------------------------------------------------------
18.94 SHORT-TERM INVESTMENTS -- REPURCHASE AGREEMENTS
18.94 UNITED STATES
Repurchase Agreement with State Street dated 10/30/1998 due 11/2/1998
at 5.350%, repurchased at $209,093 (Collateralized by US Treasury
Bonds due 11/15/2015 at 9.875%, value $218,748)(Cost $209,000) RA $ 209,000 209,000
- ----------------------------------------------------------------------------------------------------------------
100.00 TOTAL INVESTMENT SECURITIES AT VALUE
(Cost $1,371,832)
(Cost for Income Tax Purposes $1,346,964) $ 1,103,392
================================================================================================================
<PAGE>
European Fund
89.67 COMMON STOCKS & WARRANTS
1.37 DENMARK
Falck A/S AF 50,000 $ 3,891,298
William Demant Holding A/S HC 90,000 5,074,570
- ----------------------------------------------------------------------------------------------------------------
8,965,868
- ----------------------------------------------------------------------------------------------------------------
2.91 FINLAND
Helsingin Puhelin OYJ Series E Shrs TN 152,536 8,355,649
Nokia OYJ Series A Shrs CM 85,000 7,734,941
Raisio Group PLC FD 225,000 3,036,618
- ----------------------------------------------------------------------------------------------------------------
19,127,208
- ----------------------------------------------------------------------------------------------------------------
9.74 FRANCE
Alcatel Alsthom CM 30,000 3,341,731
AXA IN 85,000 9,605,902
Banque Nationale de Paris BK 25,000 1,583,138
Cap Gemini SA CO 45,000 6,761,742
Carrefour SA RT 12,500 8,295,843
Dassault Systemes SA CO 262,100 9,999,136
France Telecom SA TL 75,000 5,229,890
Pinault-Printemps-Redoute SA RT 65,000 10,878,172
Promodes Group RT 13,000 8,185,532
- ----------------------------------------------------------------------------------------------------------------
63,881,086
- ----------------------------------------------------------------------------------------------------------------
8.45 GERMANY
Daimler-Benz AG AM 75,000 5,819,044
HypoVereinsbank BK 105,000 8,336,855
Mannesmann AG MY 240,000 23,620,336
MobilCom AG TC 60,735 17,638,893
- ----------------------------------------------------------------------------------------------------------------
55,415,128
- ----------------------------------------------------------------------------------------------------------------
0.40 GREECE
STET Hellas Telecommunications SA ADR Representing Ord Shrs(a) TL 100,000 2,625,000
- ----------------------------------------------------------------------------------------------------------------
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
Shares, Units
Industry or Principal
% Description Code Amount Value
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
2.09 IRELAND
Bank of Ireland PLC BK 550,000 $ 10,113,513
CBT Group PLC Sponsored ADR Representing Ord Shrs(a) CO 300,000 3,581,250
- ----------------------------------------------------------------------------------------------------------------
13,694,763
<PAGE>
- ----------------------------------------------------------------------------------------------------------------
8.07 ITALY
Banca di Roma SpA(a) BK 10,000,000 17,457,653
Istituto Nazionale delle Assicurazioni IN 2,500,000 6,889,974
Telecom Italia Mobile SpA Savings Shrs TC 2,700,000 9,575,462
Telecom Italia SpA Savings Shrs TN 1,650,000 8,319,243
Unicredito Italiano SpA BK 2,000,000 10,743,171
- ----------------------------------------------------------------------------------------------------------------
52,985,503
- ----------------------------------------------------------------------------------------------------------------
0.79 LUXEMBOURG
Safra Republic Holdings SA IV 100,000 5,200,000
- ----------------------------------------------------------------------------------------------------------------
5.36 NETHERLANDS
Equant NV(a) CO 225,000 9,749,865
ING Groep NV IN 110,000 5,324,196
TNT Post Group NV AF 750,000 20,078,171
- ----------------------------------------------------------------------------------------------------------------
35,152,232
- ----------------------------------------------------------------------------------------------------------------
1.76 NORWAY
Tomra Systems A/S A MY 411,398 11,551,421
- ----------------------------------------------------------------------------------------------------------------
3.36 PORTUGAL
Banco Comercial Portugues SA Registered Shrs BK 319,497 10,010,335
M Accoes Portugal Closed End Fund(a) IV 90,000 2,279,622
Portugal Telecom SA Registered Shrs TN 50,000 2,370,924
Telecel-Comunicacoes Pessoais SA TL 40,000 7,374,901
- ----------------------------------------------------------------------------------------------------------------
22,035,782
- ----------------------------------------------------------------------------------------------------------------
6.43 SPAIN
Banco Bilbao Vizcaya SA Registered Shrs BK 330,000 4,443,027
Corporacion Bancaria de Espana SA Registered Shrs BK 300,000 6,515,731
Telefonica SA TN 260,909 11,758,654
TelePizza SA(a) RS 2,390,000 19,476,332
- ----------------------------------------------------------------------------------------------------------------
42,193,744
- ----------------------------------------------------------------------------------------------------------------
4.23 SWEDEN
Assa Abloy AB Series B Shrs MG 208,190 8,282,751
NetCom Systems AB Series B Shrs(a) TL 90,000 3,373,374
Nordbanken Holding AB BK 500,000 2,993,437
Skandia Forsakrings AB IN 500,000 6,364,253
Telefonaktiebolaget LM Ericsson Series B Shrs CM 300,000 6,754,423
- ----------------------------------------------------------------------------------------------------------------
27,768,238
- ----------------------------------------------------------------------------------------------------------------
9.05 SWITZERLAND
Adecco SA Bearer Shrs SV 20,757 8,277,049
Nestle SA Registered Shrs FD 4,500 9,570,226
Novartis AG Registered Shrs HD 6,000 10,810,811
Roche Holding AG Non-Voting Shrs HD 1,000 11,667,405
Swiss Bank Warrants (Exp 2001)(a) BK 400,000 2,363,019
UBS AG Registered Shrs BK 35,000 9,601,610
Valora Holding AG Registered Shrs RS 15,000 4,037,439
- ----------------------------------------------------------------------------------------------------------------
<PAGE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
Shares, Units
Industry or Principal
% Description Code Amount Value
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Zurich Allied AG Registered Shrs IN 5,000 $ 3,038,694
- ----------------------------------------------------------------------------------------------------------------
59,366,253
- ----------------------------------------------------------------------------------------------------------------
25.58 UNITED KINGDOM
Abbey National PLC FN 340,000 6,616,405
Arsenal Football Club PLC(a) ET 226 1,097,598
British Petroleum PLC OG 705,050 10,355,153
Compass Group PLC SV 900,000 9,118,741
Cortecs PLC(a) HD 231,554 139,602
Esat Telecom Group PLC Sponsored ADR Representing 2 Ord Shrs(a) TL 151,400 4,579,850
General Electric PLC MG 24,000 191,921
Glaxo Wellcome PLC HD 445,000 13,831,682
Lloyds TSB Group PLC BK 325,000 4,014,047
Manchester United PLC ET 3,000,000 10,877,177
Misys PLC CO 885,710 6,215,021
National Power PLC EU 900,000 7,822,524
National Westminster Bank PLC BK 650,000 10,983,520
Orange PLC(a) TC 1,589,286 14,785,062
Prudential Corp PLC IN 250,000 3,253,105
Royal & Sun Alliance Insurance Group PLC IN 750,000 6,870,457
Sage Group PLC CO 500,000 10,927,417
Sainsbury (J) PLC RT 850,000 7,516,054
SEMA Group PLC CO 553,712 4,488,139
SmithKline Beecham PLC HD 850,000 10,633,508
Tottenham Hotspur PLC ET 500,000 552,651
Vodafone Group PLC TC 1,200,000 16,077,120
Zeneca Group PLC HD 180,000 6,915,171
- ----------------------------------------------------------------------------------------------------------------
167,861,925
- ----------------------------------------------------------------------------------------------------------------
0.08 UNITED STATES
OXiGENE Inc(a) HD 100,000 500,000
- ----------------------------------------------------------------------------------------------------------------
TOTAL COMMON STOCKS & WARRANTS (Cost $517,721,601) 588,324,151
- ----------------------------------------------------------------------------------------------------------------
4.57 PREFERRED STOCKS
4.57 GERMANY
Fresenius AG, Non-Voting Pfd HC 50,333 8,630,946
Marschollek, Lautenschlaeger und Partner AG, Non-Voting Pfd IN 10,600 5,408,163
Porsche AG, Non-Voting Pfd AM 3,500 6,191,885
SAP AG, Non-Voting Pfd CO 20,000 9,745,200
- ----------------------------------------------------------------------------------------------------------------
TOTAL PREFERRED STOCKS (Cost $26,830,711) 29,976,194
- ----------------------------------------------------------------------------------------------------------------
5.76 SHORT-TERM INVESTMENTS -- REPURCHASE AGREEMENTS
5.76 UNITED STATES
Repurchase Agreement with State Street dated 10/30/1998 due 11/2/1998 at
5.350%, repurchased at $37,843,865 (Collateralized by US Treasury Bonds
due 11/15/2015 at 9.875%, value $38,499,669) (Cost $37,827,000) RA $ 37,827,000 37,827,000
- ----------------------------------------------------------------------------------------------------------------
100.00 TOTAL INVESTMENT SECURITIES AT VALUE
(Cost $582,379,312)
(Cost for Income Tax Purposes $584,299,822) $656,127,345
================================================================================================================
<PAGE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
Shares, Units
Industry or Principal
% Description Code Amount Value
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
International Blue Chip Fund
35.45 COMMON STOCKS
0.87 ARGENTINA
Yacimientos Petroliferos Fiscades SA Sponsored ADR Representing
Class D Shrs OG 3,000 $ 86,812
- ----------------------------------------------------------------------------------------------------------------
2.24 AUSTRALIA
National Australia Bank Ltd BK 6,000 79,157
News Corp Ltd PB 10,000 68,017
Rio Tinto Ltd GP 6,000 74,739
- ----------------------------------------------------------------------------------------------------------------
221,913
- ----------------------------------------------------------------------------------------------------------------
1.27 DENMARK
Den Danske Bank Group BK 500 67,899
Novo-Nordisk A/S Sponsored ADR Representing 1/2 Class B Shr HD 1,000 58,062
- ----------------------------------------------------------------------------------------------------------------
125,961
- ----------------------------------------------------------------------------------------------------------------
2.88 FRANCE
AXA Sponsored ADR Representing 1/2 Shr IN 1,000 56,875
Credit Commercial de France BK 1,000 70,218
Louis Vuitton Moet Hennessy BV 500 92,676
Societe Generale Series A BK 500 66,133
- ----------------------------------------------------------------------------------------------------------------
285,902
- ----------------------------------------------------------------------------------------------------------------
2.86 GERMANY
BASF AG CH 2,000 84,410
Bayer AG CH 2,000 80,606
Deutsche Bank AG BK 1,000 64,636
RWE AG MG 1,000 54,221
- ----------------------------------------------------------------------------------------------------------------
283,873
- ----------------------------------------------------------------------------------------------------------------
2.62 ITALY
Ente Nazionale Idrocarburi SpA OG 10,000 59,515
Istituto Mobiliare Italiano SpA Sponsored ADR Representing 3 Shrs BK 1,500 69,563
Telecom Italia Mobile SpA TC 10,000 58,080
Telecom Italia SpA Sponsored ADR Representing 10 Ord Shrs TN 1,000 72,625
- ----------------------------------------------------------------------------------------------------------------
259,783
<PAGE>
- ----------------------------------------------------------------------------------------------------------------
6.10 JAPAN
Canon Inc Sponsored ADR Representing Ord Shrs OE 3,000 57,750
Daiichi Pharmaceutical Ltd HD 4,000 66,764
Fuji Photo Film PI 2,000 73,286
Hitachi Ltd Sponsored ADR Representing 10 Shrs EE 1,000 51,000
Honda Motor Ltd Sponsored ADR Representing 2 Ord Shrs AM 1,000 61,375
Kirin Brewery Ltd BV 5,000 54,492
Kyocera Corp EL 2,000 88,389
Murata Manufacturing Ltd EE 2,000 67,450
Nintendo Co Ltd TY 1,000 84,613
- ----------------------------------------------------------------------------------------------------------------
605,119
- ----------------------------------------------------------------------------------------------------------------
0.53 MEXICO
Telefonos de Mexico SA Class L Sponsored ADR Representing
20 Series L Shrs TN 1,000 52,813
- ----------------------------------------------------------------------------------------------------------------
3.10 NETHERLANDS
Akzo Nobel NV HD 2,000 77,743
ING Groep NV IN 1,500 72,603
Philips Electronics NV New York Registered Shrs Representing Ord Shrs HF 1,500 82,312
- ----------------------------------------------------------------------------------------------------------------
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
Shares, Units
Industry or Principal
% Description Code Amount Value
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Unilever NV New York Registered Shrs FD 1,000 $ 75,250
- ----------------------------------------------------------------------------------------------------------------
307,908
- ----------------------------------------------------------------------------------------------------------------
0.87 NORWAY
Norsk Hydro A/S Sponsored ADR Representing Ord Shrs OG 2,000 86,875
- ----------------------------------------------------------------------------------------------------------------
0.95 PORTUGAL
Portugal Telecom SA Sponsored ADR Representing Ord Shrs TN 2,000 94,500
- ----------------------------------------------------------------------------------------------------------------
2.14 SPAIN
Banco Popular Espanol SA BK 1,000 61,650
Endesa SA EU 3,000 75,468
Repsol SA Sponsored ADR Representing Ord Shrs OG 1,500 75,000
- ----------------------------------------------------------------------------------------------------------------
212,118
- ----------------------------------------------------------------------------------------------------------------
1.48 SWEDEN
Astra AB Sponsored ADR Representing Series A Shrs HD 5,000 82,188
Volvo AB Series B AM 3,000 64,666
- ----------------------------------------------------------------------------------------------------------------
146,854
<PAGE>
- ----------------------------------------------------------------------------------------------------------------
1.66 SWITZERLAND
Nestle SA Registered Shrs FD 35 74,435
Novartis AG Registered Shrs HD 50 90,090
- ----------------------------------------------------------------------------------------------------------------
164,525
- ----------------------------------------------------------------------------------------------------------------
5.88 UNITED KINGDOM
Associated British Foods PLC FD 7,000 65,648
British Airways PLC Sponsored ADR Representing 10 Ord Shrs AR 1,000 75,625
HSBC Holdings PLC BK 4,000 91,104
Marks & Spencer PLC RT 10,000 74,105
PowerGen PLC EU 5,000 70,756
Scottish Power PLC EU 7,000 68,931
Shell Transport & Trading PLC Sponsored ADR Representing Ord Shrs OG 2,000 73,500
SmithKline Beecham PLC Sponsored ADR Representing 5 Ord Shrs HD 1,000 63,750
- ----------------------------------------------------------------------------------------------------------------
583,419
- ----------------------------------------------------------------------------------------------------------------
TOTAL COMMON STOCKS (Cost $3,511,175) 3,518,375
- ----------------------------------------------------------------------------------------------------------------
64.55 SHORT-TERM INVESTMENTS -- REPURCHASE AGREEMENTS
64.55 UNITED STATES
Repurchase Agreement with State Street dated 10/30/1998 due 11/2/1998
at 5.350%, repurchased at $6,408,856 (Collateralized by US Treasury
Bonds due 11/15/2015 at 9.875%, value $6,523,381) (Cost $6,406,000) RA $ 6,406,000 6,406,000
- ----------------------------------------------------------------------------------------------------------------
100.00 TOTAL INVESTMENT SECURITIES AT VALUE
(Cost $9,917,175)(d) $ 9,924,375
================================================================================================================
International Growth Fund
75.24 COMMON STOCKS
4.55 AUSTRALIA
Foster's Brewing Group Ltd BV 215,000 $ 525,812
National Australia Bank Ltd BK 66,000 870,722
Woolworths Ltd FD 180,000 630,639
- ----------------------------------------------------------------------------------------------------------------
2,027,173
- ----------------------------------------------------------------------------------------------------------------
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
Shares, Units
Industry or Principal
% Description Code Amount Value
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
0.47 CHINA
Beijing Datang Power Generation Ltd EU 680,000 $ 210,689
<PAGE>
- ----------------------------------------------------------------------------------------------------------------
7.98 FRANCE
Accor SA LH 2,500 525,014
Alcatel Alsthom CM 5,250 584,803
Cap Gemini SA CO 3,200 480,835
Elf Aquitaine SA OG 3,600 416,556
Pinault-Printemps-Redoute SA RT 3,650 610,851
TOTAL SA Series B Shrs OG 2,145 247,426
Vivendi SV 3,030 691,933
- ----------------------------------------------------------------------------------------------------------------
3,557,418
- ----------------------------------------------------------------------------------------------------------------
6.00 GERMANY
Adidas-Salomon AG FT 3,650 427,545
HypoVereinsbank AG BK 8,200 651,069
Daimler-Benz AG AM 4,450 345,263
Deutsche Telekom AG TL 16,300 444,062
Mannesmann AG MY 8,167 803,780
- ----------------------------------------------------------------------------------------------------------------
2,671,719
- ----------------------------------------------------------------------------------------------------------------
0.57 GREECE
Hellenic Telecommunication Organization SA TL 11,111 252,590
- ----------------------------------------------------------------------------------------------------------------
0.61 HUNGARY
MOL Magyar Olaj-es Gazipari Rt Regulation S Sponsored GDR
Representing Ord Shrs(h) OG 12,000 271,200
- ----------------------------------------------------------------------------------------------------------------
0.49 INDIA
Videsh Sanchar Nigam Ltd Regulation S GDR Representing 1/2 Ord Shr(h) TL 21,000 219,450
- ----------------------------------------------------------------------------------------------------------------
1.05 IRELAND
Bank of Ireland PLC BK 25,400 469,411
- ----------------------------------------------------------------------------------------------------------------
0.64 ISRAEL
Blue Square-Israel Ltd Sponsored ADR Representing Ord Shrs RT 22,000 283,250
- ----------------------------------------------------------------------------------------------------------------
6.79 ITALY
Autogrill SpA RS 61,000 464,691
Istituto Mobiliare Italiano SpA(a) BK 30,000 461,468
Telecom Italia Mobile SpA TC 148,200 860,750
Telecom Italia SpA Savings Shrs TN 106,000 534,448
Unicredito Italiano SpA BK 131,000 703,678
- ----------------------------------------------------------------------------------------------------------------
3,025,035
- ----------------------------------------------------------------------------------------------------------------
4.89 JAPAN
Asahi Breweries Ltd BV 8,000 114,305
Bank of Tokyo-Mitsubishi Ltd BK 850 7,885
Bridgestone Corp AP 7,000 154,080
Canon Inc OE 7,000 132,455
Fast Retailing Ltd RT 17,000 196,945
Fujikura Ltd EE 17,000 78,778
Fujitsu Ltd CO 11,000 117,051
JUSCO Co Ltd RT 12,000 193,598
Keyence Corp EL 1,200 120,278
Kitagawa Industries Ltd MG 50 305
Nichiei Co Ltd CF 2,300 185,926
Nintendo Co Ltd TY 1,500 126,920
<PAGE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
Shares, Units
Industry or Principal
% Description Code Amount Value
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Nomura Securities Ltd IV 14,000 $ 105,724
NTT Data CO 46 194,611
Rohm Co Ltd EL 2,000 176,779
Sony Corp EL 1,700 107,955
Toshiba Corp ES 35,000 164,293
- ----------------------------------------------------------------------------------------------------------------
2,177,888
- ----------------------------------------------------------------------------------------------------------------
0.74 MEXICO
Cemex SA de CV Series B Shrs BD 55,000 149,412
Panamerican Beverages Class A BV 9,000 182,250
- ----------------------------------------------------------------------------------------------------------------
331,662
- ----------------------------------------------------------------------------------------------------------------
5.63 NETHERLANDS
Equant NV(a) CO 6,840 296,396
ING Groep NV IN 13,000 629,223
Koninklijke Philips Electronics NV EL 6,400 340,611
TNT Post Group NV AF 29,100 779,033
Wolters Kluwer NV PB 2,400 465,171
- ----------------------------------------------------------------------------------------------------------------
2,510,434
- ----------------------------------------------------------------------------------------------------------------
1.15 NEW ZEALAND
Telecom Corp of New Zealand Ltd CM 125,000 512,856
- ----------------------------------------------------------------------------------------------------------------
3.05 SPAIN
Argentaria Bancaria de Espana SA Registered Shrs BK 28,600 621,166
Banco Bilbao Vizcaya SA Registered Shrs BK 10,000 134,637
Banco Popular Espanol SA BK 2,500 154,124
Telefonica SA TN 10,000 450,680
- ----------------------------------------------------------------------------------------------------------------
1,360,607
- ----------------------------------------------------------------------------------------------------------------
2.58 SWEDEN
Telefonaktiebolaget LM Ericsson Series B Shrs CM 26,100 587,635
Nordbanken Holding AB BK 93,900 562,168
- ----------------------------------------------------------------------------------------------------------------
1,149,803
- ----------------------------------------------------------------------------------------------------------------
9.32 SWITZERLAND
Adecco SA Bearer Shrs SV 1,500 598,139
Nestle SA Registered Shrs FD 450 957,023
Novartis AG Registered Shrs HD 500 900,901
Roche Holdings AG Non-Voting Shrs HD 50 583,370
Swiss Re Group Registered Shrs IN 315 701,551
Swisscom AG Registered Shrs(a) TN 810 274,546
UBS AG Registered Shrs BK 500 137,166
- ----------------------------------------------------------------------------------------------------------------
4,152,696
<PAGE>
- ----------------------------------------------------------------------------------------------------------------
18.73 UNITED KINGDOM
BTP PLC CH 28,000 185,222
Barclays PLC BK 8,480 182,773
British Petroleum PLC OG 36,799 540,471
British Telecommunications PLC TN 25,680 332,009
CGU PLC IN 23,700 375,670
Compass Group PLC SV 25,440 257,756
EMAP PLC PB 11,600 198,151
Hays PLC SV 33,290 490,885
Kingfisher PLC RT 20,080 176,379
Legal & General Group PLC FN 41,200 488,503
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
Shares, Units
Industry or Principal
% Description Code Amount Value
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Lloyds TSB Group PLC BK 84,800 $ 1,047,357
Marks & Spencer PLC RT 42,960 318,357
Reuters Group PLC SV 34,120 351,416
Schroders PLC BK 28,600 543,624
Scottish Power PLC EU 41,480 408,463
SmithKline Beecham PLC HD 108,400 1,356,085
Vodafone Group PLC TC 52,600 704,714
Zeneca Group PLC HD 10,200 391,860
- ----------------------------------------------------------------------------------------------------------------
8,349,695
- ----------------------------------------------------------------------------------------------------------------
TOTAL COMMON STOCKS (Cost $29,187,551) 33,533,576
- ----------------------------------------------------------------------------------------------------------------
2.48 PREFERRED STOCKS
1.32 BRAZIL
Cia Energetica de Minas Gerais Sponsored ADR Representing 1,000
Non-Voting Pfd Shrs EU 3,671 71,397
Petroleo Brasileiro SA Sponsored ADR Representing 100 Pfd Shrs OG 17,000 213,770
Telecom Brasileiras SA Sponsored ADR Representing 1,000 Pfd Shrs TN 4,000 303,750
- ----------------------------------------------------------------------------------------------------------------
588,917
- ----------------------------------------------------------------------------------------------------------------
1.16 GERMANY
SAP AG, Non-Voting Pfd CO 1,060 516,496
- ----------------------------------------------------------------------------------------------------------------
TOTAL PREFERRED STOCKS (Cost $877,594) 1,105,413
- ----------------------------------------------------------------------------------------------------------------
22.28 SHORT-TERM INVESTMENTS -- REPURCHASE AGREEMENTS
22.28 UNITED STATES
Repurchase Agreement with State Street dated 10/30/1998 due 11/2/1998
at 5.350%, repurchased at $9,935,428 (Collateralized by US Treasury
Bonds due 5/15/2017 at 8.750%, value $10,107,282) (Cost $9,931,000) RA $ 9,931,000 9,931,000
<PAGE>
- ----------------------------------------------------------------------------------------------------------------
100.00 TOTAL INVESTMENT SECURITIES AT VALUE
(Cost $39,996,145)
(Cost for Income Tax Purposes $40,229,000) $ 44,569,989
================================================================================================================
<CAPTION>
Pacific Basin Fund
93.56 COMMON STOCKS
25.44 AUSTRALIA
AMP Ltd(a)(b) IN 85,000 $ 1,006,760
Australia & New Zealand Banking Group Ltd(e) BK 220,000 1,252,690
Brambles Industries Ltd SV 65,000 1,419,373
Commonwealth Bank of Australia BK 75,000 928,316
Foster's Brewing Group Ltd BV 330,000 807,061
Lend Lease Ltd FN 38,000 834,682
National Australia Bank Ltd BK 100,000 1,319,276
News Corp Ltd PB 864 5,877
Rio Tinto Ltd GP 70,000 871,960
TABCORP Holdings Ltd GM 130,000 861,089
Telstra Corp Ltd Installment Receipts TN 480,000 1,896,770
- ----------------------------------------------------------------------------------------------------------------
11,203,854
- ----------------------------------------------------------------------------------------------------------------
8.27 HONG KONG
CLP Holdings Ltd EU 110,000 617,738
Cheung Kong Holdings Ltd RL 110,000 752,646
COSCO Pacific Ltd SV 510,000 250,194
<PAGE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
Shares, Units
Industry or Principal
% Description Code Amount Value
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Hang Seng Bank Ltd BK 53,000 $ 458,430
Hong Kong Telecommunications Ltd TL 270,000 540,279
Hutchison Whampoa Ltd CG 110,000 788,149
Tianjin Development Holdings Ltd DB 350,000 232,701
- ----------------------------------------------------------------------------------------------------------------
3,640,137
- ----------------------------------------------------------------------------------------------------------------
51.28 JAPAN
Ajinomoto Co(c) FD 50,000 472,840
Bank of Tokyo-Mitsubishi Ltd (c) BK 42,500 394,255
Bridgestone Corp(c) AP 50,000 1,100,575
Credit Saison Ltd (c) FN 15,000 353,342
Dai Nippon Printing Ltd(c) PB 40,000 616,150
Fujitsu Ltd(c) CO 60,000 638,462
Hitachi Ltd(c) EL 70,000 356,217
Jafco Co Ltd(c) CF 20,000 425,641
JUSCO Co Ltd(c) RT 15,000 241,998
Kao Corp(c) PL 30,000 607,569
Kitagawa Industries Ltd(c) MG 54,225 330,385
Kyocera Corp(c) EL 12,000 530,336
Mabuchi Motor Ltd(c) EE 10,000 652,193
Matsushita Electric Industrial Ltd(c) EL 44,000 646,048
Mitsui Fudosan Ltd(c) RL 40,000 265,683
NEC Corp(c) CO 50,000 370,291
NKG Spark Plug Ltd(c) AP 70,000 651,763
NTT Mobile Communication Network TC 27 975,457
Nintendo Co Ltd(c) TY 10,000 846,134
Nippon COMSYS(c) EC 15,000 194,371
Nippon Express Ltd(c) TK 100,000 562,087
Nippon Telegraph & Telephone(c) TL 100 782,631
Nomura Securities Ltd(c) IV 15,000 113,276
Orix Corp(c) FN 5,000 358,277
Rock Field Ltd(c) DB 16,000 302,068
Sanix Inc(c) SV 18,000 355,273
Sanwa Bank Ltd(c) BK 50,000 390,028
Secom Co Ltd(c) EL 10,000 742,298
Sekisui Chemical Ltd(c) CH 75,000 408,693
Seven-Eleven Japan Ltd(c) RT 10,000 760,319
Shin-Etsu Chemical Ltd (c) CH 30,000 597,271
Shiseido Co Ltd(c) PL 70,000 766,498
Sony Corp(c) EL 5,000 317,515
Taisho Pharmaceutical Ltd(c) HD 30,000 803,227
Takeda Chemical Industries Ltd(c) HD 15,000 487,857
Tokio Marine & Fire Insurance Ltd(c) IN 30,000 341,114
Tokyo Broadcasting System(c) BR 30,000 281,902
Tokyo Electron Ltd(c) ES 18,000 585,429
<PAGE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
Shares, Units
Industry or Principal
% Description Code Amount Value
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Toshiba Corp(c) ES 200,000 $ 938,814
Toyota Motor(c) AM 50,000 1,201,407
Uny Co Ltd(c) RT 15,000 244,572
Yamanouchi Pharmaceutical Ltd(c) HD 20,000 573,243
- ----------------------------------------------------------------------------------------------------------------
22,583,509
- ----------------------------------------------------------------------------------------------------------------
1.40 MALAYSIA
Malayan Banking Berhad(f) BK 120,000 108,947
Tanjong PLC(f) GM 220,000 158,053
YTL Corp Berhad(f) CG 550,000 349,539
- ----------------------------------------------------------------------------------------------------------------
616,539
- ----------------------------------------------------------------------------------------------------------------
0.90 NEW ZEALAND
Fletcher Challenge Building BD 246,016 325,602
Telecom Corp of New Zealand Ltd Installment Receipts TL 37,000 72,083
- ----------------------------------------------------------------------------------------------------------------
397,685
- ----------------------------------------------------------------------------------------------------------------
5.16 SINGAPORE
City Developments Ltd(c) RL 150,000 543,512
DBS Land Ltd RL 200,000 226,003
Development Bank of Singapore Ltd Foreign Shrs(c) BK 117,000 732,912
Singapore Press Holdings Ltd PB 13,500 116,901
Singapore Technologies Engineering Ltd EC 400,000 393,048
Singapore Telecommunications Ltd TL 150,000 258,859
- ----------------------------------------------------------------------------------------------------------------
2,271,235
- ----------------------------------------------------------------------------------------------------------------
1.11 UNITED KINGDOM
HSBC Holdings PLC(e) BK 21,316 488,457
- ----------------------------------------------------------------------------------------------------------------
TOTAL COMMON STOCKS (Cost $44,687,525) 41,201,416
- ----------------------------------------------------------------------------------------------------------------
6.44 SHORT-TERM INVESTMENTS -- REPURCHASE AGREEMENTS
6.44 UNITED STATES
Repurchase Agreement with State Street dated 10/30/1998 due 11/2/1998 at
5.350%, repurchased at $2,835,263 (Collateralized by US Treasury Bonds
due 11/15/2015 at 9.875%, value $2,890,600) (Cost $2,834,000) RA $2,834,000 2,834,000
- ----------------------------------------------------------------------------------------------------------------
100.00 TOTAL INVESTMENT SECURITIES AT VALUE
(Cost $47,521,525)
(Cost for Income Tax Purposes $48,374,109) $ 44,035,416
================================================================================================================
</TABLE>
(a)Security is non-income producing.
(b)Securities acquired pursuant to rule 144A. The Fund deems such securities to
be "liquid" since an institutional market exists.
(c)Security has been designated as collateral for forward foreign currency
contracts.
(d)Also represents cost for income tax purposes.
(e)Security has been designated as collateral for installment receipts.
(f)Security has been deemed illiquid.
<PAGE>
(g)Security is linked to a barometer index of the Korean stock market. The KOSPI
200 is an unmanaged index indicative of the
overall Korean stock market.
(h)The following are restricted securities at October 31, 1998:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
Value as
Acquisition Acquisition % of
Description Date(s) Cost Net Assets
- --------------------------------------------------------------------------------------------------------------------------
Emerging Markets Fund
<S> <C> <C> <C>
Al-Ahram Beverages SAE Regulation S GDR Representing 1/2 Ord Shr 2/23/98 - 5/28/98 $19,530 1.41%
BIG Bank Gdanski SA Regulation S GDR Representing 15 Ord Shrs 9/22/98 - 10/6/98 4,630 0.54
Kredyt Bank SA Regulation S Sponsored GDR Representing 5 Ord Shrs 8/21/98 - 9/7/98 7,660 0.75
Misr International Bank Regulation S GDR Representing 1/2 Ord Shr 7/16/98 - 7/21/98 20,250 1.43
MOL Magyar Olaj-es Gazipari Rt Regulation S Sponsored GDR
Representing Ord Shrs 2/20/98 - 7/21/98 30,416 2.01
Paints & Chemical Industries SAE Regulation S GDR Representing 1/3 Ord Shr 3/3/98 - 3/31/98 13,971 0.93
Samsung Electronics Regulation S Sponsored GDR Representing 1/2 Ord Shr 10/16/98 15,000 1.52
Suez Cement Regulation S Sponsored GDR Representing Ord Shrs 7/14/98 18,600 1.24
Videsh Sanchar Nigam Ltd Regulation S GDR Representing 1/2 Ord Shr 2/20/98 - 7/17/98 26,106 1.86
- --------------------------------------------------------------------------------------------------------------------------
11.69%
==========================================================================================================================
International Growth Fund
MOL Magyar Olaj-es Gazipari Rt Regulation S Sponsored GDR
Representing Ord Shrs 2/27/98-3/5/98 $333,447 0.5%
Videsh Sanchar Nigam Ltd Regulation S Sponsored GDR Representing 1/2 Ord Shr 3/24/97-8/8/97 349,125 0.48
- --------------------------------------------------------------------------------------------------------------------------
1.07%
==========================================================================================================================
<CAPTION>
Forward Foreign Currency Contracts
Open at October 31, 1998:
- --------------------------------------------------------------------------------------------------------------------------
Currency Currency Unrealized
Currency/Value Date Units Sold Value (US$) Loss
- --------------------------------------------------------------------------------------------------------------------------
Pacific Basin Fund
<S> <C> <C> <C>
Japanese Yen 12/18/1998 1,581,600,000 $ 10,329,002 $ (1,670,998)
Singapore Dollar 3/9/1999 1,000,000 524,134 (47,621)
- --------------------------------------------------------------------------------------------------------------------------
$ 10,853,136 $ (1,718,619)
==========================================================================================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Summary of Investments by Industry
- -------------------------------------------------------------------------------------------------------------------------
% of
Industry Investment
Industry Code Securities Value
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Emerging Markets Fund
Aluminum AL 1.33% $ 14,656
Automobiles AM 1.20 13,200
Banks BK 8.54 94,269
Beverages BV 6.27 69,149
Building Materials BD 2.80 30,850
Chemicals CH 3.60 39,777
Conglomerates CG 1.34 14,825
Electric Utilities EU 7.61 83,928
Electrical Equipment EE 1.62 17,880
Engineering & Construction EC 1.03 11,361
Financial FN 4.53 49,930
Gold & Precious Metals Mining GP 1.37 15,152
Homebuilding HB 0.36 4,022
Insurance IN 1.75 19,320
Investment Companies IC 3.26 36,000
Iron & Steel IS 1.39 15,300
Machinery MY 1.17 12,882
Oil & Gas Related OG 4.88 53,796
Repurchase Agreements RA 18.94 209,000
Retail RT 3.27 36,074
Structured Call Warrants SV 2.74 30,242
Telecommunications-- Long Distance TL 5.29 58,403
Telephone TN 13.73 151,495
Tobacco TO 0.75 8,309
Utilities Water UW 1.23 13,572
- -------------------------------------------------------------------------------------------------------------------------
100.00% $1,103,392
=========================================================================================================================
European Fund
Air Freight AF 3.65% $23,969,469
Automobiles AM 1.83 12,010,929
Banks BK 15.12 99,159,056
Communications-- Equipment & Manufacturing CM 2.72 17,831,095
Computer Related CO 9.37 61,467,770
Electric Utilities EU 1.19 7,822,524
Entertainment ET 1.91 12,527,426
Financial FN 1.01 6,616,405
Foods FD 1.92 12,606,844
Health Care Drugs-- Pharmaceuticals HD 8.31 54,498,179
Health Care Related HC 2.09 13,705,516
Insurance IN 7.13 46,754,744
Investment Bank/Broker Firm IV 1.14 7,479,622
Machinery MY 5.36 35,171,757
Manufacturing MG 1.29 8,474,672
Oil & Gas Related OG 1.58 10,355,153
Repurchase Agreement RA 5.76 37,827,000
Restaurants RS 3.58 23,513,771
Retail RT 5.32 34,875,601
Services SV 2.65 17,395,790
Telecommunications-- Cellular & Wireless TC 8.85 58,076,537
Telecommunications-- Long Distance TL 3.53 23,183,015
<PAGE>
<CAPTION>
% of
Industry Investment
Industry Code Securities Value
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Telephone TN 4.69% $ 30,804,470
- --------------------------------------------------------------------------------------------------------------------------
100.00% $ 656,127,345
==========================================================================================================================
International Blue Chip Fund
Airlines AR 0.76% $ 75,625
Automobiles AM 1.27 126,041
Banks BK 5.75 570,360
Beverages BV 1.48 147,168
Chemicals CH 1.66 165,016
Electric Utilities EU 2.17 215,155
Electrical Equipment EE 1.19 118,450
Electronics EL 0.89 88,389
Foods FD 2.17 215,333
Gold & Precious Metals Mining GP 0.75 74,739
Health Care Drugs-- Pharmaceuticals HD 4.42 438,597
Household Furniture & Appliances HF 0.83 82,312
Insurance IN 1.30 129,478
Manufacturing MG 0.55 54,221
Office Equipment & Supplies OE 0.58 57,750
Oil & Gas Related OG 3.85 381,702
Photography & Imaging PI 0.74 73,286
Publishing PB 0.69 68,017
Repurchase Agreements RA 64.55 6,406,000
Retail RT 0.75 74,105
Telecommunications-- Cellular & Wireless TC 0.59 58,080
Telephone TN 2.21 219,938
Toys TY 0.85 84,613
- --------------------------------------------------------------------------------------------------------------------------
100.00% $ 9,924,375
==========================================================================================================================
International Growth Fund
Air Freight AF 1.75% $ 779,033
Auto Parts AP 0.35 154,080
Automobiles AM 0.77 345,263
Banks BK 14.69 6,547,248
Beverages BV 1.84 822,367
Building Materials BD 0.34 149,412
Chemicals CH 0.42 185,222
Communications-- Equipment & Manufacturing CM 3.78 1,685,294
Computer Related CO 3.60 1,605,389
Consumer Finance CF 0.42 185,926
Electric Utilities EU 1.55 690,549
Electrical Equipment EE 0.18 78,778
Electronics EL 1.67 745,623
Electronics-- Semiconductor ES 0.37 164,293
Financial FN 1.10 488,503
Foods FD 3.56 1,587,662
Footwear FT 0.96 427,545
Health Care Drugs-- Pharmaceuticals HD 7.25 3,232,216
Insurance IN 3.83 1,706,444
Investment Bank/Broker Firm IV 0.24 105,724
Lodging-- Hotels LH 1.18 525,014
Machinery MY 1.80 803,780
Manufacturing MG 0.00 305
<PAGE>
<CAPTION>
% of
Industry Investment
Industry Code Securities Value
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Office Equipment & Supplies OE 0.30% $ 132,455
Oil & Gas Related OG 3.79 1,689,423
Publishing PB 1.49 663,322
Repurchase Agreements RA 22.28 9,931,000
Restaurants RS 1.04 464,691
Retail RT 3.99 1,779,380
Services SV 5.36 2,390,129
Telecommunications-- Cellular & Wireless TC 3.51 1,565,464
Telecommunications-- Long Distance TL 2.06 916,102
Telephone TN 4.25 1,895,433
Toys TY 0.28 126,920
- --------------------------------------------------------------------------------------------------------------------------
100.00% $ 44,569,989
==========================================================================================================================
Pacific Basin Fund
Auto Parts AP 3.98% $ 1,752,338
Automobiles AM 2.73 1,201,407
Banks BK 13.80 6,073,311
Beverages BV 1.83 807,061
Broadcasting BR 0.64 281,902
Building Materials BD 0.74 325,602
Chemicals CH 2.28 1,005,964
Computer Related CO 2.29 1,008,753
Conglomerates CG 2.58 1,137,688
Consumer Finance CF 0.97 425,641
Distribution DB 1.21 534,769
Electric Utilities EU 1.40 617,738
Electrical Equipment EE 1.48 652,193
Electronics EL 5.89 2,592,414
Electronics-- Semiconductor ES 3.46 1,524,243
Engineering & Construction EC 1.33 587,419
Financial FN 3.51 1,546,301
Foods FD 1.07 472,840
Gaming GM 2.31 1,019,142
Gold & Precious Metals Mining GP 1.98 871,960
Health Care Drugs-- Pharmaceuticals HD 4.23 1,864,327
Insurance IN 3.06 1,347,874
Investment Bank/Broker Firm IV 0.26 113,276
Manufacturing MG 0.75 330,385
Personal Care PL 3.12 1,374,067
Publishing PB 1.68 738,928
Real Estate Related RL 4.06 1,787,844
Repurchase Agreements RA 6.44 2,834,000
Retail RT 2.83 1,246,889
Services SV 4.60 2,024,840
Telecommunications-- Cellular & Wireless TC 2.22 975,457
Telecommunications-- Long Distance TL 3.76 1,653,852
Telephone TN 4.31 1,896,770
Toys TY 1.92 846,134
Truckers TK 1.28 562,087
- --------------------------------------------------------------------------------------------------------------------------
100.00% $44,035,416
==========================================================================================================================
</TABLE>
See Notes to Financial Statements
<PAGE>
<TABLE>
<CAPTION>
Statement of Assets and Liabilities
October 31, 1998
Emerging International
Markets European Blue Chip
Fund Fund Fund
- ------------------------------------------------------------------------------------------------------------------
ASSETS
Investment Securities:
<S> <C> <C> <C>
At Cost(a) $ 1,371,832 $ 582,379,312 $ 9,917,175
==================================================================================================================
At Value(a) $ 1,103,392 $ 656,127,345 $ 9,924,375
Cash 134,245 0 0
Foreign Currency (Cost $278, $19,982,344 and
$0 respectively) 278 5,688,854 0
Receivables:
Investment Securities Sold 0 56,378 0
Fund Shares Sold 292 25,331,123 1,438,462
Dividends and Interest 2,798 739,706 1,904
Prepaid Expenses and Other Assets 15,676 100,005 0
- ------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS 1,256,681 688,043,411 11,364,741
- ------------------------------------------------------------------------------------------------------------------
LIABILITIES
Payables:
Custodian 0 156,923 1,566,105
Distributions to Shareholders 0 79,107 0
Investment Securities Purchased 60,392 5,646,145 3,504,020
Fund Shares Repurchased 2,661 9,834,713 0
Depreciation on Forward Foreign Currency Contracts 0 0 7,155
Accrued Distribution Expenses 234 121,308 59
Accrued Expenses and Other Payables 15,719 59,446 153
TOTAL LIABILITIES 79,006 15,897,642 5,077,492
- ------------------------------------------------------------------------------------------------------------------
Net Assets at Value $ 1,177,675 $ 672,145,769 $ 6,287,249
==================================================================================================================
NET ASSETS
Paid-in Capital(b) $ 1,553,698 $ 539,575,042 $ 6,277,877
Accumulated Undistributed Net Investment Income 4,945 169,684 2,172
Accumulated Undistributed Net Realized Gain (Loss) on
Investment Securities and Foreign Currency Transactions (112,449) 58,378,482 0
Net Appreciation (Depreciation) of Investment Securities
and Foreign Currency Transactions (268,519) 74,022,561 7,200
- ------------------------------------------------------------------------------------------------------------------
Net Assets at Value $ 1,177,675 $ 672,145,769 $ 6,287,249
==================================================================================================================
Shares Outstanding 156,241 38,150,545 627,517
Net Asset Value, Offering and Redemption Price per Share $ 7.54 $ 17.62 $ 10.02
==================================================================================================================
</TABLE>
(a)Investment securities at cost and value at October 31, 1998 include
repurchase agreements of $209,000, $37,827,000 and $6,406,000 for Emerging
Markets, European and International Blue Chip Funds, respectively.
(b)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
<PAGE>
<TABLE>
<CAPTION>
Statement of Assets and Liabilities (Continued)
October 31, 1998
International Pacific
Growth Basin
Fund Fund
- ------------------------------------------------------------------------------------------------------------------
ASSETS
Investment Securities:
<S> <C> <C>
At Cost(a) $ 39,996,145 $ 47,521,525
==================================================================================================================
At Value(a) $ 44,569,989 $ 44,035,416
Cash 186 171,434
Foreign Currency (Cost $0 and $257, respectively) 0 840
Receivables:
Investment Securities Sold 238,752 4,790
Fund Shares Sold 2,339,512 3,154,509
Dividends and Interest 90,748 99,220
Prepaid Expenses and Other Assets 24,754 48,854
- ------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS 47,263,941 47,515,063
- ------------------------------------------------------------------------------------------------------------------
LIABILITIES
Payables:
Foreign Sub-Custodian (Cost $30,314 and $0, respectively) 30,324 0
Investment Securities Purchased 200,614 418,186
Fund Shares Repurchased 913,217 271,734
Depreciation on Forward Foreign Currency Contracts 153 1,718,619
Accrued Distribution Expenses 7,833 8,929
Accrued Expenses and Other Payables 20,967 29,155
- ------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 1,173,108 2,446,623
- ------------------------------------------------------------------------------------------------------------------
Net Assets at Value $ 46,090,833 $ 45,068,440
==================================================================================================================
NET ASSETS
Paid-in Capital(b) $ 35,567,919 $ 70,490,092
Accumulated Undistributed (Distributions in Excess of)
Net Investment Income (7,811) 233,342
Accumulated Undistributed Net Realized Gain (Loss) on
Investment Securities and Foreign Currency Transactions 5,953,316 (20,458,031)
Net Appreciation (Depreciation) of Investment Securities
and Foreign Currency Transactions 4,577,409 (5,196,963)
- ------------------------------------------------------------------------------------------------------------------
Net Assets at Value $ 46,090,833 $ 45,068,440
==================================================================================================================
Shares Outstanding 3,478,622 6,733,646
Net Asset Value, Offering and Redemption Price per Share $ 13.25 $ 6.69
==================================================================================================================
</TABLE>
(a)Investment securities at cost and value at October 31, 1998 include
repurchase agreements of $9,931,000 and $2,834,000 for International Growth
and Pacific Basin Funds, respectively.
(b)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
<PAGE>
<TABLE>
<CAPTION>
Statement of Operations
Period Ended October 31, 1998 (Note 1)
Emerging International
Markets European Blue Chip
Fund Fund Fund
- ------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
INCOME
<S> <C> <C> <C>
Dividends $ 11,183 $ 8,167,932 $ 0
Interest 7,016 1,127,629 2,491
Foreign Taxes Withheld (547) (1,060,803) 0
- ------------------------------------------------------------------------------------------------------------------
TOTAL INCOME 17,652 8,234,758 2,491
- ------------------------------------------------------------------------------------------------------------------
EXPENSES
Investment Advisory Fees 6,025 3,802,357 176
Distribution Expenses 1,506 1,240,942 59
Transfer Agent Fees 3,114 1,100,420 0
Administrative Fees 7,282 89,993 84
Custodian Fees and Expenses 14,881 592,568 0
Directors' Fees and Expenses 0 28,786 0
Professional Fees and Expenses 22,514 46,160 0
Registration Fees and Expenses 38,217 112,437 0
Reports to Shareholders 154 87,108 0
Other Expenses 671 87,971 0
- ------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSES 94,364 7,188,742 319
Fees and Expenses Absorbed by Investment Adviser (75,968) 0 0
Fees and Expenses Paid Indirectly (6,291) (217,949) 0
- ------------------------------------------------------------------------------------------------------------------
NET EXPENSES 12,105 6,970,793 319
- ------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 5,547 1,263,965 2,172
- ------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENT SECURITIES
Net Realized Gain (Loss) on:
Investment Securities (104,314) 58,345,864 0
Foreign Currency Transactions (8,737) 327,985 0
- ------------------------------------------------------------------------------------------------------------------
Total Net Realized Gain (Loss) (113,051) 58,673,849 0
- ------------------------------------------------------------------------------------------------------------------
Change in Net Appreciation (Depreciation) of:
Investment Securities (247,789) 1,599,499 14,355
Foreign Currency Transactions (20,730) 19,280,868 (7,155)
- ------------------------------------------------------------------------------------------------------------------
Total Net Appreciation (Depreciation) (268,519) 20,880,367 7,200
- ------------------------------------------------------------------------------------------------------------------
NET GAIN (LOSS) ON INVESTMENT SECURITIES AND
FOREIGN CURRENCY TRANSACTIONS (381,570) 79,554,216 7,200
- ------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets from Operations $ (376,023) $ 80,818,181 $ 9,372
==================================================================================================================
See Notes to Financial Statements
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statement of Operations
(Continued)
Year Ended October 31, 1998
International Pacific
Growth Basin
Fund Fund
- ------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME INCOME
<S> <C> <C>
Dividends $ 838,539 $ 910,732
Interest 202,778 258,341
Foreign Taxes Withheld (97,006) (68,440)
- ------------------------------------------------------------------------------------------------------------------
TOTAL INCOME 944,311 1,100,633
- ------------------------------------------------------------------------------------------------------------------
EXPENSES
Investment Advisory Fees 512,097 368,580
Distribution Expenses 112,705 100,442
Transfer Agent Fees 351,924 499,564
Administrative Fees 17,681 17,399
Custodian Fees and Expenses 87,303 74,353
Directors' Fees and Expenses 12,339 12,272
Professional Fees and Expenses 26,898 26,856
Registration Fees and Expenses 72,503 107,708
Reports to Shareholders 35,715 39,446
Other Expenses 11,158 6,796
- ------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSES 1,240,323 1,253,416
Fees and Expenses Absorbed by Investment Adviser (192,883) (236,517)
Fees and Expenses Paid Indirectly (32,788) (37,359)
- ------------------------------------------------------------------------------------------------------------------
NET EXPENSES 1,014,652 979,540
- ------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME (LOSS) (70,341) 121,093
- ------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENT SECURITIES
Net Realized Gain (Loss) on:
Investment Securities 10,454,552 (12,976,634)
Foreign Currency Transactions (4,079,892) (6,941,635)
- ------------------------------------------------------------------------------------------------------------------
Total Net Realized Gain (Loss) 6,374,660 (19,918,269)
- ------------------------------------------------------------------------------------------------------------------
Change in Net Appreciation (Depreciation) of:
Investment Securities (7,555,097) 4,158,665
Foreign Currency Transactions 3,231,078 3,045,780
- ------------------------------------------------------------------------------------------------------------------
Total Net Appreciation (Depreciation) (4,324,019) 7,204,445
- ------------------------------------------------------------------------------------------------------------------
NET GAIN (LOSS) ON INVESTMENT SECURITIES AND
FOREIGN CURRENCY TRANSACTIONS 2,050,641 (12,713,824)
- ------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets from Operations $ 1,980,300 $ (12,592,731)
==================================================================================================================
See Notes to Financial Statements
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statement of Changes in Net Assets
Emerging European
Markets Fund Fund
Period Ended Year Ended Year Ended
October 31 October 31 October 31
- ------------------------------------------------------------------------------------------------------------------
1998 1998 1997
(Note 1)
OPERATIONS
<S> <C> <C> <C>
Net Investment Income $ 5,547 $ 1,263,965 $ 1,190,402
Net Realized Gain (Loss) on Investment Securities
and Foreign Currency Transactions (113,051) 58,673,849 60,622,016
Change in Net Appreciation (Depreciation) of Investment
Securities and Foreign Currency Transactions (268,519) 20,880,367 1,427,595
- ------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS (376,023) 80,818,181 63,240,013
- ------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
Net Investment Income 0 (1,807,826) (1,288,400)
In Excess of Net Investment Income 0 (16,166) 0
Net Realized Gain on Investment Securities and
Foreign Currency Transactions 0 (58,987,304) (20,402,793)
- ------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS 0 (60,811,296) (21,691,193)
- ------------------------------------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS
Proceeds from Sales of Shares 1,642,362 2,657,190,380 1,120,633,773
Reinvestment of Distributions 0 56,473,483 20,975,036
- ------------------------------------------------------------------------------------------------------------------
1,642,362 2,713,663,863 1,141,608,809
Amounts Paid for Repurchases of Shares (338,664) (2,386,344,289) (1,158,926,547)
- ------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM FUND SHARE TRANSACTIONS 1,303,698 327,319,574 (17,317,738)
- ------------------------------------------------------------------------------------------------------------------
Total Increase in Net Assets 927,675 347,326,459 24,231,082
NET ASSETS
Initial Subscription (Note 1) 250,000 0 0
Beginning of Period 0 324,819,310 300,588,228
- ------------------------------------------------------------------------------------------------------------------
End of Period $ 1,177,675 $ 672,145,769 $ 324,819,310
==================================================================================================================
Accumulated Undistributed Net Investment Income
Included in Net Assets at End of Period $ 4,945 $ 169,684 $ 543,861
- ------------------------------------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS
Initial Subscription (Note 1) 25,000 0 0
Shares Sold 171,213 144,625,579 66,508,158
Shares Issued from Reinvestment of Distributions 0 3,870,367 1,370,609
- ------------------------------------------------------------------------------------------------------------------
196,213 148,495,946 67,878,767
Shares Repurchased (39,972) (129,075,181) (68,118,819)
- ------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Fund Shares 156,241 19,420,765 (240,052)
==================================================================================================================
See Notes to Financial Statements
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statement of Changes in Net Assets
(Continued)
International International
Blue Chip Fund Growth Fund
Period Ended Year Ended Year Ended
October 31 October 31 October 31
- ------------------------------------------------------------------------------------------------------------------
1998 1998 1997
(Note 1)
OPERATIONS
<S> <C> <C> <C>
Net Investment Income (Loss) $ 2,172 $ (70,341) $ 260,567
Net Realized Gain on Investment Securities
and Foreign Currency Transactions 0 6,374,660 7,485,092
Change in Net Appreciation of Investment
Securities and Foreign Currency Transactions 7,200 (4,324,019) (891,853)
- ------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET
ASSETS FROM OPERATIONS 9,372 1,980,300 6,853,806
- ------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
Net Investment Income 0 (605,350) (392,350)
In Excess of Net Investment Income 0 (76,517) (2,889)
Net Realized Gain on Investment Securities and
Foreign Currency Transactions 0 (6,800,237) (4,053,525)
- ------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS 0 (7,482,104) (4,448,764)
- ------------------------------------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS
Proceeds from Sales of Shares 6,281,511 418,257,587 471,306,125
Reinvestment of Distributions 0 7,276,633 4,405,427
- ------------------------------------------------------------------------------------------------------------------
6,281,511 425,534,220 475,711,552
Amounts Paid for Repurchases of Shares (3,634) (458,720,838) (487,923,735)
- ------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM FUND SHARE TRANSACTIONS 6,277,877 (33,186,618) (12,212,183)
- ------------------------------------------------------------------------------------------------------------------
Total Increase (Decrease) in Net Assets 6,287,249 (38,688,422) (9,807,141)
NET ASSETS
Beginning of Period 0 84,779,255 94,586,396
- ------------------------------------------------------------------------------------------------------------------
End of Period $ 6,287,249 $ 46,090,833 $ 84,779,255
==================================================================================================================
Accumulated Undistributed (Distributions in Excess of)
Net Investment Income (Loss) Included in Net Assets at
End of Period $ 2,172 $ (7,811) $ 675,691
- ------------------------------------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS
Shares Sold 627,880 28,328,985 27,110,962
Shares Issued from Reinvestment of Distributions 0 552,515 272,241
- ------------------------------------------------------------------------------------------------------------------
627,880 28,881,500 27,383,203
Shares Repurchased (363) (30,552,325) (27,828,343)
- ------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Fund Shares 627,517 (1,670,825) (445,140)
==================================================================================================================
See Notes to Financial Statements
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statement of Changes in Net Assets
(Continued)
Year Ended October 31
Pacific Basin
Fund
- ------------------------------------------------------------------------------------------------------------------
1998 1997
OPERATIONS
<S> <C> <C>
Net Investment Income (Loss) $ 121,093 $ (556,060)
Net Realized Gain (Loss) on Investment Securities
and Foreign Currency Transactions (19,918,269) 2,050,539
Change in Net Appreciation (Depreciation) of Investment
Securities and Foreign Currency Transactions 7,204,445 (20,975,739)
- ------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET
ASSETS FROM OPERATIONS (12,592,731) (19,481,260)
- ------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
Net Investment Income (645,743) 0
In Excess of Net Investment Income (21,009) (52,110)
Net Realized Gain on Investment Securities and
Foreign Currency Transactions 0 (8,942,331)
In Excess of Net Realized Gain on Investment Securities
and Foreign Currency Transactions (1,134,104) 0
- ------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS (1,800,856) (8,994,441)
- ------------------------------------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS
Proceeds from Sales of Shares 396,569,871 602,143,991
Reinvestment of Distributions 1,722,714 8,700,080
- ------------------------------------------------------------------------------------------------------------------
398,292,585 610,844,071
Amounts Paid for Repurchases of Shares (402,773,585) (668,295,262)
- ------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS FROM
FUND SHARE TRANSACTIONS (4,481,000) (57,451,191)
- ------------------------------------------------------------------------------------------------------------------
Total Decrease in Net Assets (18,874,587) (85,926,892)
NET ASSETS
Beginning of Period 63,943,027 149,869,919
- ------------------------------------------------------------------------------------------------------------------
End of Period $ 45,068,440 $ 63,943,027
==================================================================================================================
Accumulated Undistributed (Distributions in Excess of)
Net Investment Income Included in Net Assets at End
of Period $ 233,342 $ 523,439
- ------------------------------------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS
Shares Sold 52,503,576 46,222,901
Shares Issued from Reinvestment of Distributions 208,312 657,603
- ------------------------------------------------------------------------------------------------------------------
52,711,888 46,880,504
Shares Repurchased (52,543,507) (50,934,920)
- ------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Fund Shares 168,381 (4,054,416)
==================================================================================================================
</TABLE>
See Notes to Financial Statements
<PAGE>
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 five separate Funds: Emerging Markets Fund, European Fund,
International Blue Chip Fund, International Growth Fund and Pacific Basin Fund.
The investment objectives are: to seek capital appreciation through investments
in designated geographical sectors for Emerging Markets, European and Pacific
Basin Funds, to seek a high total return through capital appreciation and
current income by investing in foreign companies for International Blue Chip
Fund, and to seek a high total return through investments in designated
geographical sectors for International Growth Fund. Emerging Markets and
International Blue Chip Funds commenced investment operations on February 12,
1998 and October 28, 1998, respectively. 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
under procedures established 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.
B. REPURCHASE AGREEMENTS -- Repurchase agreements held by the Fund are fully
collateralized by U.S. Government securities and such collateral is in the
possession of the Fund's custodian. The collateral is evaluated daily to
ensure its market value exceeds the current market value of the repurchase
agreements including accrued interest. In the event of default on the
obligation to repurchase, the Fund has the right to liquidate the
collateral and apply the proceeds in satisfaction of the obligation. 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.
<PAGE>
C. STRUCTURED CALL WARRANTS -- The Fund invests in foreign stock market-linked
structured call warrants (the "Warrants") which link the market value to a
foreign stock market index. The Warrants are valued at their bid price as
determined by a pricing service approved by the Fund's board of directors
and reflects a 1.5% early exercise transaction fee. The Warrants are
guaranteed by the issuer who has agreed to accept an early exercise notice
on any business day prior to final expiration in a quantity sufficient to
liquidate the position. The Warrants are marked-to-market daily and the
related appreciation or depreciation is presented in the Statement of
Assets and Liabilities. Any realized gain or loss incurred by the Fund upon
expiration or exercising of the Warrants will be presented in the Statement
of Operations.
D. SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME -- Security
transactions are accounted for on the trade date and dividend income is
recorded on the ex dividend date. Certain dividends from foreign securities
will be recorded as soon as the Fund is informed of the dividend if such
information is obtained subsequent to the ex dividend date. Interest
income, which may be comprised of stated coupon rate, market discount,
original issue discount and amortized premium, is recorded on the accrual
basis. Income and expenses on foreign securities are translated into U.S.
dollars at rates of exchange prevailing when accrued. Discounts and
premiums on debt securities purchased are amortized over the life of the
respective security as adjustments to interest income. Cost is determined
on the specific identification basis. The cost of foreign securities is
translated into U.S. dollars at the rates of exchange prevailing when such
securities are acquired.
The Fund may have elements of risk due to concentrated investments in
foreign issuers located in a specific country. Such concentrations may
subject the Fund to additional risks resulting from future political or
economic conditions and/or possible impositions of adverse foreign
governmental laws or currency exchange restrictions. Net realized and
unrealized gain or loss from investment securities includes fluctuations
from currency exchange rates and fluctuations in market value.
The Fund's use of 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 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.
On September 1, 1998, the Malaysian government introduced capital
controls and imposed a fixed exchange rate for the Malaysian ringgit. The
controls require that all Malaysian securities and currency be repatriated
to Malaysia and impose significant restrictions on the movement of
Malaysian securities and currency out of the country. These actions may
pose significant liquidity issues and risks and may significantly affect
the valuation of Malaysian securities and currency held by the Fund. The
price of Malaysian securities have been discounted.
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.
E. FEDERAL AND STATE TAXES -- The Fund has complied, and continues to comply,
with the provisions of the Internal Revenue Code applicable to regulated
investment companies and, accordingly, has made or intends to make
sufficient distributions of net investment income and net realized capital
gains, if any, to relieve it from all federal and state income taxes and
federal excise taxes. At October 31, 1998, Emerging Markets and Pacific
Basin Funds had $107,975 and $21,276,447, respectively, in net capital loss
carryovers which expire in the year 2006.
<PAGE>
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.
Investment income received from foreign sources may be subject to
foreign withholding taxes. Dividend and interest income is shown gross of
foreign withholding taxes in the accompanying financial statements.
F. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Dividends and distributions
to shareholders are recorded by the Fund on the ex dividend/distribution
date. The Fund distributes net realized capital gains, if any, to its
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, nontaxable
dividends, net operating losses and expired capital loss carryforwards.
For the period ended October 31, 1998, 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>
Emerging Markets Fund $ (602) $ 602 $ 0
European Fund 185,850 (191,949) 6,099
International Blue Chip Fund 0 0 0
International Growth Fund 68,706 (41,842) (26,864)
Pacific Basin Fund 255,562 (262,212) 6,650
Net investment income, net realized gains and net assets were not affected.
</TABLE>
<PAGE>
G. FORWARD FOREIGN CURRENCY CONTRACTS -- The Fund enters into forward foreign
currency contracts in connection with planned purchases or sales of
securities as a hedge against fluctuations in foreign exchange rates
pending the settlement of transactions in foreign securities. A forward
foreign currency contract is an agreement between contracting parties to
exchange an amount of currency at some future time at an agreed upon rate.
These contracts are marked-to-market daily and the related appreciation or
depreciation of the contracts is presented in the Statement of Assets and
Liabilities. Any realized gain or loss incurred by the Fund upon the sale
of securities is included in the Statement of Operations.
At October 31, 1998, the Fund had outstanding forward foreign currency
contracts. Unrealized gain or loss on forward foreign currency contracts is
calculated daily as the difference between the contract exchange rate and
the closing forward rate applied to the face amount of the contract.
Forward foreign currency contracts held by the Fund are fully
collateralized by other securities which are notated in the Statment of
Investment Securities and such collateral is in the possession of the
Fund's custodian. The collateral is evaluated daily to ensure its market
value exceeds the current market value of the forward foreign currency
contract.
H. 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.
<PAGE>
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. Such credits are included
in Fees and Expenses Paid Indirectly in the Statement of Operations.
NOTE 2 -- INVESTMENT ADVISORY AND OTHER AGREEMENTS. INVESCO Funds Group, Inc.
("IFG") serves as the Fund's investment adviser. As compensation for its
services to the Fund, IFG receives an investment advisory fee which is accrued
daily at the applicable rate and paid monthly. The fee is based on an annual
rate of each Fund's average net assets as follows:
<TABLE>
<CAPTION>
AVERAGE NET ASSETS
- -----------------------------------------------------------------------------------------
$500
$0 to $0 to $350 to Million Over Over
$350 $500 $700 to $1 $700 $1
Fund Million Million Million Billion Million Billion
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Emerging Markets Fund -- 1.00% -- 0.85% -- 0.75%
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>
The fee for International Blue Chip Fund is based on the annual rate of
0.75% of average net assets.
In accordance with a Sub-Advisory Agreement between IFG and INVESCO Asset
Management Limited ("IAM"), an affiliate of IFG, investment decisions of
European, Emerging Markets, International Growth and Pacific Basin Funds are
made by IAM. A separate Sub-Advisory Agreement between IFG and INVESCO Global
Asset Management (N.A.) ("IGAM"), an affiliate of IFG, provides that investment
decisions of International Blue Chip Fund are made by IGAM. Fees for such
sub-advisory services are paid by IFG.
A plan of distribution pursuant to Rule 12b-1 of the Act (the "Plan") was
adopted 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. ("IDI" or
the "Distributor"), a wholly owned subsidiary of IFG, to a maximum of 0.25% of
annual average net assets. For the year ended October 31, 1998, Emerging
Markets, European, International Blue Chip, International Growth and Pacific
Basin Funds paid the Distributor $1,272, $1,119,634, $0, $104,872 and $91,513,
respectively, under the plan of distribution.
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.
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 has voluntarily agreed, in some instances, to absorb certain fees and
expenses incurred by European, International Growth and Pacific Basin Funds. IFG
and IAM have voluntarily agreed, in some instances, to absorb certain fees and
expenses incurred by Emerging Markets Fund. IFG and IGAM have voluntarily
agreed, in some instances, to absorb certain fees and expenses incurred by
International Blue Chip Fund.
A 1% redemption fee is retained by Emerging Markets Fund to offset
transaction costs and other expenses associated with short-term redemptions and
exchanges. The fee is imposed on redemptions or exchanges of shares held less
than three months. The redemption fee is accounted for as an addition to Paid-in
Capital. Total redemption fees received by Emerging Markets Fund for the period
ended October 31, 1998 were $1,050.
<PAGE>
NOTE 3 -- PURCHASES AND SALES OF INVESTMENT SECURITIES. For the period
ended October 31, 1998, 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:
<TABLE>
<CAPTION>
Fund Purchases Sales
- ----------------------------------------------------------------------------------------
<S> <C> <C>
Emerging Markets Fund $ 1,517,549 $ 271,644
European Fund 757,823,343 515,261,597
International Blue Chip Fund 3,511,175 0
International Growth Fund 47,660,246 88,714,515
Pacific Basin Fund 50,039,875 60,858,680
There were no purchases or sales of U.S. Government securities.
</TABLE>
NOTE 4 -- APPRECIATION AND DEPRECIATION. At October 31, 1998, 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:
<TABLE>
<CAPTION>
Net
Gross Gross Appreciation
Fund Appreciation Depreciation (Depreciation)
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Emerging Markets Fund $ 18,587 $ 292,401 $ (273,814)
European Fund 103,773,927 31,946,404 71,827,523
International Blue Chip Fund 36,981 29,781 7,200
International Growth Fund 5,797,779 1,456,790 4,340,989
Pacific Basin Fund 1,995,715 6,334,408 (4,338,693)
</TABLE>
NOTE 5 -- TRANSACTIONS WITH AFFILIATES. Certain of the Fund's officers and
directors are also officers and directors of IFG, IDI, IAM or IGAM.
The Fund has adopted an unfunded defined benefit 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 were based on an annual rate equal to 40% of the retainer fee at
the time of retirement. As of July 1, 1998, benefits are based on the annual
rate of 50% of the sum of the retainer fee at the time of retirement plus the
annual meeting fee.
The independent directors have contributed to a deferred compensation plan,
pursuant to which they have deferred receipt of a portion of the compensation
which they would otherwise have been paid as directors of selected INVESCO
Funds. The deferred amounts are being invested in the shares of all of the
INVESCO and Treasurer's Series Trust Funds.
<PAGE>
Pension expenses for the year ended October 31, 1998, 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 $ 6,643 $ 10,698 $ 31,887
International Growth Fund 1,870 5,416 13,250
Pacific Basin Fund 1,898 12,665 27,114
Pension expenses, unfunded accrued pension costs and pension liabilities
were insignificant for Emerging Markets and International Blue Chip Funds.
NOTE 6 -- LINE OF CREDIT. European, International Growth and Pacific Basin Funds
have 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, 1998, there were no
such borrowings.
--------------------------------------------------------
Other Information
UNAUDITED
Year 2000 Computer Issue. Many computer systems in use today may not be able to
recognize any date after December 31, 1999. If these systems are not fixed by
that date, it is possible that they could generate erroneous information or fail
altogether. INVESCO has committed substantial resources in an effort to make
sure that its own major computer systems will continue to function on and after
January 1, 2000. Of course, INVESCO cannot fix systems that are beyond its
control. If INVESCO's own systems, or the systems of third parties upon which it
relies, do not perform properly after December 31, 1999, the Funds could be
adversely affected.
In addition, the markets for, or values of, securities in which the Funds invest
may possibly be hurt by computer failures affecting portfolio investments or
trading of securities beginning January 1, 2000. For example, improperly
functioning computer systems could result in securities trade settlement
problems and liquidity issues, production issues for individual companies and
overall economic uncertainties. Individual issuers may incur increased costs in
making their own systems Year 2000 compliant. The combination of market
uncertainty and increased costs means that there is a possibility that Year 2000
computer issues may adversely affect the Funds' investments.
<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 Emerging Markets Fund,
INVESCO European Fund, INVESCO International Blue Chip Fund, INVESCO
International Growth Fund and INVESCO Pacific Basin Fund (constituting INVESCO
International Funds, Inc., hereafter referred to as the "Fund") at October 31,
1998, the results of each of their operations for each of the periods indicated,
the changes in each of their net assets for each of the periods indicated and
the financial highlights for each of the periods indicated, 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, 1998 by
correspondence with the custodian, provide a reasonable basis for the opinion
expressed above.
/s/ PricewaterhouseCoopers
- --------------------------
PricewaterhouseCoopers LLP
Denver, Colorado
December 9, 1998
<PAGE>
Financial Highlights -- Emerging Markets Fund
(For a Fund Share Outstanding Throughout the Period)
Period
Ended
October 31
- --------------------------------------------------------------------------
1998(a)
PER SHARE DATA
Net Asset Value-- Beginning of Period $ 10.00
- --------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.03
Net Loss on Securities (Both Realized and Unrealized) (2.49)
- --------------------------------------------------------------------------
Total from Investment Operations (2.46)
- --------------------------------------------------------------------------
Net Asset Value-- End of Period $ 7.54
==========================================================================
TOTAL RETURN (24.60%)(b)
RATIOS
Net Assets-- End of Period ($000 Omitted) $ 1,178
Ratio of Expenses to Average Net Assets(c)(d) 3.04%(e)
Ratio of Net Investment Income to Average Net Assets(d) 0.91%(e)
Portfolio Turnover Rate 42%(b)
(a)From February 12, 1998, commencement of investment operations, to October
31, 1998.
(b)Based on operations for the period shown and, accordingly, is not
representative of a full year.
(c)Ratio is based on Total Expenses of the Fund, less Expenses Absorbed by
Investment Adviser, which is before any expense offset arrangements.
(d)Various expenses of the Fund were voluntarily absorbed by IFG and IAM for
the period ended October 31, 1998. If such expenses had not been voluntarily
absorbed, ratio of expenses to average net assets would have been 15.58%
(annualized) and ratio of net investment loss to average net assets would
have been (11.63%) (annualized).
(e)Annualized
<PAGE>
<TABLE>
<CAPTION>
Financial Highlights (Continued) -- European Fund
(For a Fund Share Outstanding Throughout Each Period)
Year Ended October 31
- -----------------------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994
PER SHARE DATA
<S> <C> <C> <C> <C> <C>
Net Asset Value-- Beginning of Period $ 17.34 $ 15.85 $ 14.09 $ 12.95 $ 12.20
- -----------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.04 0.07 0.05 0.23 0.16
Net Gains on Securities
(Both Realized and Unrealized) 3.58 2.63 3.00 1.12 0.75
- -----------------------------------------------------------------------------------------------------------
Total from Investment Operations 3.62 2.70 3.05 1.35 0.91
- -----------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
Dividends from Net Investment Income(a) 0.06 0.07 0.08 0.21 0.16
Distributions from Capital Gains 3.28 1.14 1.21 0.00 0.00
- -----------------------------------------------------------------------------------------------------------
Total Distributions 3.34 1.21 1.29 0.21 0.16
- -----------------------------------------------------------------------------------------------------------
Net Asset Value-- End of Period $ 17.62 $ 17.34 $ 15.85 $ 14.09 $ 12.95
===========================================================================================================
TOTAL RETURN 24.92% 18.07% 23.47% 10.42% 7.43%
RATIOS
Net Assets -- End of Period
($000 Omitted) $ 672,146 $324,819 $ 300,588 $224,200 $ 349,842
Ratio of Expenses to Average Net Assets 1.34%(b) 1.25%(b) 1.36%(b) 1.40%(b) 1.20%
Ratio of Net Investment Income
to Average Net Assets 0.24% 0.33% 0.37% 1.26% 1.28%
Portfolio Turnover Rate 102% 90% 91% 96% 70%
(a)Distributions in excess of net investment income for the year ended October
31, 1998, amounted to less that $0.01 on a per share basis.
(b)Ratio is based on Total Expenses of the Fund, which is before any expense
offset arrangements.
</TABLE>
<PAGE>
Financial Highlights (Continued) -- International Blue Chip Fund
(For a Fund Share Outstanding Throughout the Period)
Period
Ended
October 31
- --------------------------------------------------------------------------
1998(a)
PER SHARE DATA
Net Asset Value-- Beginning of Period $ 10.00
- --------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net Gains on Securities (Both Realized and Unrealized) 0.02
- --------------------------------------------------------------------------
Net Asset Value-- End of Period $ 10.02
==========================================================================
TOTAL RETURN 0.20%(b)
RATIOS
Net Assets-- End of Period ($000 Omitted) $ 6,287
Ratio of Expenses to Average Net Assets(c) 0.90%(d)
Ratio of Net Investment Income to Average Net Assets 6.16%(d)
Portfolio Turnover Rate 0%(b)
(a)From October 28, 1998, commencement of investment operations, to October 31,
1998.
(b)Based on operations for the period shown and, accordingly, is not
representative of a full year.
(c)Ratio is based on Total Expenses of the Fund, which is before any expense
offset arrangements.
(d)Annualized
<PAGE>
<TABLE>
<CAPTION>
Financial Highlights (Continued) -- International Growth
(For a Fund Share Outstanding Throughout Each Period)
Year Ended October 31
- ------------------------------------------------------------------------------------------------------------
1998(a) 1997 1996 1995 1994(b)
PER SHARE DATA
<S> <C> <C> <C> <C> <C>
Net Asset Value-- Beginning of Period $ 16.46 $ 16.91 $ 15.78 $ 17.29 $ 15.75
- ------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss) (0.02) 0.06 0.07 0.08 0.04
Net Gains (Losses) on Securities
(Both Realized and Unrealized) (0.45) 0.37 1.77 (0.61) 1.57
- ------------------------------------------------------------------------------------------------------------
Total from Investment Operations (0.47) 0.43 1.84 (0.53) 1.61
- ------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
Dividends from Net Investment Income 0.25 0.08 0.15 0.09 0.07
In Excess of Net Investment Income(c) 0.00 0.00 0.00 0.03 0.00
Distributions from Capital Gains 2.49 0.80 0.56 0.86 0.00
- ------------------------------------------------------------------------------------------------------------
Total Distributions 2.74 0.88 0.71 0.98 0.07
- ------------------------------------------------------------------------------------------------------------
Net Asset Value-- End of Period $ 13.25 $ 16.46 $ 16.91 $ 15.78 $ 17.29
============================================================================================================
TOTAL RETURN (2.75%) 2.65% 12.01% (2.84%) 10.21%
RATIOS
Net Assets -- End of Period ($000 Omitted) $ 46,091 $ 84,779 $94,586 $75,391 $ 161,884
Ratio of Expenses to Average Net Assets(d) 2.05%(e) 1.71%(e) 1.80%(e) 1.81%(e) 1.50%
Ratio of Net Investment Income (Loss)
to Average Net Assets(d) (0.14%) 0.26% 0.43% 0.41% 0.46%
Portfolio Turnover Rate 102% 57% 64% 62% 87%
(a)The per share information was computed based on average shares.
(b)The per share information was computed based on weighted average shares.
(c)Distributions in excess of net investment income for the years ended October
31, 1998, 1997 and 1996 aggregated less than $0.01 on a per share basis.
(d)Various expenses of the Fund were voluntarily absorbed by IFG for the year
ended October 31, 1998. If such expenses had not been voluntarily absorbed,
ratio of expenses to average net assets would have been 2.43% and ratio of
net investment loss to average net assets would have been (0.52%).
(e)Ratio is based on Total Expenses of the Fund, less Expenses Absorbed by
Investment Advisor, if applicable, which is before any expense offset
arrangements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Financial Highlights (Continued) -- Pacific Basin Fund
(For a Fund Share Outstanding Throughout Each Period)
Year Ended October 31
- --------------------------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994
PER SHARE DATA
<S> <C> <C> <C> <C> <C>
Net Asset Value-- Beginning of Period $ 9.74 $ 14.11 $ 13.83 $ 17.07 $ 15.11
- --------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss) 0.07 (0.09) (0.02) 0.06 0.04
Net Gains (Losses) on Securities
(Both Realized and Unrealized) (2.80) (3.45) 0.51 (1.45) 2.28
- --------------------------------------------------------------------------------------------------------------
Total from Investment Operations (2.73) (3.54) 0.49 (1.39) 2.32
- --------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS
Dividends from Net Investment Income(a) 0.12 0.00 0.03 0.06 0.04
Distributions from Capital Gains 0.00 0.83 0.18 1.79 0.32
In Excess of Capital Gains 0.20 0.00 0.00 0.00 0.00
- --------------------------------------------------------------------------------------------------------------
Total Distributions 0.32 0.83 0.21 1.85 0.36
- --------------------------------------------------------------------------------------------------------------
Net Asset Value-- End of Period $ 6.69 $ 9.74 $ 14.11 $ 13.83 $ 17.07
==============================================================================================================
TOTAL RETURN (28.68%) (26.65%) 3.55% (8.31%) 15.63%
RATIOS
Net Assets -- End of Period
($000 Omitted) $ 45,070 $ 63,943 $ 149,870 $ 154,374 $ 352,888
Ratio of Expenses to Average Net Assets(b) 2.07%(c) 1.72%(c) 1.60%(c) 1.52%(c) 1.24%
Ratio of Net Investment Income (Loss)
to Average Net Assets(b) 0.25% (0.44%) (0.04%) 0.37% 0.28%
Portfolio Turnover Rate 114% 86% 70% 56% 70%
(a)Distributions in excess of net investment income for the years ended October
31, 1998, 1997 and 1996 aggregated less than $0.01 on a per share basis.
(b)Various expenses of the Fund were voluntarily absorbed by IFG for the year
ended October 31, 1998. If such expenses had not been voluntarily absorbed,
ratio of expenses to average net assets would have been 2.56% and ratio of
net investment loss to average net asstes would have been (0.24%).
(c)Ratio is based on Total Expenses of the Fund, less Expenses Absorbed by
Investment Adviser, if applicable, which is before any expense offset
arrangements.
</TABLE>
<PAGE>
INVESCO Distributors, Inc.,(SM)
Distributor
Post Office Box 173706
Denver, Colorado 80217-3706
1-800-525-8085
PAL(R): 1-800-424-8085
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.
Printed on recycled paper.
AINT 9910
