INVESCO DIVERSIFIED FUNDS, INC.
INVESCO Small Company Value Fund
Supplement to Prospectus dated December 1, 1997
The section of the above Fund's Prospectus entitled "Annual Fund Expenses" is
amended to (1) delete the fourth, fifth and sixth paragraphs, and (2) substitute
the following paragraphs in their place:
Annual Fund Operating Expenses (as a percentage of
average net assets)
Management Fee ............................0.75%
12b-1 Fees.................................None
Other Expenses(1),(2)......................0.50%
Total Fund Operating Expenses(1),(2).......1.25%
(1)It should be noted that the Fund's actual total operating expenses
were lower than the figures shown, because the Fund's custodian fees
and pricing expenses were reduced under expense offset arrangements.
However, as a result of an SEC requirement for mutual funds to state
their total operating expenses without crediting any such expense
offset arrangement, the figures shown do not reflect these reductions.
In comparing expenses for different years, please note that the Ratio
of Expenses to Average Net Assets shown under "Financial Highlights"
do reflect reductions for expense offset arrangements for periods
including and prior to the fiscal year ended July 31, 1995. See "The
Fund And Its Management."
(2)Certain expenses of the Fund are being absorbed voluntarily by IFG
and IMR. In the absence of such absorbed expenses, the Fund's "Other
Expenses" and "Total Fund Operating Expenses" would have been 0.60%
and 1.35%, respectively, based on the Fund's actual expenses for the
fiscal year ended July 31, 1997.
The section of the above Fund's Prospectus entitled "Financial Highlights" is
amended to (1) delete the section in its entirety, and (2) substitute the
following in its place:
<PAGE>
FINANCIAL HIGHLIGHTS
(For a Fund Share Outstanding Throughout Each Period)
The following information has been audited by PricewaterhouseCoopers LLP,
independent accountants. This information should be read in conjunction with the
audited financial statements and the Report of Independent Accountants thereon
appearing in the Company's 1997 Annual Report to Shareholders, which is
incorporated by reference into the Statement of Additional Information. Both are
available without charge by contacting IDI at the address or telephone number on
the cover of this Prospectus. The Annual Report also contains more information
about the Fund's performance.
<TABLE>
<CAPTION>
Period Ended
Year Ended July 31 July 31
----------------------------------- ---------
1997 1996 1995 1994^
<S> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value - Beginning of Period $12.19 $11.77 $9.76 $10.00
----------------------------------- ---------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.09 0.08 0.05 0.06
Net Gains or (Losses) on Securities
(Both Realized and Unrealized) 4.10 0.68 2.05 (0.28)
Total from Investment Operations 4.19 0.76 2.10 (0.22)
----------------------------------- ---------
LESS DISTRIBUTIONS
Dividends from Net Investment Income 0.09 0.08 0.09 0.02
Distributions from Capital Gains 1.35 0.26 0.00 0.00
----------------------------------- ---------
Total Distributions 1.44 0.34 0.09 0.02
----------------------------------- ---------
<PAGE>
Net Asset Value - End of Period $14.94 $12.19 $11.77 $9.76
==================================== =========
TOTAL RETURN 36.97% 6.47% 21.64% (2.21%)*
RATIOS
Net Assets - End of Period
($000 Omitted) $58,549 $46,693 $40,071 $13,474
Ratio of Expenses to Average
Net Assets# 1.25%@ 1.09%@ 1.00% 1.00%~
Ratio of Net Investment Income to
Average Net Assets# 0.75% 0.61% 0.84% 1.20%~
Portfolio Turnover Rate 147% 156% 73% 55%*
Average Commission Rate Paid^^ $0.0582 - - -
</TABLE>
^ From December 1, 1993, commencement of investment operations, to July 31,
1994.
* Based on operations for the period shown and, accordingly, are not
representative of a full year.
# Various expenses of the Fund were voluntarily absorbed by IFG and IMR for the
years ended July 31, 1997, 1996 and 1995, and for the period ended July 31,
1994. If such expenses had not been voluntarily absorbed, ratio of expenses to
average net assets would have been 1.35% (prior to any expense offset
arrangement), 1.09% (prior to any expense offset arrangement), 1.32% and 1.64%
(annualized), respectively, and ratio of net investment income to average net
assets would have been 0.65%, 0.61%, 0.52% and 0.56% (annualized), respectively.
@ Ratio is based on Total Expenses of the Fund, less Expenses Absorbed by
Investment Adviser, which is before any expense offset arrangements.
~ Annualized
^^ The average commission rate paid is the total brokerage commissions paid on
applicable purchases and sales of securities for the period divided by the total
number of related shares purchased or sold which is required to be disclosed for
fiscal years beginning September 1, 1995 and thereafter.
Further information about the performance of the Fund is contained in the
Company's Annual Report to Shareholders, which may be obtained without charge by
writing INVESCO Distributors, Inc., P.O. Box 173706, Denver, Colorado 80217-3706
or by calling 1-800-525-8085.
The date of this Supplement is July 30, 1998.
