SEMIANNUAL REPORT
June 30, 1995
INVESCO
VARIABLE
INVESTMENT
FUNDS,
INC.
VIF - Industrial Income Portfolio
VIF - Total Return Portfolio
VIF - High Yield Portfolio
VIF - Utilities Portfolio
INVESCO FUNDS
<PAGE>
Market Overview July 1995
Unemployment is up. The yield curve is flat. The dollar, housing starts,
and consumer confidence are leveling. The Gross Domestic Product expanded by
just 2.7% during the first quarter 1995. And inflation has accelerated.
Taken altogether, this is good news. These signs may indicate that
economic growth is approaching a more moderate, sustainable level.
Analysts know that a rapidly growing economy puts stress on credit
availability. To meet increasing demand, companies may borrow to expand capacity
with new equipment and facilities. They add workers at a brisk rate, and those
workers are able to command higher wages in a "seller's market." Demand thus
outraces supply when it comes to the key resources of credit and employees.
Ultimately, something has to give -- and that something is interest rates. They
rise, and eventually the increased cost of borrowing slows the entire cycle
down.
Fearing the long-term corrosive effects of inflation, the Federal Reserve
Board actively sought to slow the U.S. economy in 1994. Over a period of 12
months beginning in February 1994, they doubled short-term interest rates.
For five quarters running, the GDP had racked up impressive gains,
including a solid +5.1% for the last quarter of 1994. Then, reacting to the
relentless pressure of high short-term interest rates, the growth rate
contracted during the first half of 1995.
To many market watchers, "moderate" is synonymous with "sustainable." Now
that they've reined in the galloping expansion, the Fed will act to keep
it going at a sustainable trot. Having cut the Fed Funds rate by 0.25% in July,
their strategy may include additional cuts over the next several months. (This
is the rate charged on overnight loans between member banks.)
In our opinion, interest rates will probably drop further in 1995. That
will ease inflationary pressure somewhat, as well as have a positive impact on
the bond market. Short-term rates could drop to 5.5% or less, compared to a
5.75% Fed Funds rate as of late July. The benchmark 30-year Treasury bond is now
yielding around 6.9%; we may expect to see that gradually decrease. Overall,
bond prices have strengthened since the fourth quarter of 1994.
Given the advances in equities during the first half of 1995, we're likely
to see a correction as the market "digests" its gains; this happened in mid-July
for technology stocks, for example. However, we do not anticipate a significant
setback in prices over the third and fourth quarters. Some industrial,
construction, and consumer cyclical stocks have lagged the overall market due to
earlier fears about the economy; since the recent cut in interest rates may
herald an economic rebound, these stocks may well enjoy advances over the next
few months.
<PAGE>
VIF--Industrial Income Portfolio
From the fund's inception 8/10/94 through 6/30/95, INVESCO VIF--Industrial
Income Fund had an annualized total return of 16.55%, compared with a total
return of 21.76% in the same period for the S&P 500 Index, a measure of the
broad stock market. The Lehman Brothers Government/Corporate Index, which
reflects the bond market in general, was up 10.55% in the same period. (Of
course, past performance is no guarantee of future results.)*
VIF - Industrial Income Portfolio
Average Annual Total Return*
as of 6/30/95
Since Inception (8/10/94) 16.55%
-----------------------------------------
INVESCO VIF--Industrial Income Portfolio aims for high current income by
investing 60% to 75% of its assets in dividend-paying stocks and the rest in
bonds. Capital appreciation is a secondary concern.
The difference in performance between the S&P 500 Index and the fund is
mainly due to the small size of the fund and its large cash component in the
first five months of operations.
As the fund has grown, it has picked up momentum, delivering a return of
13.68% in the first six months of 1995, compared to a 1.23% return in 1994.
Total net assets in the portfolio have increased from $524,584 as of 12/31/94 to
$3,357,649 as of 6/30/95.
In our selection of securities, we are guided by themes which we believe
will produce superior results in the next six months: capital goods; domestic
companies with world-wide earnings; technology; and global energy producers.
GRAPH:
This line graph represents a comparison of the value of a $10,000 investment
in the INVESCO VIF-Industrial Income Fund to the value of a $10,000
investment in the S&P 500 and Lehman Government/Corporate Bond Indexes,
assuming in each case reinvestment of all dividends and capital gain
distributions, for the period from inception (8/10/94) through 6/30/95.
The line graph above represents the value of a $10,000 investment in
INVESCO VIF--Industrial Income Fund and the indexes, plus reinvested dividends
and capital gain distributions, if any, since inception through 6/30/95.*
The chart and other total return figures cited reflect the fund's
operating expenses, but the indexes do not have expenses, which would have
lowered their performance.
Fund Managers. VIF--Industrial Income Fund is co-managed by two INVESCO
Trust Company senior vice presidents. Industry veteran Charles P. Mayer oversees
the equity portion of the holdings. He began his investment career in 1969, and
previously managed a sizable equity portfolio for Westinghouse Pension
Investment Corporation. Mr. Mayer earned his MBA from St. John's University and
BA from St. Peter's College.
Donovan "Jerry" Paul manages the fund's fixed-income investments. He
earned his MBA from the University of Northern Iowa, as well as a BBA from the
University of Iowa. A Chartered Financial Analyst, Mr. Paul has more than 19
years of experience in the securities industry. He joined INVESCO in 1994;
previously, he was director of fixed-income research for Stein, Roe & Farnham.
VIF--Total Return Portfolio
For the one-year period ended 6/30/95, INVESCO VIF--Total Return Portfolio
had a total return of 13.40%. This compares with a total return of 12.76% for
the Lehman Government/Corporate Bond Index over the same period, and a return of
25.91% for the S&P 500 Index for the same period. (Of course, past performance
is no guarantee of future results.)*
<PAGE>
VIF-Total Return Portfolio
Average Annual Total Return*
as of 6/30/95
1 year 13.40%
-----------------------------------
Since inception (6/2/94) 12.72%
-----------------------------------
INVESCO VIF--Total Return Portfolio seeks a high total return on
investment through a combination of capital appreciation and current income.
Ordinarily, 30% of the portfolio will be allocated to equity securities, 30% to
fixed-income securities, and the rest to common stock or fixed-income, according
to market conditions.
As of 12/31/94, the fund consisted of 40% cash and short-term instruments;
29% government bonds, and 31% common stocks. Its large fixed-income component
prevented the fund from achieving a return equal to the S&P 500 Index, which
consists of 500 large stocks and no bonds.
Going forward, we believe the business cycle favors stocks over bonds;
therefore, we expect to increase our common stock component. Purchases will
concentrate on high quality, large companies whose prices are low relative to
their historical profitability. On the fixed-income side, we have increased the
average duration of fund holdings. Currently, economic indicators and Fed policy
indicate an environment of stable to declining interest rates. When interest
rates decline, it is, of course, beneficial to own longer bonds. We do not
anticipate changing our position near-term.
Fund Manager. INVESCO VIF--Total Return Portfolio is managed by Edward C.
Mitchell, president of INVESCO Capital Management, Inc. He earned his MBA at the
University of Colorado and a BA from the University of Virginia. A Chartered
Financial Analyst, Mr. Mitchell began his investment career in 1969.
He is assisted by David S. Griffin, who began his investment career in
1982. Mr. Griffin holds an MBA from the College of William and Mary, as well as
a BA from Ohio Wesleyan University. He is a Chartered Financial Analyst.
GRAPH:
This line graph represents a comparison of the value of a $10,000
investment in the INVESCO VIF-Total Return Portfolio to the value of a
$10,000 investment in the S&P 500 and Lehman Government/Corporate Bond
Indexes, assuming in each case reinvestment of all dividends and capital
gain distributions, for the period from inception (6/2/94) through 6/30/95.
The above line graph represents the value of a $10,000 investment in
INVESCO VIF--Total Return Portfolio and the indexes, plus reinvested dividends
and capital gain distributions, if any, since inception, 6/2/94, through
6/30/95.*
The chart and other total return figures cited reflect the fund's
operating expenses, but the indexes do not have expenses, which would have
lowered their performance.
VIF--High Yield Portfolio
INVESCO VIF--High Yield Portfolio had a total return of 10.76% for the
one-year period ended 6/30/95. This compares to a total return of 13.38% for the
Merrill Lynch High Yield Master Index in the same period. In the six months
ended 6/30/95, the fund returned 9.99% compared with a return of 12.74% for the
Merrill Lynch High Yield Index.* The fund has grown from $623,639 in assets to
$3.1 million in the same period. (Of course, past performance is not a guarantee
of future results.)
<PAGE>
INVESCO VIF--High Yield Portfolio seeks a high level of current income by
investing nearly all of its assets in lower-rated bonds and other debt
securities and in preferred stocks. Capital appreciation is a secondary factor.
Our strategy is to utilize various themes, focus on improving creditworthiness
opportunities, and to locate special situations, rather than focus on "trendy"
industry sectors.
VIF-High Yield Portfolio
Average Annual Total Return*
as of 6/30/95
1 year 10.76%
-------------------------------------
Since inception (5/27/94) 9.06%
-------------------------------------
The fund's large cash component during its first nine months of operation
partially accounts for the lower performance compared to the index. Another
factor was the fund's small size, which dictated a more cautious approach. As
the fund has grown, we have been able to diversify into lower-rated holdings
that offer higher income and possible price appreciation. As of 6/30/95, 74.1%
of the portfolio was invested in bonds rated B or lower, compared to 55.3% as of
12/31/94.
Going into the last half of the fiscal year, the fund is overweighted in
cable television and television broadcasting, energy and health care. These
represent several of our themes involving improving fundamentals and probable
industry consolidation. It is underweighted in retail and restaurants.
GRAPH:
This line graph represents a comparison of the value of a $10,000
investment in the INVESCO VIF-High Yield Portfolio to the value of a
$10,000 investment in the Lehman Government/Corporat e Bond and Merrill
Lynch High Yield Master Indexes, assuming in each case reinvestment of all
dividends and capital gain distributions, for the period from inception
(5/27/94) through 6/30/95.
The above line graph represents the value of a $10,000 investment in
INVESCO VIF--High Yield Portfolio and the indexes, plus reinvested dividends and
capital gain distributions, if any, since inception on 5/27/94 through 6/30/95.*
The chart and other total return figures cited reflect the fund's
operating expenses, but the index does not have expenses, which would have
lowered its performance.
Fund Manager. Donovan "Jerry" Paul manages the VIF--High Yield Portfolio.
He earned his MBA from the University of Northern Iowa, as well as a BBA from
the University of Iowa. A Chartered Financial Analyst, Mr. Paul has more than 19
years of experience in the securities industry. He joined INVESCO in 1994;
previously, he was director of fixed-income research for Stein, Roe & Farnham.
VIF--Utilities Portfolio
INVESCO VIF--Utilities Portfolio consisted of $27,507 in net cash as of
6/30/95. Since inception on 1/95, the fund had an annualized total return of
2.21%. (Past performance is not a guarantee of future results.)* As the fund
grows, we
will be selecting securities that are broadly
representative of the major industry sectors, including electric utilities,
natural gas companies and telecommunications firms. The Federal Reserve's
decision to cut the Fed Funds rate in July could indicate stable or lower
interest rates for the rest of the year and an attractive environment for
utilities stocks.
<PAGE>
GRAPH:
This line graph represents a comparison of the value of a $10,000
investment in the INVESCO VIF-Total Return Portfolio to the value of a
$10,000 investment in the S&P 500 Index, assuming in each case reinvestment
of all dividends and capital gain distributions, for the period from
inception (1/1/95) through 6/30/95.
The line graph above represents the value of a $10,000 investment in
INVESCO VIF--Utilities Portfolio and the indexes, plus reinvested dividends and
capital gain distributions, if any, since inception on 11/1/95 through 6/30/95.*
The fund is managed by INVESCO Vice President Brian F. Kelly. A Certified
Public Accountant, he holds an MBA and JD from the University of Iowa, as well
as a BA from the University of Notre Dame. Before joining INVESCO in 1993, Mr.
Kelly was with Sears, Roebuck.
*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 when purchased.
The S&P 500 is an unmanaged index considered representative of common stock
performance; the Lehman Brothers Government/Corporate Bond Index is an unmanaged
index reflecting the broad bond market. The Merrill Lynch High Yield Master
Index is an unmanaged index of high yield issues.
<PAGE>
<TABLE>
<CAPTION>
INVESCO Variable Investment Funds, Inc.
Statement of Investment Securities
June 30, 1995
UNAUDITED
Shares or
<S> <C> <C>
Principal
Description Amount Value
-------------- --------------
HIGH YIELD Portfolio
FIXED INCOME SECURITIES 76.85%
Corporate Bonds 76.22%
ADVERTISING 0.72%
Outdoor Systems, Sr Notes, 10.750%, 8/15/2003 $25,000 $24,000
--------------
BROADCASTING 4.07%
Act III Broadcasting, Sr Sub Notes,
9.625%, 12/15/2003 $10,000 10,087
Allbritton Communications, Sr Sub Deb,
11.500%, 8/15/2004 $100,000 105,000
SCI Television, Sr Secured Notes, 11.000%, 6/30/2005 $20,000 20,750
--------------
135,837
--------------
BUILDING & CONSTRUCTION RELATED 5.08%
Schuller International Group, Sr Notes,
10.875%, 12/15/2004 $20,000 21,800
USG Corp
Deb, 8.750%, 3/1/2017 $100,000 96,000
Sr Notes, Series B, 9.250%, 9/15/2001 $50,000 51,625
--------------
169,425
--------------
CABLE TELEVISION 9.93%
CF Cable TV, Sr Secured 2nd Priority Notes,
11.625%, 2/15/2005 $25,000 26,500
Cablevision Industries, Sr Deb, Series B,
9.250%, 4/1/2008 $100,000 103,625
Century Communications, Sr Notes, 9.500%, 3/1/2005 $25,000 24,875
Diamond Cable Communications PLC, Sr Discount
Step-Up Notes Zero Coupon^^, 9/30/2004 $40,000 26,300
International CableTel, Sr Step-Up Notes^
Zero Coupon^^, 4/15/2005 $50,000 29,500
Le Groupe Videotron Ltee, Sr Notes,
10.625%, 2/15/2005 $25,000 26,375
Marcus Cable Operating LP/Marcus Cable
Capital II, Sr Sub Gtd Discount Step-Up
Notes, Zero Coupon^^, 8/1/2004 $150,000 94,125
--------------
331,300
--------------
CHEMICALS 4.01%
Harris Chemical North America, Gtd Sr
Secured Step-Up Notes
Zero Coupon^^, 7/15/2001 $30,000 27,450
Rexene Corp, Sr Notes, 11.750%, 12/1/2004 $100,000 106,250
--------------
133,700
--------------
CONTAINERS 2.17%
Silgan Holdings, Sr Discount Step-Up Deb,
Zero Coupon^^, 12/15/2002 $25,000 22,625
Stone Container, Sr Notes, 9.875%, 2/1/2001 $50,000 49,750
--------------
72,375
--------------
<PAGE>
FOOD PRODUCTS & BEVERAGES 0.66% Dr Pepper/Seven-Up Cos, Sr Sub Step-Up Notes,
Zero Coupon^^, 11/1/2002 $25,000 22,125
HEALTH CARE RELATED 3.95%
Hillhaven Corp, Sr Sub Notes, 10.125%, 9/1/2001 $25,000 25,813
National Medical Enterprises, Sr Sub Notes,
10.125%, 3/1/2005 $100,000 105,750
--------------
131,563
--------------
HOTELS 2.87%
Host Marriott Travel Plaza, Sr Secured Notes^,
9.500%, 5/15/2005 $100,000 95,875
--------------
INSURANCE 3.33%
Employee Benefit Plans, Conv Sub Deb,
6.750%, 7/31/2006 $100,000 96,125
Home Holdings, Sr Notes, 8.625%, 12/15/2003 $20,000 14,800
--------------
--------------
MANUFACTURING 1.38%
Acme Metals, Sr Secured Discount Step-Up Notes,
Zero Coupon^^, 8/1/2004 $25,000 18,750
American Standard, Sr Deb, 11.375%, 5/15/2004 $25,000 27,219
--------------
45,969
--------------
OIL & GAS RELATED 4.48%
Gulf Canada Resources Ltd
Sr Sub Deb, 9.250%, 1/15/2004 $100,000 99,612
Sr Sub Notes, 9.625%, 7/1/2005 $50,000 49,687
--------------
149,299
--------------
PAPER & PAPER PRODUCTS 6.45%
Fort Howard, Sr Sub Notes, 9.000%, 2/1/2006 $50,000 45,750
Gaylord Container, Sr Sub Discount Step-Up
Deb, Zero Coupon^^, 5/15/2005 $100,000 97,500
Repap New Brunswick, 2nd Priority Sr Secured
Notes, 10.625%, 4/15/2005 $50,000 50,375
SD Warren, Sr Sub Notes, Series B,
12.000%, 12/15/2004 $20,000 21,500
--------------
215,125
--------------
PRINTING & PUBLISHING 0.78%
Time Warner, Conv Sub Deb, 8.750%, 1/10/2015 $25,000 25,875
--------------
RECREATION PRODUCTS & SERVICES 14.03%
Affinity Group, Sr Sub Notes, 11.500%, 10/15/2003 $100,000 99,750
Bally's Grand, 1st Mortgage Notes, Series B,
10.375%, 12/15/2003 $20,000 19,600
Bally's Park Place Funding, Gtd 1st Mortgage
Notes, 9.250%, 3/15/2004 $100,000 94,500
GNS Finance, Sr Sub Notes, Series B,
9.250%, 3/15/2003 $50,000 53,000
Royal Caribbean Cruises Ltd, Sr Sub Notes,
11.375%, 5/15/2002 $25,000 27,500
Station Casinos, Sr Sub Notes, 9.625%, 6/1/2003 $25,000 23,250
<PAGE>
Trump Hotels & Casinos Resorts Holdings LP/
Trump Hotels & Casinos Resorts Funding, Sr
Secured Notes, 15.500%, 6/15/2005 $100,000 97,250
United Artists Theatre Circuit, Sr Secured
Notes, Series B, 11.500%, 5/1/2002 $50,000 53,000
--------------
467,850
--------------
RETAIL 2.09%
Southland Corp, 2nd Priority Sr Sub Deb,
Series A, 4.500%, 6/15/2004 $100,000 69,750
--------------
TELECOMMUNICATIONS 8.71%
Allnet Communication Services, Sr Sub Notes,
9.000%, 5/15/2003 $50,000 52,875
Centennial Cellular, Sr Notes, 8.875%, 11/1/2001 $20,000 18,850
Comcast Cellular, Sr Participation Notes,
Series B, Zero Coupon, 3/5/2000 $100,000 70,375
Commnet Cellular, Sub Notes, 11.250%, 7/1/2005 $100,000 100,000
Geotek Communications, Sr Discount Step-Up Notes,
Zero Coupon^^, 7/15/2000 $100,000 48,344
--------------
290,444
--------------
TEXTILES & APPAREL MANUFACTURERS 1.51% Guess Inc, Sr Sub Notes, Series B,
9.500%, 8/15/2003 $25,000 25,000
PT Polysindo Eka Perkasa, Sr Notes,
13.000%, 6/15/2001 $25,000 25,250
--------------
50,250
--------------
TOTAL CORPORATE BONDS
(Cost $2,513,212) 2,541,687
--------------
Asset-Backed Securities 0.63% RECREATION PRODUCTS & SERVICES 0.63% Griffin
Gaming & Entertainment, Secured
Non Recourse Pass-Through Notes
Zero Coupon, 6/30/2000 (Cost $20,852) $25,000 21,196
--------------
TOTAL FIXED INCOME SECURITIES
(Cost $2,534,064) 2,562,883
--------------
PREFERRED STOCKS 2.71%
ELECTRICAL EQUIPMENT 1.59%
BCP/Essex Holdings^, 15%, Series A, Cum
Redeemable Exchangeable Pfd 2,000 53,000
--------------
TOBACCO 1.12%
RJR Nabisco Holdings, Depository Shrs
Representing 1/1000
$9.25, Series B Pfd 1,500 37,313
--------------
TOTAL PREFERRED STOCKS
(Cost $88,858) 90,313
--------------
<PAGE>
OTHER SECURITIES 6.06%
CABLE TELEVISION 2.29%
Australis Media Ltd, Units (Each unit
consists of one million Sr Sub Discount
Step-Up Notes, Zero Coupon^^, 5/15/2003
and one wrnt to buy 57.5521 shrs of cmn stock) 100,000 52,000
Peoples Choice TV, Units (Each unit consists of one million Sr Discount Step-Up
Notes, Zero Coupon^^, 6/1/2004 and one wrnt to buy
1.427 shrs of cmn stock) 50,000 24,500
--------------
76,500
--------------
RECREATION PRODUCTS & SERVICES 0.77%
Casino America, Units (Each unit consists
of one million 1st Mortgage Notes 11.500%,
11/15/2001 and 3.263 wrnts to buy 1.5 shrs
of cmn stock) 25,000 25,500
--------------
TELECOMMUNICATIONS 3.00%
Intermedia Communications of Florida, Units^
(Each unit consists of one million Sr Notes,
13.500%, 6/1/2005 and one wrnt to buy
2.19 shrs of cmn stock) 100,000 100,000
--------------
TOTAL OTHER SECURITIES
(Cost $203,205)
202,000
SHORT-TERM INVESTMENTS --
US GOVERNMENT AGENCY OBLIGATIONS 14.38%
Federal National Mortgage Association
5.900% 7/5/1995 $300,000 299,803
5.900% 7/7/1995 $180,000 179,823
--------------
TOTAL SHORT-TERM INVESTMENTS
(Cost $479,626) 479,626
--------------
TOTAL INVESTMENT SECURITIES AT VALUE 100.00%
(Cost $3,305,753#) $3,334,822
==============
INDUSTRIAL INCOME Portfolio
COMMON STOCKS 55.96%
AEROSPACE & DEFENSE 1.14%
Boeing Co 600 $37,575
--------------
AUTOMOBILE RELATED 1.76%
Chrysler Corp 600 28,725
Eaton Corp 500 29,062
--------------
57,787
--------------
<PAGE>
BANKING 1.62%
Bank of New York 600 24,225
Citicorp 500 28,937
--------------
53,162
--------------
BROADCASTING 0.82%
CBS Inc 400 26,800
--------------
BUILDING & CONSTRUCTION RELATED 0.76%
Armstrong World Industries 500 25,063
--------------
CHEMICALS 6.76%
ARCO Chemical 1,000 45,375
Lawter International 3,000 36,000
PPG Industries 1,000 43,000
Potash Corp Saskatchewan 1,000 55,875
Vigoro Corp 1,000 41,500
--------------
221,750
--------------
CLEANING PRODUCTS 0.78%
Colgate-Palmolive Co 350 25,594
--------------
COMPUTER RELATED 2.93%
Apple Computer 600 27,862
Hewlett-Packard Co 400 29,800
International Business Machines 400 38,400
--------------
96,062
--------------
DIVERSIFIED COMPANIES 3.41%
AlliedSignal Inc 600 26,700
du Pont (E I) de Nemours 400 27,500
Minnesota Mining & Manufacturing 500 28,625
Whitman Corp 1,500 29,062
--------------
111,887
--------------
ELECTRICAL EQUIPMENT 1.61%
General Electric 400 22,550
Honeywell Inc 700 30,187
--------------
52,737
FINANCE RELATED 3.13%
Beneficial Corp 600 26,400
Block (H & R) Inc 800 32,900
PMI Group 1,000 43,375
--------------
102,675
--------------
FOOD PRODUCTS & BEVERAGES 4.10%
CPC International 300 18,525
General Mills 500 25,687
Heinz (H J) Co 750 33,281
Quaker Oats 1,000 32,875
Seagram Co Ltd 700 24,237
--------------
134,605
--------------
<PAGE>
HOTELS 1.50%
Hilton Hotels 700 49,175
--------------
INSURANCE 3.07%
Allmerica Property & Casualty 2,000 44,250
Hilb, Rogal & Hamilton 2,000 25,000
Ohio Casualty 1,000 31,500
--------------
100,750
--------------
MACHINERY 1.77%
Deere & Co 350 29,969
TRINOVA Corp 800 28,000
--------------
57,969
--------------
MEDICAL PRODUCTS 0.66%
Baxter International 600 21,825
--------------
MEDICAL RELATED - DRUGS 2.89%
American Home Products 400 30,950
Upjohn Co 1,000 37,875
Warner-Lambert Co 300 25,913
--------------
94,738
--------------
MINING 1.37%
ASARCO Inc 1,000 30,500
Newmont Mining 350 14,656
--------------
45,156
--------------
OIL & GAS RELATED 3.84%
Amoco Corp 500 33,313
Exxon Corp 400 28,250
Halliburton Co 1,000 35,750
Mobil Corp 300 28,800
--------------
126,113
--------------
PHOTO EQUIPMENT 0.92%
Eastman Kodak 500 30,313
--------------
PRINTING & PUBLISHING 1.44%
Donnelley (R R) & Sons 800 28,800
Time Warner 450 18,506
--------------
47,306
--------------
RECREATION PRODUCTS & SERVICES 0.51%
Disney (Walt) Co 300 16,688
--------------
RETAIL 3.92%
Darden Restaurants* 300 3,263
Jostens Inc 1,500 31,875
Limited Inc 1,300 28,600
Melville Corp 1,200 41,100
Sears Roebuck & Co 400 23,950
--------------
128,788
--------------
<PAGE>
TELECOMMUNICATIONS 0.97%
AT&T Corp 600 31,875
--------------
TOBACCO 0.91%
Philip Morris 400 29,750
--------------
TRANSPORTATION 0.62%
Norfolk Southern 300 20,213
--------------
UTILITIES 2.75%
Rochester Gas & Electric 1,500 31,875
U S WEST 1,400 58,275
--------------
90,150
--------------
TOTAL COMMON STOCKS
(Cost $1,645,158) 1,836,506
--------------
PREFERRED STOCKS 0.66%
MINING 0.66%
Amax Gold, $3.75, Conv Pfd, Series B
(Cost $20,992) 450 21,713
--------------
FIXED INCOME SECURITIES 26.79%
US Government Obligations 14.21%
US Treasury Notes
7.750%, 11/30/1999 $50,000 53,359
7.750%, 1/31/2000 $100,000 106,875
6.750%, 4/30/2000 $100,000 103,063
6.500%, 5/15/2005 $100,000 102,063
6.250%, 5/31/2000 $100,000 101,125
--------------
TOTAL US GOVERNMENT OBLIGATIONS
(Cost $454,867) 466,485
--------------
Corporate Bonds 12.58%
AUTOMOBILE RELATED 1.13%
Auburn Hills Trust, Deb, Gtd Exchangeable
ertificates, 12.000%, 5/1/2020 $25,000 37,021
--------------
BROADCASTING 0.63%
SCI Television, Sr Secured Notes, 11.000%, 6/30/2005 $20,000 20,750
--------------
BUILDING & CONSTRUCTION RELATED 1.57%
USG Corp, Sr Notes, Series B, 9.250%, 9/15/2001 $ 50,000 51,625
--------------
FOOD PRODUCTS & BEVERAGES 2.70% Dr Pepper/Seven-Up Cos, Sr Sub Step-Up Notes,
Zero Coupon^^, 11/1/2002 $100,000 88,500
--------------
PRINTING & PUBLISHING 2.54%
News America Holdings, Deb, 8.500%, 2/23/2025 $ 25,000 27,442
Valassis Communications, Notes, 9.550%, 12/1/2003 $ 50,000 56,072
--------------
83,514
--------------
RECREATION PRODUCTS & SERVICES 3.23% GNS Finance, Sr Sub Notes, Series B,
9.250%, 3/15/2003 $50,000 53,000
United Artists Theatre Circuit, Sr Secured
Notes, Series B, 11.500%, 5/1/2002 $50,000 53,000
--------------
106,000
--------------
<PAGE>
TOBACCO 0.78%
Philip Morris, Notes, 9.800%, 12/15/1998 $25,000 25,437
--------------
TOTAL CORPORATE BONDS
(Cost $402,764) 412,847
--------------
TOTAL FIXED INCOME SECURITIES
(Cost $857,631) 879,332
--------------
SHORT-TERM INVESTMENTS --
US GOVERNMENT AGENCY OBLIGATIONS 16.59%
Federal Farm Credit Bank
6.000%, 7/6/1995 $110,000 109,908
6.000%, 7/12/1995 $50,000 49,908
Federal National Mortgage Association
6.000%, 7/7/1995 $75,000 74,925
5.910%, 7/5/1995 $310,000 309,797
--------------
TOTAL SHORT-TERM INVESTMENTS
(Cost $544,538) 544,538
--------------
TOTAL INVESTMENT SECURITIES AT VALUE 100.00%
(Cost $3,068,319#) $ 3,282,089
==============
TOTAL RETURN Portfolio
COMMON STOCKS 42.33%
AEROSPACE & DEFENSE 1.91%
Boeing Co 400 25,050
Lockheed Martin 400 25,250
Raytheon Co 200 15,525
--------------
65,825
--------------
AUTOMOBILE RELATED 1.03%
Ford Motor 1,200 35,700
--------------
BANKING 3.62%
Comerica Inc 700 22,487
First of America Bank 500 18,563
NBD Bancorp 1,500 48,000
Wachovia Corp 1,000 35,750
--------------
124,800
--------------
BUILDING & CONSTRUCTION RELATED 1.03%
Sherwin-Williams Co 1,000 35,625
--------------
COMPUTER RELATED 0.92%
Compaq Computer* 700 31,762
--------------
DIVERSIFIED COMPANIES 2.21%
Hanson PLC Sponsored ADR 2,000 35,250
Minnesota Mining & Manufacturing 500 28,625
Textron Inc 200 11,625
US Industries* 50 681
--------------
76,181
--------------
<PAGE>
FINANCE RELATED 1.22%
Dun & Bradstreet 800 42,000
--------------
FOOD PRODUCTS & BEVERAGES 2.48%
Anheuser-Busch Cos 500 28,438
Heinz (H J) Co 500 22,188
Kellogg Co 300 21,413
PepsiCo Inc 300 13,688
--------------
85,727
--------------
HOUSEHOLD APPLIANCES 1.11%
Whirlpool Corp 700 38,500
--------------
INSURANCE 2.01%
Marsh & McLennan 500 40,562
SAFECO Corp 500 28,719
--------------
69,281
--------------
INVESTMENT BROKERS 0.47%
Morgan Stanley Group 200 16,200
--------------
MEDICAL RELATED - DRUGS 2.59%
American Home Products 600 46,425
Bristol-Myers Squibb 400 27,250
Lilly (Eli) & Co 200 15,700
--------------
89,375
--------------
OFFICE SUPPLIES 0.67%
Deluxe Corp 700 23,187
--------------
OIL & GAS RELATED 4.17%
Amoco Corp 400 26,650
Exxon Corp 300 21,187
Repsol SA Sponsored ADR 1,500 47,437
Royal Dutch Petroleum 5 Gldr Shrs 400 48,750
--------------
144,024
--------------
PRINTING & PUBLISHING 1.57%
Gannett Co 1,000 54,250
--------------
RETAIL 5.34%
Circuit City Stores 800 25,300
Genuine Parts 1,000 37,875
Giant Food Class A 600 17,025
K mart Corp 1,500 21,937
Melville Corp 1,000 34,250
Penney (J C) Co 1,000 48,000
--------------
184,387
--------------
TEXTILES & APPAREL MANUFACTURERS 2.22%
Liz Claiborne 2,000 42,500
Shaw Industries 2,000 34,000
--------------
76,500
--------------
TOBACCO 2.01%
American Brands 1,000 39,750
Philip Morris 400 29,750
--------------
69,500
--------------
<PAGE>
TRANSPORTATION 0.96%
Roadway Services 700 33,075
--------------
UTILITIES 4.79%
CINergy Corp 1,500 39,375
NYNEX Corp 500 20,125
Telefonica de Espana SA Sponsored ADR 700 27,125
Telefonos de Mexico SA de CV Sponsored
ADR Representing Ord Series L Shrs 1,500 44,438
Texas Utilities 1,000 34,375
--------------
165,438
--------------
TOTAL COMMON STOCKS
(Cost $1,368,607) 1,461,337
--------------
FIXED INCOME SECURITIES 32.32%
US Government Obligations 32.32%
US Treasury Notes
8.000%, 1/15/1997 $50,000 51,594
7.250%, 8/15/2004 $200,000 213,562
6.375%, 7/15/1999 $125,000 126,836
6.375%, 8/15/2002 $200,000 202,187
US Treasury Bonds
9.375%, 2/15/2006 $150,000 185,438
9.250%, 2/15/2016 $150,000 192,797
8.125%, 8/15/2019 $100,000 116,656
7.250%, 8/15/2022 $25,000 26,703
--------------
TOTAL FIXED INCOME SECURITIES
(Cost $1,067,575) 1,115,773
--------------
SHORT-TERM INVESTMENTS --
REPURCHASE AGREEMENTS 25.35%
Repurchase Agreement with State Street Bank & Trust Co dated 6/30/1995 due
7/3/1995 at 5.500%, repurchased at $875,401 (Collateralized by US Treasury
Notes due 4/30/1997 at 6.875%, value
$893,943)(Cost $875,000) $875,000 875,000
--------------
TOTAL INVESTMENT SECURITIES AT VALUE 100.00%
(Cost $3,311,182#) $ 3,452,110
<PAGE>
==============
<FN>
^^ Step-up bonds are obligations which increase the interest payment rate at
specific points in time. Rate shown reflects current rate which may step
up at a future date.
# Also represents cost for income tax purposes.
* Security is non-income producing.
^ The following are restricted securities at June 30, 1995:
</FN>
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Value as
Acquisition Acquisition % of
Security Name Date Cost Net Assets
- -----------------------------------------------------------------------------------------------
High Yield Portfolio
BCD/Essex Holdings, 15%, Series A,
Cum Redeemable Exchangeable Pfd 5/26/95 $ 52,580 1.69%
Host Marriott Travel Plaza, Sr
Secured Notes, 9.500%, 5/15/2005 5/18/95 96,337 3.06%
Intermedia Communications of Florida,
Units 5/25/95 100,000 3.19%
International CableTel, Sr Step-Up
Notes, Zero Coupon, 4/15/2005 4/13/95 26,998 0.94%
---------
8.88%
See Notes to Financials Statements
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
INVESCO Variable Investment Funds, Inc.
Statement of Assets and Liabilities
June 30, 1995
UNAUDITED
<S> <C> <C> <C> <C>
High Industrial Total
Yield Income Return Utilities
Portfolio Portfolio Portfolio Portfolio
ASSETS
Investment Securities:
At Cost $3,305,753 $3,068,319 $2,436,182 $0
====================================================================
At Value $3,334,822 $3,282,089 $ 2,577,110 $0
Repurchase Agreements at Value~ 0 0 875,000 0
Cash 13,439 40,809 39,082 13,621
Receivables:
Investment Securities Sold 0 25,455 0 0
Fund Shares Sold 825 0 200 0
Dividends and Interest 49,782 16,114 32,265 0
Organization Costs (Note 1) 12,887 12,887 12,887 12,887
Prepaid Expenses and Other Assets 23,914 23,324 23,780 21,512
--------------------------------------------------------------------
TOTAL ASSETS 3,435,669 3,400,678 3,560,324 48,020
--------------------------------------------------------------------
LIABILITIES
Payables:
Investment Securities Purchased 280,307 0 0 0
Fund shares Repurchased 0 22,516 0 0
Accrued Expenses and Other Payables 20,513 20,513 20,513 20,513
--------------------------------------------------------------------
TOTAL LIABILITIES 300,820 43,029 20,513 20,513
--------------------------------------------------------------------
Net Assets at Value $3,134,849 $ 3,357,649 $3,539,811 $27,507
====================================================================
NET ASSETS
Paid-in Capital* $3,004,228 $ 3,084,163 $ 3,357,308 $27,223
Accumulated Undistributed
Net Investment Income 64,154 40,395 38,615 284
Accumulated Undistributed Net Realized
Gain on Investment Securities 37,398 19,321 2,960 0
Net Appreciation of Investment Securities 29,069 213,770 140,928 0
--------------------------------------------------------------------
Net Assets at Value $3,134,849 $ 3,357,649 $3,539,811 $27,507
====================================================================
Shares Outstanding 284,684 292,841 313,425 2,720
Net Asset Value, Offering and Redemption
Price per Share $ 11.01 $ 11.47 $11.29 $10.11
====================================================================
<FN>
~ Also represents cost.
* 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 Portfolio.
See Notes to Financial Statements
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
INVESCO Variable Investment Funds, Inc.
Statement of Operations
Six Months Ended June 30, 1995
UNAUDITED
<S> <C> <C> <C> <C>
High Industrial Total
Yield Income Return Utilities
Portfolio Portfolio Portfolio Portfolio
-----------------------------------------------------------------
INVESTMENT INCOME
INCOME
Dividends $469 $16,767 $ 9,988 $0
Interest 69,506 32,525 36,000 368
-----------------------------------------------------------------
TOTAL INCOME 69,975 49,292 45,988 368
-----------------------------------------------------------------
EXPENSES
Investment Advisory Fees 4,539 7,587 6,347 77
Transfer Agent Fees 2,500 2,500 2,500 2,500
Administrative Fees 5,113 5,152 5,127 5,002
Custodian Fees and Expenses 0 0 673 0
Directors' Fees and Expenses 3,518 3,522 3,522 3,501
Organization Expenses 1,841 1,841 1,841 1,841
Professional Fees and Expenses 9,116 10,180 9,594 7,663
Registration Fees and Expenses 109 100 148 55
Reports to Shareholders 141 109 141 50
Other Expenses 2,055 1,186 1,112 819
-----------------------------------------------------------------
TOTAL EXPENSES 28,932 32,177 31,005 21,508
Fees and Expenses Absorbed by
Investment Adviser (22,880) (23,072) (23,388) (21,424)
-----------------------------------------------------------------
NET EXPENSES 6,052 9,105 7,617 84
-----------------------------------------------------------------
NET INVESTMENT INCOME 63,923 40,187 38,371 284
-----------------------------------------------------------------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENT SECURITIES
Net Realized Gain on Investment Securities 37,316 19,321 2,960 0
Change in Net Appreciation of
Investment Securities 28,490 209,557 141,944 0
-----------------------------------------------------------------
NET GAIN ON INVESTMENT SECURITIES 65,806 228,878 144,904 0
-----------------------------------------------------------------
Net Increase in Net Assets from Operations $129,729 $269,065 $183,275 $284
=================================================================
See Notes to Financial Statements
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
INVESCO Variable Investment Funds, Inc.
Statement of Changes in Net Assets
High Yield Industrial Income
Portfolio Portfolio
<S> <C> <C> <C> <C>
---------------------------------- ----------------------------------
Six Months Ended Period Ended Six Months Ended Period Ended
June 30 December 31 June 30 December 31
---------------------------------- ----------------------------------
1995 1994 1995 1994
UNAUDITED (Note 1) UNAUDITED (Note 1)
OPERATIONS
Net Investment Income $63,923 $ 3,332 $ 40,187 $1,915
Net Realized Gain on Investment Securities 37,316 82 19,321 0
Change in Net Appreciation
of Investment Securities 28,490 579 209,557 4,213
---------------------------------- ----------------------------------
NET INCREASE IN NET
ASSETS FROM OPERATIONS 129,729 3,993 269,065 6,128
---------------------------------- ----------------------------------
DIVIDENDS TO SHAREHOLDERS
FROM NET INVESTMENT INCOME 0 (3,101) 0 (1,707)
---------------------------------- ----------------------------------
FUND SHARE TRANSACTIONS
Proceeds from Sales of Shares 3,202,091 653,782 2,890,701 554,351
Reinvestment of Distributions 0 3,101 0 1,707
---------------------------------- ----------------------------------
3,202,091 656,883 2,890,701 556,058
Amounts Paid for Repurchases of Shares (820,610) (59,136) (326,701) (60,895)
---------------------------------- ----------------------------------
NET INCREASE IN NET ASSETS FROM
FUND SHARE TRANSACTIONS 2,381,481 597,747 2,564,000 495,163
---------------------------------- ----------------------------------
Total Increase in Net Assets 2,511,210 598,639 2,833,065 499,584
NET ASSETS
Initial Subscription (Note 1) 0 25,000 0 25,000
Beginning of Period 623,639 0 524,584 0
---------------------------------- ----------------------------------
End of Period $3,134,849 $623,639 $ 3,357,649 $524,584
================================== ==================================
Accumulated Undistributed Net
Invesment Income Included in
Net Assets at End of Period $64,154 $ 231 $ 40,395 $ 208
-------------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS
Initial Subscription (Note 1) 0 2,500 0 2,500
Shares Sold 299,252 65,433 270,925 55,410
Shares Issued from Reinvestment
of Distributions 0 310 0 169
---------------------------------- ----------------------------------
299,252 68,243 270,925 58,079
Shares Repurchased (76,887) (5,924) (30,092) (6,071)
---------------------------------- ----------------------------------
Net Increase in Fund Shares 222,365 62,319 240,833 52,008
================================== ==================================
See Notes to Financial Statements
<PAGE>
INVESCO Variable Investment Funds, Inc.
Statement of Changes in Net Assets (Continued)
Total Return Utilities
Portfolio Portfolio
---------------------------------- ----------------------------------
Six Months Ended Period Ended Six Months Ended Period Ended
June 30 December 31 June 30 December 31
---------------------------------- ----------------------------------
1995 1994 1995 1994
UNAUDITED (Note 1) UNAUDITED (Note 1)
OPERATIONS
Net Investment Income $ 38,371 $ 9,035 $ 284 $ 0
Net Realized Gain on Investment
Securities 2,960 0 0 0
Change in Net Appreciation
(Depreciation) of Investment Securities 141,944 (1,016) 0 0
---------------------------------- ----------------------------------
NET INCREASE IN NET
ASSETS FROM OPERATIONS 183,275 8,019 284 0
---------------------------------- ----------------------------------
DIVIDENDS TO SHAREHOLDERS
FROM NET INVESTMENT INCOME 0 (8,791) 0 0
---------------------------------- ----------------------------------
FUND SHARE TRANSACTIONS
Proceeds from Sales of Shares 3,703,840 1,138,563 2,625 0
Reinvestment of Distributions 0 8,791 0 0
---------------------------------- ----------------------------------
3,703,840 1,147,354 2,625 0
Amounts Paid for Repurchases
of Shares (1,401,948) (116,938) (402) 0
---------------------------------- ----------------------------------
NET INCREASE IN NET ASSETS FROM
FUND SHARE TRANSACTIONS 2,301,892 1,030,416 2,223 0
---------------------------------- ----------------------------------
Total Increase in Net Assets 2,485,167 l,029,644 2,507 0
NET ASSETS
Initial Subscription (Note 1) 0 25,000 0 25,000
Beginning of Period 1,054,644 0 25,000 0
---------------------------------- ----------------------------------
End of Period $ 3,539,811 $ 1,054,644 $ 27,507 $ 25,000
================================== ==================================
Accumulated Undistributed Net
Investment Income Included in
Net Assets at End of Period $ 38,615 $ 244 $ 284 $ 0
----------------------------------------------------------------------------------------------------
FUND SHARE TRANSACTIONS
Initial Subscription (Note 1) 0 2,500 0 2,500
Shares Sold 340,021 112,706 260 0
Shares Issued from Reinvestment
of Distributions 0 871 0 0
---------------------------------- ----------------------------------
340,021 116,077 260 2,500
Shares Repurchased (131,083) (11,590) (40) 0
---------------------------------- ----------------------------------
Net Increase in Fund Shares 208,938 104,487 220 2,500
================================== ==================================
See Notes to Financial Statements
</TABLE>
<PAGE>
INVESCO Variable Investment Funds, Inc.
Notes to Financial Statements
UNAUDITED
NOTE 1 -- ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES. INVESCO Variable
Investment Funds, Inc. (the "Fund") a Maryland Corporation, was incorporated on
August 19, 1993, and consists of four separate portfolios: High Yield Portfolio,
Industrial Income Portfolio, Total Return Portfolio and Utilities Portfolio. The
Fund is registered under the Investment Company Act of 1940 (the "Act") as a
diversified, open-end management investment company. Investment operations of
the High Yield Portfolio commenced on May 27, 1994, the Industrial Income
Portfolio on August 10, 1994, the Total Return Portfolio on June 2, 1994 and the
Utilities Portfolio on January 1, 1995. The Fund's shares are not offered
directly to the public but are sold exclusively to life insurance companies
("Participating Insurance Companies") as a pooled funding vehicle for variable
annuity and variable life insurance contracts issued by separate accounts of the
Participating Insurance Companies.
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements.
A. SECURITY VALUATION -- Equity securities traded on national securities
exchanges or in the over-the-counter market are valued at the last sale
price in the market where such securities are primarily traded. If last
sale 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.
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 dealers making a market for such securities.
If market quotations or pricing service valuations are not readily
available, securities are valued at fair value as determined in good faith
by the Fund's board of directors. Restricted securities are valued in
accordance with procedures established by the Fund's board of directors.
Short-term securities are stated at amortized cost (which
approximates market value) if maturity is 60 days or less, or at market
value if maturity is greater than 60 days.
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.
C. SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME -- Security
transactions are accounted for on the trade date and dividend income is
recorded on the ex dividend date. Interest income, which may be comprised
of stated coupon rate, market discount and original issue discount is
recorded on the accrual basis. Discounts 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 High Yield Portfolio invests primarily in high yield bonds, some
of which may be rated below investment grade. These high yield bonds may
be more susceptible than higher grade bonds, to real or perceived adverse
economic or industry conditions. The secondary market, on which high yield
bonds are traded, may also be less liquid than the market for higher grade
bonds.
Restricted securities held by the High Yield Portfolio 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
the Portfolio to sell a security at a fair price and may
substantially delay the sale of the security which the Portfolio seeks to
sell. In addition, these securities may exhibit greater price
volatility than securities for which secondary markets exist.
<PAGE>
Investments in securities of governmental agencies may only be
guaranteed by the respective agency's limited authority to borrow form the
U.S. Government and may not be guaranteed by the full faith and credit of
the United States.
D. FEDERAL AND STATE TAXES -- The Fund has complied and continues to comply
with the provisions of the Internal Revenue Code applicable to regulated
investment companies and, accordingly, has made or intends to make
sufficient distributions of net investment income and net realized capital
gains, if any, to relieve it from all federal and state income taxes and
federal excise taxes. Therefore, no federal income tax provision is
required.
E. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Dividends and distributions
to shareholders are recorded by the Fund on the ex-dividend/distribution
date. The Fund distributes net realized capital gains, if any, to its
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 mortgage-backed securities, market discounts,
nontaxable dividends, net operating losses, expiring capital loss
carryforwards and deferral of wash sales.
F. ORGANIZATION COSTS -- Organization costs of $73,640 advanced by INVESCO
Funds Group, Inc. ("IFG") are amortized and are payable on a straight-line
basis over a sixty-month period from the date the Fund commenced
operations. IFG has agreed that if it redeems any of its initially
acquired shares of the Fund during the five years from the date the Fund
commenced operations, the proceeds payable to it in respect of such shares
will be reduced by a pro rata share of the Fund's unamortized organization
costs.
G. EXPENSES -- Each of the Portfolios bears expenses incurred specifically on
its behalf and, in addition, each Portfolio bears a portion of general
expenses, based on the relative net assets of each Portfolio.
NOTE 2 -- INVESTMENT ADVISORY AND OTHER AGREEMENTS. IFG serves as the Fund's
investment adviser. As compensation for its services to the Fund, IFG receives
an investment advisory fee which is accrued daily at the applicable rate and
paid monthly. The fee is based on the annual rate of each Portfolio's average
net assets as follows:
AVERAGE NET ASSETS
--------------------------------------------
$0 to $500 Million Over
$500 to $1 $1
Portfolio Million Billion Billion
- --------------------------------------------------------------------------------
High Yield Portfolio 0.60% 0.55% 0.45%
Industrial Income Portfolio 0.75% 0.65% 0.55%
Total Return Portfolio 0.75% 0.65% 0.55%
Utilities Portfolio 0.60% 0.55% 0.45%
In accordance with a Sub-Advisory Agreement between IFG and INVESCO Trust
Company ("ITC"), a wholly owned subsidiary of IFG, investment decisions of the
High Yield, Industrial Income and Utilities Portfolios are made by ITC. A
separate Sub- Advisory Agreement between IFG and INVESCO Capital Management,
Inc. ("ICM"), an affiliate of IFG, provides that investment decisions of the
Total Return Portfolio are made by ICM. Fees for such sub-advisory services are
paid by IFG.
In accordance with an Administrative Agreement, each Portfolio pays IFG an
annual fee of $10,000, plus an additional amount computed at an annual rate of
0.015% of average net assets to provide administrative, accounting and clerical
services. The fee is accrued daily and paid monthly.
IFG receives a transfer agent fee of $5,000 per Portfolio per year. The fee
is paid monthly at one-twelfth of the annual fee.
IFG has voluntarily agreed, in some instances, to absorb certain fees and
expenses incurred by each Portfolio.
<PAGE>
NOTE 3 -- PURCHASES AND SALES OF INVESTMENT SECURITIES. For the six months ended
June 30, 1995, 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:
Portfolio Purchases Sales
- ------------------------------------------------------------------
High Yield Portfolio $4,151,615 $1,726,641
Industrial Income Portfolio 2,047,134 404,428
Total Return Portfolio 1,037,211 0
The aggregate cost of purchases and proceeds from sales of U.S. Government
securities were as follows:
Portfolio Purchases Sales
- ------------------------------------------------------------------
Industrial Income Portfolio $404,922 $0
Total Return Portfolio 837,836 128,418
NOTE 4 -- APPRECIATION AND DEPRECIATION. At June 30, 1995, 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 by Portfolio were as follows:
Gross Gross Net
Portfolio Appreciation Depreciation Appreciation
- --------------------------------------------------------------------------------
High Yield Portfolio $46,572 $17,503 $29,069
Industrial Income Portfolio 225,766 11,996 213,770
Total Return Portfolio 147,607 6,679 140,928
NOTE 5 -- TRANSACTIONS WITH AFFILIATES. Certain of the Fund's officers and
directors are also officers and directors of IFG, ITC or ICM. At June 30, 1995,
91.91% of outstanding shares of Utilities Portfolio was held by IFG.
The Fund has adopted an unfunded noncontributory defined benefit pension plan
covering all independent directors of the Fund who will have served as an
independent director for at least five years at the time of retirement. Benefits
under this plan are based on an annual rate equal to 25% of the retainer fee at
the time of retirement. Pension expenses for the six months ended June 30, 1995
were insignificant.
<PAGE>
<TABLE>
<CAPTION>
INVESCO Variable Investment Funds, Inc.
Financial Highlights
(For a Fund Share Outstanding throughout Each Period)
<S> <C> <C> <C> <C>
Six Months Period Six Months Period
Ended Ended Ended Ended
June 30 December 31 June 30 December 31
------------ ------------ ------------ ------------
1995 1994 1995 1994
UNAUDITED (Note 1) UNAUDITED (Note 1)
High Yield Portfolio Industrial Income Portfolio
PER SHARE DATA
Net Asset Value -- Beginning of Period $ 10.01 $10.00 $10.09 $10.00
------------ ------------ ------------ ------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.22 0.05 0.13 0.03
Net Gains on Securities
(Both Realized and Unrealized) 0.78 0.01 1.25 0.09
------------ ------------ ------------ ------------
Total from Investment Operations 1.00 0.06 1.38 0.12
------------ ------------ ------------ ------------
LESS DISTRIBUTIONS
Dividends from Net Investment Income 0.00 0.05 0.00 0.03
------------ ------------ ------------ ------------
Net Asset Value -- End of Period $ 11.01 $10.01 $ 11.47 $10.09
============ ============ ============ ============
TOTAL RETURN@ 9.99%* 0.60%* 13.68%* 1.23%*
RATIOS
Net Assets -- End of Period ($000 Omitted) $3,135 $624 $3,358 $525
Ratio of Expenses to Average Net Assets# 0.40%* 0.74%~ 0.45%* 0.79%~
Ratio of Net Investment Income to
Average Net Assets# 4.20%* 2.72%~ 1.97%* 1.69%~
Portfolio Turnover Rate 133%* 23%* 26%* 0%*
<FN>
@@ Total return does not reflect expenses that apply to the related insurance
policies, and inclusion of these charges would reduce the total return for
the period shown.
* These amounts are based on operations for the period shown and,
accordingly, are not representative of a full year.
# Various expenses of the High Yield and Industrial Income Portfolios were
voluntarily absorbed by IFG for the six months ended June 30, 1995 and the
period ended December 31, 1994. If such expenses had not been voluntarily
absorbed, ratio of expenses to average net assets would have been 1.90%
and 30.38% for High Yield, respectively, and 1.58% and 32.55% for
Industrial Income, respectively, and ratio of net investment income to
average net assets would have been 2.70% and (26.92%) for High Yield,
respectively, and 0.84% and (30.07%) for Industrial Income, respectively.
~ Annualized
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
INVESCO Variable Investment Funds, Inc.
Financial Highlights (Continued)
(For a Fund Share Outstanding throughout Each Period)
<S> <C> <C> <C> <C>
Six Months Period Six Months Period
Ended Ended Ended Ended
June 30 December 31 June 30 December 31+
------------ ------------ ------------ ------------
1995 1994 1995 1994
UNAUDITED (Note 1) UNAUDITED (Note 1)
Total Return Portfolio Utilities Portfolio
PER SHARE DATA
Net Asset Value -- Beginning of Period $ 10.09 $10.00 $10.00 $10.00
------------ ------------ ------------ ------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.12 0.09 0.11 0.00
Net Gains or on Securities
(Both Realized and Unrealized) 1.08 0.09 0.00 0.00
------------ ------------ ------------ ------------
Total from Investment Operations 1.20 0.18 0.11 0.00
------------ ------------ ------------ ------------
LESS DISTRIBUTIONS
Dividends from Net Investment Income 0.00 0.09 0.00 0.00
------------ ------------ ------------ ------------
Net Asset Value -- End of Period $ 11.29 $10.09 $ 10.11 $10.00
============ ============ ============ ============
TOTAL RETURN@ 11.89%* 1.75%* 1.10%* 0.00%
RATIOS
Net Assets -- End of Period ($000 Omitted) $3,540 $1,055 $28 $25
Ratio of Expenses to Average Net Assets# 0.45%* 0.86%~ 0.32%* 0.00%
Ratio of Net Investment Income to
Average Net Assets# 2.24%* 3.86%~ 1.09%* 0.00%
Portfolio Turnover Rate 10%* 0%* 0%* 0%
<FN>
+ All of the expenses for the Utilities Portfolio were voluntarily absorbed
by IFG for the period ended December 31, 1994, since investment operations
did not commence during 1994.
@@ Total return does not reflect expenses that apply to the related insurance
policies, and inclusion of these charges would reduce the total return for
the period shown.
* These amounts are based on operations for the period shown and,
accordingly, are not representative of a full year.
# Various expenses of the Total Return and Utilities Portfolios were
voluntarily absorbed by IFG for the six months ended June 30, 1995 and the
year ended December 31, 1994. If such expenses had not been voluntarily
absorbed, ratio of expenses to average net assets would have been 1.81%
and 16.44% for Total Return, respectively, and 82.32% for Utilities, and
ratio of net investment income to average net assets would have been 0.88%
and (11.72%) for Total Return, respectively, and (80.91%) for Utilities.
~ Annualized
</FN>
</TABLE>
<PAGE>
INVESCO FUNDS
INVESCO Funds Group, Inc., Distributor
Post Office Box 173706
Denver, Colorado 80217-3706
This information must be preceded or accompanied by a current
prospectus.
