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Previous: INVESCO VARIABLE INVESTMENT FUNDS INC, NSAR-A, 1998-08-28 |
Next: NEWFIELD EXPLORATION CO /DE/, 8-K, 1998-08-28 |
Semiannual Report
June 30, 1998
INVESCO
VARIABLE
INVESTMENT FUNDS
High Yield Fund
Industrial Income Fund
Total Return Fund
Utilities Fund
Dynamics Fund
Growth Fund
Health Sciences Fund
Small Company Growth Fund
Technology Fund
Realty Fund
You should know
what INVESCO knows. (TM)
INVESCO FUNDS
<PAGE>
Economic Overview July 1998
The first half of 1998 produced strong gains for the equity markets, as
lower interest rates, low inflation, and robust consumer confidence lifted the
markets to euphoric levels. However, much like the latter half of 1997, these
gains were produced only with increased volatility as concerns about the Asian
contagion and its potential effect on the domestic economy continued to weigh on
investors. As negative sentiment intensified, investors sought safety in
large-capitalization stocks, producing severe sector rotation and
underperformance of many small- and mid-cap stock indexes. Nevertheless,
numerous financial pundits speculate that the current economic environment
represents investment nirvana.
How long will this situation last? The key to maintaining the current
economic backdrop and equity valuations may lie in the following variables:
o Consumer Confidence: American household optimism, as measured by the
Consumer Confidence Index, is riding a 29-year high. Concomitantly, consumer
willingness to spend money increases, benefiting the economy.
o Interest Rates: Interest rates are at historic low levels. A significant
increase would slow the domestic economy, decrease corporate earnings, and have
a negative effect on the financial markets.
o Productivity: Significant gains in productivity by American workers have
contributed strongly to the lengthy bull market; as productivity improves,
earnings accelerate, supporting company stock prices. Conversely, slower
productivity could have a negative effect on corporate earnings and stock
prices. If these three variables remain positive, the economic expansion and
bullmarket in the U.S. should continue. But, as with most perfect scenarios, if
conditions in the economy change and create a negative backdrop for financial
markets, then the markets are likely to experience a contraction. Either way,
investors need to remember that short-term fluctuations in the markets should
not influence long-term financial plans, and presently the underpinnings for a
strong equity market remain intact.
For fixed-income investors, the outlook for bonds and interest rates
remains positive. Inflation remains subdued and the world's largest borrower,
the U.S. government, may have a budget surplus this year -- decreasing their
need to borrow funds. In addition, given the economic and currency problems
elsewhere around the world, our fixed-income market still looks quite attractive
on a risk/reward basis, causing many international investors to favor
dollar-denominated fixed-income obligations in the U.S.
INVESCO Variable Investment Funds, Inc.
The line graphs on the following pages illustrate, for the period from
inception through 6/30/98, the value of a $10,000 investment in each of the
INVESCO Variable Investment Funds, plus reinvested dividends and capital gain
distributions. 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. (Past performance is not a guarantee of
future results.)(1),(2)
<PAGE>
VIF--High Yield Fund
VIF-High Yield Fund
Average Annualized Total Return
as of 6/30/98 (1)
1 year 15.57%
-------------------------------
Since inception (5/94) 14.29%
-------------------------------
For the six-month period ended 6/30/98, VIF--High Yield Fund achieved a
total return of 5.86%. This outperformed the Merrill Lynch High Yield Index,
which over the same period had a total return of 4.51%. In addition, independent
mutual fund analyst Lipper Analytical Services ranked VIF--High Yield Fund #1 of
55 variable high yield funds for the one-year period ended 6/30/98. For the
three-year period, the fund ranked #2 of 40 funds. (Of course, past performance
is not a guarantee of future results.)(1),(2),(3)
The fund's strong relative performance originates in our value-oriented bond
management strategy. We attempt to identify corporate securities that are
mispriced by the market, as well as look for obligations that provide the
potential for capital appreciation in multiple ways. This disciplined investment
style tends to focus more on corporate and industry fundamentals, and less on
interest rates and Federal Reserve Policy.
Graph:
This line graph represents a comparison of the value of a $10,000 investment
in VIF-High Yield Fund to the value of a $10,000 investment in the Merrill
Lynch High Yield Index, assuming in each case reinvestment of all dividends
and capital gain distributions, for the period from inception (5/94) through
6/30/98.
During the last six months, our thematic approach identified opportunities
in the communications and energy sectors and the radio/broadcasting industry.
In the communications sector, we continue to favor investments in
competitive local exchange carriers (CLECs) and rural service providers. Both
CLECs and rural service providers are improving fundamentally, and industry
consolidation is intensifying -- enhancing potential returns.
Although the gains produced by energy companies have been minimal so far,
the fundamentals driving the energy sector are similar to those in
communications. We have directed the fund's investments towards natural gas
companies. Many smaller companies are exploiting proven reserves through new
<PAGE>
technology, which has enhanced their profitability. This has increased
acquisition activity -- which we feel is in its infancy stages -- and improved
industry fundamentals. Plus, we feel that many natural gas firms have had their
corporate debt mispriced by the market due to their relatively small size.
The radio/broadcasting industry remains a prominent theme in the portfolio.
Deregulation has increased competition as companies try to improve their
nationwide presence; this has intensified the pace of consolidation within the
industry and created enormous opportunities for selected companies.
Looking forward, we believe that the high-yield market offers attractive
returns to investors, regardless of the interest rate environment. This market
has the potential to offer competitive returns with less risk than the broad
equity market, and may be appropriate for more aggressive investors. While the
domestic economy stays strong, the outlook for high yield bonds will remain
bright.
Fund Management
VIF--High Yield Fund is managed by Senior Vice President and Director of
Fixed-Income Investments Donovan J. "Jerry" Paul. Jerry began his investment
career in 1976; before joining INVESCO, he worked for Stein, Roe & Farnham Inc.,
as well as Quixote Investment Management. He earned an MBA from the University
of Northern Iowa, and a BBA from the University of Iowa. He is a Chartered
Financial Analyst and Certified Public Accountant.
VIF--Industrial Income Fund
For the six-month period ended 6/30/98, VIF--Industrial Income Fund achieved
a total return of 10.21%. During the same period, the S&P 500 had a total return
of 17.63%, and the Lehman Government/Corporate Bond Index had a total return of
4.17%. (Of course, past performance is not a guarantee of future
results.)(1),(2)
VIF-Industrial Income Fund
Average Annualized Total Return
as of 6/30/98 (1)
1 year 23.80%
-------------------------------
Since inception (8/94) 23.14%
-------------------------------
Equity Strategy
In the summer and fall of 1997, the Asian financial crisis spread from a few
isolated countries to the whole Asian/Pacific Rim region. This created
uncertainty in the domestic equity markets and produced the first correction in
more than seven years. In this volatile environment, we have concentrated the
fund's investments in companies that exhibit strong balance sheets, positive
cash flows, strong management, market-leadership positions, and the ability to
grow earnings, while avoiding firms that derive a significant portion of their
revenue from the Asian/Pacific Rim economies.
<PAGE>
Over the last six months, we reduced the fund's equity position. For the
equity portion of the portfolio, we have concentrated on retailers,
telecommunication companies, health care firms, and financials, while decreasing
our exposure to capital goods, energy, and technology companies -- except for
those firms benefiting from the year 2000 problem.
Fixed-Income Strategy
We continue to believe that fixed-income securities appear quite attractive
on a risk/reward basis, as inflation is almost non-existent. As a result, we
have increased our investment focus on debt obligations. Through our disciplined
value-oriented bond management style, we seek to identify corporate issues that
are mispriced by the market. Presently, we feel the best investment
opportunities are available in the communications and energy sectors, as well as
the electric utilities industry.
Graph:
This line graph represents a comparison of the value of a $10,000 investment
in VIF-Industrial Income Fund to the value of a $10,000 investment in each
of 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 (8/94) through 6/30/98.
Fund Management
Senior Vice President and Director of Investments Charles P. Mayer is
responsible for the equity side of the portfolio. An industry veteran with 29
years of professional experience, he earned an MBA from St. John's University
and a BA from St. Peter's College. Previously, Charlie was with Westinghouse
Pension Investment Corp.
Senior Vice President and Director of Fixed-Income Investments Donovan J.
"Jerry" Paul serves as co-portfolio manager of the fund, concentrating on
fixed-income securities. Jerry began his investment career in 1976; before
joining INVESCO, he worked for Stein, Roe & Farnham Inc., as well as Quixote
Investment Management. He earned an MBA from the University of Northern Iowa,
and a BBA from the University of Iowa. He is a Chartered Financial Analyst and
Certified Public Accountant.
<PAGE>
VIF-Total Return Fund
VIF--Total Return Fund
Average Annualized Total Return
as of 6/30/98 (1)
1 year 16.29%
-------------------------------
Since inception (6/94) 16.20%
-------------------------------
For the six-month period ended 6/30/98, VIF--Total Return Fund achieved a
total return of 7.15%. During the same period, the S&P 500 had a total return of
17.63%, and the Lehman Government/Corporate Bond Index had a total return of
4.17%. (Of course, past performance is not a guarantee of future
results.)(1),(2)
The fund seeks to add value in three ways: through asset allocation, stock
selection, and bond strategy. Asset allocation is based on the spread of returns
between bonds and stocks. If this relationship is out-of-line with the
historical spread of three percent, then the fund's asset mix is adjusted, with
60% stocks and 40% bonds considered a neutral position. As of 6/30/98, we
slightly favored equities, with an approximate allocation of 65% equities, 32%
bonds, and 3% in cash/cash equivalents. Historically, our value-based,
conservative investment philosophy has helped create a higher-quality,
lower-risk portfolio with minimal portfolio turnover.
Our analysis continues to favor stocks relative to other investments. With
the spread on the 30-year Treasury bond yield and INVESCO's implied rate of
return for equities greater than 300 basis points, equity investors are
presently being rewarded with premium returns. As long as inflation remains in
check and interest rates are low, we consider our current equity valuations
appropriate, and we have adjusted the portfolio accordingly.
Graph:
This line graph represents a comparison of the value of a $10,000 investment
in VIF-Total Return Fund to the value of a $10,000 investment in each of 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 (6/94) through 6/30/98.
Individual stock selection continues to drive the equity performance of the
fund. We use a value-oriented process to identify securities that may be
mispriced by the market. Many times these stocks will exhibit lower
price-to-earnings ratios and higher dividend yields compared to the broad equity
market. In the last six months, many value-oriented stocks have significantly
underperformed aggressive growth stocks in this euphoric market. Investors need
to remember that history has shown that value-oriented securities do not
outperform in raging bull markets, but may significantly outperform growth
stocks in flat and down markets.
Fund Management
VIF--Total Return Fund 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. Ed began his investment career in
1969.
He is assisted by David S. Griffin, who began his investment career in
1982. David holds an MBA from the College of William & Mary, as well as a BA
from Ohio Wesleyan University. He is a Chartered Financial Analyst.
<PAGE>
VIF--Utilities Fund
For the six-month period ended 6/30/98, VIF--Utilities Fund achieved a total
return of 12.36%. During the same period, the Dow Jones Utilities Index had a
total return of 7.62%. (Of course, past performance is not a guarantee of future
results.)(1),(2)
We made minor adjustments to the portfolio over the last six months,
increasing our weighting in telecommunications companies, decreasing exposure to
electric utilities, and maintaining our position in natural gas companies. This
modest reallocation was in response to changes in valuations for these three
industries. In the last few months of 1997, increased market volatility, as a
result of the Asian financial crisis, led investors to focus on defensive
stocks. As a result, electric utilities experienced strong relative performance
and went from being undervalued to overvalued in a short period of time. This
created an opportunity to reduce the number of these holdings at a profit and
invest the proceeds in telecommunications stocks, which currently represent
better values.
VIF-Utilities Fund
Average Annualized Total Return
as of 6/30/98 (1)
1 year 30.27%
-------------------------------
Since inception (1/95) 16.48%
-------------------------------
Looking forward, the utilities sector is going through a dynamic period of
change. Positive structural changes are expected to make utilities more
efficient and profitable. As the process of deregulation continues -- which is
in its infancy stage of development -- growth opportunities within this sector
will improve, making it attractive to long-term investors.
Fund Management
Brian B. Hayward assumed responsibilities of portfolio manager of
VIF--Utilities Fund in July 1997. Previously, he was a senior equity analyst for
Mississippi Valley Advisors in St. Louis, Missouri and began his investment
career in 1985. Brian earned a BA in Mathematics and an MA in Economics from the
University of Missouri. He is a Chartered Financial Analyst.
Graph:
This line graph represents a comparison of the value of a $10,000 investment
in VIF-Utilities Fund to the value of a $10,000 investment in the Dow Jones
Utilities Index, assuming in each case reinvestment of all dividends and
capital gain distributions, for the period from inception (1/95) through
6/30/98.
<PAGE>
VIF--Dynamics Fund
VIF-Dynamics Fund
Total Return from Inception
through 6/30/98 (1)
Since inception (8/97) 21.80%
-----------------------------
The fund's return for the six-month period ended 6/30/98 was 17.79%. During
the same time period, the S&P MidCap 400 Index returned 8.63%.(1),(2)
The fund uses a disciplined investment approach by investing in a core group
of higher-quality, market-leading growth companies; the remaining holdings
consist of rapidly accelerating growth companies, which tend to experience
higher volatility. This strategy offers controlled exposure to the
faster-growing sectors of the economy, which typically include health care,
technology, communications, and selected consumer growth companies.
Graph:
This line graph represents a comparison of the value of a $10,000 investment
in VIF-Dynamics Fund to the value of a $10,000 investment in the S&P MidCap
400 Index, assuming in each case reinvestment of all dividends and capital
gain distributions, for the period from inception (8/97) through 6/30/98.
During the last six months, the fund experienced positive returns due to low
interest rates and strong stock selection. Some of the strongest results were
produced by firms in the financial services, health care, technology, and
telecommunications sectors. In the financial services sector, we have
concentrated the fund's investments in regional banks and brokerage companies.
Although this industry group is not typically thought of as a growth sector, the
pace of consolidation creates enormous opportunities for institutions with
strong regional franchises.
Within the health care sector, the strongest returns over the last year were
produced by companies that sell medical devices and supplies. Changing
demographics in America have intensified the need for products that extend or
improve the quality of life. In addition, as health care administrators focus on
containing medical expenditures, products that can enhance patient care -- while
reducing long-term costs -- are in increasing demand.
<PAGE>
Telecommunications remains a prominent theme in the portfolio. The
Telecommunication Act of 1996 created new opportunities for competitive local
exchange carriers (CLECs) and telephone equipment companies. These firms are
experiencing accelerating growth as they build their local phone networks and
expand their services.
Although the technology sector suffered extreme day-to-day price swings over
the last 12 months as a result of the Asian financial crisis, we are optimistic
about its long-term potential. The volatility, especially in the fall of 1997
and spring of 1998, allowed us to improve the quality of holdings and increase
our positions in market-leading companies.
Looking forward, volatility may continue for the rest of the year, but we
are confident in the fundamental underpinnings of mid-cap stocks. A strong,
robust economy and low interest rates should continue to provide a positive
economic backdrop for this equity market.
Fund Management
VIF--Dynamics Fund is managed by INVESCO Senior Vice President Timothy J.
Miller and Thomas R. Wald. Tim received his MBA from the University of Missouri,
and a BSBA from St. Louis University. A 19-year veteran of the investment
business, he is a Chartered Financial Analyst. Before joining INVESCO in 1992,
Tim was an analyst and portfolio manager with Mississippi Valley Advisors.
Thomas R. Wald assumed responsibilities of co-manager in October 1997. He
received his MBA from The Wharton School, University of Pennsylvania, and a BA
from Tulane University. Before joining INVESCO in 1997, Tom was the senior
health care analyst at Munder Capital Management.
VIF--Growth Fund
VIF-Growth Fund
Total Return from Inception
through 6/30/98 (1)
Since inception (8/97) 26.00%
------------------------------
The fund's return for the six-month period ended 6/30/98, was 17.87%. During
the same time period, the S&P 500 Index returned 17.63%.(1),(2)
The fund focuses on classic growth companies (such as Coca-Cola Co., General
Electric, Microsoft Corp., and Pfizer, Inc.), while remaining exposed to some
faster-growing, more volatile stocks. However, large-capitalization growth
companies will make up the foundation of the portfolio.
Graph:
This line graph represents a comparison of the value of a $10,000 investment
in VIF-Growth Fund 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 (8/97) through 6/30/98.
<PAGE>
In selecting our group of faster-growing firms serving attractive growth
markets, we have avoided companies that derive a significant portion of their
revenue from Asia. We focused instead on institutions that could benefit from
the strong domestic economy. For instance, we believe that deregulation of the
telecommunications industry has created strong growth opportunities for selected
telecommunications companies, and WorldCom Inc. remains one of our favorite
stocks. The fund will continue to look for the best investments in the
communications sector, as well as the health care and technology sectors.
We believe that 1998 will be a year of slower earnings growth and more
volatile equity markets. Within this environment, predictability of earnings
will remain critical as any disappointments will be negatively dealt with by the
market. Thus, we will continue to allocate a substantial portion of the fund's
assets to large-cap growth companies.
Fund Management
VIF--Growth Fund is managed by Vice President Trent E. May. He received a
BS from the Florida Institute of Technology and an MBA from Rollins College.
Before joining INVESCO in 1996, Trent was a senior equity manager/equity analyst
with Munder Capital Management. He is a Chartered Financial Analyst.
Senior Vice President Timothy J. Miller is co-manager of the fund. He
received his MBA from the University of Missouri, and a BSBA from St. Louis
University. A 19-year veteran of the investment business, he is a Chartered
Financial Analyst. Before joining INVESCO in 1992, Tim was an analyst and
portfolio manager with Mississippi Valley Advisors.
VIF--Health Sciences Fund
VIF-Health Sciences Fund
Average Annualized Total Return
as of 6/30/98 (1)
1 year 36.30%
-------------------------------
Since inception (5/97) 30.40%
-------------------------------
The fund's return for the six-month period ended 6/30/98, was 23.46%. During
the same time period, the S&P 500 Index returned 17.63%.(1),(2)
The dominant theme in the portfolio remains large-capitalization
pharmaceuticals, which produced significant gains for the fund in the last six
months. These companies are benefiting from an improved regulatory environment
and strong new product pipelines. The Food & Drug Administration (FDA) has
dramatically cut the approval time for new drugs. This has improved the
profitability of large-cap pharmaceuticals, since new drugs sales typically
drive their revenue and earnings growth. Not only are new drugs coming to the
market sooner, but better-educated consumers are increasing the demand for these
new products.
<PAGE>
Medical devices and supplies have also produced strong returns for the fund.
Like the pharmaceutical industry, this area has high barriers to entry, and
profits are somewhat protected by patents.
Graph:
This line graph represents a comparison of the value of a $10,000 investment
in VIF-Health Sciences Fund 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 (5/97) through 6/30/98.
Looking forward, the health care sector should be a major engine of growth
for world economies in years to come. We will continue to focus a substantial
portion of the fund's assets on market-leading pharmaceuticals, as these
companies are positioned to benefit from dominant market positions, an improved
regulatory environment, and strong new product pipelines. As long as interest
rates remain relatively stable, the technical underpinnings for the health care
sector should remain positive.
Fund Management
VIF--Health Sciences Portfolio is managed by INVESCO Senior Vice President
John R. Schroer, a Chartered Financial Analyst. He started his investment career
in 1989, after earning an MBA and BA from the University of Wisconsin.
VIF--Small Company Growth Fund
VIF-Small Company Growth Fund
Total Return from Inception
through 6/30/98 (1)
Since inception (8/97) 9.30%
-----------------------------
The fund's return for the six-month period ended 6/30/98, was 10.29%. During
the same time period, the Russell 2000 Index returned 4.93%.(1),(2)
The fund invests in companies with market capitalization of a billion
dollars or less at purchase, which have the potential to grow their earnings
faster than the small-cap market in general. Our strategy focuses on the
faster-growing sectors of the economy, including health care, technology, and
consumer cyclicals -- although fund performance is typically driven by
individual stock selection.
<PAGE>
Although returns were strong by historical measures during the last year, we
continue to witness the underperformance of small-capitalization stocks compared
to large-cap issues, maintaining a trend established three and a half years ago.
This situation may persist until investors become less concerned about
liquidity, and focus more on stocks that are inexpensive relative to their
growth rates. When this happens, we could enter a prolonged period of time in
which small-cap stocks significantly outperform.
During the last six months, we focused the fund on the fastest-growing
companies. Our strategy has skewed the portfolio towards consumer cyclical,
finance, health care, and technology companies, while avoiding firms that derive
a significant portion of their revenue from Asian/Pacific Rim economies. Some of
the strongest returns for the fund were produced by stocks from retailers.
Graph:
This line graph represents a comparison of the value of a $10,000 investment
in VIF-Small Company Growth Fund to the value of a $10,000 investment in the
Russell 2000 Index, assuming in each case reinvestment of all dividends and
capital gain distributions, for the period from inception (8/97) through
6/30/98.
The fund also benefited from its exposure to outsourcing vendors over the
last six months, an area which will continue to be a dominant theme in the
portfolio. As firms focus on becoming more efficient and profitable, outsourcing
non-critical operations to outside vendors has increased in popularity.
Fund Management
Stacie L. Cowell is the lead portfolio manager of VIF--Small Company Growth
Fund. She earned her BA in Economics from Colgate University and is a Chartered
Financial Analyst. Prior to joining INVESCO, Stacie was a senior equities
analyst with Founders Asset Management, and a capital markets and trading
analyst with Chase Manhattan Bank. She is assisted by co-managers Tim J. Miller
and Trent E. May.
Tim, a senior vice president, heads up our growth investment team. He
received his MBA from the University of Missouri, and a BSBA from St. Louis
University. A 19-year veteran of the investment business, he is a Chartered
Financial Analyst. Before joining INVESCO in 1992, Tim was an analyst and
portfolio manager with Mississippi Valley Advisors.
Trent, a vice president, received a BS from the Florida Institute of
Technology and an MBA from Rollins College. Before joining INVESCO in 1996,
Trent was a senior equity manager/equity analyst with Munder Capital Management.
He is a Chartered Financial Analyst.
<PAGE>
VIF--Technology Fund
VIF-Technology Fund
Average Annualized Total Return
as of 6/30/98 (1)
1 Year 36.80%
---------------------------------
Since inception 30.81%
---------------------------------
The fund's return for the six-month period ended 6/30/98, was 19.16%. During
the same time period, the S&P 500 Index returned 17.63%.(1),(2)
The fund invests in the fastest-growing companies in the technology sector.
We believe that these industries will be a major engine of expansion for the
U.S. and world economies in coming years. Although short-term volatility is
likely, the dynamic potential for long-term growth remains bright.
We have remained fairly conservative with the fund's investments over the
last six months. The Asian financial crisis, which began in the summer of 1997,
increased investment risk associated with this sector, as many technology firms
derive a significant portion of their revenue from the Asian/Pacific Rim region.
In response to this uncertain environment, we have focused holdings in companies
that can benefit from continued economic strength in the U.S. and Europe, while
avoiding those that rely on revenue from Asia. This strategy concentrates the
portfolio on market-leading companies with defensible positions in the software,
services, computing and specialty technology fields, while avoiding
semiconductor stocks.
Graph:
This line graph represents a comparison of the value of a $10,000
investment in VIF-Technology Fund 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 (5/97) through
6/30/98.
Looking forward, the Asian financial crisis will probably continue to cause
extreme volatility on a day-to-day basis. Paradoxically, the crisis may improve
the earnings of selected technology companies which manufacture or buy their
products in the Asian/Pacific Rim region, but sell these products in the U.S. or
Europe -- as their cost of production has decreased. After the Asian crisis
passes, we believe that the technology sector will re-establish itself as one of
the preeminent drivers of growth for the world's economies. This sector
continues to produce better products at lower prices each year, enhancing the
availability of technology for everyone.
<PAGE>
Fund Management
VIF--Technology Fund is co-managed by Senior Vice President Daniel B.
Leonard and Vice President Gerard Hallaren. Dan's experience in investment
management extends back to 1960. He joined INVESCO in 1975 and is now a senior
vice president. He attended the New York University Graduate School of Business
and holds a BA from Washington & Lee University. Gerard, who joined INVESCO in
1994, earned his BA from the University of Massachusetts at Amherst and is a
Chartered Financial Analyst.
VIF--Realty Fund
VIF-Realty Fund
Total Return from Inception
through 6/30/98 (1)
Since inception (4/98) -5.00%
-----------------------------
In its limited performance history, the fund posted a loss of -5.00% from
inception (4/98) through 6/30/98. During the same time period, the NAREIT
Composite posted a loss of -1.48%.
Despite the short-term disappointments, we believe that the outlook for
REITs remains bright. While a flood of new IPOs and secondary stock offerings in
1997 caused some short-term price constraints, the long-term underpinnings for
this sector remain sound. The fund will continue to diversify across property
and geographic sectors, searching for real estate markets that are improving
fundamentally.
Graph:
This line graph represents a comparison of the value of a $10,000 investment
in VIF-Realty Fund to the value of a $10,000 investment in the NAREIT Index,
assuming in each case reinvestment of all dividends and capital gain
distributions, for the period from inception (4/98) through 6/30/98.
Fund Management
VIF--Realty Fund's investments are selected by a team of INVESCO Realty
Advisors, Inc. portfolio managers who are collectively responsible for the
investment decisions relating to the fund.
(1)Total return assumes reinvestment of dividends and capital gain distributions
for the periods indicated. Investment return and principal value will fluctuate
so that, when redeemed, an investor's shares may be worth more or less than when
purchased.
<PAGE>
(2)The S&P 500 is an unmanaged index considered representative of the
performance of the broad U.S. stock market. The S&P MidCap 400 is an unmanaged
index indicative of domestic mid-capitalization stocks. The Russell 2000 is an
unmanaged index indicative of smaller-capitalization stocks, while the Dow Jones
Utilities Index is an unmanaged index of utilities stocks. The Lehman
Government/Corporate Bond and Merrill Lynch High Yield Index are unmanaged
indexes indicative of the broad fixed-income and high-yield markets,
respectively. The NAREIT is an unmanaged index indicative of the U.S. real
estate investment-trust market.
(3)Rankings provided by Lipper Analytical Services, an independent fund analyst,
are based upon total return performance unadjusted for commissions. When
available, rankings are cited for one-, five-, and 10-year periods.
<PAGE>
INVESCO Variable Investment Funds, Inc.
Statement of Investment Securities
June 30, 1998
UNAUDITED
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
Shares, Units
or Principal
Description Amount Value
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
DYNAMICS Portfolio
COMMON STOCKS 100.00%
AUTO PARTS 0.37%
O'Reilly Automotive* 30 $ 1,080
------------
BANKS 3.77%
State Street 50 3,475
Summit Bancorp 45 2,137
Zions Bancorp 100 5,312
------------
10,924
------------
BEVERAGES 0.95%
Coca-Cola Enterprises 70 2,748
------------
BROADCASTING 2.00%
Clear Channel Communications* 40 4,365
Sinclair Broadcast Group Class A* 50 1,438
------------
5,803
------------
CABLE 3.99%
Cox Communications Class A* 50 2,422
TCA Cable TV 50 3,000
Tele-Communications Inc TCI Group Series A* 160 6,150
------------
11,572
------------
COMMUNICATIONS -- EQUIPMENT & MANUFACTURING 3.77%
Aspect Telecommunications* 60 1,642
CIENA Corp* 35 2,437
PairGain Technologies* 65 1,133
Tellabs Inc* 80 5,730
------------
10,942
------------
<PAGE>
COMPUTER RELATED 15.91%
Ascend Communications* 100 4,956
Autodesk Inc 45 1,738
BMC Software* 80 4,155
Bay Networks* 170 5,483
Broderbund Software* 80 1,825
Cisco Systems* 45 4,143
Computer Horizons* 30 1,112
Electronic Arts* 95 5,130
FORE Systems* 100 2,650
HMT Technology* 80 670
Networks Associates* 60 2,872
Parametric Technology* 100 2,712
PeopleSoft Inc* 120 5,640
RealNetworks Inc* 10 373
Remedy Corp* 80 1,360
Symantec Corp* 50 1,306
------------
46,125
------------
CONSUMER FINANCE 0.50%
FIRSTPLUS Financial Group* 40 1,440
------------
ELECTRICAL EQUIPMENT 0.68%
SLI Inc* 75 1,959
------------
ELECTRONICS -- SEMICONDUCTOR 4.49%
KLA-Tencor Corp* 60 1,661
Linear Technology 60 3,619
Maxim Integrated Products* 190 6,021
Xilinx Inc* 50 1,700
------------
13,001
------------
FINANCIAL 2.20%
Edwards (A G) Inc 60 2,561
Northern Trust 50 3,813
------------
6,374
------------
GAMING 1.29%
Midway Games* 40 625
Mirage Resorts* 50 1,066
Sun International Hotels Ltd* 45 2,048
------------
<PAGE>
3,739
------------
HEALTH CARE DRUGS -- PHARMACEUTICALS 2.89%
ALZA Corp* 75 3,244
Watson Pharmaceuticals* 110 5,136
------------
8,380
------------
HEALTH CARE RELATED 3.81%
HBO & Co 160 5,640
Professional Staff PLC Sponsored ADR
Representing Cmn Shrs* 100 1,375
Stryker Corp* 105 4,029
------------
11,044
------------
INSURANCE 2.51%
Nationwide Financial Services Class A 75 3,825
Provident Cos 100 3,450
------------
7,275
------------
INVESTMENT BANK/BROKER FIRM 3.22%
Bear Stearns 50 2,844
Lehman Brothers Holdings 45 3,490
Price (T Rowe) Associates 80 3,005
------------
9,339
------------
LEISURE TIME 3.09%
International Game Technology 140 3,395
Royal Caribbean Cruises Ltd 70 5,565
------------
8,960
------------
MACHINERY 0.63%
Cincinnati Milacron 75 1,823
------------
MANUFACTURING 1.61%
Eaton Corp 60 4,665
------------
OIL & GAS RELATED 7.04%
Apache Corp 75 2,363
BJ Services* 40 1,162
Canadian Occidental Petroleum 120 2,580
<PAGE>
Coflexip SA Sponsored ADR Representing
1/2 Ord Shrs 50 3,056
Cooper Cameron* 75 3,825
EEX Corp* 360 3,375
Global Industries Ltd* 60 1,012
Nabors Industries* 75 1,486
National Energy Group* 190 273
Ocean Energy* 65 1,272
------------
20,404
------------
POLLUTION CONTROL 2.96%
Laidlaw Inc 170 2,072
Republic Services Class A* 100 2,400
USA Waste Services* 83 4,098
------------
8,570
------------
RAILROADS 1.46%
Kansas City Southern Industries 85 4,218
------------
RETAIL 6.28%
Costco Cos* 25 1,577
Home Depot 40 3,323
Meyer (Fred) Inc* 60 2,550
Nordstrom Inc 50 3,862
Tandy Corp 130 6,898
------------
18,210
------------
SAVINGS & LOAN 1.86%
Peoples Heritage Financial Group 120 2,835
Sovereign Bancorp 156 2,550
------------
5,385
------------
SERVICES 9.09%
America Online* 60 6,360
Avis Rent A Car* 50 1,237
Corrections Corp of America* 80 1,880
i2 Technologies* 120 4,215
Keane Inc* 30 1,680
<PAGE>
Omnicom Group 70 3,491
Robert Half International* 75 4,191
Snyder Communications* 75 3,300
------------
26,354
------------
TELECOMMUNICATIONS -- CELLULAR & WIRELESS 2.27%
Millicom International Cellular SA* 50 2,187
NEXTEL Communications Class A* 120 2,985
Western Wireless Class A* 70 1,396
------------
6,568
------------
TELECOMMUNICATIONS -- LONG DISTANCE 3.84%
ADC Telecommunications* 70 2,557
ICG Communications* 85 3,108
Qwest Communications International* 40 1,395
Teleport Communications Group Class A* 75 4,069
------------
11,129
------------
TELEPHONE 5.69%
Century Telephone Enterprises 90 4,129
COLT Telecom Group PLC Sponsored ADR
Representing 4 Ord Shrs* 50 8,175
Intermedia Communications* 100 4,194
------------
16,498
------------
TEXTILE -- APPAREL MANUFACTURING 1.02%
Warnaco Group Class A 70 2,971
------------
TOYS 0.81%
Hasbro Inc 60 2,359
------------
TOTAL INVESTMENT SECURITIES AT VALUE 100.00%
(Cost $239,217#) $ 289,859
============
GROWTH Portfolio
COMMON STOCKS 100.00%
AUTOMOBILES 3.75%
Ford Motor 200 $ 11,800
------------
BANKS 1.38%
<PAGE>
BankAmerica Corp 50 4,322
------------
BEVERAGES 4.08%
Coca-Cola Co 150 12,825
------------
CHEMICALS 4.15%
du Pont (E I) de Nemours 175 13,059
------------
COMMUNICATIONS -- EQUIPMENT &
MANUFACTURING 0.63%
Northern Telecom Ltd 35 1,986
------------
COMPUTER RELATED 12.35%
Dell Computer* 10 928
HNC Software* 80 3,265
Hewlett-Packard Co 150 8,981
International Business Machines 100 11,481
Microsoft Corp* 125 13,547
Veritas Software* 15 621
------------
38,823
------------
ELECTRICAL EQUIPMENT 3.91%
General Electric 135 12,285
------------
ELECTRONICS -- SEMICONDUCTOR 4.37%
Intel Corp 100 7,413
Maxim Integrated Products* 200 6,338
------------
13,751
------------
ENTERTAINMENT 3.34%
Disney (Walt) Co 100 10,506
------------
FINANCIAL 4.65%
Associates First Capital Class A 52 3,997
Fannie Mae 175 10,631
------------
14,628
------------
HEALTH CARE DRUGS -- PHARMACEUTICALS 18.45%
Bristol-Myers Squibb 100 11,494
Johnson & Johnson 155 11,431
Lilly (Eli) & Co 125 8,258
Merck & Co 95 12,706
<PAGE>
Pfizer Inc 130 14,129
------------
58,018
------------
HOUSEHOLD PRODUCTS 6.42%
Colgate-Palmolive Co 100 8,800
Procter & Gamble 125 11,383
------------
20,183
------------
INSURANCE 8.04%
American International Group 90 13,140
Travelers Group 200 12,125
------------
25,265
------------
OIL & GAS RELATED 6.72%
Exxon Corp 150 10,697
Royal Dutch Petroleum New York Registry
1.25 Gldr Shrs 190 10,414
------------
21,111
------------
RETAIL 5.02%
Wal-Mart Stores 260 15,795
------------
SERVICES 1.01%
America Online* 30 3,180
------------
TELECOMMUNICATIONS -- LONG DISTANCE 2.59%
AT&T Corp 100 5,713
WorldCom Inc* 50 2,422
------------
8,135
------------
TELEPHONE 6.63%
Bell Atlantic 220 10,038
SBC Communications 270 10,800
------------
20,838
------------
TOBACCO 2.51%
Philip Morris 200 7,875
------------
TOTAL INVESTMENT SECURITIES AT VALUE 100.00%
(Cost $250,297)
(Cost for Income Tax Purposes $250,414) $ 314,385
============
<PAGE>
HEALTH SCIENCES Portfolio
COMMON STOCKS 62.07%
BIOTECHNOLOGY 3.41%
Emisphere Technologies* 110 $ 1,327
Genentech Inc Special Cmn* 465 31,562
MedImmune Inc* 620 38,673
Sepracor Inc* 50 2,075
------------
73,637
------------
HEALTH CARE -- SERVICES 6.01%
Cognizant Corp* 550 34,650
Columbia/HCA Healthcare 925 26,941
Humana Inc* 500 15,594
McKesson Corp 650 52,812
------------
129,997
------------
HEALTH CARE DRUGS -- PHARMACEUTICALS 39.22%
Abbott Laboratories 995 40,671
ALZA Corp* 110 4,757
American Home Products 1,570 81,247
Bristol-Myers Squibb 715 82,180
Forest Laboratories* 220 7,865
Glaxo Wellcome PLC Sponsored ADR
Representing 2 Ord Shrs 1,020 61,009
ICN Pharmaceuticals 1,052 48,063
Johnson & Johnson 625 46,094
Lilly (Eli) & Co 640 42,280
Merck & Co 615 82,256
Monsanto Co 415 23,188
Novartis AG Registered Shrs 5 8,320
Pfizer Inc 760 82,602
Schering-Plough Corp 870 79,714
Shire Pharmaceuticals Group PLC* 225 1,584
SmithKline Beecham PLC Sponsored ADR
Representing Ord A Shrs 1,245 75,323
Warner-Lambert Co 1,165 80,822
------------
847,975
------------
<PAGE>
MEDICAL EQUIPMENT & DEVICES 13.43%
Allegiance Corp 400 20,500
Beckman Coulter 125 7,281
Becton Dickinson 325 25,228
Guidant Corp 1,145 81,653
IDEXX Laboratories* 335 8,333
Medtronic Inc 1,060 67,575
ResMed Inc* 385 17,542
Sofamor/Danek Group* 720 62,325
------------
290,437
------------
TOTAL COMMON STOCKS
(Cost $1,228,750) 1,342,046
------------
SHORT-TERM INVESTMENTS --
REPURCHASE AGREEMENTS 37.93%
Repurchase Agreement with State Street
dated 6/30/1998 due 7/1/1998 at 5.700%,
repurchased at $820,130 (Collateralized
by US Treasury Bonds due 5/15/2014 at
13.250%, value $846,676) (Cost $820,000) $ 820,000 820,000
------------
TOTAL INVESTMENT SECURITIES AT VALUE 100.00%
(Cost $2,048,750)
(Cost for Income Tax Purposes $2,049,757) $ 2,162,046
============
HIGH YIELD Portfolio
FIXED INCOME SECURITIES 84.47%
Corporate Bonds 84.47%
AIR FREIGHT 1.56%
Stena Line AB, Sr Notes, 10.625%, 6/1/2008 $ 400,000 $ 405,000
TBS Shipping International Ltd, 1st
Pfd Ship Mortgage Notes^ 10.000%, 5/1/2005 $ 250,000 227,813
------------
632,813
------------
BIOTECHNOLOGY 0.72%
Packard BioScience, Sr Sub Notes, Series B,
9.375%, 3/1/2007 $ 300,000 291,000
------------
BROADCASTING 6.45%
American Radio Systems, Gtd Sr Sub Notes,
9.000%, 2/1/2006 $ 350,000 375,375
<PAGE>
Capstar Radio Broadcasting Partners,
Sr Sub Notes, 9.250%, 7/1/2007 $ 250,000 262,500
Cumulus Media, Sr Sub Notes,
10.375%, 7/1/2008 $ 250,000 253,750
EchoStar Communications, Gtd Sr Secured
Discount Step-Up Notes Zero Coupon^^,
6/1/2004 $ 463,000 451,425
Heritage Media, Sr Sub Notes,
8.750%, 2/15/2006 $ 500,000 532,500
JCAC Inc, Gtd Sr Sub Notes,
10.125%, 6/15/2006 $ 250,000 273,437
Jacor Communications, Gtd Sr Sub Notes,
8.000%, 2/15/2010 $ 350,000 353,500
Young Broadcasting, Gtd Sr Sub Notes,
11.750%, 11/15/2004 $ 100,000 110,500
------------
2,612,987
------------
CABLE 2.18%
Diamond Cable Communications PLC, Sr
Discount Step-Up Notes
Zero Coupon^^, 2/15/2007 $ 600,000 442,500
NTL Inc, Sr Deferred Coupon Step-Up Notes,
Series A Zero Coupon^^, 4/15/2005 $ 500,000 442,500
------------
885,000
------------
CHEMICALS 1.06%
Terra Industries, Sr Notes, Series B,
10.500%, 6/15/2005 $ 400,000 431,000
------------
COMMUNICATIONS -- EQUIPMENT &
MANUFACTURING 2.94%
RCN Corp, Sr Discount Step-Up Notes,
Zero Coupon^^ 7/1/2008 $ 1,000,000 593,750
Series B, 2/15/2008 $ 1,000,000 600,000
------------
1,193,750
------------
ELECTRIC UTILITIES 2.11%
Niagara Mohawk Power Sr Discount Step-Up
Notes, Series H, Zero Coupon^^,
7/1/2010 $ 500,000 342,500
Sr Notes, Series G, 7.750%, 10/1/2008 $ 250,000 256,563
Western Massachusetts Electric, 1st
<PAGE>
Mortgage, Series V 7.750%, 12/1/2002 $ 250,000 255,554
------------
854,617
------------
ELECTRICAL EQUIPMENT 0.53%
Alpine Group, Gtd Sr Secured Notes,
Series B, 12.250%, 7/15/2003 $ 200,000 217,000
------------
ENGINEERING & CONSTRUCTION 0.47%
Ryland Group, Sr Sub Notes, 8.250%, 4/1/2008 $ 200,000 192,000
------------
ENTERTAINMENT 1.87%
Empress Entertainment, Sr Sub Notes^,
8.125%, 7/1/2006 $ 250,000 250,625
Production Resource Group LLC/Program
Finance, Sr Sub Notes^
11.500%, 1/15/2008 $ 250,000 243,750
Rio Hotel & Casino, Gtd Sr Sub Notes,
9.500%, 4/15/2007 $ 250,000 261,875
------------
756,250
------------
FOODS 2.03%
Favorite Brands International, Sr Notes^,
10.750%, 5/15/2006 $ 250,000 252,500
Grupo Azucarero Mexico SA de CV, Sr Notes^,
11.500%, 1/15/2005 $ 200,000 171,250
Keebler Corp, Gtd Sr Sub Notes,
10.750%, 7/1/2006 $ 350,000 397,250
------------
821,000
------------
GAMING 2.81%
Aztar Corp, Sr Sub Notes,
13.750%, 10/1/2004 $ 350,000 397,250
Circus Circus Enterprises, Sr Sub Notes,
6.750%, 7/15/2003 $ 250,000 241,596
Station Casinos, Sr Sub Notes,
9.625%, 6/1/2003 $ 250,000 258,750
Trump Atlantic City Association/Trump
Atlantic City Funding Gtd Secured
1st Mortgage Notes, 11.250%, 5/1/2006 $ 250,000 242,500
------------
1,140,096
------------
<PAGE>
HEALTH CARE DRUGS -- PHARMACEUTICALS 0.98%
Home Products International, Sr Sub
Notes^,
9.625%, 5/15/2008 $ 400,000 398,000
------------
HOUSEHOLD FURNITURE & APPLIANCES 0.76%
Home Interiors & Gifts, Sr Sub Notes^,
10.125%, 6/1/2008 $ 300,000 306,375
------------
IRON & STEEL 3.44%
Inland Steel, 1st Mortgage, Series R,
7.900%, 1/15/2007 $ 500,000 500,000
Metal Management, Sr Sub Notes^,
10.000%, 5/15/2008 $ 400,000 394,000
National Steel, 1st Mortgage,
8.375%, 8/1/2006 $ 500,000 500,000
------------
1,394,000
------------
LEISURE TIME 1.81%
Bally Total Fitness Holdings, Sr Sub Notes,
Series B 9.875%, 10/15/2007 $ 500,000 515,000
Players International, Sr Notes,
10.875%, 4/15/2005 $ 200,000 216,750
------------
731,750
------------
LODGING -- HOTELS 1.82%
Hilton Hotels, Sr Notes,
7.200%, 12/15/2009 $ 500,000 492,807
Signature Resorts, Sr Sub Notes,
9.750%, 10/1/2007 $ 250,000 243,750
------------
736,557
------------
MANUFACTURING 0.62%
Simonds Industries, Sr Sub Notes^,
10.250%, 7/1/2008 $ 250,000 250,000
------------
METALS MINING 2.23%
Glencore Nickel Property Ltd, Gtd Sr
Secured Notes 9.000%, 12/1/2014 $ 350,000 337,750
Haynes International, Sr Notes,
11.625%, 9/1/2004 $ 500,000 565,000
------------
902,750
------------
<PAGE>
NATURAL GAS 0.35%
Noram Energy, Conv Sub Deb,
6.000%, 3/15/2012 $ 150,000 141,750
------------
OIL & GAS RELATED 10.27%
Belco Oil & Gas, Sr Sub Notes, Series B,
8.875%, 9/15/2007 $ 400,000 387,000
Canadian Forest Oil Ltd, Gtd Sr Sub Notes,
8.750%, 9/15/2007 $ 400,000 392,283
Chiles Offshore LLC/Chiles Offshore
Finance, Sr Notes^ 10.000%, 5/1/2008 $ 250,000 240,625
Cliffs Drilling, Gtd Sr Notes, Series B,
10.250%, 5/15/2003 $ 350,000 369,250
Coda Energy, Gtd Sr Sub Notes,
Series B, 10.500%, 4/1/2006 $ 250,000 262,500
Cross Timbers Oil, Sr Sub Notes,
Series B, 9.250%, 4/1/2007 $ 250,000 256,562
Energy Corp of America, Sr Sub Notes,
Series A, 9.500%, 5/15/2007 $ 250,000 245,000
Gulfmark Offshore, Sr Notes^,
8.750%, 6/1/2008 $ 250,000 242,500
Houston Exploration, Sr Sub Notes^,
8.625%, 1/1/2008 $ 250,000 250,000
KCS Energy, Gtd Sr Sub Notes,
8.875%, 1/15/2008 $ 350,000 332,500
Northern Offshore ASA, Gtd Sr Notes^,
10.000%, 5/15/2005 $ 500,000 477,500
Nuevo Energy, Sr Sub Notes^,
8.875%, 6/1/2008 $ 200,000 203,500
Petsec Energy, Sr Sub Notes, Series B,
9.500%, 6/15/2007 $ 250,000 252,500
Stone Energy, Gtd Sr Sub Notes,
8.750%, 9/15/2007 $ 250,000 251,875
------------
4,163,595
------------
PAPER & FOREST PRODUCTS 1.31%
Ainsworth Lumber Ltd, Sr Secured Notes,
12.500%, 7/15/2007 $ 200,000 215,000
Tembec Finance, Gtd Sr Notes,
9.875%, 9/30/2005 $ 300,000 317,250
------------
532,250
------------
<PAGE>
PUBLISHING 2.45%
Affiliated Newspaper Investments,
Sr Discount Step-Up Notes
Zero Coupon^^, 7/1/2006 $ 1,000,000 992,500
------------
REAL ESTATE RELATED 0.87%
LNR Property, Sr Sub Notes^,
9.375%, 3/15/2008 $ 350,000 350,875
------------
SAVINGS & LOAN 1.18%
Western Financial Savings Bank, Sub
Capital Deb, 8.875%, 8/1/2007 $ 500,000 476,863
------------
SERVICES 2.35%
APCOA Inc, Sr Sub Notes^,
9.250%, 3/15/2008 $ 200,000 198,500
Brill Media LLC/Brill Media Management
Appreciation Notes (Exp 2007) $ 7,143 1
Gtd Sr Step-Up Notes, Series B,
7.500%^^, 12/15/2007 $ 250,000 235,000
United Rentals, Sr Sub Notes^,
9.500%, 6/1/2008 $ 500,000 520,000
------------
953,501
------------
SHIPPING 0.64%
Navigator Gas Transport PLC, 1st
Priority Ship Mortgage Notes^
10.500%, 6/30/2007 $ 250,000 260,625
------------
SPECIALTY PRINTING 0.26%
MDC Communications, Sr Sub Notes,
10.500%, 12/1/2006 $ 100,000 105,000
------------
TELECOMMUNICATIONS -- CELLULAR &
WIRELESS 7.26%
Centennial Cellular, Sr Notes,
10.125%, 5/15/2005 $ 550,000 616,000
Esat Holdings Ltd, Sr Deferred Coupon
Step-Up Notes, Series B
Zero Coupon^^, 2/1/2007 $ 650,000 477,750
NEXTEL Communications, Sr Discount
Step-Up Notes, Zero Coupon^^
8/15/2004 $ 500,000 487,500
10/31/2007 $ 250,000 162,500
<PAGE>
Price Communications Wireless, Sr
Secured Notes^ 9.125%, 12/15/2006 $ 250,000 249,688
Teligent Inc
Sr Discount Step-Up Notes^, Zero Coupon^^,
3/1/2008 $ 500,000 275,625
Sr Notes, 11.500%, 12/1/2007 $ 250,000 252,500
Triton PCS, Sr Sub Discount Step-Up Notes^,
Zero Coupon^^ 5/1/2008 $ 750,000 421,875
------------
2,943,438
------------
TELECOMMUNICATIONS -- LONG DISTANCE 15.92%
Barak International Telecommunications
Services, Sr Sub Discount Step-Up Notes,
Series B, Zero Coupon^^, 11/15/2007 $ 500,000 300,000
Esprit Telecom Group PLC, Sr Notes,
11.500%, 12/15/2007 $ 250,000 257,500
fONOROLA Inc, Gtd Sr Secured Notes,
12.500%, 8/15/2002 $ 250,000 276,875
GCI Inc, Sr Notes, 9.750%, 8/1/2007 $ 395,000 414,750
GST Telecommunications/GST Network Funding
Sr Secured Discount Step-Up Notes^,
Zero Coupon^^, 5/1/2008 $ 500,000 300,000
IDT Corp, Sr Notes^, 8.750%, 2/15/2006 $ 500,000 480,000
IXC Communications, Sr Sub Notes^,
9.000%, 4/15/2008 $ 250,000 250,625
Level 3 Communications, Sr Notes^,
9.125%, 5/1/2008 $ 1,000,000 973,750
McLeodUSA Inc
Sr Discount Step-Up Notes^, Zero Coupon^^,
3/1/2007 $ 445,000 331,525
Sr Notes, 9.250%, 7/15/2007 $ 250,000 259,375
Sr Notes, 8.375%, 3/15/2008 $ 250,000 250,625
NEXTLINK Communications
Sr Discount Step-Up Notes^,
Zero Coupon^^, 4/15/2008 $ 500,000 305,625
Sr Notes, 9.625%, 10/1/2007 $ 250,000 256,250
NEXTLINK Communications LLC/NEXTLINK
Capital, Sr Notes
12.500%, 4/15/2006 $ 750,000 851,250
Primus Telecommunications Group,
Sr Notes^, 9.875%, 5/15/2008 $ 250,000 245,000
Qwest Communications International,
Sr Discount Step-Up Notes^
Zero Coupon^^, 2/1/2008 $ 350,000 252,000
<PAGE>
RSL Communications PLC, Sr Discount
Step-Up Notes^
Zero Coupon^^, 3/1/2008 $ 750,000 446,250
------------
6,451,400
------------
TELEPHONE 5.22%
Intermedia Communications
Sr Notes^, 8.600%, 6/1/2008 $ 250,000 253,125
Sr Notes, Series B, 8.500%, 1/15/2008 $ 500,000 500,000
MetroNet Communications
Sr Discount Step-Up Notes, Zero Coupon^^,
11/1/2007 $ 500,000 328,125
Sr Discount Step-Up Notes^, Zero Coupon^^,
6/15/2008 $ 850,000 520,538
Sr Notes, 12.000%, 8/15/2007 $ 250,000 281,875
Netia Holdings BV, Gtd Sr Discount
Step-Up Notes, Series B
Zero Coupon^^, 11/1/2007 $ 350,000 231,000
------------
2,114,663
------------
TOTAL FIXED INCOME SECURITIES
(Cost $34,352,158) 34,233,405
------------
PREFERRED STOCKS & WARRANTS 0.95%
PUBLISHING 0.84%
PRIMEDIA Inc, Exchangeable Pfd^,
Series G, 8.625% 3,500 340,375
TELECOMMUNICATIONS--- CELLULAR &
WIRELESS 0.08%
Microcell Telecommunications Warrants*^
(Exp 2006) 2,000 33,000
------------
TELEPHONE 0.03%
MetroNet Communications Warrants*^
(Exp 2007) 250 12,000
------------
TOTAL PREFERRED STOCKS & WARRANTS
(Cost $363,095) 385,375
------------
OTHER SECURITIES 6.85%
COMPUTER RELATED 1.99%
Rhythms NetConnections, Units^ (Each
unit consists of one $1,000
face amount Sr Discount Step-Up Note,
Zero Coupon^^ 5/15/2008 and 4 wrnts
to purchase 6.80 shrs of cmn stk) 1,000 490,000
<PAGE>
Wam!Net Inc, Units^
(Each unit consists of one $1,000 face amount
Sr Discount Step-Up Note, Zero Coupon^^, 3/1/2005
and 3 wrnts to purchase 6.03 shrs of cmn stk) 500 315,000
------------
805,000
------------
GAMING 0.34%
Aladdin Gaming Holdings LLC/Aladdin Capital, Units^
(Each unit consists of one
$1,000 face amount Sr Discount
Step-Up Note, Zero Coupon^^, 3/1/2010 and 10
wrnts to purchase 10 shrs of Class B cmn stk) 300 139,500
------------
SERVICES 0.44%
Spin Cycle, Units^ (Each unit consists
of one $1,000 face amount Sr Discount
Step-Up Note, Zero Coupon^^, 5/1/2005 and one wrnt
to purchase 0.18 shrs of cmn stk) 250 177,500
------------
TELECOMMUNICATIONS -- CELLULAR & WIRELESS 0.81%
American Mobile Satellite/AMSC Acquisition,
Units^ (Each unit consists of one $1,000
face amount Sr Note, 12.250%, 4/1/2008
and one wrnt to purchase 3.76 shrs of cmn stk) 350 329,000
------------
TELECOMMUNICATIONS -- LONG DISTANCE 2.44%
DTI Holdings, Units^ (Each unit consists of one
$1,000 face amount Sr Discount Step-Up Note,
Zero Coupon^^, 3/1/2008 and 5 wrnts to
purchase 7.76 shrs of cmn stk) 750 405,000
FirstWorld Communications, Units^
(Each unit consists of one $1,000 face amount
Sr Discount Step-Up Note, 13.000%, 4/15/2008 and
one wrnt to purchase 7.90 shrs of Series B cmn stk) 1,000 440,000
STARTEC Global Communications, Units^
(Each unit consists of one $1,000 face amount
Sr Note, 12.000%, 5/15/2008 and one wrnt to
purchase 1.25 shrs of cmn stk) 150 145,500
------------
990,500
------------
<PAGE>
TELEPHONE 0.83%
Convergent Communications, Units^
(Each unit consists of one $1,000 face amount
Sr Note, 13.000%, 4/1/2008 and 4 wrnts to purchase
10.80 shrs of cmn stk) 350 336,000
------------
TOTAL OTHER SECURITIES
(Cost $3,010,359) 2,777,500
------------
SHORT-TERM INVESTMENTS --
REPURCHASE AGREEMENTS 7.73%
Repurchase Agreement with State Street dated
6/30/1998 due 7/1/1998 at 5.700%,
repurchased at $3,132,496 (Collateralized by
US Treasury Bonds due 2/15/2015
at 11.250%, value
$3,215,516) (Cost $3,132,000) $ 3,132,000 3,132,000
------------
TOTAL INVESTMENT SECURITIES AT VALUE 100.00%
(Cost $40,857,612)
(Cost for Income Tax Purposes $40,857,625) $ 40,528,280
============
INDUSTRIAL INCOME Portfolio
COMMON STOCKS 73.14%
AEROSPACE & DEFENSE 1.45%
Howmet International* 25,000 $ 375,000
Northrop Grumman 4,000 412,500
------------
787,500
------------
AIRLINES 1.66%
KLM Royal Dutch Airlines New York
Registered Shrs 22,000 900,625
------------
AUTOMOBILES 0.48%
Ford Motor 2,000 118,000
General Motors Class H* 3,000 141,375
------------
259,375
------------
BANKS 7.73%
Bank of New York 10,000 606,875
Citicorp 3,500 522,375
First Tennessee National 20,000 631,250
Fleet Financial Group 6,100 509,350
<PAGE>
Mellon Bank 10,000 696,250
NationsBank Corp 6,700 512,550
Summit Bancorp 15,000 712,500
------------
4,191,150
------------
BEVERAGES 0.70%
Anheuser-Busch Cos 8,000 377,500
------------
BIOTECHNOLOGY 1.03%
MedImmune Inc* 9,000 561,375
------------
CHEMICALS 0.66%
Agrium Inc 15,000 189,375
Olin Corp 4,000 166,750
------------
356,125
------------
COMMUNICATIONS -- EQUIPMENT &
MANUFACTURING 0.78%
Motorola Inc 8,000 420,500
------------
COMPUTER RELATED 2.04%
Edwards (J D) & Co* 6,500 279,094
International Business Machines 7,200 826,650
------------
1,105,744
------------
ELECTRIC UTILITIES 0.68%
Interstate Energy 11,400 370,500
------------
ELECTRICAL EQUIPMENT 1.79%
Emerson Electric 7,000 422,625
General Electric 6,000 546,000
------------
968,625
------------
ELECTRONICS -- SEMICONDUCTOR 1.80%
Applied Materials* 13,300 392,350
Texas Instruments 10,000 583,125
------------
975,475
------------
FOODS 6.67%
General Mills 10,000 683,750
<PAGE>
Heinz (H J) Co 9,725 545,816
Kellogg Co 10,000 375,625
Quaker Oats 10,000 549,375
Ralston-Purina Group 7,000 817,687
Tasty Baking 41,250 641,953
------------
3,614,206
------------
GOLD & PRECIOUS METALS MINING 0.30%
Newmont Mining 7,000 165,375
------------
HEALTH CARE DRUGS -- PHARMACEUTICALS 7.85%
Abbott Laboratories 8,000 327,000
American Home Products 12,000 621,000
Bristol-Myers Squibb 4,400 505,725
Merck & Co 7,000 936,250
Monsanto Co 9,700 541,987
Novo-Nordisk A/S Sponsored ADR
Representing 1/2 Class B Shrs* 5,000 344,063
Pfizer Inc 4,000 434,750
SmithKline Beecham PLC Sponsored ADR
Representing 5 Ord Shrs 9,000 544,500
------------
4,255,275
------------
HEALTH CARE RELATED 0.57%
Becton Dickinson 4,000 310,500
------------
HOUSEHOLD PRODUCTS 0.45%
Colgate-Palmolive Co 2,800 246,400
------------
INSURANCE 5.13%
Allmerica Financial 15,000 975,000
Chubb Corp 8,000 643,000
Lincoln National 3,000 274,125
Ohio Casualty 8,000 354,000
Travelers Property Casualty Class A 12,500 535,938
------------
2,782,063
------------
INVESTMENT BANK/BROKER FIRM 1.01%
Morgan Stanley Dean Witter Discover & Co 6,000 548,250
------------
LODGING -- HOTELS 1.26%
Hilton Hotels 24,000 684,000
------------
<PAGE>
MANUFACTURING 2.17%
AlliedSignal Inc 12,000 532,500
Textron Inc 9,000 645,188
------------
1,177,688
------------
OIL & GAS RELATED 4.92%
Apache Corp 15,000 472,500
Chevron Corp 5,000 415,312
Exxon Corp 8,000 570,500
Phillips Petroleum 5,000 240,937
USX-Marathon Group 10,000 343,125
Union Pacific Resources Group 5,000 87,813
Unocal Corp 15,000 536,250
------------
2,666,437
------------
PAPER & FOREST PRODUCTS 0.49%
Fort James 6,000 267,000
------------
POLLUTION CONTROL 0.97%
Republic Services Class A* 22,000 528,000
------------
RAILROADS 1.24%
Kansas City Southern Industries 13,500 669,937
------------
REAL ESTATE INVESTMENT TRUST 0.22%
Patriot American Hospitality 4,998 119,640
------------
RETAIL 5.04%
Dayton Hudson 16,000 776,000
May Department Stores 6,000 393,000
Penney (J C) Co 3,000 216,938
Proffitt's Inc* 13,600 549,100
Tandy Corp 15,000 795,938
------------
2,730,976
------------
SAVINGS & LOAN 3.36%
Ahmanson (H F) & Co 8,000 568,000
Charter One Financial 20,500 690,594
St Paul Bancorp 25,000 564,844
------------
1,823,438
------------
<PAGE>
SERVICES 4.19%
Ceridian Corp* 11,000 646,250
First Data 15,000 499,687
Galileo International 25,000 1,126,562
------------
2,272,499
------------
TELEPHONE 5.32%
Ameritech Corp 6,000 269,250
Bell Atlantic 16,144 736,570
BellSouth Corp 8,000 537,000
GTE Corp 8,500 472,812
SBC Communications 10,000 400,000
US WEST 10,000 470,000
------------
2,885,632
------------
TRUCKERS 1.18%
CNF Transportation 15,000 637,500
------------
TOTAL COMMON STOCKS
(Cost $31,987,655) 39,659,310
------------
FIXED INCOME SECURITIES 19.13%
US Government Obligations 0.49%
US Teasury Notes, 6.500%, 5/15/2005
(Cost $256,405) $ 250,000 263,906
US Government Agency Obligations 2.35%
Freddie Mac, Gold, Participation
Certificates, 6.500%, 8/1/2011
(Cost $1,239,312) $ 1,267,789 1,276,804
------------
Corporate Bonds 16.29%
AUTOMOBILES 0.19%
General Motors Acceptance, Medium-Term
Notes, 6.700%, 4/25/2001 $ 100,000 101,611
------------
BROADCASTING 1.05%
CBS Inc, Sr Deb, 8.875%, 6/1/2022 $ 300,000 324,595
Clear Channel Communications, Notes,
6.625%, 6/15/2008 $ 250,000 248,001
------------
572,596
------------
<PAGE>
BUILDING MATERIALS 1.02%
USG Corp, Sr Notes, 8.500%, 8/1/2005 $ 500,000 555,900
------------
CABLE 0.55%
Continental Cablevision, Sr Deb,
9.500%, 8/1/2013 $ 250,000 297,708
------------
COMMUNICATIONS -- EQUIPMENT &
MANUFACTURING 0.44%
RCN Corp, Sr Discount Step-Up Notes,
Zero Coupon^^, 7/1/2008 $ 400,000 237,500
------------
ELECTRIC UTILITIES 4.34%
Boston Edison, Deb, 7.800%, 5/15/2010 $ 250,000 275,733
Carolina Power & Light, 1st Mortgage,
6.875%, 8/15/2023 $ 250,000 253,723
Cleveland Electric Illuminating,
1st Mortgage, 8.375%, 8/1/2012 $ 150,000 154,425
Consumers Energy, 1st & Refunding Mortgage,
7.375%, 9/15/2023 $ 500,000 523,771
DQU-II Funding, Collateral Lease,
8.700%, 6/1/2016 $ 200,000 223,916
Jersey Central Power & Light, 1st Mortgage,
6.750%, 11/1/2025 $ 200,000 198,250
New York State Electric & Gas, 1st Mortgage,
8.300%, 12/15/2022 $ 200,000 216,294
PSI Energy, Deb, 6.350%, 11/15/2006 $ 250,000 253,461
Western Massachusetts Electric, 1st
Mortgage, Series V 7.750%, 12/1/2002 $ 250,000 255,554
------------
2,355,127
------------
GAMING 0.48%
Station Casinos, Sr Sub Notes,
9.625%, 6/1/2003 $ 250,000 258,750
------------
HEALTH CARE DRUGS -- PHARMACEUTICALS 0.26%
McKesson Corp, Sub Deb, 4.500%, 3/1/2004 $ 150,000 139,939
------------
INSURANCE 0.53%
Equitable Cos, Sr Notes, 9.000%, 12/15/2004 $ 250,000 286,840
------------
LODGING -- HOTELS 0.45%
Hilton Hotels, Sr Notes, 7.200%, 12/15/2009 $ 250,000 246,403
------------
<PAGE>
METALS MINING 0.21%
Haynes International, Sr Notes,
11.625%, 9/1/2004 $ 100,000 113,000
------------
OIL & GAS RELATED 2.52%
Atlantic Richfield, Deb,
10.875%, 7/15/2005 $ 500,000 635,595
Belco Oil & Gas, Sr Sub Notes, Series B,
8.875%, 9/15/2007 $ 150,000 145,125
Coda Energy, Gtd Sr Sub Notes, Series B,
10.500%, 4/1/2006 $ 100,000 105,000
Cross Timbers Oil, Sr Sub Notes, Series B,
9.250%, 4/1/2007 $ 200,000 205,250
Gulf Canada Resources Ltd, Sr Notes,
8.350%, 8/1/2006 $ 250,000 273,743
------------
1,364,713
------------
PUBLISHING 0.18%
Affiliated Newspaper Investments,
Sr Discount Step-Up Notes
Zero Coupon^^, 7/1/2006 $ 100,000 99,250
------------
RETAIL 0.47%
Federated Department Stores, Sr Deb,
6.790%, 7/15/2027 $ 250,000 257,822
TELECOMMUNICATIONS-- CELLULAR &
WIRELESS 1.12%
360 Communications, Sr Notes,
7.600%, 4/1/2009 $ 250,000 271,290
Centennial Cellular, Sr Notes
10.125%, 5/15/2005 $ 145,000 162,400
8.875%, 11/1/2001 $ 165,000 171,394
------------
605,084
------------
TELECOMMUNICATIONS -- LONG DISTANCE 0.83%
Level 3 Communications, Sr Notes^,
9.125%, 5/1/2008 $ 250,000 243,437
NEXTLINK Communications, Sr Notes,
9.625%, 10/1/2007 $ 200,000 205,000
------------
448,437
------------
TELEPHONE 1.65%
<PAGE>
Centel Capital, Deb, 9.000%, 10/15/2019 $ 250,000 317,349
Frontier Corp, Notes, 7.250%, 5/15/2004 $ 250,000 263,561
Intermedia Communications, Sr Notes,
8.500%, 1/15/2008 $ 200,000 200,000
MetroNet Communications, Sr Notes,
12.000%, 8/15/2007 $ 100,000 112,750
------------
893,660
------------
TOTAL CORPORATE BONDS
(Cost $8,745,073) 8,834,340
------------
TOTAL FIXED INCOME SECURITIES
(Cost $10,240,790) 10,375,050
------------
SHORT-TERM INVESTMENTS --
REPURCHASE AGREEMENTS 7.73%
Repurchase Agreement with State Street
dated 6/30/1998 due 7/1/1998 at 5.700%,
repurchased at $4,189,664 (Collateralized
by US Treasury Bonds due 11/15/2016
at 7.500%, value $4,302,186)
(Cost $4,189,000) $ 4,189,000 4,189,000
------------
TOTAL INVESTMENT SECURITIES AT VALUE 100.00%
(Cost $46,417,445#) $ 54,223,360
============
REALTY Portfolio
COMMON STOCKS 100.00%
FINANCIAL 2.38%
AMRESCO Inc* 300 $ 8,737
------------
LEISURE TIME 0.71%
American Skiing* 200 2,600
------------
LODGING -- HOTELS 0.67%
Bristol Hotels* 100 2,450
------------
REAL ESTATE INVESTMENT TRUST 93.90%
American General Hospitality 600 12,750
Apartment Investment & Management Class A 125 4,937
Arden Realty Group 700 18,112
Avalon Bay Communities 100 3,800
Bedford Property Investors 250 4,562
<PAGE>
CarrAmerica Realty 450 12,769
Catellus Development* 260 4,599
Cornerstone Properties 200 3,525
EastGroup Properties SBI 175 3,511
Equity Office Properties Trust SBI 300 8,513
Equity Residential Properties Trust SBI 100 4,744
Essex Property Trust 300 9,300
Federal Realty Investment Trust SBI 100 2,406
FelCor Suite Hotels 200 6,275
First Industrial Realty Trust 435 13,838
Gables Residential Trust SBI 100 2,713
General Growth Properties 200 7,475
Glenborough Realty Trust 200 5,275
Highwoods Properties 500 16,156
Home Properties of New York 200 5,338
IRT Property 200 2,200
Liberty Property Trust SBI 400 10,225
Mack-Cali Realty 390 13,406
Meditrust Corp Paired Certificates 100 2,794
Meridian Industrial Trust 100 2,300
Mid-America Apartment Communities 100 2,631
Mid-Atlantic Realty Trust 300 3,694
Pan Pacific Retail Properties 200 4,075
Patriot American Hospitality 650 15,559
Philips International Realty* 100 1,650
Prentiss Properties Trust 600 14,588
Prime Group Realty Trust 400 6,850
Public Storage 300 8,400
Reckson Associates Realty 200 4,725
Regency Realty 300 7,538
Rouse Co 215 6,759
SL Green Realty 300 6,750
Simon DeBartolo Group 200 6,500
Smith (Charles E) Residential Realty 100 3,200
Starwood Lodging Trust SBI 450 21,741
Storage USA 100 3,500
Sunstone Hotel Investors 575 7,655
Tower Realty Trust 250 5,594
TriNet Corporate Realty Trust 200 6,800
Urban Shopping Centers 150 4,725
Vornado Realty Trust SBI 300 11,906
Weeks Corp 250 7,906
------------
344,269
------------
<PAGE>
REAL ESTATE RELATED 2.34%
Kilroy Realty 225 $ 5,625
Parkway Properties 100 2,950
------------
8,575
------------
TOTAL INVESTMENT SECURITIES AT VALUE 100.00%
(Cost $384,501#) $ 366,631
============
SMALL COMPANY GROWTH Portfolio
COMMON STOCKS 100.00%
AEROSPACE & DEFENSE 1.31%
Aeroflex Inc* 430 $ 4,461
------------
AIR FREIGHT 0.71%
Eagle USA Airfreight* 70 2,428
------------
AUTO PARTS 1.72%
CSK Auto* 90 2,272
O'Reilly Automotive* 100 3,600
------------
5,872
------------
BUILDING MATERIALS 1.22%
Advanced Lighting Technologies* 180 4,185
------------
COMMUNICATIONS -- EQUIPMENT &
MANUFACTURING 6.51%
Aspect Telecommunications* 100 2,737
Comverse Technology* 70 3,631
GeoTel Communications* 75 3,056
Gilat Satellite Networks Ltd* 150 5,016
Natural Microsystems* 125 2,000
NICE-Systems Ltd Sponsored ADR
Representing Ord Shrs* 110 4,125
REMEC Inc* 150 1,706
------------
22,271
------------
COMPUTER RELATED 15.45%
AXENT Technologies* 135 4,134
Aspen Technology* 70 3,535
BEA Systems* 180 4,129
CBT Group PLC Sponsored ADR Representing
<PAGE>
Ord Shrs* 100 5,350
Citrix Systems* 60 4,102
Concord Communications* 150 3,834
Datastream Systems* 150 2,859
Metro Information Services* 100 3,913
Mobius Management Systems* 270 4,050
Peerless Systems* 100 2,075
Peregrine Systems* 150 4,275
QuadraMed Corp* 110 3,004
Saville Systems PLC Sponsored ADR
Representing Ord Shrs* 80 4,010
Wind River Systems* 100 3,588
------------
52,858
------------
CONSUMER FINANCE 1.12%
Metris Cos 60 3,825
------------
CONTAINERS 1.05%
Ivex Packaging* 155 3,604
------------
DISTRIBUTION 2.38%
Daisytek International* 120 3,052
Weider Nutrition International Class A 300 5,100
------------
8,152
------------
ELECTRICAL EQUIPMENT 1.23%
Moog Inc Class A* 110 4,201
------------
ELECTRONICS 2.08%
Aehr Test Systems* 250 1,492
CerProbe Corp* 75 984
Level One Communications* 112 2,632
Mettler-Toledo International* 100 2,006
------------
7,114
------------
ELECTRONICS -- SEMICONDUCTOR 4.52%
Applied Micro Circuits* 180 4,657
Flextronics International Ltd* 40 1,740
QLogic Corp* 75 2,677
SIPEX Corp* 200 4,300
VLSI Technology* 125 2,098
------------
<PAGE>
15,472
------------
ENGINEERING & CONSTRUCTION 0.69%
Willbros Group* 150 2,344
------------
ENTERTAINMENT 1.07%
SFX Entertainment Class A* 80 3,670
------------
FINANCIAL 1.58%
AMRESCO Inc* 100 2,912
Primark Corp* 80 2,505
------------
5,417
------------
FOOTWEAR 0.77%
bebe stores* 200 2,625
------------
HEALTH CARE RELATED 4.16%
HealthCare Financial Partners* 75 4,598
Osteotech Inc* 300 5,325
Sunrise Assisted Living* 125 4,297
------------
14,220
------------
INSURANCE 2.97%
HCC Insurance Holdings 125 2,750
Mercury General 50 3,222
Orion Capital 75 4,191
------------
10,163
------------
LEISURE TIME 2.48%
Bally Total Fitness Holdings* 125 4,500
Intrawest Corp 200 3,988
------------
8,488
------------
LODGING -- HOTELS 0.84%
Prime Hospitality* 165 2,877
------------
OIL & GAS RELATED 4.69%
Key Energy Group* 150 1,969
Newfield Exploration* 150 3,731
Patterson Energy* 180 1,761
Petsec Energy Ltd Sponsored ADR
<PAGE>
Representing 5 Ord Shrs* 200 3,238
Precision Drilling* 100 1,963
Stolt Comex Seaway SA* 120 2,325
Stolt Comex Seaway SA ADR Representing
Class A Shrs* 60 1,050
------------
16,037
------------
PERSONAL CARE 2.96%
Helen of Troy Ltd* 150 3,300
Ocular Sciences* 100 3,250
Playtex Products* 225 3,586
------------
10,136
------------
PHOTOGRAPHY & IMAGING 0.45%
Zomax Optical Media* 100 1,538
------------
POLLUTION CONTROL 1.05%
Allied Waste Industries* 150 3,600
------------
PUBLISHING 0.75%
Petersen Cos Class A* 100 2,563
------------
RETAIL 8.94%
Cost Plus* 130 3,867
Duane Reade* 100 3,000
Family Dollar Stores 200 3,700
Men's Wearhouse* 113 3,713
PETsMART Inc* 270 2,700
Proffitt's Inc* 100 4,038
Stage Stores* 80 3,620
Trans World Entertainment* 60 2,588
Wild Oats Markets* 110 3,341
------------
30,567
------------
SAVINGS & LOAN 1.14%
FirstFed Financial* 75 3,900
------------
SERVICES 18.38%
ACNielsen Corp* 125 3,156
AHL Services* 75 2,953
Alternative Resources* 155 1,918
Atlantic Data Services* 160 3,070
<PAGE>
Boron LePore & Associates* 100 3,800
Concord EFS* 75 1,959
Cotelligent Group* 165 3,857
Diamond Technology Partners Class A* 150 4,537
Harbinger Corp* 150 3,628
INSpire Insurance Solutions* 100 3,325
Integrated Electrical Services* 125 2,516
Interim Services* 110 3,534
Labor Ready* 130 3,924
NCO Group* 172 3,784
NCS HealthCare Class A* 75 2,138
Profit Recovery Group International* 90 2,514
Renaissance Worldwide* 200 4,350
Safeguard Scientifics* 80 3,335
TSI International Software Ltd* 200 4,575
------------
62,873
------------
TELECOMMUNICATIONS -- CELLULAR &
WIRELESS 1.42%
Brightpoint Inc* 180 2,610
Microcell Telecommunications Class B* 250 2,250
------------
4,860
------------
TELECOMMUNICATIONS -- LONG DISTANCE 4.42%
ICG Communications* 120 4,388
IDT Corp* 150 4,509
Lycos Inc* 40 3,015
Pacific Gateway Exchange* 80 3,205
------------
15,117
------------
TEXTILE -- APPAREL MANUFACTURING 1.94%
Quiksilver Inc* 150 2,991
Westpoint Stevens* 110 3,630
------------
6,621
------------
TOTAL INVESTMENT SECURITIES AT VALUE 100.00%
(Cost $307,416#) $ 342,059
============
TECHNOLOGY Portfolio
COMMON STOCKS 63.80%
<PAGE>
COMMUNICATIONS -- EQUIPMENT &
MANUFACTURING 3.25%
DSP Communications* 300 $ 4,125
Pittway Corp Class A 300 22,163
------------
26,288
------------
COMPUTER SOFTWARE & SERVICE 16.12%
Brio Technology* 200 2,675
CBT Group PLC Sponsored ADR
Representing 1/2 Ord Shrs* 400 21,400
Edwards (J D) & Co* 500 21,469
HNC Software* 300 12,244
Micromuse Inc* 1,200 48,975
Software AG Systems* 500 14,625
StarBase Corp* 2,000 3,875
Symantec Corp* 200 5,225
------------
130,488
------------
COMPUTER SYSTEMS 1.64%
Geac Computer Ltd* 400 13,328
------------
COMPUTERS -- HARDWARE 7.32%
Compaq Computer 500 14,187
HMT Technology* 300 2,513
Kentek Information Systems 1,000 8,625
Unisys Corp* 1,200 33,900
------------
59,225
------------
ELECTRONICS -- INSTRUMENTS 4.00%
Franklin Electronic Publishers* 800 8,000
SanDisk Corp* 400 5,525
Uniphase Corp* 300 18,834
------------
32,359
------------
ELECTRONICS -- SEMICONDUCTOR 5.58%
Applied Materials* 200 5,900
LSI Logic* 500 11,531
SIPEX Corp* 500 10,750
Xilinx Inc* 500 17,000
------------
45,181
------------
<PAGE>
HEALTH CARE RELATED 0.62%
Eclipse Surgical Technologies* 500 5,000
------------
LEISURE TIME 2.39%
International Game Technology 800 19,400
------------
PHOTOGRAPHY & IMAGING 1.91%
Zomax Optical Media* 1,005 15,452
------------
RETAIL 3.86%
Software.net Corp* 800 15,300
Tandy Corp 300 15,919
------------
31,219
------------
SERVICES 10.81%
AnswerThink Consulting Group* 1,000 21,500
BISYS Group* 500 20,500
First Data 200 6,662
Harbinger Corp* 750 18,141
Manhattan Associates* 100 2,081
Safeguard Scientifics* 300 12,506
TeleTech Holdings* 500 6,125
------------
87,515
------------
TELECOMMUNICATIONS -- CELLULAR &
WIRELESS 4.62%
AirTouch Communications* 400 23,375
Paging Network* 1,000 14,000
------------
37,375
------------
TELECOMMUNICATIONS -- LONG DISTANCE 1.68%
General Instrument* 500 13,594
------------
TOTAL COMMON STOCKS
(Cost $423,788) 516,424
------------
SHORT-TERM INVESTMENTS --
REPURCHASE AGREEMENTS 36.20%
Repurchase Agreement with State Street
dated 6/30/1998 due 7/1/1998 at 5.700%,
repurchased at $293,046 (Collateralized by
<PAGE>
US Treasury Bonds due 5/15/2014 at 13.250%,
value $301,171)
(Cost $293,000) $ 293,000 293,000
------------
TOTAL INVESTMENT SECURITIES AT VALUE 100.00%
(Cost $716,788)
(Cost for Income Tax Purposes $718,281) $ 809,424
============
TOTAL RETURN Portfolio
COMMON STOCKS 62.49%
AEROSPACE & DEFENSE 2.87%
Boeing Co 4,500 $ 200,531
Lockheed Martin 2,000 211,750
Precision Castparts 5,000 266,875
Raytheon Co Class B 3,500 206,937
------------
886,093
------------
AUTO PARTS 0.78%
Genuine Parts 7,000 241,938
------------
AUTOMOBILES 0.96%
Ford Motor 5,000 295,000
------------
BANKS 4.33%
Comerica Inc 2,850 188,812
First Chicago NBD 2,600 230,425
First Union 3,000 174,750
National City 3,960 281,160
State Street 4,200 291,900
Wachovia Corp 2,000 169,000
------------
1,336,047
------------
BEVERAGES 1.21%
Anheuser-Busch Cos 4,000 188,750
PepsiCo Inc 4,500 185,344
------------
374,094
------------
BUILDING MATERIALS 1.84%
Hanson PLC Sponsored ADR Representing 5 Shrs 10,000 303,125
Sherwin-Williams Co 8,000 265,000
------------
568,125
CHEMICALS 2.27%
Dow Chemical 2,000 193,375
Great Lakes Chemical 7,000 276,062
Morton International 8,000 200,000
Octel Corp* 1,500 29,813
------------
699,250
------------
<PAGE>
COMPUTER RELATED 1.41%
Compaq Computer 10,000 283,750
Hewlett-Packard Co 2,500 149,687
------------
433,437
------------
CONGLOMERATES 0.66%
National Service Industries 4,000 203,500
------------
DISTRIBUTION 0.86%
Supervalu Inc 6,000 266,250
------------
ELECTRIC UTILITIES 3.54%
CINergy Corp 3,700 129,500
Edison International 6,300 186,244
Entergy Corp 10,000 287,500
Texas Utilities 5,000 208,125
Unicom Corp 8,000 280,500
------------
1,091,869
------------
ELECTRICAL EQUIPMENT 0.77%
General Electric 2,600 236,600
------------
ELECTRONICS -- SEMICONDUCTOR 1.56%
Rockwell International 10,000 480,625
------------
FOODS 2.56%
Archer-Daniels-Midland Co 6,452 125,008
General Mills 1,700 116,238
Heinz (H J) Co 3,550 199,244
Kellogg Co 2,600 97,663
Unilever NV New York Shrs 3,200 252,600
------------
790,753
------------
HARDWARE & TOOLS 0.82%
Snap-On Inc 7,000 253,750
------------
<PAGE>
HEALTH CARE DRUGS -- PHARMACEUTICALS 2.77%
Abbott Laboratories 5,000 204,375
American Home Products 3,600 186,300
Bristol-Myers Squibb 2,200 252,862
Lilly (Eli) & Co 3,200 211,400
------------
854,937
------------
HEALTH CARE RELATED 0.76%
Columbia/HCA Healthcare 8,000 233,000
------------
HOUSEHOLD FURNITURE & APPLIANCES 1.52%
Shaw Industries 11,000 193,875
Whirlpool Corp 4,000 275,000
------------
468,875
------------
INSURANCE 4.24%
Lincoln National 3,000 274,125
Loews Corp 3,000 261,375
Ohio Casualty 6,000 265,500
Old Republic International 8,000 234,500
SAFECO Corp 6,000 272,625
------------
1,308,125
------------
INSURANCE BROKERS 0.71%
Marsh & McLennan 3,600 217,575
------------
INVESTMENT BANK/BROKER FIRM 0.93%
Morgan Stanley Dean Witter Discover & Co 3,135 286,461
------------
IRON & STEEL 1.04%
Nucor Corp 7,000 322,000
------------
MACHINERY 0.86%
Caterpillar Inc 5,000 264,375
------------
MANUFACTURING 1.56%
Federal Signal 6,000 145,875
Minnesota Mining & Manufacturing 2,000 164,375
Textron Inc 2,400 172,050
------------
482,300
------------
<PAGE>
METALS MINING 0.74%
Phelps Dodge 4,000 228,750
------------
OFFICE EQUIPMENT & SUPPLIES 0.57%
Ikon Office Solutions 12,000 174,750
------------
OIL & GAS RELATED 4.45%
Amoco Corp 2,600 108,225
Exxon Corp 3,500 249,594
Norsk Hydro A/S Sponsored ADR
Representing Ord Shrs 6,000 264,750
Repsol SA Sponsored ADR Representing Ord Shrs 5,000 275,000
Royal Dutch Petroleum New York Registry
1.25 Gldr Shrs 3,200 175,400
Yacimientos Petroliferos Fiscades SA
Sponsored ADR
Representing Class D Shrs 10,000 300,625
------------
1,373,594
------------
PAPER & FOREST PRODUCTS 0.55%
Westvaco Corp 6,000 169,500
------------
POLLUTION CONTROL 0.79%
Waste Management 7,000 245,000
------------
PUBLISHING 0.64%
Gannett Co 2,800 198,975
------------
RAILROADS 1.03%
CSX Corp 7,000 318,500
------------
RESTAURANTS 1.12%
McDonald's Corp 5,000 345,000
------------
RETAIL 3.19%
Dillard's Inc Class A 7,000 290,062
Giant Food Class A 3,300 142,106
K mart Corp* 8,500 163,625
Penney (J C) Co 2,100 151,856
Toys "R" Us* 10,000 235,625
------------
983,274
------------
<PAGE>
SERVICES 2.57%
Dun & Bradstreet 6,800 245,650
Electronic Data Systems 7,000 280,000
First Data 8,000 266,500
------------
792,150
------------
SPECIALTY PRINTING 0.93%
Deluxe Corp 8,000 286,500
TELECOMMUNICATIONS-- LONG DISTANCE 1.20%
British Telecommunications PLC
Sponsored ADR
Representing 10 Ord Shrs 3,000 370,500
------------
TELEPHONE 1.80%
Bell Atlantic 4,000 182,500
Telefonica SA Sponsored ADR Representing
3 Ord Shrs 1,500 208,594
Telefonos de Mexico SA de CV Class L
Sponsored ADR
Representing 20 Series L Shrs 3,400 163,412
------------
554,506
------------
TEXTILE -- APPAREL MANUFACTURING 0.85%
Liz Claiborne 5,000 261,250
------------
TOBACCO 1.23%
Fortune Brands 2,700 103,781
Philip Morris 7,000 275,625
------------
379,406
------------
TOTAL COMMON STOCKS
(Cost $14,450,585) 19,276,634
------------
FIXED INCOME SECURITIES 30.30%
US Government Obligations 20.82%
US Treasury Bonds
8.125%, 8/15/2019 $ 400,000 516,250
7.625%, 2/15/2025 $ 500,000 629,531
7.250%, 8/15/2022 $ 500,000 598,438
<PAGE>
US Treasury Notes
7.500%, 11/15/2001 $ 300,000 317,719
7.250%, 8/15/2004 $ 600,000 653,063
6.500%, 8/15/2005 $ 700,000 738,938
6.375%, 7/15/1999 $ 200,000 201,688
6.375%, 1/15/2000 $ 300,000 303,563
6.375%, 8/15/2002 $ 400,000 412,125
6.250%, 2/15/2003 $ 700,000 720,344
6.125%, 8/15/2007 $ 800,000 832,750
5.500%, 2/15/2008 $ 500,000 499,844
------------
TOTAL US GOVERNMENT OBLIGATIONS
(Cost $6,231,696) 6,424,253
------------
US Government Agency Obligations 5.67%
Fannie Mae Gtd Mortgage Pass-Through
Certificates
8.500%, 3/1/2010 $ 92,924 96,890
7.000%, 12/1/2027 $ 195,088 197,900
6.500%, 5/1/2026 $ 131,810 131,656
6.000%, 5/1/2009 $ 120,183 119,465
Medium-Term Notes, 6.300%, 8/19/2002 $ 200,000 204,428
Federal Farm Credit Bank, Medium-Term
Notes, 6.150%, 9/1/2000 $ 500,000 504,901
Freddie Mac, Gold, Participation Certificates
8.000%, 10/1/2010 $ 47,732 49,231
6.500%, 7/1/2001 $ 71,261 71,897
Government National Mortgage Association I
Pass-Through Certificates
7.500%, 3/15/2026 $ 66,738 68,594
7.000%, 4/15/2028 $ 298,109 302,884
------------
TOTAL US GOVERNMENT AGENCY OBLIGATIONS
(Cost $1,723,263) 1,747,846
------------
Corporate Bonds 3.81%
BANKS 1.37%
ABN Amro Bank NV, Sub Notes,
7.550%, 6/28/2006 $ 200,000 215,866
NationsBank Corp, Sub Notes,
6.500%, 3/15/2006 $ 100,000 101,762
Wachovia Bank, Medium-Term Notes,
7.000%, 10/17/2008 $ 100,000 105,813
------------
423,441
------------
<PAGE>
BEVERAGES 0.33%
PepsiCo Inc, Medium-Term Notes,
5.875%, 6/1/2000 $ 100,000 100,242
------------
FOODS 0.49%
Campbell Soup, Notes, 6.150%, 12/1/2002 $ 150,000 151,463
------------
INSURANCE 0.32%
CNA Financial, Notes, 6.450%, 1/15/2008 $ 100,000 99,465
------------
LEISURE TIME 0.64%
Carnival Corp, Sr Notes, 6.150%, 4/15/2008 $ 200,000 198,133
------------
MACHINERY 0.66%
Cooper Industries, Medium-Term Notes,
Series 3, 6.375%, 5/8/2008 $ 200,000 202,937
------------
TOTAL CORPORATE BONDS
(Cost $1,155,630) 1,175,681
------------
TOTAL FIXED INCOME SECURITIES
(Cost $9,110,589) 9,347,780
------------
SHORT-TERM INVESTMENTS -- REPURCHASE
AGREEMENTS 7.21%
Repurchase Agreement with State Street
dated 6/30/1998 due 7/1/1998 at 5.700%,
repurchased at $2,224,352 (Collateralized
by US Treasury Bonds due 2/15/2015
at 11.250%, value $2,278,000)
(Cost $2,224,000) $ 2,224,000 2,224,000
------------
TOTAL INVESTMENT SECURITIES AT VALUE 100.00%
(Cost $25,785,174#) $ 30,848,414
============
UTILITIES Portfolio
COMMON STOCKS 85.78%
MACHINERY 0.66%
Mannesmann AG 400 $ 41,108
------------
OIL & GAS RELATED 2.68%
Enron Corp 1,200 64,875
Williams Cos 3,000 101,250
------------
166,125
------------
<PAGE>
SERVICES 1.10%
Havas SA 800 67,880
------------
TELECOMMUNICATIONS 17.60%
Advanced Communications Group* 1,300 9,019
AirTouch Communications* 1,900 111,031
ICG Communications* 3,100 113,344
IXC Communications* 2,200 106,700
MCI Communications 1,500 87,188
McLeodUSA Inc Class A* 1,950 75,806
NEXTEL Communications Class A* 3,900 97,013
Qwest Communications International* 2,565 89,454
Sprint Corp 1,900 133,950
Tel-Save Holdings* 3,100 45,725
WorldCom Inc* 4,565 221,117
------------
1,090,347
------------
Utilities 63.74%
ELECTRIC 24.05%
Allegheny Energy 1,400 42,175
Ameren Corp 800 31,800
CMS Energy 1,800 79,200
Carolina Power & Light 800 34,700
Consolidated Edison 1,900 87,519
DTE Energy 2,000 80,750
Duke Energy 1,426 84,490
Edison International 2,700 79,819
FPL Group 600 37,800
Florida Progress 1,100 45,237
GPU Inc 900 34,031
Houston Industries 2,800 86,450
Interstate Energy 3,270 106,275
New Century Energies 2,200 99,963
NIPSCO Industries 2,600 72,800
Northern States Power 1,800 51,525
PG&E Corp 1,300 41,031
PP&L Resources 3,300 74,869
PacifiCorp 2,200 49,775
Pinnacle West Capital 1,700 76,500
SCANA Corp 2,000 59,625
TNP Enterprises 1,500 46,313
<PAGE>
Unicom Corp 2,500 87,656
------------
1,490,303
------------
NATURAL GAS 6.42%
Coastal Corp 1,250 87,266
Columbia Energy Group 1,400 77,875
NGC Corp 4,000 50,000
New Jersey Resources 1,500 53,531
ONEOK Inc 1,350 53,831
TransCanada PipeLines Ltd 3,400 75,650
------------
398,153
------------
TELEPHONE 33.27%
ALLTEL Corp 2,200 102,300
Ameritech Corp 3,640 163,345
BCE Inc 2,500 106,719
Bell Atlantic 3,834 174,926
BellSouth Corp 2,270 152,374
Century Telephone Enterprises 2,800 128,450
Cincinnati Bell* 3,700 105,912
COLT Telecom Group PLC Sponsored ADR
Representing 4 Ord Shrs* 1,400 228,900
GTE Corp 1,750 97,344
Intermedia Communications* 2,600 109,037
MetroNet Communications Class B
Non-Voting Shrs* 6,000 169,500
Portugal Telecom SA Sponsored ADR
Representing Ord Shrs 1,600 84,700
SBC Communications 4,100 164,000
Telefonica de Espana SA Sponsored ADR
Representing 3 Ord Shrs 1,090 151,578
US WEST 2,600 122,200
------------
2,061,285
------------
TOTAL UTILITIES 3,949,741
------------
TOTAL COMMON STOCKS
(Cost $4,116,540) 5,315,201
------------
<PAGE>
SHORT-TERM INVESTMENTS --
REPURCHASE AGREEMENTS 14.22%
Repurchase Agreement with State Street
dated 6/30/1998 due 7/1/1998 at 5.700%,
repurchased at $881,139 (Collateralized by
US Treasury Bonds due 5/15/2014 at 13.250%,
value $903,664) (Cost $881,000) $ 881,000 $ 881,000
------------
TOTAL INVESTMENT SECURITIES AT VALUE 100.00%
(Cost $4,997,540#) $ 6,196,201
============
</TABLE>
* Security is non-income producing.
^ Securities acquired pursuant to Rule 144A. The Fund deems such securities to
be "liquid" because an institutional market exists.
^^ Step up bonds are obligations which increase the interest payment rate at a
specific point in time. Rate shown reflects current rate which may step up at
a future date.
** Securities may make dividend payments in other types of securities or cash.
# Also represents cost for income tax purposes.
See Notes to Financial Statements
<PAGE>
<TABLE>
<CAPTION>
INVESCO Variable Investment Funds, Inc.
Statement of Assets and Liabilities
June 30, 1998
UNAUDITED
Health High
Dynamics Growth Sciences Yield
Portfolio Portfolio Portfolio Portfolio
----------------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS
Investment Securities:
At Cost~ $ 239,217 $ 250,297 $ 2,048,750 $ 40,857,612
======================================================================
At Value~ $ 289,859 $ 314,385 $ 2,162,046 $ 40,528,280
Cash 10,405 2,322 669 26,288
Receivables:
Investment Securities Sold 5,050 0 10,098 410,736
Fund Shares Sold 0 0 65,356 105,576
Dividends and Interest 110 270 752 585,189
Organization Costs 0 0 0 1,841
Prepaid Expenses and Other Assets 239 0 0 407
---------------------------------------------------------------------
TOTAL ASSETS 305,663 316,977 2,238,921 41,658,317
---------------------------------------------------------------------
LIABILITIES
Payables:
Investment Securities Purchased 2,400 3,090 494,179 756,049
Fund Shares Repurchased 0 0 249,322 0
Accrued Expenses and Other Payables 0 28 0 10,612
---------------------------------------------------------------------
TOTAL LIABILITIES 2,400 3,118 743,501 766,661
---------------------------------------------------------------------
Net Assets at Value $ 303,263 $ 313,859 $ 1,495,420 $ 40,891,656
=====================================================================
NET ASSETS
Paid-in Capital* $ 249,000 $ 249,000 $ 1,295,976 $ 38,452,624
Accumulated Undistributed Net
Investment Income (Loss) (209) 1,688 8,039 1,594,558
Accumulated Undistributed Net
Realized Gain (Loss) on Investment
Securities and Foreign Currency
Transactions 3,830 (917) 78,109 1,173,806
Net Appreciation (Depreciation) of
Investment Securities and Foreign
Currency Transactions 50,642 64,088 113,296 (329,332)
---------------------------------------------------------------------
Net Assets at Value $ 303,263 $ 313,859 $ 1,495,420 $ 40,891,656
=====================================================================
Shares Outstanding 24,896 24,905 109,698 3,101,133
Net Asset Value, Offering and
Redemption Price per Share $12.18 $12.60 $13.63 $13.19
=====================================================================
</TABLE>
~ Investment securities at cost and value at June 30, 1998 include repurchase
agreements of $820,000 and $3,132,000 for Health Sciences and High Yield
Portfolios, respectively.
* The Fund has one billion 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
<PAGE>
<TABLE>
<CAPTION>
INVESCO Variable Investment Funds, Inc.
Statement of Assets and Liabilities (Continued)
June 30, 1998
UNAUDITED
Small
Industrial Company
Income Realty Growth Technology
Portfolio Portfolio Portfolio Portfolio
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment Securities:
At Cost~ $ 46,417,445 $ 384,501 $ 307,416 $ 716,788
====================================================================
At Value~ $ 54,223,360 $ 366,631 $ 342,059 $ 809,424
Cash 0 18,136 57,824 889
Receivables:
Investment Securities Sold 0 0 2,062 0
Fund Shares Sold 252,294 6,569 0 384,410
Dividends and Interest 208,704 2,369 19 113
Organization Costs 1,841 0 0 0
Prepaid Expenses and Other Assets 1,564 990 379 0
--------------------------------------------------------------------
TOTAL ASSETS 54,687,763 394,695 402,343 1,194,836
--------------------------------------------------------------------
LIABILITIES
Payables:
Custodian 24,953 0 0 0
Investment Securities Purchased 1,987,766 19,005 33,507 0
Fund Shares Repurchased 72,383 65 0 214,092
Accrued Expenses and Other Payables 11,070 28 0 0
--------------------------------------------------------------------
TOTAL LIABILITIES 2,096,172 19,098 33,507 214,092
--------------------------------------------------------------------
Net Assets at Value $ 52,591,591 $ 375,597 $ 368,836 $ 980,744
====================================================================
NET ASSETS
Paid-in Capital* $ 41,779,124 $ 388,920 $ 343,968 $ 898,361
Accumulated Undistributed Net
Investment Income (Loss) 482,110 3,336 (673) 2,755
Accumulated Undistributed Net
Realized Gain (Loss) on Investment
Securities and Foreign Currency
Transactions 2,524,442 1,211 (9,102) (13,008)
Net Appreciation (Depreciation) of
Investment Securities and Foreign
Currency Transactions 7,805,915 (17,870) 34,643 92,636
--------------------------------------------------------------------
Net Assets at Value $ 52,591,591 $ 375,597 $ 368,836 $ 980,744
====================================================================
Shares Outstanding 2,800,452 39,542 33,733 71,680
Net Asset Value, Offering and
Redemption Price per Share $18.78 $9.50 $10.93 $13.68
====================================================================
</TABLE>
~ Investment securities at cost and value at June 30, 1998 include repurchase
agreements of $4,189,000 and $293,000 for Industrial Income and Technology
Portfolios, respectively.
* The Fund has one billion 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
<PAGE>
<TABLE>
<CAPTION>
INVESCO Variable Investment Funds, Inc.
Statement of Assets and Liabilities (Continued)
June 30, 1998
UNAUDITED
Total
Return Utilities
Portfolio Portfolio
-----------------------------------------------------
<S> <C> <C>
ASSETS
Investment Securities:
At Cost~ $ 25,785,174 $ 4,997,540
=====================================================
At Value~ $ 30,848,414 $ 6,196,201
Cash 200 0
Foreign Currency (Cost $0 and $13,333, respectively) 0 13,172
Receivables:
Investment Securities Sold 0 508,314
Fund Shares Sold 114,065 9,887
Dividends and Interest 210,864 9,645
Appreciation on Forward Foreign Currency Contracts 0 61
Organization Costs 1,841 1,841
Prepaid Expenses and Other Assets 10,601 16,784
---------------------------------------------------
TOTAL ASSETS 31,185,985 6,755,905
---------------------------------------------------
LIABILITIES
Payables:
Custodian 0 42
Investment Securities Purchased 290,744 1,278,753
Fund Shares Repurchased 20,736 4,352
Accrued Expenses and Other Payables 10,556 9,389
---------------------------------------------------
TOTAL LIABILITIES 322,036 1,292,536
---------------------------------------------------
Net Assets at Value $ 30,863,949 $ 5,463,369
===================================================
NET ASSETS
Paid-in Capital* $ 25,024,876 $ 4,146,696
Accumulated Undistributed Net Investment Income 376,769 57,267
Accumulated Undistributed Net Realized Gain on
Investment Securities and Foreign Currency
Transactions 399,064 60,935
Net Appreciation of Investment Securities
and Foreign Currency Transactions 5,063,240 1,198,471
---------------------------------------------------
Net Assets at Value $ 30,863,949 $ 5,463,369
===================================================
Shares Outstanding 1,821,618 337,617
Net Asset Value, Offering and Redemption
Price per Share $16.94 $16.18
===================================================
</TABLE>
~ Investment securities at cost and value at June 30, 1998 include repurchase
agreements of $2,224,000 and $881,000 for Total Return and Utilities
Portfolios, respectively.
* The Fund has one billion 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
<PAGE>
<TABLE>
<CAPTION>
INVESCO Variable Investment Funds, Inc.
Statement of Operations
Six Months Ended June 30, 1998
UNAUDITED
Health High
Dynamics Growth Sciences Yield
Portfolio Portfolio Portfolio Portfolio
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
INCOME
Dividends $ 454 $ 1,987 $ 3,330 $ 12,773
Interest 15 0 3,861 1,700,233
Foreign Taxes Withheld 0 (27) (70) 0
---------------------------------------------------------------------
TOTAL INCOME 469 1,960 7,121 1,713,006
---------------------------------------------------------------------
EXPENSES
Investment Advisory Fees 838 1,232 3,150 107,412
Transfer Agent Fees 2,500 2,527 2,500 2,500
Administrative Fees 5,021 5,022 5,063 7,685
Custodian Fees and Expenses 1,248 297 2,683 7,921
Directors' Fees and Expenses 4,502 0 4,506 5,010
Organization Expenses 0 0 0 1,841
Professional Fees and Expenses 6,543 6,544 6,631 12,064
Registration Fees and Expenses 0 0 0 22
Other Expenses 33 63 154 2,344
--------------------------------------------------------------------
TOTAL EXPENSES 20,685 15,685 24,687 146,799
Fees and Expenses Absorbed
by Investment Adviser (18,534) (13,877) (20,523) 0
Fees and Expenses Paid Indirectly (887) (203) (1,323) (4,344)
NET EXPENSES 1,264 1,605 2,841 142,455
--------------------------------------------------------------------
NET INVESTMENT INCOME (LOSS) (795) 355 4,280 1,570,551
--------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENT SECURITIES
Net Realized Gain on Investment
Securities and Foreign Currency
Transactions 115 719 94,165 1,070,932
Change in Net Appreciation (Depreciation)
of Investment Securities and Foreign
Currency Transactions 46,526 46,558 79,533 (718,731)
--------------------------------------------------------------------
NET GAIN ON INVESTMENT SECURITIES 46,641 47,277 173,698 352,201
--------------------------------------------------------------------
Net Increase in Net Assets
from Operations $ 45,846 $ 47,632 $ 177,978 $ 1,922,752
====================================================================
</TABLE>
See Notes to Financial Statements
<PAGE>
<TABLE>
<CAPTION>
INVESCO Variable Investment Funds, Inc.
Statement of Operations (Continued)
Period Ended June 30, 1998 (Note 1)
UNAUDITED
Small
Industrial Company
Income Realty Growth Technology
Portfolio Portfolio Portfolio Portfolio
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
INCOME
Dividends $ 271,651 $ 4,094 $ 221 $ 213
Interest 396,214 190 0 3,069
Foreign Taxes Withheld (891) 0 0 0
--------------------------------------------------------------------
TOTAL INCOME 666,974 4,284 221 3,282
--------------------------------------------------------------------
EXPENSES
Investment Advisory Fees 176,901 654 1,095 2,162
Transfer Agent Fees 2,500 1,277 2,500 2,500
Administrative Fees 8,538 2,511 5,022 5,043
Custodian Fees and Expenses 7,968 668 1,448 1,671
Directors' Fees and Expenses 5,226 0 4,503 4,504
Organization Expenses 1,841 0 0 0
Professional Fees and Expenses 13,574 306 6,941 6,618
Registration Fees and Expenses 22 0 0 0
Other Expenses 1,816 10 29 76
--------------------------------------------------------------------
TOTAL EXPENSES 218,386 5,426 21,538 22,574
Fees and Expenses Absorbed by
Investment Adviser (1,203) (4,117) (19,134) (19,344)
Fees and Expenses Paid Indirectly (3,646) (361) (930) (1,017)
NET EXPENSES 213,537 948 1,474 2,213
--------------------------------------------------------------------
NET INVESTMENT INCOME (LOSS) 453,437 3,336 (1,253) 1,069
====================================================================
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENT SECURITIES
Net Realized Gain (Loss) on Investment
Securities and Foreign Currency
Transactions 1,960,821 1,211 (8,451) (18,645)
Change in Net Appreciation (Depreciation)
of Investment Securities and Foreign
Currency Transactions 2,045,867 (17,870) 37,009 109,827
--------------------------------------------------------------------
NET GAIN (LOSS) ON INVESTMENT
SECURITIES 4,006,688 (16,659) 28,558 91,182
--------------------------------------------------------------------
Net Increase (Decrease) in Net
Assets from Operations $ 4,460,125 $ (13,323) $ 27,305 $ 92,251
====================================================================
</TABLE>
See Notes to Financial Statements
<PAGE>
<TABLE>
<CAPTION>
INVESCO Variable Investment Funds, Inc.
Statement of Operations (Continued)
Six Months Ended June 30, 1998
UNAUDITED
Total
Return Utilities
Portfolio Portfolio
-----------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
INCOME
Dividends $ 182,700 $ 63,587
Interest 314,623 15,611
Foreign Taxes Withheld (4,034) (2,137)
-----------------------------------------------------
TOTAL INCOME 493,289 77,061
-----------------------------------------------------
EXPENSES
Investment Advisory Fees 100,879 14,731
Transfer Agent Fees 2,500 2,500
Administrative Fees 7,018 5,368
Custodian Fees and Expenses 4,874 2,738
Directors' Fees and Expenses 4,910 4,579
Organization Expenses 1,841 1,841
Professional Fees and Expenses 11,223 8,315
Registration Fees and Expenses 22 22
Other Expenses 1,251 388
-----------------------------------------------------
TOTAL EXPENSES 134,518 40,482
Fees and Expenses Absorbed by
Investment Adviser (10,422) (16,782)
Fees and Expenses Paid Indirectly (2,305) (1,482)
-----------------------------------------------------
NET EXPENSES $ 121,791 $ 22,218
-----------------------------------------------------
NET INVESTMENT INCOME 371,498 54,843
-----------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENT SECURITIES
Net Realized Gain on Investment Securities
and Foreign Currency Transactions 319,216 47,352
Change in Net Appreciation of Investment
Securities and Foreign Currency Transactions 1,089,040 453,781
-----------------------------------------------------
NET GAIN ON INVESTMENT SECURITIES 1,408,256 501,133
-----------------------------------------------------
Net Increase in Net Assets from Operations $ 1,779,754 $ 555,976
=====================================================
</TABLE>
See Notes to Financial Statements
<PAGE>
<TABLE>
<CAPTION>
INVESCO Variable Investment Funds, Inc.
Statement of Changes in Net Assets
Dynamics Portfolio Growth Portfolio
Six Months Period Six Months Period
Ended Ended Ended Ended
June 30 December 31 June 30 December 31
--------------------------------- ---------------------------------
1998 1997 1998 1997
UNAUDITED (Note 1) UNAUDITED (Note 1)
<S> <C> <C> <C> <C>
OPERATIONS
Net Investment Income (Loss) $ (795) $ 586 $ 355 $ 1,333
Net Realized Gain (Loss) on Investment
Securities and Foreign Currency
Transactions 115 3,715 719 (1,636)
Change in Net Appreciation of Investment
Securities and Foreign Currency
Transactions 46,526 4,116 46,558 17,530
--------------------------------- ---------------------------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS 45,846 8,417 47,632 17,227
--------------------------------- ---------------------------------
FUND SHARE TRANSACTIONS
Proceeds from Sales of Shares 0 250,000 0 250,000
Amounts Paid for Repurchases of Shares 0 (2,000) 0 (2,000)
--------------------------------- ---------------------------------
NET INCREASE IN NET ASSETS FROM
FUND SHARE TRANSACTIONS 0 248,000 0 248,000
--------------------------------- ---------------------------------
Total Increase in Net Assets 45,846 256,417 47,632 265,227
NET ASSETS
Initial Subscription (Note 1) 0 1,000 0 1,000
Beginning of Period $ 257,417 $ 0 $ 266,227 $ 0
-------------------------------- ---------------------------------
End of Period $ 303,263 $ 257,417 $ 313,859 $ 266,227
================================ =================================
Accumulated Undistributed Net Investment
Income (Loss) Included in Net Assets at
End of Period $ (209) $ 586 $ 1,688 $ 1,333
FUND SHARE TRANSACTIONS
Initial Subscription (Note 1) 0 100 0 100
Shares Sold 0 25,000 0 25,000
-------------------------------- ---------------------------------
0 25,100 0 25,100
Shares Repurchased 0 (204) 0 (195)
-------------------------------- ---------------------------------
Net Increase in Fund Shares 0 24,896 0 24,905
================================ =================================
</TABLE>
See Notes to Financial Statements
<PAGE>
<TABLE>
<CAPTION>
INVESCO Variable Investment Funds, Inc.
Statement of Changes in Net Assets (Continued)
Health Sciences Portfolio High Yield Portfolio
Six Months Period Six Months Year
Ended Ended Ended Ended
June 30 December 31 June 30 December 31
--------------------------------- ----------------------------------
1998 1997 1998 1997
UNAUDITED (Note 1) UNAUDITED
<S> <C> <C> <C> <C>
OPERATIONS
Net Investment Income $ 4,280 $ 3,759 $ 1,570,551 $ 1,702,625
Net Realized Gain (Loss) on Investment
Securities and Foreign Currency
Transactions 94,165 (16,056) 1,070,932 1,351,668
Change in Net Appreciation (Depreciation)
of Investment Securities and Foreign
Currency Transactions 79,533 33,763 (718,731) 69,593
-------------------------------- ----------------------------------
NET INCREASE IN NET ASSETS FROM OPERATIONS 177,978 21,466 1,922,752 3,123,886
-------------------------------- ----------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
Net Investment Income 0 0 0 (1,687,001)
Net Realized Gain on Investment Securities
and Foreign Currency Transactions 0 0 0 (1,250,049)
-------------------------------- ----------------------------------
TOTAL DISTRIBUTIONS 0 0 0 (2,937,050)
-------------------------------- ----------------------------------
FUND SHARE TRANSACTIONS
Proceeds from Sales of Shares 2,383,564 890,308 20,722,738 33,849,922
Reinvestment of Distributions 0 0 0 2,937,050
-------------------------------- ----------------------------------
2,383,564 890,308 20,722,738 36,786,972
Amounts Paid for Repurchases of Shares (1,489,080) (489,816) (12,634,748) (20,131,245)
-------------------------------- ----------------------------------
NET INCREASE IN NET ASSETS FROM
FUND SHARE TRANSACTIONS 894,484 400,492 8,087,990 16,655,727
-------------------------------- ----------------------------------
Total Increase in Net Assets 1,072,462 421,958 10,010,742 16,842,563
NET ASSETS
Initial Subscription (Note 1) 0 1,000 0 0
Beginning of Period 422,958 0 30,880,914 14,038,351
-------------------------------- ----------------------------------
End of Period $1,495,420 $ 422,958 $ 40,891,656 $ 30,880,914
================================ ==================================
Accumulated Undistributed Net Investment
Income Included in Net Assets at
End of Period (Note 1) $ 8,039 $ 3,759 $ 1,594,558 $ 24,007
FUND SHARE TRANSACTIONS
Initial Subscription (Note 1) 0 100 0 0
Shares Sold 190,159 85,755 1,600,371 2,645,545
Shares Issued from Reinvestment of
Distributions 0 0 0 236,097
-------------------------------- ----------------------------------
190,159 85,855 1,600,371 2,881,642
Shares Repurchased (118,779) (47,537) (977,624) (1,594,764)
-------------------------------- ----------------------------------
Net Increase in Fund Shares 71,380 38,318 622,747 1,286,878
================================ ==================================
</TABLE>
See Notes to Financial Statements
<PAGE>
<TABLE>
<CAPTION>
INVESCO Variable Investment Funds, Inc.
Statement of Changes in Net Assets (Continued)
Industrial Income Portfolio Realty Portfolio
Six Months Year Period
Ended Ended Ended
June 30 December 31 June 30
----------------------------------- ------------------
1998 1997 1998
UNAUDITED UNAUDITED
(Note 1)
<S> <C> <C> <C>
Net Investment Income $ 453,437 $ 650,284 $ 3,336
Net Realized Gain on Investment Securities
and Foreign Currency Transactions 1,960,821 2,766,021 1,211
Change in Net Appreciation (Depreciation)
of Investment Securities and Foreign
Currency Transactions 2,045,867 3,726,765 (17,870)
----------------------------------- -----------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS 4,460,125 7,143,070 (13,323)
----------------------------------- -----------------
DISTRIBUTIONS TO SHAREHOLDERS
Net Investment Income 0 (621,902) 0
Net Realized Gain on Investment Securities
and Foreign Security Transactions 0 (2,199,803) 0
----------------------------------- -----------------
TOTAL DISTRIBUTIONS 0 (2,821,705) 0
----------------------------------- -----------------
FUND SHARE TRANSACTIONS
Proceeds from Sales of Shares 11,361,439 27,309,883 388,348
Reinvestment of Distributions 0 2,821,705 0
----------------------------------- ----------------
11,361,439 30,131,588 388,348
Amounts Paid for Repurchases of Shares (3,323,442) (16,701,751) (428)
----------------------------------- ----------------
NET INCREASE IN NET ASSETS FROM
FUND SHARE TRANSACTIONS 8,037,997 13,429,837 387,920
----------------------------------- ----------------
Total Increase in Net Assets 12,498,122 17,751,202 374,597
NET ASSETS
Initial Subscription (Note 1) 0 0 1,000
Beginning of Period 40,093,469 22,342,267 0
----------------------------------- ----------------
End of Period $ 52,591,591 $ 40,093,469 $ 375,597
=================================== ================
Accumulated Undistributed Net Investment
Income Included in Net Assets at End
of Period $ 482,110 $ 28,673 $ 3,336
FUND SHARE TRANSACTIONS
Initial Subscription (Note 1) 0 0 100
Shares Sold 629,321 1,689,472 39,487
Shares Issued from Reinvestment of
Distributions 0 169,076 0
----------------------------------- ----------------
629,321 1,858,548 39,587
Shares Repurchased (182,086) (1,064,382) (45)
----------------------------------- ----------------
Net Increase in Fund Shares 447,235 794,166 39,542
=================================== ================
</TABLE>
See Notes to Financial Statements
<PAGE>
<TABLE>
<CAPTION>
INVESCO Variable Investment Funds, Inc.
Statement of Changes in Net Assets (Continued)
Small Company Technology
Growth Portfolio Portfolio
Six Months Period Six Months Period
Ended Ended Ended Ended
June 30 December 31 June 30 December 31
--------------------------------- --------------------------------
1998 1997 1998 1997
UNAUDITED (Note 1) UNAUDITED (Note 1)
<S> <C> <C> <C> <C>
OPERATIONS
Net Investment Income (Loss) $ (1,253) $ 480 $ 1,069 $ 1,686
Net Realized Gain (Loss) on Investment
Securities and Foreign Currency
Transactions (8,451) (551) (18,645) 5,637
Change in Net Appreciation (Depreciation) of
Investment Securities and Foreign Currency
Transactions 37,009 (2,366) 109,827 (17,191)
--------------------------------- --------------------------------
NET INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS 27,305 (2,437) 92,251 (9,868)
--------------------------------- --------------------------------
FUND SHARE TRANSACTIONS
Proceeds from Sales of Shares 153,507 249,999 2,759,751 1,391,792
Amounts Paid for Repurchases of Shares (58,538) (2,000) (2,285,684) (968,498)
--------------------------------- --------------------------------
NET INCREASE IN NET ASSETS FROM
FUND SHARE TRANSACTIONS 94,969 247,999 474,067 423,294
--------------------------------- --------------------------------
Total Increase in Net Assets 122,274 245,562 566,318 413,426
<PAGE>
NET ASSETS
Initial Subscription (Note 1) $ 0 $ 1,000 $ 0 $ 1,000
Beginning of Period 246,562 0 414,426 0
--------------------------------- -------------------------------
End of Period $ 368,836 $ 246,562 $ 980,744 $ 414,426
================================= ===============================
Accumulated Undistributed Net Investment
Income (Loss) Included in Net Assets at
End of Period $ (673) $ 580 $ 2,755 $ 1,686
FUND SHARE TRANSACTIONS
Initial Subscription (Note 1) 0 100 0 100
Shares Sold 14,105 25,000 215,953 122,765
--------------------------------- -------------------------------
14,105 25,100 215,953 122,865
Shares Repurchased (5,256) (216) (180,350) (86,788)
--------------------------------- -------------------------------
Net Increase in Fund Shares $ 8,849 $ 24,884 $ 35,603 $ 36,077
================================= ===============================
</TABLE>
See Notes to Financial Statements
<PAGE>
<TABLE>
<CAPTION>
INVESCO Variable Investment Funds, Inc.
Statement of Changes in Net Assets (Continued)
Total Return Utilities
Portfolio Portfolio
Six Months Year Six Months Year
Ended Ended Ended Ended
June 30 December 31 June 30 December 31
--------------------------------- ---------------------------------
1998 1997 1998 1997
UNAUDITED UNAUDITED
<S> <C> <C> <C> <C>
OPERATIONS
Net Investment Income $ 371,498 $ 514,521 $ 54,843 $ 95,237
Net Realized Gain on Investment Securities
and Foreign Currency Transactions 319,216 208,618 47,352 27,459
Change in Net Appreciation of Investment
Securities and Foreign Currency
Transactions 1,089,040 2,541,805 453,781 643,128
-------------------------------- ---------------------------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS 1,779,754 3,264,944 555,976 765,824
-------------------------------- ---------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
Net Investment Income 0 (465,401) 0 (91,300)
Net Realized Gain on Investment Securities
and Foreign Currency Transactions 0 (109,339) 0 (13,881)
-------------------------------- ---------------------------------
TOTAL DISTRIBUTIONS 0 (574,740) 0 (105,181)
-------------------------------- ---------------------------------
FUND SHARE TRANSACTIONS
Proceeds from Sales of Shares 7,965,233 17,640,610 1,104,669 2,682,154
Reinvestment of Distributions 0 574,740 0 105,181
-------------------------------- ---------------------------------
7,965,233 18,215,350 1,104,669 2,787,335
Amounts Paid for Repurchases of Shares (2,148,629) (11,151,066) (785,125) (1,520,377)
-------------------------------- ---------------------------------
NET INCREASE IN NET ASSETS FROM
FUND SHARE TRANSACTIONS 5,816,604 7,064,284 319,544 1,266,958
-------------------------------- ---------------------------------
Total Increase in Net Assets 7,596,358 9,754,488 875,520 1,927,601
NET ASSETS
Beginning of Period 23,267,591 13,513,103 4,587,849 2,660,248
-------------------------------- ---------------------------------
End of Period $ 30,863,949 $ 23,267,591 $ 5,463,369 $ 4,587,849
================================ =================================
Accumulated Undistributed Net Investment
Income Included in Net Assets at
End of Period $ 376,769 $ 5,271 $ 57,267 $ 2,424
FUND SHARE TRANSACTIONS
Shares Sold 482,221 1,194,193 70,927 203,031
Shares Issued from Reinvestment of
Distributions 0 37,056 0 7,481
-------------------------------- ---------------------------------
482,221 1,231,249 70,927 210,512
Shares Repurchased (132,428) (782,443) (52,007) (114,385)
-------------------------------- ---------------------------------
Net Increase in Fund Shares 349,793 448,806 18,920 96,127
================================ =================================
</TABLE>
See Notes to Financial Statements
<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") is incorporated in Maryland and presently
consists of ten separate Portfolios: Dynamics Portfolio, Growth Portfolio,
Health Sciences Portfolio, High Yield Portfolio, Industrial Income Portfolio,
Realty Portfolio, Small Company Growth Portfolio, Technology Portfolio, Total
Return Portfolio and Utilities Portfolio. The investment objectives of the
Portfolios are: To seek appreciation of capital for Dynamics Portfolio; to seek
long-term capital growth for Growth and Small Company Growth Portfolios; to seek
capital appreciation and income on securities principally engaged in specific
business sectors for Health Sciences, Realty and Technology Portfolios; to seek
a high level of current income by investing primarily in lower rated bonds and
other debt securities and in preferred stock for High Yield Portfolio; to seek
the best possible current income for Industrial Income Portfolio; to seek a high
total return on investment through capital appreciation and current income for
Total Return Portfolio; and to seek capital appreciation and income on
securities of companies principally engaged in public utilties for Utilities
Portfolio. Dynamics, Growth and Small Company Growth Portfolios commenced
investment operations on August 25, 1997. Health Sciences, Realty and Technology
Portfolios commenced investment operations on May 22, 1997, January 2, 1998 and
May 21, 1997, respectively. The Fund is registered under the Investment Company
Act of 1940 (the "Act") as a diversified, open-end management investment
company. 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. 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.
<PAGE>
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.
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.
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.
Short-term securities are stated at amortized cost (which approximates
market value) if maturity is 60 days or less at the time of purchase, or
market value if maturity is greater than 60 days.
Assets and liabilities initially expressed in terms of foreign
currencies are translated into U.S. dollars at the prevailing market rates
as quoted by one or more banks or dealers on the date of valuation. The
cost of securities is translated into U.S. dollars at the rates of exchange
prevailing when such securities are acquired. Income and expenses are
translated into U.S. dollars at the rates of exchange prevailing when
accrued.
B. REPURCHASE AGREEMENTS -- Repurchase agreements held by the Fund are fully
collateralized by U.S. Government securities and such collateral is in the
possession of the Fund's custodian. The collateral is evaluated daily to
ensure its market value exceeds the current market value of the repurchase
agreements including accrued interest. In the event of default on the
obligation to repurchase, the Fund has the right to liquidate the
collateral and apply the proceeds in satisfaction of the obligation. In
the event of default or bankruptcy by the other party to the agreement,
realization and/or retention of the collateral or proceeds may be subject
to legal proceedings.
C. SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME -- Security
transactions are accounted for on the trade date and dividend income is
recorded on the ex dividend date. Certain dividends from foreign securities
will be recorded as soon as the Fund is informed of the dividend if such
information is obtained subsequent to the ex dividend date. Interest
income, which may be comprised of stated coupon rate, market discount,
original issue discount and amortized premium, is recorded on the accrual
basis. Discounts and premiums on debt securities purchased are amortized
over the life of the respective security as adjustments to interest income.
Cost is determined on the specific identification basis.
<PAGE>
The Fund may have elements of risk due to investments in specific
industries or 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.
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.
The Fund's use of short-term forward foreign currency contracts may
subject it to certain risks as a result of unanticipated movements in
foreign exchange rates. The Fund does not hold short-term forward foreign
currency contracts for trading purposes. The Fund may hold foreign currency
in anticipation of settling foreign security transactions and not for
investment purposes.
Investments in securities of governmental agencies may only be
guaranteed by the respective agency's limited authority to borrow from the
U.S. Government and may not be guaranteed by the full faith and credit of
the U.S. Government.
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. At December 31, 1997, Health Sciences and Small
Company Growth Portfolios had $8,421 and $555, respectively, in net capital
loss carryovers which expire in the year 2005.
Growth, Health Sciences and High Yield Portfolios incurred and elected
to defer post-October 31 net capital losses of $1,668, $5,592 and $9,906,
respectively, to the year ended December 31, 1998. To the extent future
capital gains are offest 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.
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, amortized premiums, foreign currency transactions, nontaxable
dividends, net operating losses and expired capital loss carryforwards.
<PAGE>
F. ORGANIZATION COSTS -- Organization costs of $73,640 advanced by INVESCO
Funds Group, Inc. ("IFG") for High Yield, Industrial Income, Total Return
and Utilities Portfolios 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.
Under an agreement between each Portfolio 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. 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:
<PAGE>
<TABLE>
<CAPTION>
AVERAGE NET ASSETS
----------------------------------------------------------------------------
$500
$0 to $0 to $350 to Million Over Over
$350 $500 $700 to $1 $700 $1
Portfolio Million Million Million Billion Million Billion
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Dynamics Portfolio 0.60% --- 0.55% --- 0.50% ---
Health Sciences
Portfolio 0.75% --- 0.65% --- 0.55% ---
High Yield Portfolio --- 0.60% --- 0.55% --- 0.45%
Industrial Income
Portfolio --- 0.75% --- 0.65% --- 0.55%
Realty Portfolio --- 1.10% --- 0.90% --- 0.75%
Small Company Growth
Portfolio 0.75% --- 0.65% --- 0.55% ---
Technology Portfolio 0.75% --- 0.65% --- 0.55% ---
Total Return
Portfolio --- 0.75% --- 0.65% --- 0.55%
Utilities Portfolio --- 0.60% --- 0.55% --- 0.45%
</TABLE>
The fee for Growth Portfolio is based on the annual rate of 0.85% of average
net assets.
In accordance with a Sub-Advisory Agreement between IFG and INVESCO Trust
Company ("ITC"), a wholly owned subsidiary of IFG, investment decisions of
Dynamics, Growth, Health Sciences, High Yield, Industrial Income, Small Company
Growth, Technology and Utilities Portfolios were made by ITC. Fees for such
sub-advisory services were paid by IFG. Effective February 4, 1998, such
responsibilities were transferred to IFG. A separate Sub-Advisory Agreement
between IFG and INVESCO Realty Advisors, Inc. ("IRAI"), an affiliate of IFG,
provides that investment decisions of Realty Portfolio are made by IRAI. A
separate Sub-Advisory Agreement between IFG and INVESCO Capital Management, Inc.
("ICM"), an affiliate of IFG, provides that investment decisions of Total Return
Portfolio are made by ICM. Fees for such sub-advisory services were 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 period ended
June 30, 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:
Portfolio Purchases Sales
- --------------------------------------------------------------------------------
Dynamics Portfolio $ 115,223 $ 118,142
Growth Portfolio 69,661 66,991
Health Sciences Portfolio 1,284,620 459,062
High Yield Portfolio 62,618,067 54,736,452
Industrial Income Portfolio 24,304,226 16,982,678
Realty Portfolio 414,423 31,133
Small Company Growth Portfolio 210,713 139,818
Technology Portfolio 579,841 542,905
Total Return Portfolio 4,872,996 938,849
Utilities Portfolio 1,649,705 976,362
For the period ended June 30, 1998, the aggregate cost of purchases and
proceeds from sales of U.S. Government securities for Total Return Portfolio
were $4,470,700 and $1,000,391, respectively. There were no purchases or sales
of U.S. Government securities in any other Portfolio.
NOTE 4 -- APPRECIATION AND DEPRECIATION. At June 30, 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 Portfolio were
as follows:
Net
Gross Gross Appreciation
Portfolio Appreciation Depreciation (Depreciation)
- --------------------------------------------------------------------------------
Dynamics Portfolio $ 64,696 $ 14,054 $ 50,642
Growth Portfolio 66,616 2,645 63,971
Health Sciences Portfolio 116,770 4,481 112,289
High Yield Portfolio 383,470 712,815 (329,345)
Industrial Income Portfolio 8,451,510 645,595 7,805,915
Realty Portfolio 1,050 18,920 (17,870)
Small Company Growth Portfolio 54,382 19,739 34,643
Technology Portfolio 118,380 27,237 91,143
Total Return Portfolio 5,659,554 596,314 5,063,240
Utilities Portfolio 1,254,467 55,806 1,198,661
<PAGE>
NOTE 5 -- TRANSACTIONS WITH AFFILIATES. Certain of the Fund's officers and
directors are also officers and directors of IFG, ICM or IRAI.
The Fund has adopted an unfunded deferred compensation plan covering all
independent directors of the Fund who will have served as an independent
director for at least five years at the time of retirement. Benefits under this
plan are based on an annual rate equal to 40% of the retainer fee at the time of
retirement. As of July 1, 1998, benefits will be based on an annual rate of 50%
of the sum of the retainer fee at the time of retirement plus the annual meeting
fee.
Pension expenses for the period ended June 30, 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
Portfolio Expenses Pension Costs Liability
- --------------------------------------------------------------------------------
High Yield Portfolio $ 161 $ 340 $ 799
Industrial Income Portfolio 247 537 1,230
Total Return Portfolio 136 308 752
Utilities Portfolio 27 50 107
Pension expenses, unfunded accrued pension costs and pension liability were
insignificant for the remaining Portfolios.
NOTE 6 -- LINE OF CREDIT. The Fund has available a Redemption Line of
Credit Facility ("LOC"), from a consortium of national banks, to be used for
temporary or emergency purposes to fund redemptions of investor shares. The LOC
permits borrowings to a maximum of 10% of the Net Assets at Value of each
respective Portfolio. Each Portfolio agrees to pay annual fees and interest on
the unpaid principal balance based on prevailing market rates as defined in the
agreement. At June 30, 1998, there were no such borrowings.
<PAGE>
<TABLE>
<CAPTION>
INVESCO Variable Investment Funds, Inc.
Financial Highlights
(For a Fund Share Outstanding Throughout Each Period)
Six Months Period
Ended Ended
June 30 December 31
------------ ------------
1998 1997+
UNAUDITED
Dynamics Portfolio
<S> <C> <C>
Net Asset Value-- Beginning of Period $10.34 $10.00
------------ ------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss) (0.03) 0.02
Net Gains on Securities (Both Realized
and Unrealized) 1.87 0.32
------------ ------------
Total from Investment Operations 1.84 0.34
------------ ------------
Net Asset Value-- End of Period $12.18 $10.34
============ ============
TOTAL RETURN> 17.79%* 3.40%*
RATIOS
Net Assets-- End of Period ($000 Omitted) $303 $257
Ratio of Expenses to Average Net Assets# 0.76%*@ 0.52%@~
Ratio of Net Investment Income (Loss)
to Average Net Assets# (0.28%)* 0.63%~
Portfolio Turnover Rate 43%* 28%*
</TABLE>
+ From August 25, 1997, commencement of investment operations, through December
31, 1997.
> Total return does not reflect expenses that apply to the related insurance
policies, and inclusion of these charges would reduce the total return
figures for the period shown.
* Based on operations for the period shown and, accordingly, are not
representative of a full year.
< For the six months ended June 30, 1998, all of the expenses of the Portfolio
were voluntarily absorbed by IFG from January 1, 1998 through May 31, 1998
and various expenses of the Portfolio were voluntarily absorbed by IFG from
June 1, 1998 through June 30, 1998. All of the expenses of the Portfolio
were voluntarily absorbed by IFG for the period ended December 31, 1997. If
such expenses had not been voluntarily absorbed, ratio of expenses to average
net assets would have been 7.31% and 34.18%, respectively, and ratio of net
investment loss to average net assets would have been (6.83%) and (33.03%),
respectively.
@ Ratio is based on Total Expenses of the Portfolio, less Expenses Absorbed by
Investment Adviser, which is before any expense offset arrangements.
~ Annualized
<PAGE>
<TABLE>
<CAPTION>
INVESCO Variable Investment Funds, Inc.
Financial Highlights (Continued)
(For a Fund Share Outstanding Throughout Each Period)
Six Months Period
Ended Ended
June 30 December 31
------------ ------------
1998 1997+
UNAUDITED
Growth Portfolio
<S> <C> <C>
PER SHARE DATA
Net Asset Value-- Beginning of Period $10.69 $10.00
------------ ------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.01 0.05
Net Gains on Securities (Both Realized
and Unrealized) 1.90 0.64
------------ ------------
Total from Investment Operations 1.91 0.69
------------ ------------
Net Asset Value-- End of Period $12.60 $10.69
============ ============
TOTAL RETURN> 17.87%* 6.90%*
RATIOS
Net Assets-- End of Period ($000 Omitted) $314 $266
Ratio of Expenses to Average Net Assets 0.62%*@ 0.29%@~
Ratio of Net Investment Income to
Average Net Assets 0.12%* 1.45%~
Portfolio Turnover Rate 23%* 12%*
</TABLE>
+ From August 27, 1997, commencement of investment operations, through December
31, 1997.
> Total return does not reflect expenses that apply to the related insurance
policies, and inclusion of these charges would reduce the total return
figures for the period shown.
* Based on operations for the period shown and, accordingly, are not
representative of a full year.
# All of the expenses of the Portfolio were voluntarily absorbed by IFG from
January 1, 1998 through May 31, 1998 and for the period ended December 31,
1997. If such expenses had not been voluntarily absorbed, ratio of expenses
to average net assets would have been 5.34% and 28.76%, respectively, and
ratio of net investment income to average net assets would have been (4.60%)
and (27.02%), respectively.
@ Ratio is based on Total Expenses of the Portfolio, less Expenses Absorbed by
Investment Adviser, which is before any expense offset arrangements.
~ Annualized
<PAGE>
<TABLE>
<CAPTION>
INVESCO Variable Investment Funds, Inc.
Financial Highlights (Continued)
(For a Fund Share Outstanding Throughout Each Period)
Six Months Period
Ended Ended
June 30 December 31
------------ ------------
1998 1997+
UNAUDITED
Health Sciences Portfolio
<S> <C> <C>
PER SHARE DATA
Net Asset Value-- Beginning of Period $11.04 $10.00
------------ ------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.06 0.10
Net Gains on Securities (Both Realized
and Unrealized) 2.53 0.94
------------ ------------
Total from Investment Operations 2.59 1.04
------------ ------------
Net Asset Value-- End of Period $13.63 $11.04
============ ============
TOTAL RETURN> 23.46%* 10.40%*
RATIOS
Net Assets-- End of Period ($000 Omitted) $1,495 $423
Ratio of Expenses to Average Net Assets# 0.49%*@ 0.60%@~
Ratio of Net Investment Income to
Average Net Assets# 0.50%* 2.34%~
Portfolio Turnover Rate 60%* 112%*
</TABLE>
+ From May 22, 1997, commencement of investment operations, through December
31, 1997.
> Total return does not reflect expenses that apply to the related insurance
policies, and inclusion of these charges would reduce the total return
figures for the period shown.
* Based on operations for the period shown and, accordingly, are not
representative of a full year.
# All of the expenses of the Portfolio were voluntarily absorbed by IFG from
January 1, 1998 through May 31, 1998 and for the period ended December 31,
1997. If such expenses had not been voluntarily absorbed, ratio of expenses
to average net assets would have been 2.90% and 21.45%, respectively, and
ratio of net investment income to average net assets would have been (1.91%)
and (18.51%), respectively.
@ Ratio is based on Total Expenses of the Portfolio, less Expenses Absorbed by
Investment Adviser, which is before any expense offset arrangements.
~ Annualized
<PAGE>
<TABLE>
<CAPTION>
INVESCO Variable Investment Funds, Inc.
Financial Highlights (Continued)
(For a Fund Share Outstanding Throughout Each Period)
Six Months Period
Ended Ended
June 30 Year Ended December 31 December 31
------------ --------------------------------------------- ------------
1998 1997 1996 1995 1994^
UNAUDITED
High Yield Portfolio
<S> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value -
Beginning of Period $ 12.46 $ 11.78 $ 11.04 $ 10.01 $ 10.00
------------ --------------------------------------------- ------------
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income 0.50 0.78 0.72 0.55 0.05
Net Gains on Securities
(Both Realized and
Unrealized) 0.23 1.26 1.11 1.43 0.01
------------ --------------------------------------------- ------------
Total from Investment
Operations 0.73 2.04 1.83 1.98 0.06
------------ --------------------------------------------- ------------
LESS DISTRIBUTIONS
Dividends from Net
Investment Income 0.00 0.78 0.71 0.55 0.05
Distributions from
Capital Gains 0.00 0.58 0.38 0.40 0.00
------------ --------------------------------------------- ------------
Total Distributions 0.00 1.36 1.09 0.95 0.05
------------ --------------------------------------------- ------------
Net Asset Value -
End of Period $ 13.19 $ 12.46 $ 11.78 $ 11.04 $ 10.01
============ ============================================= ============
TOTAL RETURN> 5.86%* 17.33% 16.59% 19.76% 0.60%*
RATIOS
Net Assets - End of Period
($000 Omitted) $40,892 $ 30,881 $14,033 $ 5,233 $ 624
Ratio of Expenses to Average
Net Assets# 0.41%*@ 0.83%@ 0.87%@ 0.97%@ 0.74%~
Ratio of Net Investment Income
to Average Net Assets# 4.35%* 8.67% 9.19% 8.79% 2.72%~
Portfolio Turnover Rate 159%* 344% 380% 310% 23%*
</TABLE>
^ From May 27, 1994, commencement of investment operations, to December 31,
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 periods shown.
* Based on operations for the period shown and, accordingly, are not
representative of a full year.
<PAGE>
# Various expenses of the Portfolio were voluntarily absorbed by IFG for the
years ended December 31, 1997, 1996 and 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 0.94%, 1.32%, 2.71% and
30.38%, respectively, and ratio of net investment income to average net
assets would have been 8.56%, 8.74%, 7.05% and (26.92)%, respectively.
@ Ratio is based on Total Expenses of the Portfolio, less Expenses Absorbed by
Investment Adviser, which is before any expense offset arrangements.
~ Annualized
<PAGE>
<TABLE>
<CAPTION>
INVESCO Variable Investment Funds, Inc.
Financial Highlights (Continued)
(For a Fund Share Outstanding Throughout Each Period)
Six Months Period
Ended Ended
June 30 Year Ended December 31 December 31
------------ -------------------------------------------- ------------
1998 1997 1996 1995 1994^
UNAUDITED
Industrial Income Portfolio
<S> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value --
Beginning of Period $ 17.04 $ 14.33 $ 12.58 $ 10.09 $ 10.00
------------ -------------------------------------------- ------------
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income 0.16 0.30 0.28 0.19 0.03
Net Gains on Securities
(Both Realized and
Unrealized) 1.58 3.71 2.52 2.76 0.09
------------ -------------------------------------------- ------------
Total from Investment
Operations 1.74 4.01 2.80 2.95 0.12
------------ -------------------------------------------- ------------
LESS DISTRIBUTIONS
Dividends from Net
Investment Income 0.00 0.29 0.28 0.20 0.03
------------ -------------------------------------------- ------------
Distributions from
Capital Gains 0.00 1.01 0.77 0.26 0.00
------------ -------------------------------------------- -------------
Total Distributions 0.00 1.30 1.05 0.46 0.03
------------ -------------------------------------------- -------------
Net Asset Value --
End of Period $ 18.78 $17.04 $ 14.33 $ 12.58 $ 10.09
============ =========================================== =============
TOTAL RETURN> 10.21%* 28.17% 22.28% 29.25% 1.23%*
RATIOS
Net Assets -- End of Period
($000 Omitted) $ 52,592 $40,093 $22,342 $ 8,362 $ 525
Ratio of Expenses to
Average Net Assets# 0.46%*@ 0.91%@ 0.95%@ 1.03%@ 0.79%~
Ratio of Net Investment Income
to Average Net Assets# 0.95%* 2.18% 2.87% 3.50% 1.69%~
Portfolio Turnover Rate 38%* 87% 93% 97% 0%*
</TABLE>
^ From August 10, 1994, commencement of investment operations, to December 31,
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 periods shown.
* Based on operations for the period shown and, accordingly, are not
representative of a full year.
<PAGE>
# Various expenses of the Portfolio were voluntarily absorbed by IFG for the
six months ended June 30, 1998, the years ended December 31, 1997, 1996, and
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
0.46%, 0.97%, 1.19%, 2.31% and 32.55%, respectively, and ratio of net
investment income to average net assets would have been 0.95%, 2.12%, 2.63%,
2.22% and (30.07)%, respectively.
< Ratio is based on Total Expenses of the Portfolio, less Expenses Absorbed by
Investment Adviser, which is before any expense offset arrangements.
~ Annualized
<PAGE>
<TABLE>
<CAPTION>
INVESCO Variable Investment Funds, Inc.
Financial Highlights (Continued)
(For a Fund Share Outstanding Throughout Each Period)
Period
Ended
June 30
---------------
1998+
UNAUDITED
Realty Portfolio
<S> <C>
PER SHARE DATA
Net Asset Value-- Beginning of Period $10.00
---------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.09
Net Losses on Securities (Both Realized and Unrealized) (0.59)
---------------
Total from Investment Operations (0.50)
---------------
Net Asset Value-- End of Period $ 9.50
===============
TOTAL RETURN> (5.00)%*
RATIOS
Net Assets-- End of Period ($000 Omitted) $ 376
Ratio of Expenses to Average Net Assets# 0.74%*@
Ratio of Net Investment Income to Average Net Assets# 1.88%*
Portfolio Turnover Rate 25%*
</TABLE>
+ From April 1, 1998, commencement of investments, to June 30, 1998.
> Total return does not reflect expenses that apply to the related insurance
policies, and inclusion of these charges would reduce the total return
figures for the period shown.
* Based on operations for the period shown and, accordingly, are not
representative of a full year.
< Various expenses of the Portfolio were voluntarily absorbed by IFG for the
period ended June 30, 1998. If such expenses had not been voluntarily
absorbed, ratio of expenses to average net assets would have been 3.06% (not
annualized) and ratio of net investment income to average net assets would
have been (0.44%) (not annualized).
@ Ratio is based on Total Expenses of the Portfolio, less Expenses Absorbed by
Investment Adviser, which is before any expense offset arrangements.
~ Annualized
<PAGE>
<TABLE>
<CAPTION>
INVESCO Variable Investment Funds, Inc.
Financial Highlights (Continued)
(For a Fund Share Outstanding Throughout Each Period)
Six Months Period
Ended Ended
June 30 December 31
------------ ------------
1998 1997+
UNAUDITED
Small Company Growth Portfolio
<S> <C> <C>
PER SHARE DATA
Net Asset Value-- Beginning of Period $ 9.91 $10.00
------------ -------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss) (0.04) 0.02
Net Gains or (Losses) on Securities
(Both Realized and Unrealized) 1.06 (0.11)
------------ -------------
Total from Investment Operations 1.02 (0.09)
------------ -------------
Net Asset Value-- End of Period $10.93 $ 9.91
============ =============
TOTAL RETURN> 10.29%* (0.90%)*
RATIOS
Net Assets-- End of Period ($000 Omitted) $ 369 $ 247
Ratio of Expenses to Average Net Assets# 0.81%*@ 0.61%@~
Ratio of Net Investment Income (Loss)
to Average Net Assets# (0.42%)* 0.52%~
Portfolio Turnover Rate 51%* 25%*
</TABLE>
+ From August 25, 1997, commencement of investment operations, through December
31, 1997.
> Total return does not reflect expenses that apply to the related insurance
policies, and inclusion of these charges would reduce the total return
figures for the period shown.
* Based on operations for the period shown and, accordingly, are not
representative of a full year.
# For the six months ended June 30, 1998, all of the expenses of the Portfolio
were voluntarily absorbed by IFG from January 1, 1998 through May 31, 1998
and various expenses of the Portfolio were voluntarily absorbed by IFG from
June 1, 1998 through June 30, 1998. All of the expenses of the Portfolio
were voluntarily absorbed by IFG for the period ended December 31, 1997. If
such expenses had not been voluntarily absorbed, ratio of expenses to average
net assets would have been 7.28% and 35.99%, respectively, and ratio of net
investment loss to average net assets would have been (6.89%) and (34.86%),
respectively.
@ Ratio is based on Total Expenses of the Portfolio, less Expenses Absorbed by
Investment Adviser, which is before any expense offset arrangements.
~ Annualized
<PAGE>
<TABLE>
<CAPTION>
INVESCO Variable Investment Funds, Inc.
Financial Highlights (Continued)
(For a Fund Share Outstanding Throughout Each Period)
Six Months Period
Ended Ended
June 30 December 31
------------ ------------
1998^ 1997+
UNAUDITED
Technology Portfolio
<S> <C> <C>
PER SHARE DATA
Net Asset Value-- Beginning of Period $11.49 $10.00
------------ ------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.02 0.05
Net Gains on Securities (Both
Realized and Unrealized) 2.17 1.44
------------ ------------
Total from Investment Operations 2.19 1.49
------------ ------------
Net Asset Value-- End of Period $13.68 $11.49
============ ============
TOTAL RETURN> 19.16%* 14.80%*
RATIOS
Net Assets-- End of Period ($000 Omitted) $ 981 $ 414
Ratio of Expenses to Average Net Assets# 0.55%*@ 0.48%@~
Ratio of Net Investment Income to
Average Net Assets# 0.18%* 0.95%~
Portfolio Turnover Rate 122%* 102%*
</TABLE>
^ The per share information was computed based on average shares.
+ From May 21, 1997, commencement of investment operations, to December 31,
1997.
> Total return does not reflect expenses that apply to the related insurance
policies, and inclusion of these charges would reduce the total return
figures for the period shown.
* Based on operations for the period shown and, accordingly, are not
representative of a full year.
# All of the expenses of the Portfolio were voluntarily absorbed by IFG from
January 1, 1998 through May 31, 1998 and for the period ended December 31,
1997. If such expenses had not been voluntarily absorbed, ratio of expenses
to average net assets would have been 3.86% (not annualized) and 19.25%,
respectively, and ratio of net investment income to average net assets would
have been (3.13%) (not annualized) and (17.82%), respectively.
@ Ratio is based on Total Expenses of the Portfolio, less Expenses Absorbed by
Investment Adviser, which is before any expense offset arrangements.
~ Annualized
<PAGE>
<TABLE>
<CAPTION>
INVESCO Variable Investment Funds, Inc.
Financial Highlights (Continued)
(For a Fund Share Outstanding Throughout Each Period)
Six Months Period
Ended Ended
June 30 Year Ended December December 31
------------ -------------------------------------------- --------------
1998 1997 1996 1995 1994^
UNAUDITED
Total Return Portfolio
<S> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value -
Beginning of Period $ 15.81 $ 13.21 $ 12.14 $ 10.09 $ 10.00
------------ --------------------------------------------- --------------
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income 0.20 0.36 0.36 0.25 0.09
Net Gains on Securities (Both
Realized and Unrealized) 0.93 2.66 1.12 2.05 0.09
------------ ---------------------------------------------- --------------
Total from Investment
Operations 1.13 3.02 1.48 2.30 0.18
------------ ---------------------------------------------- --------------
LESS DISTRIBUTIONS
Dividends from Net
Investment Income 0.00 0.34 0.36 0.24 0.09
In Excess of Net
Investment Income 0.00 0.00 0.05 0.00 0.00
Distributions from Capital Gains 0.00 0.08 0.00 0.01 0.00
------------ ---------------------------------------------- --------------
Total Distributions 0.00 0.42 0.41 0.25 0.09
------------ ---------------------------------------------- --------------
Net Asset Value -
End of Period $ 16.94 $ 15.81 $ 13.21 $ 12.14 $ 10.09
============ ============================================== ==============
TOTAL RETURN> 7.15% 22.91% 12.18% 22.79% 1.75%*
RATIOS
Net Assets - End of Period
($000 Omitted) $30,864 $23,268 $13,513 $ 6,553 $ 1,055
Ratio of Expenses to
Average Net Assets# 0.46%*@ 0.92%@ 0.94%@ 1.01%@ 0.86%~
Ratio of Net Investment Income
to Average Net Assets# 1.37%* 3.07% 3.44% 3.91% 3.86%~
Portfolio Turnover Rate 8%* 27% 12% 5% 0%*
</TABLE>
^ From June 2, 1994, commencement of investment operations, to December 31,
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 periods shown.
* Based on operations for the period shown and, accordingly, are not
representative of a full year.
<PAGE>
# Various expenses of the Portfolio were voluntarily absorbed by IFG for the
six months ended June 30, 1998, the years ended December 31, 1997, 1996 and
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
0.50%, 1.10%, 1.30%, 2.51% and 16.44%, respectively, and ratio of net
investment income to average net assets would have been 1.33%, 2.89%, 3.08%,
2.41% and (11.72%), respectively.
@ Ratio is based on Total Expenses of the Portfolio, less Expenses Absorbed by
Investment Adviser, which is before any expense offset arrangements.
~ Annualized
<PAGE>
<TABLE>
<CAPTION>
INVESCO Variable Investment Funds, Inc.
Financial Highlights (Continued)
(For a Fund Share Outstanding Throughout Each Period)
Six Months Period
Ended Ended
June 30 Year Ended December 31 December 31
------------ --------------------------------------------- -------------
1998 1997 1996 1995 1994+
UNAUDITED
Utilities Portfolio
<S> <C> <C> <C> <C> <C>
Net Asset Value --
Beginning of Period $ 14.40 $ 11.95 $ 10.84 $ 10.00 $ 10.00
------------ ---------------------------------------------- -------------
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income 0.16 0.31 0.13 0.07 0.00
Net Gains on Securities (Both
Realized and Unrealized) 1.62 2.48 1.26 0.84 0.00
------------ ---------------------------------------------- -------------
Total from Investment
Operations 1.78 2.79 1.39 0.91 0.00
------------ ---------------------------------------------- -------------
LESS DISTRIBUTIONS
Dividends from Net
Investment Income 0.00 0.29 0.13 0.07 0.00
In Excess of Net
Investment Income 0.00 0.00 0.01 0.00 0.00
Distributions from Capital
Gains 0.00 0.05 0.14 0.00 0.00
------------ ----------------------------------------------- -------------
Total Distributions 0.00 0.34 0.28 0.07 0.00
------------ ----------------------------------------------- -------------
Net Asset Value --
End of Period $ 16.18 $ 14.40 $ 11.95 $ 10.84 $ 10.00
============ =============================================== =============
TOTAL RETURN> 12.36%* 23.41% 12.76% 9.08% 0.00%
RATIOS
Net Assets -- End of Period
($000 Omitted) $ 5,463 $ 4,588 $ 2,660 $ 290 $ 25
Ratio of Expenses to Average
Net Assets# 0.48%*@ 0.99%@ 1.16%@ 1.80%@ 0.00%
Ratio of Net Investment Income
to Average Net Assets# 1.11%* 2.92% 2.92% 2.47% 0.00%
Portfolio Turnover Rate 22%* 33% 48% 24% 0%
</TABLE>
+ All of the expenses for the 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 periods shown.
* Based on operations for the period shown and, accordingly, are not
representative of a full year.
<PAGE>
# Various expenses of the Portfolio were voluntarily absorbed by IFG for the
six months ended June 30, 1998 and the years ended December 31, 1997, 1996
and 1995. If such expenses had not been voluntarily absorbed, ratio of
expenses to average net assets would have been 0.82%, 2.07%, 5.36% and
57.13%, respectively, and ratio of net investment income to average net
assets would have been 0.77%, 1.84%, (1.28%) and (52.86%), respectively.
@ Ratio is based on Total Expenses of the Portfolio, less Expenses Absorbed by
Investment Adviser, which is before any expense offset arrangements.
<PAGE>
INVESCO FUNDS
INVESCO Distributors, Inc.,(SM) Distributor
Post Office Box 173706
Denver, CO 80217-3706
1-800-525-8085
PAL(R): 1-800-424-8085
http://www.invesco.com
In Denver, visit one of our
convenient Investor Centers:
Cherry Creek, 155-B Fillmore Street
Denver Tech Center, 7800 East Union Avenue,
Lobby Level
This information must be preceded or
accompanied by a current prospectus.
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