INVESCO VARIABLE INVESTMENT FUNDS INC, 485APOS, 1999-06-11

INVESCO VARIABLE INVESTMENT FUNDS INC
485APOS, 1999-06-11

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As filed on June 11, 1999 File No. 033-70154

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
Pre-Effective Amendment No. ___ __
Post-Effective Amendment No. 15 X
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
Amendment No. 16 X

INVESCO VARIABLE INVESTMENT FUNDS, INC.
(Exact Name of Registrant as Specified in Charter)
7800 E. Union Avenue, Denver, Colorado 80237
(Address of Principal Executive Offices)
P.O. Box 173706, Denver, Colorado 80217-3706
(Mailing Address)
Registrant's Telephone Number, including Area Code: (303) 930-6300
Glen A. Payne, Esq.
7800 E. Union Avenue
Denver, Colorado 80237
(Name and Address of Agent for Service)
------------
Copies to:
W. Randolph Thompson, Esq.
Of Counsel, Jones & Blouch LLP
1025 Thomas Jefferson St., NW
Suite 405 West
Washington, D.C. 20007
------------
Approximate Date of Proposed Public Offering: As soon as practicable after this
post-effective amendment becomes effective.

It is proposed that this filing will become effective (check appropriate box)
_ immediately upon filing pursuant to paragraph (b)
_ on __________________ , pursuant to paragraph (b)
_ 60 days after filing pursuant to paragraph (a)(1)
_ on ____________, pursuant to paragraph (a)(1)
X 75 days after filing pursuant to paragraph (a)(2)
_ on _________, pursuant to paragraph (a)(2) of rule 485

If appropriate, check the following box:
_ this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.

Page 1 of 99
Exhibit index is located at page 88
<PAGE>

NOTE

This Post-Effective Amendment (Form N-1A) is being filed to add the INVESCO VIF
- - Financial Services Fund and INVESCO VIF - Telecommunications Fund to the
Registrant, INVESCO Variable Investment Funds, Inc. and does not affect the
other ten series of the Registrant: INVESCO VIF - Blue Chip Growth Fund, INVESCO
VIF - Dynamics Fund, INVESCO VIF - Equity Income Fund, INVESCO VIF - Health
Sciences Fund, INVESCO VIF - High Yield Fund, INVESCO VIF - Realty Fund, INVESCO
VIF - Small Company Growth Fund, INVESCO VIF - Technology Fund, INVESCO VIF
Total Return Fund and INVESCO VIF - Utilities Fund.

<PAGE>
PROSPECTUS | ________________, 1999
- --------------------------------------------------------------------------------
YOU SHOULD KNOW WHAT INVESCO KNOWS (TM)
- --------------------------------------------------------------------------------
INVESCO VARIABLE INVESTMENT FUNDS, INC.
INVESCO VIF-
FINANCIAL SERVICES FUND

A mutual fund sold exclusively to insurance company separate accounts for
variable annuity and variable life insurance contracts.

TABLE OF CONTENTS
Investment Goals And Strategies......................4
Fund Performance.....................................4
Fees And Expenses....................................4
Investment Risks.....................................6
Risks Associated With Particular Investments.........7
Temporary Defensive Positions........................10
Fund Management......................................11
The Portfolio Manager................................11
Share Price..........................................11
Taxes................................................12
Dividends And Capital Gain Distributions.............12
Voting Rights........................................12

The Securities and Exchange Commission has not approved or disapproved the
shares of this Fund. Likewise, the Commission has not determined if this
Prospectus is truthful or complete. Anyone who tells you otherwise is
committing a federal crime.

[INVESCO ICON]
INVESCO
<PAGE>
THIS PROSPECTUS WILL TELL YOU MORE ABOUT:

[KEY ICON] INVESTMENT OBJECTIVES & STRATEGIES

[ARROW ICON] POTENTIAL INVESTMENT RISKS

[GRAPH ICON] PAST PERFORMANCE & POTENTIAL ADVANTAGES

[INVESCO ICON] WORKING WITH INVESCO
- --------------------------------------------------------------------------------

[KEY ICON] INVESTMENT GOALS AND STRATEGIES

FOR MORE DETAILS ABOUT THE FUND'S CURRENT INVESTMENTS AND MARKET OUTLOOK, PLEASE
SEE THE MOST RECENT ANNUAL OR SEMIANNUAL REPORT.

INVESCO Funds Group, Inc. ("INVESCO") is the investment adviser for the
Fund. Together with our affiliated companies, we at INVESCO control all
aspects of the management of the Fund.

The Fund is used solely as an investment vehicle for variable annuity or
variable life insurance contracts issued by certain life insurance
companies. You cannot purchase shares of the Fund directly. As an owner of
a variable annuity or variable life insurance contract that offers the Fund
as an investment option, however, you may allocate your contract values to
a separate account of the insurance company that invests in shares of the
Fund.

Your variable annuity or variable life insurance contract is offered
through its own prospectus, which contains information about that contract,
including how to purchase the contract and how to allocate contract values
to the Fund. INVESCO and the Fund do not control the insurance company that
issues your contract and are not responsible for anything stated in the
prospectus for your contract.

The Fund is aggressively managed. It primarily invests in equity securities
that INVESCO believes will rise in price - and increase in value - faster
than other investments, as well as options and other investments whose
value is based upon the values of equity securities. It can also invest in
debt securities.

The Fund normally invests at least 80% of its assets in the equity
securities of companies involved in the financial services sector. This
sector includes, among others, banks (regional and money-centers),
insurance companies (life, property and casualty, and multiline), and
investment and miscellaneous industries (asset managers, brokerage firms,
and government-sponsored agencies). The remainder of the Fund's assets are
not required to be invested in the sector. To determine whether a potential
investment is truly doing business in the financial services sector, a
company must meet at least one of the following tests:

* At least 50% of its gross income or its net sales must come from
activities in the financial services sector;
* At least 50% of its assets must be devoted to producing revenues from the
financial services sector; or
* Based on other available information, we determine that its primary
business is within the financial services sector.

INVESCO uses a bottom-up investment approach to create the Fund's
investment portfolio, focusing on company fundamentals and growth prospects
when selecting securities. In general, the Fund emphasizes strongly managed
companies that INVESCO believes will generate above-average growth rates
for the next three to five years. We prefer markets and industries where
leadership is in a few hands, and we tend to avoid slower-growing markets
or industries.
<PAGE>
Because of accounting differences in this sector, we place a greater
emphasis on companies that are increasing their revenue streams along with
their earnings. We seek companies that we believe can grow their revenues
and earnings regardless of the interest rate environment - although
securities prices of financial services companies generally are interest
rate-sensitive. We prefer companies that have both marketing expertise and
superior technology, because INVESCO believes these companies are more
likely to deliver products that match their customers' needs. We attempt to
keep the portfolio holdings well diversified across the entire financial
services sector. We adjust portfolio weightings depending on current
economic conditions and relative valuations of securities.

The Fund's investments are diversified across the financial services
sector. However, because the Fund's investments are limited to a
comparatively narrow segment of the economy, the portfolio is not as
diversified as most mutual funds, and far less diversified than the broad
securities markets. This means the Fund tends to be more volatile than many
other mutual funds, and the value of its portfolio investments may tend to
go up and down more rapidly. As a result, the value of your investment in
the Fund may rise or fall rapidly.

Regulatory changes can significantly affect the sector and the Fund. In
addition, the profitability of businesses in these industries depends
heavily upon the availability and cost of money, and may fluctuate
significantly in response to changes in interest rates, as well as changes
in general economic conditions. From time to time, severe competition may
also affect the profitability of these industries, and the insurance
industry in particular.

[ARROW ICON] FUND PERFORMANCE

The Fund is initially offered by this Prospectus, and therefore has no
historical performance.

FEES AND EXPENSES

ANNUAL FUND OPERATING EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS
VIF-FINANCIAL SERVICES FUND
Management Fees ____%
Distribution and Service(12b-1)Fees None
Other Expenses(1) ____%
Total Annual Fund Operating Expenses(1) ____%

(1)Based on estimated expenses for the current fiscal year which may be
more or less than actual expenses. Actual expenses are not provided
because the Fund did not begin a public offering of its shares until
_______________, 1999. If necessary, certain Fund expenses will be
absorbed by INVESCO for at least the first fiscal year of the Fund's
operations in order to ensure that expenses for the Fund will not exceed
____% of the Fund's average net assets pursuant to an agreement between
the Fund and INVESCO. If such expense limit was not in effect, the
Fund's "Other Expenses" and "Total Fund Operating Expenses" for the
fiscal year ending December 31, 1999 are estimated to be ____% and
____%, respectively, of the Fund's average net assets.

INVESCO has agreed with the Company to absorb certain expense of the Fund
so that the Fund's total operating expenses do not exceed ____% of the
Fund's average net assets. This agreement is binding until May 2000, at
which time INVESCO and the Company will review it and decide if it should
be changed.
<PAGE>
EXAMPLE
This Example is intended to help you compare the cost of investing in the
Fund to the cost of investing in other mutual funds.

This Example assumes a $10,000 allocation to the Fund for the time periods
indicated and does not reflect any of the fees or expenses of your variable
annuity or variable insurance contract. The Example also assumes a
hypothetical 5% return each year, and assumes that the Fund's operating
expenses remain the same. Although the Fund's actual costs and performance
may be higher or lower, based on these assumptions your costs would have
been:

1 year 3 years 5 years 10 years
$---- $---- $---- $----

[ARROW ICON] INVESTMENT RISKS

BEFORE ALLOCATING CONTRACT VALUES TO THE FUND, YOU SHOULD DETERMINE THE LEVEL OF
RISK WITH WHICH YOU ARE COMFORTABLE. TAKE INTO ACCOUNT FACTORS LIKE YOUR AGE,
CAREER, INCOME LEVEL, AND TIME HORIZON.

You should determine the level of risk with which you are comfortable
before you allocate contract values to the Fund. The principal risks of any
mutual fund, including the Fund, are:

NOT INSURED. Mutual funds are not insured by the Federal Deposit Insurance
Corporation ("FDIC") or any other agency, unlike bank deposits such as CDs
or savings accounts.

NO GUARANTEE. No mutual fund can guarantee that it will meet its investment
objectives.

POSSIBLE LOSS OF INVESTMENT. A mutual fund cannot guarantee its
performance, nor assure you that the market value of your investment will
increase. You may lose the money you invest, and the Fund will not
reimburse you for any of these losses.

VOLATILITY. The price of Fund shares will increase or decrease with changes
in the value of the Fund's underlying investments.

YEAR 2000. Many computer systems in use today may not be able to recognize
any date after December 31, 1999. If these systems are not fixed by that
date, it is possible that they could generate erroneous information or fail
altogether. INVESCO has committed substantial resources in an effort to
make sure that its own major computer systems will continue to function on
and after January 1, 2000. Of course, INVESCO cannot fix systems that are
beyond its control. If INVESCO's own systems, or the systems of third
parties upon which it relies, do not perform properly after December 31,
1999, the Fund could be adversely affected.

In addition, the markets for, or values of, securities in which the Fund
invests may possibly be hurt by computer failures affecting portfolio
investments or trading of securities beginning January 1, 2000. For
example, improperly functioning computer systems could result in securities
trade settlement problems and liquidity issues, production issues for
individual companies and overall economic uncertainties. Individual issuers
may incur increased costs in making their own systems Year 2000 compliant.
The combination of market uncertainty and increased costs means that there
is a possibility that Year 2000 computer issues may adversely affect the
Fund's investments.
<PAGE>
[ARROW ICON] RISKS ASSOCIATED WITH PARTICULAR INVESTMENTS

You should consider the special factors associated with the policies
discussed below in determining the appropriateness of allocating your
contract values to the Fund. See the Statement of Additional Information
for a discussion of additional risk factors.

MARKET RISK
Equity stock prices vary and may fall, thus reducing the value of the
Fund's investments. Certain stocks selected for the Fund's portfolio may
decline in value more than the overall stock market.

CREDIT RISK
The Fund may invest in debt instruments, such as notes and bonds. There is
a possibility that the issuers of these instruments will be unable to meet
interest payments or repay principal. Changes in the financial strength of
an issuer may reduce the credit rating of its debt instruments and may
affect their value.

DEBT SECURITIES RISK
Debt securities include bonds, notes and other securities that give the
holder the right to receive fixed amounts of principal, interest, or both,
on a date in the future or on demand. Debt securities also are often
referred to as fixed income securities, even if the rate of interest varies
over the life of the security.

Debt securities are generally subject to credit risk and market risk.
Credit risk is the risk that the issuer of the security may be unable to
meet interest or principal payments, or both, as they come due. Market risk
is the risk that the market value of the security may decline for a variety
of reasons, including changes in interest rates. An increase in interest
rates tends to reduce the market values of debt securities in which the
Fund invests. A decline in interest rates tends to increase the market
values of debt securities in which the Fund invests.

Moody's and Standard & Poor's ("S&P") ratings provide a useful but not
certain guide to the credit risk of many debt securities. The lower the
rating of a debt security, the greater the credit risk the rating service
assigns to the security. To compensate investors for accepting that greater
risk, lower-rated securities tend to offer higher interest rates.
Lower-rated debt securities are often referred to as "junk bonds." A debt
security is considered lower grade if it is rated Ba or less by Moody's or
BB or less by S&P and is usually considered to be speculative.

In addition to poor individual company performance in the marketplace or in
its internal management, a significant economic downturn or increase in
interest rates may cause issuers of debt securities to experience increased
financial problems which could hurt their ability to pay principal and
interest obligations, to meet projected business goals, and to obtain
additional financing. These conditions more severely impact issuers of
lower-rated debt securities. The market for lower-rated straight debt
securities may not be as liquid as the market for higher-rated straight
debt securities. Therefore, INVESCO attempts to limit purchases of
lower-rated securities to securities having an established secondary
market.
<PAGE>
Debt securities rated Caa by Moody's may be in default or may present risks
of non-payment of principal or interest. Lower-rated securities by S&P
(categories BB, B, CCC) include those which are predominantly speculative
because of the issuer's perceived capacity to pay interest and repay
principal in accordance with their terms; BB indicates the lowest degree of
speculation and CCC a high degree of speculation. While such bonds will
likely have some quality and protective characteristics, these are usually
outweighed by large uncertainties or major risk exposures to adverse
conditions.

CURRENCY RISK. A change in the exchange rate between U.S. dollars and a
foreign currency may reduce the value of the Fund's investment in a
security valued in the foreign currency, or based on that currency value.

POLITICAL RISK. Political actions, events or instability may result in
unfavorable changes in the value of a security.

REGULATORY RISK. Government regulations may affect the value of a
security. In foreign countries, securities markets that are less
regulated than those in the U.S. may permit trading practices that are
not allowed in the U.S.

DIPLOMATIC RISK. A change in diplomatic relations between the U.S. and a
foreign country could affect the value or liquidity of investments.

EUROPEAN ECONOMIC AND MONETARY UNION. Austria, Belgium, Finland, France,
Germany, Ireland, Italy, Luxembourg, The Netherlands, Portugal and Spain
are presently members of the European Economic and Monetary Union (the
"EMU") which as of January 1, 1999 adopted the euro as a common currency.
The national currencies will be sub-currencies of the euro until July 1,
2002, at which time the old currencies will disappear entirely. Other
European countries may adopt the euro in the future.

The introduction of the euro presents some uncertainties and possible
risks, which could adversely affect the value of securities held by the
Fund.

EMU countries, as a single market, may affect future investment decisions
of the Fund. As the euro is implemented, there may be changes in the
relative strength and value of the U.S. dollar and other major
currencies, as well as possible adverse tax consequences. The euro
transition by EMU countries - present and future - may affect the fiscal
and monetary levels of those participating countries. There may be
increased levels of price competition among business firms within EMU
countries and between businesses in EMU and non-EMU countries. The
outcome of these uncertainties could have unpredictable effects on trade
and commerce and result in increased volatility for all financial
markets.

INTEREST RATE RISK
Changes in interest rates will affect the resale value of debt securities
held in the Fund's portfolio. In general, as interest rates rise, the
resale value of debt securities decreases; as interest rates decline, the
resale value of debt securities generally increases. Debt securities with
longer maturities usually are more sensitive to interest rate movements.

DURATION RISK
Duration is a measure of a debt security's sensitivity to interest rate
changes. Duration is usually expressed in terms of years, with longer
durations usually more sensitive to interest rate fluctuations.
<PAGE>
LIQUIDITY RISK
The Fund's portfolio is liquid if the Fund is able to sell the securities
it owns at a fair price within a reasonable time. Liquidity is generally
related to the market trading volume for a particular security. Investments
in smaller companies or in foreign companies or companies in emerging
markets are subject to a variety of risks, including potential lack of
liquidity.

OPTIONS AND FUTURES RISK
Options and futures are common types of derivatives that the Fund may
occasionally use to hedge its investments. An option is the right to buy or
sell a security or other instrument, index or commodity at a specific price
on or before a specific date. A future is an agreement to buy or sell a
security or other instrument, index or commodity at a specific price on a
specific date. Counterparty Risk This is a risk associated primarily with
repurchase agreements and some derivatives transactions. It is the risk
that the other party in such a transaction will not fulfill its contractual
obligation to complete a transaction with the Fund.

LACK OF TIMELY INFORMATION RISK
Timely information about a security or its issuer may be unavailable,
incomplete or inaccurate. This risk is more common to securities issued by
foreign companies and companies in emerging markets than it is to the
securities of U.S.-based companies.

The Fund generally invests in equity securities of companies that are
related to financial services. However, in an effort to diversify its
holdings and provide some protection against the risk of other investments,
the Fund also may invest in other types of securities and other financial
instruments, as indicated in the chart below. These investments, which at
any given time may constitute a significant portion of the Fund's
portfolio, have their own risks.

- -------------------------------------------------------------------------------------
INVESTMENT RISKS
- -------------------------------------------------------------------------------------
FUTURES
A futures contract is an agreement to buy or sell a Market, Liquidity, and
specific amount of a financial instru ment (such as an Options and Futures Risks
index option) at a stated price on a stated date. The
Fund uses futures contracts to provide liquidity and to
hedge portfolio value.
- -------------------------------------------------------------------------------------
ILLIQUID SECURITIES
Securities that cannot be sold quickly at fair value. Liquidity Risk
- -------------------------------------------------------------------------------------
OPTIONS
The obligation or right to deliver or receive a security Credit, Information,
or other instrument, index or com modity, or cash Liquidity Risks, and
payment depending on the price of the underlying Options and Futures Risks
security or the perfor mance of an index or other
benchmark. Includes options on specific securities
and stock indices, and stock index futures. Used in
Fund's portfolio to provide liquidity and hedge portfolio
value.
- -------------------------------------------------------------------------------------
OTHER FINANCIAL INSTRUMENTS
These may include forward contracts, swaps, caps, floors Counterparty, Credit,
and collars. They may be used to try to manage the Fund's Currency, Interest Rate,
foreign currency exposure and other investment risks, Liquidity, Market, and
which can cause its net asset value to rise or fall. The Regulatory Risks
Fund may use these financial instruments, commonly known
as "derivatives," to increase or decrease its exposure to
changing securities prices, interest rates, currency
exchange rates or other factors.
- -------------------------------------------------------------------------------------
REPURCHASE AGREEMENT
A contract under which the seller of a security agrees Credit and Counterparty
to buy it back at an agreed-upon price and time in the Risks
future.
- -------------------------------------------------------------------------------------
RULE 144A SECURITIES
Securities that are not registered, but which are bought Liquidity Risk
and sold solely by institutional investors. The Fund
considers many Rule 144A securities to be "liquid,"
although the market for such securities typically is
less active than the public securities markets.
- -------------------------------------------------------------------------------------

</TABLE>

[ARROW ICON] TEMPORARY DEFENSIVE POSITIONS

When securities markets or economic conditions are unfavorable or
unsettled, we might try to protect the assets of the Fund by investing in
securities that are highly liquid such as high quality money market
instruments, like short-term U.S. government obligations, commercial paper
or repurchase agreements. We have the right to invest up to 100% of the
Fund's assets in these securities, although we are unlikely to do so. Even
though the securities purchased for defensive purposes often are considered
the equivalent of cash, they also have their own risks. Investments that
are highly liquid or comparatively safe tend to offer lower returns.
Therefore, the Fund's performance could be comparatively lower if it
concentrates in defensive holdings.
<PAGE>
[INVESCO ICON] FUND MANAGEMENT

INVESCO IS A SUBSIDIARY OF AMVESCAP PLC, AN INTERNATIONAL INVESTMENT MANAGEMENT
COMPANY THAT MANAGES MORE THAN $281 BILLION IN ASSETS WORLDWIDE. AMVESCAP IS
BASED IN LONDON, WITH MONEY MANAGERS LOCATED IN EUROPE, NORTH AND SOUTH AMERICA,
AND THE FAR EAST.

THE INVESTMENT ADVISER

INVESCO, located at 7800 East Union Avenue, Denver, Colorado, is the
investment adviser of the Fund. INVESCO was founded in 1932 and manages
over $22.7 billion for more than 900,000 shareholders of 50 INVESCO mutual
funds. INVESCO performs a wide variety of other services for the Funds,
including administration and transfer agency functions (the processing of
purchases, sales and exchanges of Fund shares). A wholly owned subsidiary
of INVESCO, INVESCO Distributors, Inc. ("IDI"), is the Fund's distributor
and is responsible for the sale of the Fund's shares.

INVESCO and IDI are subsidiaries of AMVESCAP PLC.

The Fund had not paid any advisory fees as of December 31, 1998, as it did
not commence operations until _____________, 1999.

[INVESCO ICON] THE PORTFOLIO MANAGER

The following individual is responsible for the day-to-day management of
the Fund's portfolio holdings:

Jeffrey G. Morris, a Chartered Financial Analyst, has been the portfolio
manager of the Fund since _________ . Jeff also manages INVESCO Financial
Services Fund and is a vice president of INVESCO. He joined INVESCO in 1992
and served as a research analyst from 1994 to 1995. Jeff received an M.S.
in Finance from the University of Colorado-Denver and a B.S. in Business
Administration from Colorado State University.

Jeff Morris is a member of INVESCO's Sector Team, which is co-led by
William R. Keithler and John R. Schroer.

[INVESCO ICON] SHARE PRICE

CURRENT MARKET VALUE OF FUND ASSETS
+ ACCRUED INTEREST AND DIVIDENDS
- - FUND DEBTS,
INCLUDING ACCRUED EXPENSES
- --------------------------------------
/ NUMBER OF SHARES
= YOUR SHARE PRICE (NAV).

The value of Fund shares is likely to change daily. This value is known as
the Net Asset Value per share, or NAV. INVESCO determines the market value
of each investment in the Fund's portfolio each day that the New York Stock
Exchange ("NYSE") is open, at the close of trading on that exchange
(normally, 4:00 p.m. New York time). Therefore, shares of the Fund are not
priced on days when the NYSE is closed, which, generally, is on weekends
and national holidays in the U.S.

<PAGE>
Foreign securities exchanges, which set the prices for foreign securities
held by the Fund, are not always open the same days as the NYSE, and may be
open for business on days the NYSE is not. For example, Thanksgiving Day is
a holiday observed by the NYSE and not by overseas exchanges. In this
situation, the Fund would not calculate NAV on Thanksgiving Day (and
INVESCO would not buy, sell or exchange shares on that day), even though
activity on foreign exchanges could result in changes in the value of
investments held by the Fund on that day.

[GRAPH ICON] TAXES

The Fund has elected to be taxed as a "regulated investment company" under
the provisions of Subchapter M of the Internal Revenue Code of 1986, as
amended ("the Code"). If the Fund continues to qualify as a "regulated
investment company" and complies with the appropriate provisions of the
Code, it will pay no federal income taxes on the amounts it distributes.

Because the shareholders of the Fund are insurance companies (such as the
one that issues your contract), no discussion of the federal income tax
consequences to shareholders is included here. For information about the
federal tax consequences of purchasing the contracts, see the prospectus
for your contract.

[GRAPH ICON] DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS

NET INVESTMENT INCOME AND NET REALIZED CAPITAL GAINS ARE DISTRIBUTED TO
SHAREHOLDERS AT LEAST ANNUALLY.

The Fund intends to distribute substantially all of its net investment
income, if any, in dividends to its shareholders. For dividend purposes,
net investment income consists of all dividends or interest earned by the
Fund's investments, minus the Fund's expenses (including the advisory fee).
All of the Fund's net realized capital gains, if any, are distributed
periodically, at least once a year. All dividends and distributions of the
Fund are reinvested in additional shares of the Fund at net asset value.

[INVESCO ICON] VOTING RIGHTS

Since the shares of the Fund are owned by your insurance company and not by
you directly, you will not vote shares of the Fund. Your insurance company
will vote the shares that it holds as required by state and federal law.
Your contract prospectus contains more information on your rights to
instruct your insurance company how to vote Fund shares held in connection
with your contract.

<PAGE>

_______________________, 1999
INVESCO VARIABLE INVESTMENT FUNDS, INC.
INVESCO VIF-FINANCIAL SERVICES FUND

You may obtain additional information about the Fund from several sources:

FINANCIAL REPORTS. Although this Prospectus describes the Fund's
anticipated investments and operations, the Fund also prepares annual and
semiannual reports that detail the Fund's actual investments at the report
date. These reports include discussion of the Fund's recent performance, as
well as market and general economic trends affecting the Fund's
performance. The annual report also includes the report of the Fund's
independent accountants.

STATEMENT OF ADDITIONAL INFORMATION. The SAI dated ______________, 1999, is
a supplement to this Prospectus, and has detailed information about the
Fund and its investment policies and practices. A current SAI for the Fund
is on file with the Securities and Exchange Commission and is incorporated
in this Prospectus by reference; in other words, the SAI is legally a part
of this Prospectus, and you are considered to be aware of the contents of
the SAI.

INTERNET. The current Prospectus of the Fund may be accessed through the
INVESCO Web site at www.invesco.com. In addition, the Prospectus, annual
report, semiannual report and the SAI of the Fund are available on the SEC
Web site at www.sec.gov.

To obtain a free copy of the current annual report, semiannual report or
SAI, write to INVESCO Distributors, Inc., P.O. Box 173706, Denver, Colorado
80217-3706; or call 1-800-525-8085. Copies of these materials are also
available (with a copying charge) from the SEC's Public Reference Section
at 450 Fifth Street, N.W., Washington, D.C. Information on the Public
Reference Section can be obtained by calling 1-800-SEC-0330. The SEC file
numbers for the Fund are 811-8038 and 033-70154.

To reach PAL(R), your 24-hour Personal Account Line, call:

1-800-424-8085

If you're in Denver, please visit one of our convenient Investor Centers:

Cherry Creek
155-B Fillmore Street

Denver Tech Center
7800 East Union Avenue

PV12 811-8038

A mutual fund sold exclusively to insurance company separate accounts for
variable annuity and variable life insurance contracts.

TABLE OF CONTENTS
Investment Goals And Strategies......................15
Fund Performance.....................................16
Fees And Expenses....................................16
Investment Risks.....................................17
Risks Associated With Particular Investments.........17
Temporary Defensive Positions........................21
Fund Management......................................22
The Portfolio Manager................................22
Share Price..........................................22
Taxes................................................23
Dividends And Capital Gain Distributions.............23
Voting Rights........................................23

[INVESCO ICON]
INVESCO
<PAGE>
THIS PROSPECTUS WILL TELL YOU MORE ABOUT:

[KEY ICON] INVESTMENT OBJECTIVES & STRATEGIES

[ARROW ICON] POTENTIAL INVESTMENT RISKS

[GRAPH ICON] PAST PERFORMANCE & POTENTIAL ADVANTAGES

[INVESCO ICON] WORKING WITH INVESCO
- --------------------------------------------------------------------------------

[KEY ICON] INVESTMENT GOALS AND STRATEGIES

FOR MORE DETAILS ABOUT THE FUND'S CURRENT INVESTMENTS AND MARKET OUTLOOK, PLEASE
SEE THE MOST RECENT ANNUAL OR SEMIANNUAL REPORT.

INVESCO Funds Group, Inc. ("INVESCO") is the investment adviser for the
Fund. Together with our affiliated companies, we at INVESCO control all
aspects of the management of the Fund.

The Fund is aggressively managed. It primarily invests in equity securities
that INVESCO believes will rise in price -- and increase in value -- faster
than other investments, as well as options and other investments whose
value is based upon the values of equity securities. It can also invest in
debt securities. Above-average current income is an additional
consideration in the Fund's investments.

The Fund normally invests at least 80% of its assets in the equity
securities of companies that are primarily engaged in the design,
development, manufacture, distribution, or sale of communications services
and equipment, and companies that are involved in developing, constructing,
or operating communications infrastructure projects throughout the world,
or in supplying equipment or services to such companies.

The telecommunications sector includes companies that offer telephone
services, wireless communications, satellite communications, television and
movie programming, and broadcasting. Infrastructure projects may include
communications, as well as utilities, natural gas and oil pipelines, and
transportation projects such as airports, railroads and highways. To
determine whether a potential investment is truly doing business in the
telecommunications sector, a company must meet at least one of the
following tests:

* At least 50% of its gross income or its net sales must come from
activities in the telecommunications sector;
* At least 50% of its assets must be devoted to producing revenues from the
telecommunications sector; or
* Based on other available information, we determine that its primary
business is within the telecommunications sector.
<PAGE>
INVESCO uses a bottom-up investment approach to create the Fund's
investment portfolio, focusing on company fundamentals and growth prospects
when selecting securities. We select stocks based on projected total return
for individual companies, while also analyzing country-specific factors
that might affect stock performance or influence company valuation.
Normally, the Fund will invest at least 65% of its assets in companies
located in at least three different countries, although U.S.
issuers will often dominate the portfolio.

We prefer markets and industries where leadership is in a few hands, and we
tend to avoid slower-growing markets or industries. The Fund's portfolio
emphasizes strongly managed market leaders, with a lesser weighting on
smaller, faster-growing companies which offer new products or services
and/or are increasing their market shares.

The Fund's investments are diversified across the telecommunications
sector. However, because the Fund's investments are limited to a
comparatively narrow segment of the economy, the portfolio is not as
diversified as most mutual funds, and far less diversified than the broad
securities markets. This means the Fund tends to be more volatile than many
other mutual funds, and the value of its portfolio investments may tend to
go up and down more rapidly. As a result, the value of your investment in
the Fund may rise or fall rapidly. The telecommunications sector is highly
regulated, and changes in government regulation can play a significant role
in the prospects of the sector or specific markets within the
telecommunications sector.

[GRAPH ICON] FUND PERFORMANCE

The Fund is initially offered by this Prospectus, and therefore has no
historical performance.

FEES AND EXPENSES

ANNUAL FUND OPERATING EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS
VIF-TELECOMMUNICATIONS FUND
Management Fees ____%
Distribution and Service(12b-1) Fees None
Other Expenses(1) ____%
Total Annual Fund Operating Expenses(1) ____%

EXAMPLE
This Example is intended to help you compare the cost of investing in the
Fund to the cost of investing in other mutual funds.
<PAGE>
This Example assumes a $10,000 allocation to the Fund for the time periods
indicated and does not reflect any of the fees or expenses of your variable
annuity or variable insurance contract. The Example also assumes a
hypothetical 5% return each year, and assumes that the Fund's operating
expenses remain the same. Although the Fund's actual costs and performance
may be higher or lower, based on these assumptions your costs would have
been:
1 year 3 years 5 years 10 years
$---- $---- $---- $----

[ARROW ICON] INVESTMENT RISKS

BEFORE ALLOCATING CONTRACT VALUES TO THE FUND, YOU SHOULD DETERMINE THE LEVEL OF
RISK WITH WHICH YOU ARE COMFORTABLE. TAKE INTO ACCOUNT FACTORS LIKE YOUR AGE,
CAREER, INCOME LEVEL, AND TIME HORIZON.

You should determine the level of risk with which you are comfortable
before you allocate contract values to the Fund. The principal risks of any
mutual fund, including the Fund, are:

NOT INSURED. Mutual funds are not insured by the Federal Deposit Insurance
Corporation ("FDIC") or any other agency, unlike bank deposits such as CDs
or savings accounts.

NO GUARANTEE. No mutual fund can guarantee that it will meet its investment
objectives.

VOLATILITY. The price of Fund shares will increase or decrease with changes
in the value of the Fund's underlying investments.

[ARROW ICON] RISKS ASSOCIATED WITH PARTICULAR INVESTMENTS

POTENTIAL CONFLICTS
Although it is unlikely, there potentially may be differing interests
involving the Fund among owners of variable annuity and variable life
insurance contracts issued by different insurance companies, or even the
same insurance company. INVESCO will monitor events for any potential
conflicts.
<PAGE>
MARKET RISK
Equity stock prices vary and may fall, thus reducing the value of the
Fund's investments. Certain stocks selected for the Fund's portfolio may
decline in value more than the overall stock market. In general, the
securities of large businesses with outstanding securities worth $5 billion
or more have less volatility than those of mid-size businesses with
outstanding securities worth more than $1 billion or small businesses with
outstanding securities worth less than $1 billion.

Debt securities rated Caa by Moody's may be in default or may present risks
of non-payment of principal or interest. Lower-rated securities by S&P
(categories BB, B, CCC) include those which are predominantly speculative
because of the issuer's perceived capacity to pay interest and repay
principal in accordance with their terms; BB indicates the lowest degree of
speculation and CCC a high degree of speculation. While such bonds will
likely have some quality and protective characteristics, these are usually
outweighed by large uncertainties or major risk exposures to adverse
conditions.

FOREIGN SECURITIES RISK
Investments in foreign and emerging markets carry special risks, including
currency, political, regulatory and diplomatic risks. The Fund may invest
in securities of non-U.S. issuers.
<PAGE>
CURRENCY RISK. A change in the exchange rate between U.S. dollars and a
foreign currency may reduce the value of the Fund's investment in a
security valued in the foreign currency, or based on that currency value.

POLITICAL RISK. Political actions, events or instability may result in
unfavorable changes in the value of a security.

DIPLOMATIC RISK. A change in diplomatic relations between the U.S. and a
foreign country could affect the value or liquidity of investments.

The introduction of the euro presents some uncertainties and possible
risks, which could adversely affect the value of securities held by the
Fund.

LIQUIDITY RISK
The Fund's portfolio is liquid if the Fund is able to sell the securities
it owns at a fair price within a reasonable time. Liquidity is generally
related to the market trading volume for a particular security. Investments
in smaller companies or in foreign companies or companies in emerging
markets are subject to a variety of risks, including potential lack of
liquidity.

DERIVATIVES RISK
A derivative is a financial instrument whose value is "derived," in some
manner, from the price of another security, index, asset or rate.
Derivatives include options and futures contracts, among a wide range of
other instruments. The principal risk of investments in derivatives is that
the fluctuations in their values may not correlate perfectly with the
overall securities markets. Some derivatives are more sensitive to interest
rate changes and market price fluctuations than others. Also, derivatives
are subject to counterparty risk.
<PAGE>
OPTIONS AND FUTURES RISK
Options and futures are common types of derivatives that the Fund may
occasionally use to hedge its investments. An option is the right to buy or
sell a security or other instrument, index or commodity at a specific price
on or before a specific date. A future is an agreement to buy or sell a
security or other instrument, index or commodity at a specific price on a
specific date.

COUNTERPARTY RISK
This is a risk associated primarily with repurchase agreements and some
derivatives transactions. It is the risk that the other party in such a
transaction will not fulfill its contractual obligation to complete a
transaction with the Fund.

The Fund generally invests in equity securities of companies that are
related to telecommunications. However, in an effort to diversify its
holdings and provide some protection against the risk of other investments,
the Fund also may invest in other types of securities and other financial
instruments, as indicated in the chart below. These investments, which at
any given time may constitute a significant portion of the Fund's
portfolio, have their own risks.

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
INVESTMENT RISKS
- -------------------------------------------------------------------------------------
<S> <C>
AMERICAN DEPOSITORY RECEIPTS (ADRS)
These are securities issued by U.S. banks that represent Market, Information,
shares of foreign corporations held by those banks. Political, Regulatory,
Although traded in U.S. securities markets and valued in Diplomatic, Liquidity,
U.S. dollars, ADRs carry most of the risks of investing and Currency Risks
directly in foreign securities.
- -------------------------------------------------------------------------------------
DEBT SECURITIES
Securities issued by private companies or governments Market, Credit, Interest
representing an obligation to pay interest and to Rate, and Duration Risks
repay principal when the security matures.
- -------------------------------------------------------------------------------------
DELAYED DELIVERY OR WHEN-ISSUED SECURITIES
Ordinarily, the Fund purchases securities and pays for Market and Interest Rate
them in cash at the normal trade settlement time. When Risks
the Fund purchases a delayed delivery or when-issued
security, it promises to pay in the future - for example,
when the security is actually available for delivery to
the Fund. The Fund's obligation to pay and interest rate
it receives, in the case of debt securities, usually are
fixed when the Fund promises to pay. Between the date the
Fund promises to pay and the date the securities are
actually received, the Fund receives no interest on its
investment, and bears the risk that the market value
of the when-issued security may decline.
- -------------------------------------------------------------------------------------
FORWARD FOREIGN CURRENCY CONTRACTS
A contract to exchange an amount of currency on a date Currency, Political,
in the future at an agreed-upon exchange rate might be Diplomatic, and
used by the Fund to hedge against changes in foreign Regulatory Risks
currency exchange rates when the Fund invests in foreign
securities. Does not reduce price fluctuations in
foreign securities, or prevent losses if the prices of
those securities decline.
- -------------------------------------------------------------------------------------
<PAGE>

</TABLE>

[ARROW ICON] TEMPORARY DEFENSIVE POSITIONS

THE INVESTMENT ADVISER

INVESCO and IDI are subsidiaries of AMVESCAP PLC.

The Fund had not paid any advisory fees as of December 31, 1998, as it did
not commence operations until _____________, 1999.

[INVESCO ICON] THE PORTFOLIO MANAGER

The following individual is responsible for the day-to-day management of
the Fund's portfolio holdings:

Brian B. Hayward, a Chartered Financial Analyst, has been the portfolio
manager of the Fund since _________ . Brian also manages INVESCO
Telecommunications Fund, INVESCO Utilities Fund and INVESCO VIF - Utilities
Fund and is a vice president of INVESCO. Brian began his investment career
in 1985, and before joining INVESCO was senior equity analyst with
Mississippi Valley Advisors. He received an M.A.. in Economics and a B.A.
in Mathematics from the University of Missouri.

Brian Hayward is a member of the INVESCO Sector Team, which is co-led by
William R. Keithler and John R. Schroer.

[INVESCO ICON] SHARE PRICE

CURRENT MARKET VALUE OF FUND ASSETS
+ ACCRUED INTEREST AND DIVIDENDS
- - FUND DEBTS,
INCLUDING ACCRUED EXPENSES
- --------------------------------------
/ NUMBER OF SHARES
= YOUR SHARE PRICE (NAV).

NAV is calculated by adding together the current market price of all of the
Fund's investments and other assets, including accrued interest and
dividends; subtracting the Fund's debts, including accrued expenses; and
dividing that dollar amount by the total number of the Fund's outstanding
shares.
<PAGE>
Foreign securities exchanges, which set the prices for foreign securities
held by the Fund, are not always open the same days as the NYSE, and may be
open for business on days the NYSE is not. For example, Thanksgiving Day is
a holiday observed by the NYSE and not by overseas exchanges. In this
situation, the Fund would not calculate NAV on Thanksgiving Day (and
INVESCO would not buy, sell or exchange shares on that day), even though
activity on foreign exchanges could result in changes in the value of
investments held by the Fund on that day.

[GRAPH ICON] TAXES

[GRAPH ICON] DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS

NET INVESTMENT INCOME AND NET REALIZED CAPITAL GAINS ARE DISTRIBUTED TO
SHAREHOLDERS AT LEAST ANNUALLY.

[INVESCO ICON] VOTING RIGHTS

<PAGE>

________________________, 1999
INVESCO VARIABLE INVESTMENT FUNDS, INC.
INVESCO VIF - TELECOMMUNICATIONS FUND

You may obtain additional information about the Fund from several sources:

To reach PAL(R), your 24-hour Personal Account Line, call:

1-800-424-8085

If you're in Denver, please visit one of our convenient Investor Centers:

Cherry Creek
155-B Fillmore Street

Denver Tech Center
7800 East Union Avenue

PV12 811-8038

<PAGE>

STATEMENT OF ADDITIONAL INFORMATION

INVESCO VARIABLE INVESTMENT FUNDS, INC.

INVESCO VIF -- Blue Chip Growth Fund
(formerly, INVESCO VIF - Growth Portfolio)
INVESCO VIF -- Dynamics Fund
INVESCO VIF -- Equity Income Fund
(formerly, INVESCO VIF - Industrial Income Fund)
INVESCO VIF - Financial Services Fund
INVESCO VIF -- Health Sciences Fund
INVESCO VIF -- High Yield Fund
INVESCO VIF -- Realty Fund
INVESCO VIF -- Small Company Growth Fund
INVESCO VIF -- Technology Fund
INVESCO VIF - Telecommunications Fund
INVESCO VIF -- Total Return Fund
INVESCO VIF -- Utilities Fund

Address: Mailing Address:

7800 E. Union Ave., Denver, CO 80237 P.O. Box 173706, Denver, CO 80217-3706

Telephone:

In continental U.S., 1-800-525-8085

_________________, 1999

- ------------------------------------------------------------------------------

Prospectuses for Blue Chip Growth, Dynamics, Equity Income, Health Sciences,
High Yield, Realty, Small Company Growth, Technology, Total Return and Utilities
Funds dated May 1, 1999, and Prospectuses for Financial Services and
Telecommunications Fund dated _____________, 1999, provide the basic information
you should know before investing in a Fund. This Statement of Additional
Information ("SAI") is incorporated by reference into the Funds' Prospectuses;
in other words, this SAI is legally part of the Funds' Prospectuses. Although
this SAI is not a prospectus, it contains information in addition to that set
forth in the Prospectuses. It is intended to provide additional information
regarding the activities and operations of the Funds and should be read in
conjunction with the Prospectuses.

You may obtain, without charge, copies of the current Prospectuses of the
Funds, SAI and current annual and semiannual reports by writing to INVESCO
Distributors, Inc., P.O. Box 173706, Denver, CO 80217-3706 , or by calling
1-800-525-8085.

<PAGE>

Table of Contents

The Company . . . . . . . . . . . . . . . . . . 27

Investments, Policies and Risks . . . . . . . . 27

Management of the Funds . . . . . . . . . . . . .45

Other Service Providers . . . . . . . . . . . . 66

Brokerage Allocation and Other Practices . . . .67

Capital Stock . . . . . . . . . . . . . . . . . 70

Tax Consequences of Owning Shares of the Fund . .70

Performance . . . . . . . . . . . . . . . . . . 71

Financial Statements. . . . . . . . . . . . . . 75

Appendix A. . . . . . . . . . . . . . . . . . . 76

<PAGE>
THE COMPANY

The Company was incorporated under the laws of Maryland as INVESCO Variable
Investment Funds, Inc. on August 19, 1993.

The Company is an open-end, diversified, no-load management investment company
currently consisting of twelve portfolios of investments: INVESCO VIF -- Blue
Chip Growth, INVESCO VIF -- Dynamics, INVESCO VIF -- Equity Income, INVESCO VIF
- - Financial Services, INVESCO VIF -- Health Sciences, INVESCO VIF -- High Yield,
INVESCO VIF -- Realty, INVESCO VIF -- Small Company Growth, INVESCO VIF --
Technology, INVESCO VIF - Telecommunications, INVESCO VIF -- Total Return and
INVESCO VIF -- Utilities Funds (the "Funds"). Additional Funds may be offered in
the future. The Company'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 Participating Insurance
Companies.

"Open-end" means that each Fund issues an indefinite number of shares which it
continuously offers to redeem at net asset value per share ("NAV"). A
"management" investment company actively buys and sells securities for each
portfolio at the direction of a professional manager. Open-end management
investment companies (or one or more series of such companies, such as the
Funds) are commonly referred to as mutual funds.

INVESTMENTS, POLICIES AND RISKS

The principal investments and policies of the Funds are discussed in the
Prospectuses of the Funds. The Funds also may invest in the following securities
and engage in the following practices.

ADRs -- American Depository Receipts, or ADRs, are securities issued by American
banks. ADRs are receipts for the shares of foreign corporations that are held by
the bank issuing the receipt. An ADR entitles its holder to all dividends and
capital gains on the underlying foreign securities, less any fees paid to the
bank. Purchasing ADRs gives a Fund the ability to purchase the functional
equivalent of foreign securities without going to the foreign securities markets
to do so. ADRs are bought and sold in U.S. dollars, not foreign currencies. An
ADR that is "sponsored" means that the foreign corporation whose shares are
represented by the ADR is actively involved in the issuance of the ADR, and
generally provides material information about the corporation to the U.S.
market. An "unsponsored" ADR program means that the foreign corporation whose
shares are held by the bank is not obligated to disclose material information in
the United States, and, therefore, the market value of the ADR may not reflect
important facts known only to the foreign company.

Since they mirror their underlying foreign securities, ADRs generally have the
same risks as investing directly in the underlying foreign securities.

DEBT SECURITIES -- Debt securities include bonds, notes and other securities
that give the holder the right to receive fixed amounts of principal, interest,
or both on a date in the future or on demand. Debt securities also are often
referred to as fixed income securities, even if the rate of interest varies
over the life of the security.

Debt securities are generally subject to credit risk and market risk. Credit
risk is the risk that the issuer of the security may be unable to meet interest
or principal payments or both as they come due. Market risk is the risk that the
market value of the security may decline for a variety of reasons, including
changes in interest rates. An increase in interest rates tends to reduce the
market values of debt securities in which a Fund has invested. A decline in
interest rates tends to increase the market values of debt securities in which a
Fund has invested.
<PAGE>
Moody's Investor Services, Inc. ("Moody's") and Standard & Poor's ("S&P")
ratings provide a useful guide to the credit risk of many debt securities. The
lower the rating of a debt security, the greater the credit risk the rating
service assigns to the security. To compensate investors for accepting that
greater risk, lower-rated debt securities tend to offer higher interest rates.
Lower-rated debt securities are often referred to as "junk bonds." Increasing
the amount of Fund assets invested in unrated or lower grade straight debt
securities may increase the yield produced by a Fund's debt securities but will
also increase the credit risk of those securities. A debt security is considered
lower grade if it is rated Ba or less by Moody's or BB or less by S&P.

Lower-rated and non-rated debt securities of comparable quality are subject to
wider fluctuations in yields and market values than higher-rated debt securities
and may be considered speculative. Although a Fund may invest in debt securities
assigned lower grade ratings by S&P or Moody's, the Funds' investments have
generally been limited to debt securities rated B or higher by either S&P or
Moody's. Debt securities rated lower than B by either S&P or Moody's are usually
considered to be highly speculative. The Funds' investment adviser will limit
Fund investments to debt securities which the adviser believes are not highly
speculative and which are rated at least CCC by S&P or Caa by Moody's.

A significant economic downturn or increase in interest rates may cause issuers
of debt securities to experience increased financial problems which could
adversely affect their ability to pay principal and interest obligations, to
meet projected business goals, and to obtain additional financing. These
conditions more severely impact issuers of lower-rated debt securities. The
market for lower-rated debt securities may not be as liquid as the market for
higher-rated debt securities. Therefore, a Fund's investment adviser attempts to
limit purchases of lower-rated securities to securities having an established
secondary market.

Debt securities rated Caa by Moody's may be in default or may present risks of
non-payment of principal or interest. Lower rated securities by S&P (categories
BB, B, CCC) include those which are predominantly speculative because of the
issuer's perceived capacity to pay interest and repay principal in accordance
with their terms; BB indicates the lowest degree of speculation and CCC a high
degree of speculation. While such debt securities will likely have some quality
and protective characteristics, these are usually outweighed by large
uncertainties or major risk exposures to adverse conditions.

The Funds expect that most emerging country debt securities in which they invest
will not be rated by U.S. rating services. Although bonds in the lowest
investment grade debt category (those rated BBB by S&P, Baa by Moody's or the
equivalent) are regarded as having adequate capability to pay principal and
interest, they have speculative characteristics. Adverse economic conditions or
changing circumstances are more likely to lead to a weakened capacity to make
principal and interest payments than is the case for higher-rated bonds.
Lower-rated bonds by Moody's (categories Ba, B, or Caa) are of poorer quality
and also have speculative characteristics. Bonds rated Caa may be in default or
there may be present elements of danger with respect to principal or interest.
Lower-rated bonds by S&P (categories BB, B, or CCC) include those that are
regarded, on balance, as predominantly speculative with respect to the issuer's
capacity to pay interest and repay principal in accordance with their terms; BB
indicates the lowest degree of speculation and CCC a high degree of speculation.
While such bonds likely will have some quality and protective characteristics,
these are outweighed by large uncertainties or major risk exposures to adverse
conditions. Bonds having equivalent ratings from other ratings services will
have characteristics similar to those of the corresponding S&P and Moody's
ratings. For a specific description of S&P and Moody's corporate bond rating
categories, please refer to Appendix B.

EQUITY SECURITIES -- As discussed in the Prospectuses, the Funds may invest in
common, preferred and convertible preferred stocks, and securities whose values
are tied to the price of stocks, such as rights, warrants and convertible debt
securities. Common stocks and preferred stocks represent equity ownership in a
corporation. Owners of stock, such as the Funds, share in a corporation's
earnings through dividends which may be declared by the corporation, although
the receipt of dividends is not the principal benefit that the Funds seek when
they invest in stocks and similar instruments.
<PAGE>
Instead, the Funds seek to invest in stocks that will increase in market value
and may be sold for more than a Fund paid to buy them. Market value is based
upon constantly changing investor perceptions of what the company is worth
compared to other companies. Although dividends are a factor in the changing
market value of stocks, many companies do not pay dividends, or pay
comparatively small dividends. As discussed in the Prospectuses, the principal
risk of investing in equity securities is that their market values fluctuate
constantly, often due to factors entirely outside the control of the Funds or
the company issuing the stock. At any given time, the market value of an equity
security may be significantly higher or lower than the amount paid by a Fund to
acquire it.

Owners of preferred stocks are entitled to dividends payable from the
corporation's earnings, which in some cases may be "cumulative" if prior
dividends on the preferred stock have not been paid. Dividends payable on
preferred stock have priority over distributions to holders of common stock, and
preferred stocks generally have a priority on the distribution of assets in the
event of the corporation's liquidation. Preferred stocks may be "participating,"
which means that they may be entitled to dividends in excess of the stated
dividend in certain cases. The holders of a company's debt securities generally
are entitled to be paid by the company before it pays anything to its
stockholders.

Rights and warrants are securities which entitle the holder to purchase the
securities of a company (usually, its common stock) at a specified price during
a specified time period. The value of a right or warrant is affected by many of
the same factors that determine the prices of common stocks. Rights and warrants
may be purchased directly or acquired in connection with a corporate
reorganization or exchange offer.

The Funds also may purchase convertible securities including convertible debt
obligations and convertible preferred stock. A convertible security entitles the
holder to exchange it for a fixed number of shares of common stock (or other
equity security), usually at a fixed price within a specified period of time.
Until conversion, the owner of convertible securities usually receives the
interest paid on a convertible bond or the dividend preference of a preferred
stock.

A convertible security has an "investment value", which is a theoretical value
determined by the yield it provides in comparison with similar securities
without the conversion feature. Investment value changes are based upon
prevailing interest rates and other factors. It also has a "conversion value,"
which is the market value the convertible security would have if it were
exchanged for the underlying equity security. Convertible securities may be
purchased at varying price levels above or below their investment values or
conversion values.

Conversion value is a simple mathematical calculation that fluctuates directly
with the price of the underlying security. However, if the conversion value is
substantially below investment value, the market value of the convertible
security is governed principally by its investment value. If the conversion
value is near or above investment value, the market value of the convertible
security generally will rise above investment value. In such cases, the market
value of the convertible security may be higher than its conversion value, due
to the combination of the convertible security's right to interest (or dividend
preference) and the possibility of capital appreciation from the conversion
feature. However, there is no assurance that any premium above investment value
or conversion value will be recovered because prices change and, as a result,
the ability to achieve capital appreciation through conversion may be
eliminated.
<PAGE>
FOREIGN SECURITIES -- As discussed in the Prospectuses, investments in the
securities of foreign companies, or companies that have their principal business
activities outside the United States, involve certain risks not associated with
investment in U.S. companies. Non-U.S. companies generally are not subject to
the same uniform accounting, auditing and financial reporting standards that
apply to U.S. companies. Therefore, financial information about foreign
companies may be incomplete, or may not be comparable to the information
available on U.S. companies. There may also be less publicly available
information about a foreign company.

Although the volume of trading in foreign securities markets is growing,
securities of many non-U.S. companies may be less liquid and have greater swings
in price than securities of comparable U.S. companies. The costs of buying and
selling securities on foreign securities exchanges are generally significantly
higher than similar costs in the United States. There is generally less
government supervision and regulation of exchanges, brokers and issuers in
foreign countries than there is in the United States. Investment in non-U.S.
securities may also be subject to other risks different from those affecting
U.S. investments, including local political or economic developments,
expropriation or nationalization of assets, confiscatory taxation, and
imposition of withholding taxes on dividends or interest payments. If it becomes
necessary, it may be more difficult for a Fund to obtain or to enforce a
judgment against a foreign issuer than against a domestic issuer.

Securities traded on foreign markets are usually bought and sold in local
currencies, not in U.S. dollars. Therefore, the market value of foreign
securities acquired by a Fund can be affected -- favorably or unfavorably -- by
changes in currency rates and exchange control regulations. Costs are incurred
in converting money from one currency to another. Foreign currency exchange
rates are determined by supply and demand on the foreign exchange markets.
Foreign exchange markets are affected by the international balance of payments
and other economic and financial conditions, government intervention,
speculation and other factors, all of which are outside the control of each
Fund. Generally, the Funds' foreign currency exchange transactions will be
conducted on a cash or "spot" basis at the spot rate for purchasing or selling
currency in the foreign currency exchange markets.

FUTURES, OPTIONS AND OTHER FINANCIAL INSTRUMENTS

General. As discussed in the Prospectuses, the adviser and/or sub-adviser may
use various types of financial instruments, some of which are derivatives, to
attempt to manage the risk of the Funds' investments or, in certain
circumstances, for investment (e.g., as a substitute for investing in
securities). These financial instruments include options, futures contracts
(sometimes referred to as "futures"), forward contracts, swaps, caps, floors and
collars (collectively, "Financial Instruments"). The policies in this section do
not apply to other types of instruments sometimes referred to as derivatives,
such as indexed securities, mortgage-backed and other asset-backed securities,
and stripped interest and principal of debt.

Generally, the Funds are authorized to use any type of Financial Instrument.
However, as a non-fundamental policy, the Funds will only use a particular
Financial Instrument (other than those related to foreign currency) if the Funds
are authorized to take a position in the type of asset to which the return on,
or value of, the Financial Instrument is primarily related. Therefore, for
example, if a Fund is authorized to invest in a particular type of security
(such as an equity security), it could take a position in an option on an index
relating to equity securities.

Hedging strategies can be broadly categorized as "short" hedges and "long" or
"anticipatory" hedges. A short hedge involves the use of a Financial Instrument
in order to partially or fully offset potential variations in the value of one
or more investments held in a Fund's portfolio. A long or anticipatory hedge
involves the use of a Financial Instrument in order to partially or fully offset
potential increases in the acquisition cost of one or more investments that the

<PAGE>

Fund intends to acquire. In an anticipatory hedge transaction, the Fund does not
already own a corresponding security. Rather, it relates to a security or type
of security that the Fund intends to acquire. If the Fund does not eliminate the
hedge by purchasing the security as anticipated, the effect on the Fund's
portfolio is the same as if a long position were entered into. Financial
Instruments may also be used, in certain circumstances, for investment (e.g., as
a substitute for investing in securities).

Financial Instruments on individual securities generally are used to attempt to
hedge against price movements in one or more particular securities positions
that a Fund already owns or intends to acquire. Financial Instruments on
indexes, in contrast, generally are used to attempt to hedge all or a portion of
a portfolio against price movements of the securities within a market sector in
which the Fund has invested or expects to invest.

The use of Financial Instruments is subject to applicable regulations of the
Securities and Exchange Commission ("SEC"), the several exchanges upon which
they are traded, and the Commodity Futures Trading Commission ("CFTC"). In
addition, the Funds' ability to use Financial Instruments will be limited by tax
considerations. See "Tax Consequences of Owning Shares of the Funds."

In addition to the instruments and strategies described below, the adviser
and/or sub-adviser may use other similar or related techniques to the extent
that they are consistent with a Fund's investment objective and permitted by its
investment limitations and applicable regulatory authorities. The Funds'
Prospectuses or Statement of Additional Information ("SAI") will be supplemented
to the extent that new products or techniques become employed involving
materially different risks than those described below or in the Prospectuses.

Special Risks. Financial Instruments and their use involve special
considerations and risks, certain of which are described below.

(1) Financial Instruments may increase the volatility of the Funds. If the
adviser and/or sub-adviser employs a Financial Instrument that correlates
imperfectly with a Fund's investments, a loss could result, regardless of
whether or not the intent was to manage risk. In addition, these techniques
could result in a loss if there is not a liquid market to close out a position
that a Fund has entered.

(2) There might be imperfect correlation between price movements of a Financial
Instrument and price movement of the investment(s) being hedged. For example, if
the value of a Financial Instrument used in a short hedge increased by less than
the decline in value of the hedged investment(s), the hedge would not be fully
successful. This might be caused by certain kinds of trading activity that
distorts the normal price relationship between the security being hedged and the
Financial Instrument. Similarly, the effectiveness of hedges using Financial
Instruments on indexes will depend on the degree of correlation between price
movements in the index and price movements in the securities being hedged.

The Funds are authorized to use options and futures contracts related to
securities with issuers, maturities or other characteristics different from the
securities in which it typically invests. This involves a risk that the options
or futures position will not track the performance of a Fund's portfolio
investments.

The direction of options and futures price movements can also diverge from the
direction of the movements of the prices of their underlying instruments, even
if the underlying instruments match a Fund's investments well. Options and
futures prices are affected by such factors as current and anticipated
short-term interest rates, changes in volatility of the underlying instrument,
and the time remaining until expiration of the contract, which may not affect
security prices the same way. Imperfect correlation may also result from

<PAGE>

differing levels of demand in the options and futures markets and the securities
markets, from structural differences in how options and futures and securities
are traded, or from imposition of daily price fluctuation limits or trading
halts. The Funds may take positions in options and futures contracts with a
greater or lesser face value than the securities it wishes to hedge or intends
to purchase in order to attempt to compensate for differences in volatility
between the contract and the securities, although this may not be successful in
all cases.

(3) If successful, the above-discussed hedging strategies can reduce risk of
loss by wholly or partially offsetting the negative effect of unfavorable price
movements of portfolio securities. However, such strategies can also reduce
opportunity for gain by offsetting the positive effect of favorable price
movements. For example, if a Fund entered into a short hedge because the adviser
and/or sub-adviser projected a decline in the price of a security in the Fund's
portfolio, and the price of that security increased instead, the gain from that
increase would likely be wholly or partially offset by a decline in the value of
the short position in the Financial Instrument. Moreover, if the price of the
Financial Instrument declined by more than the increase in the price of the
security, the Fund could suffer a loss.

(4) A Fund's ability to close out a position in an exchange-traded Financial
Instrument prior to expiration or maturity depends on the degree of liquidity of
the market.

(5) As described below, the Funds are required to maintain assets as "cover,"
maintain segregated accounts or make margin payments when it takes positions in
Financial Instruments involving obligations to third parties (i.e., Financial
Instruments other than purchased options). If a Fund is unable to close out its
positions in such Financial Instruments, it might be required to continue to
maintain such assets or segregated accounts or make such payments until the
position expired. These requirements might impair a Fund's ability to sell a
portfolio security or make an investment at a time when it would otherwise be
favorable to do so, or require that the Fund sell a portfolio security at a
disadvantageous time.

Cover. Positions in Financial Instruments, other than purchased options, expose
the Funds to an obligation to another party. A Fund will not enter into any such
transaction unless it owns (1) an offsetting ("covered") position in securities,
currencies or other options, futures contracts or forward contracts, or (2) cash
and liquid assets with a value, marked-to-market daily, sufficient to cover its
obligations to the extent not covered as provided in (1) above. The Funds will
comply with SEC guidelines regarding cover for these instruments and will, if
the guidelines so require, designate cash or liquid assets as segregated in the
prescribed amount as determined daily.

Assets used as cover or held as segregated cannot be sold while the position in
the corresponding Financial Instrument is open unless they are replaced with
other appropriate assets. As a result, the commitment of a large portion of a
Fund's assets to cover or to hold as segregated could impede portfolio
management or the Fund's ability to meet redemption requests or other current
obligations.

Options. The Funds may engage in certain strategies involving options to attempt
to manage the risk of its investments or, in certain circumstances, for
investment (e.g., as a substitute for investing in securities). A call option
gives the purchaser the right to buy, and obligates the writer to sell the
underlying investment at the agreed-upon exercise price during the option
period. A put option gives the purchaser the right to sell, and obligates the
writer to buy the underlying investment at the agreed-upon exercise price during
the option period. Purchasers of options pay an amount, known as a premium, to
the option writer in exchange for the right under the option contract. See
"Options on Indexes" below with regard to cash settlement of option contracts on
index values.

<PAGE>

The purchase of call options can serve as a hedge against a price rise of the
underlier and the purchase of put options can serve as a hedge against a price
decline of the underlier. Writing call options can serve as a limited short
hedge because declines in the value of the hedged investment would be offset to
the extent of the premium received for writing the option. However, if the
security or currency appreciates to a price higher than the exercise price of
the call option, it can be expected that the option will be exercised and a Fund
will be obligated to sell the security or currency at less than its market
value.

Writing put options can serve as a limited long or anticipatory hedge because
increases in the value of the hedged investment would be offset to the extent of
the premium received for writing the option. However, if the security or
currency depreciates to a price lower than the exercise price of the put option,
it can be expected that the put option will be exercised and a Fund will be
obligated to purchase the security or currency at more than its market value.

The value of an option position will reflect, among other things, the current
market value of the underlying investment, the time remaining until expiration,
the relationship of the exercise price to the market price of the underlying
investment, the price volatility of the underlying investment and general market
and interest rate conditions. Options that expire unexercised have no value.

A Fund may effectively terminate its right or obligation under an option by
entering into a closing transaction. For example, the Fund may terminate its
obligation under a call or put option that it had written by purchasing an
identical call or put option; which is known as a closing purchase transaction.
Conversely, the Fund may terminate a position in a put or call option it had
purchased by writing an identical put or call option, which is known as a
closing sale transaction. Closing transactions permit a Fund to realize profits
or limit losses on an option position prior to its exercise or expiration.

Risks of Options on Securities. Options embody the possibility of large amounts
of exposure, which will result in a Fund's net asset value being more sensitive
to changes in the value of the related investment.

The Funds' ability to establish and close out positions in options depends on
the existence of a liquid market. If a Fund is not able to enter into an
offsetting closing transaction on an option it has written, it will be required
to maintain the securities subject to the call or the liquid assets underlying
the put until a closing purchase transaction can be entered into or the option
expires. However, there can be no assurance that such a market will exist at any
particular time.

If a Fund were unable to effect a closing transaction for an option it had
purchased, it would have to exercise the option to realize any profit. The
inability to enter into a closing purchase transaction for a covered call option
written by a Fund could cause material losses because the Fund would be unable
to sell the investment used as cover for the written option until the option
expires or is exercised.

Options on Indexes. Puts and calls on indexes are similar to puts and calls on
securities or futures contracts except that all settlements are in cash and
changes in value depend on changes in the index in question. When a Fund writes
a call on an index, it receives a premium and agrees that, prior to the
expiration date, upon exercise of the call, the purchaser will receive from the
Fund an amount of cash equal to the positive difference between the closing
price of the index and the exercise price of the call times a specified multiple
("multiplier"), which determines the total dollar value for each point of such
difference. When a Fund buys a call on an index, it pays a premium and has the
same rights as to such call as are indicated above. When a Fund buys a put on an
index, it pays a premium and has the right, prior to the expiration date, to

<PAGE>

require the seller of the put to deliver to the Fund an amount of cash equal to
the positive difference between the exercise price of the put and the closing
price of the index times the multiplier. When a Fund writes a put on an index,
it receives a premium and the purchaser of the put has the right, prior to the
expiration date, to require the Fund to deliver to it an amount of cash equal to
the positive difference between the exercise price of the put and the closing
level of the index times the multiplier.

The risks of purchasing and selling options on indexes may be greater than
options on securities. Because index options are settled in cash, when a Fund
writes a call on an index it cannot fulfill its potential settlement obligations
by delivering the underlying securities. A Fund can offset some of the risk of
writing a call index option by holding a diversified portfolio of securities
similar to those on which the underlying index is based. However, a Fund cannot,
as a practical matter, acquire and hold a portfolio containing exactly the same
securities as underlie the index and, as a result, bears a risk that the value
of the securities held will vary from the value of the index.

Even if a Fund could assemble a portfolio that exactly reproduced the
composition of the underlying index, it still would not be fully covered from a
risk standpoint because of the "timing risk" inherent in writing index options.
When an index option is exercised, the amount of cash that the holder is
entitled to receive is determined by the difference between the exercise price
and the closing index level. As with other kinds of options, a Fund as the call
writer will not learn what it has been assigned until the next business day. The
time lag between exercise and notice of assignment poses no risk for the writer
of a covered call on a specific underlying security, such as common stock,
because in that case the writer's obligation is to deliver the underlying
security, not to pay its value as of a moment in the past. In contrast, the
writer of an index call will be required to pay cash in an amount based on the
difference between the closing index value on the exercise date and the exercise
price. By the time a Fund learns what it has been assigned, the index may have
declined. This "timing risk" is an inherent limitation on the ability of index
call writers to cover their risk exposure.

If a Fund has purchased an index option and exercises it before the closing
index value for that day is available, it runs the risk that the level of the
underlying index may subsequently change. If such a change causes the exercised
option to fall out-of-the-money, a Fund nevertheless will be required to pay the
difference between the closing index value and the exercise price of the option
(times the applicable multiplier) to the assigned writer.

Futures Contracts and Options on Futures Contracts. When a Fund purchases or
sells a futures contract, it incurs an obligation respectively to take or make
delivery of a specified amount of the obligation underlying the contract at a
specified time and price. When a Fund writes an option on a futures contract, it
becomes obligated to assume a position in the futures contract at a specified
exercise price at any time during the term of the option. If a Fund writes a
call, on exercise it assumes a short futures position. If it writes a put, on
exercise it assumes a long futures position.

The purchase of futures or call options on futures can serve as a long or an
anticipatory hedge, and the sale of futures or the purchase of put options on
futures can serve as a short hedge. Writing call options on futures contracts
can serve as a limited short hedge, using a strategy similar to that used for
writing call options on securities or indexes. Similarly, writing put options on
futures contracts can serve as a limited long or anticipatory hedge.

<PAGE>

In addition, futures strategies can be used to manage the "duration" (a measure
of anticipated sensitivity to changes in interest rates, which is sometimes
related to the weighted average maturity of a portfolio) and associated interest
rate risk of a Fund's fixed-income portfolio. If the adviser and/or sub-adviser
wishes to shorten the duration of a Fund's fixed-income portfolio (i.e., reduce
anticipated sensitivity), a Fund may sell an appropriate debt futures contract
or a call option thereon, or purchase a put option on that futures contract. If
the adviser and/or sub-adviser wishes to lengthen the duration of a Fund's
fixed-income portfolio (i.e., increase anticipated sensitivity), a Fund may buy
an appropriate debt futures contract or a call option thereon, or sell a put
option thereon.

At the inception of a futures contract, a Fund is required to deposit "initial
margin" in an amount generally equal to 10% or less of the contract value.
Initial margin must also be deposited when writing a call or put option on a
futures contract, in accordance with applicable exchange rules. Subsequent
"variation margin" payments are made to and from the futures broker daily as the
value of the futures or written option position varies, a process known as
"marking-to-market." Unlike margin in securities transactions, initial margin on
futures contracts and written options on futures contracts does not represent a
borrowing on margin, but rather is in the nature of a performance bond or
good-faith deposit that is returned to a Fund at the termination of the
transaction if all contractual obligations have been satisfied. Under certain
circumstances, such as periods of high volatility, a Fund may be required to
increase the level of initial margin payments. If a Fund has insufficient cash
to meet daily variation margin requirements, it might need to sell securities in
order to do so at a time when such sales are disadvantageous.

Purchasers and sellers of futures contracts and options on futures can enter
into offsetting closing transactions, similar to closing transactions on
options, by selling or purchasing, respectively, an instrument identical to the
instrument purchased or sold. However, there can be no assurance that a liquid
market will exist for a particular contract at a particular time. In such event,
it may not be possible to close a futures contract or options position.

Under certain circumstances, futures exchanges may establish daily limits on the
amount that the price of a futures contract or an option on a futures contract
can vary from the previous day's settlement price; once that limit is reached,
no trades may be made that day at a price beyond the limit. Daily price limits
do not limit potential losses because prices could move to the daily limit for
several consecutive days with little or no trading, thereby preventing
liquidation of unfavorable positions.

If a Fund were unable to liquidate a futures contract or an option on a futures
contract position due to the absence of a liquid market or the imposition of
price limits, it could incur substantial losses. The Fund would continue to be
subject to market risk with respect to the position. In addition, except in the
case of purchased options, the Fund would continue to be required to make daily
variation margin payments and might be required to continue to maintain the
position being hedged by the futures contract or option or to continue to
maintain cash or securities in a segregated account.

To the extent that a Fund enters into futures contracts, options on futures
contracts and options on foreign currencies traded on a CFTC-regulated exchange,
in each case that is not for bona fide hedging purposes (as defined by the
CFTC), the aggregate initial margin and premiums required to establish these
positions (excluding the amount by which options are "in-the-money" at the time
of purchase) may not exceed 5% of the liquidation value of the Fund's portfolio,
after taking into account unrealized profits and unrealized losses on any
contracts the Fund has entered into. This policy does not limit to 5% the
percentage of the Fund's assets that are at risk in futures contracts, options
on futures contracts and currency options.

<PAGE>

Risks of Futures Contracts and Options Thereon. The ordinary spreads at a given
time between prices in the cash and futures markets (including the options on
futures markets), due to differences in the natures of those markets, are
subject to the following factors. First, all participants in the futures market
are subject to margin deposit and maintenance requirements. Rather than meeting
additional margin deposit requirements, investors may close futures contracts
through offsetting transactions, which could distort the normal relationship
between the cash and futures markets. Second, the liquidity of the futures
market depends on participants entering into offsetting transactions rather than
making or taking delivery. To the extent participants decide to make or take
delivery, liquidity in the futures market could be reduced, thus producing
distortion. Due to the possibility of distortion, a hedge may not be successful.
Additionally, the adviser and/or sub-adviser may be incorrect in its
expectations as to the extent of various interest rates, currency exchange rates
or stock market movements or the time span within which the movements take
place.

Index Futures. The risk of imperfect correlation between movements in the price
of index futures and movements in the price of the securities that are the
subject of a hedge increases as the composition of a Fund's portfolio diverges
from the index. The price of the index futures may move proportionately more
than or less than the price of the securities being hedged. If the price of the
index futures moves proportionately less than the price of the securities that
are the subject of the hedge, the hedge will not be fully effective. Assuming
the price of the securities being hedged has moved in an unfavorable direction,
as anticipated when the hedge was put into place, the Fund would be in a better
position than if it had not hedged at all, but not as good as if the price of
the index futures moved in full proportion to that of the hedged securities.
However, if the price of the securities being hedged has moved in a favorable
direction, this advantage will be partially offset by movement of the price of
the futures contract. If the price of the futures contract moves more than the
price of the securities, the Fund will experience either a loss or a gain on the
futures contract that will not be completely offset by movements in the price of
the securities that are the subject of the hedge.

Where index futures are purchased in an anticipatory hedge, it is possible that
the market may decline instead. If a Fund then decides not to invest in the
securities at that time because of concern as to possible further market decline
or for other reasons, it will realize a loss on the futures contract that is not
offset by a reduction in the price of the securities it had anticipated
purchasing.

Foreign Currency Hedging Strategies--Special Considerations. A Fund may use
options and futures contracts on foreign currencies, as mentioned previously,
and forward currency contracts, as described below, to attempt to hedge against
movements in the values of the foreign currencies in which a Fund's securities
are denominated or, in certain circumstances, for investment (e.g., as a
substitute for investing in securities denominated in foreign currency).
Currency hedges can protect against price movements in a security that a Fund
owns or intends to acquire that are attributable to changes in the value of the
currency in which it is denominated.

A Fund might seek to hedge against changes in the value of a particular currency
when no Financial Instruments on that currency are available or such Financial
Instruments are more expensive than certain other Financial Instruments. In such
cases, a Fund may seek to hedge against price movements in that currency by
entering into transactions using Financial Instruments on another currency or a
basket of currencies, the value of which the adviser and/or sub-adviser believes
will have a high degree of positive correlation to the value of the currency
being hedged. The risk that movements in the price of the Financial Instrument
will not correlate perfectly with movements in the price of the currency subject
to the hedging transaction may be increased when this strategy is used.

<PAGE>

The value of Financial Instruments on foreign currencies depends on the value of
the underlying currency relative to the U.S. dollar. Because foreign currency
transactions occurring in the interbank market might involve substantially
larger amounts than those involved in the use of such Financial Instruments, a
Fund could be disadvantaged by having to deal in the odd-lot market (generally
consisting of transactions of less than $1 million) for the underlying foreign
currencies at prices that are less favorable than for round lots.

There is no systematic reporting of last sale information for foreign currencies
or any regulatory requirement that quotations available through dealers or other
market sources be firm or revised on a timely basis. Quotation information
generally is representative of very large transactions in the interbank market
and thus might not reflect odd-lot transactions where rates might be less
favorable. The interbank market in foreign currencies is a global,
round-the-clock market. To the extent the U.S. options or futures markets are
closed while the markets for the underlying currencies remain open, significant
price and rate movements might take place in the underlying markets that cannot
be reflected in the markets for the Financial Instruments until they reopen.

Settlement of hedging transactions involving foreign currencies might be
required to take place within the country issuing the underlying currency. Thus,
a Fund might be required to accept or make delivery of the underlying foreign
currency in accordance with any U.S. or foreign regulations regarding the
maintenance of foreign banking arrangements by U.S. residents and might be
required to pay any fees, taxes and charges associated with such delivery
assessed in the issuing country.

Forward Currency Contracts and Foreign Currency Deposits. The Funds may enter
into forward currency contracts to purchase or sell foreign currencies for a
fixed amount of U.S. dollars or another foreign currency. A forward currency
contract involves an obligation to purchase or sell a specific currency at a
future date, which may be any fixed number of days (term) from the date of the
forward currency contract agreed upon by the parties, at a price set at the time
the forward currency contract is entered. Forward currency contracts are
negotiated directly between currency traders (usually large commercial banks)
and their customers.

Such transactions may serve as long or anticipatory hedges. For example, a Fund
may purchase a forward currency contract to lock in the U.S. dollar price of a
security denominated in a foreign currency that the Fund intends to acquire.
Forward currency contracts may also serve as short hedges. For example, a Fund
may sell a forward currency contract to lock in the U.S. dollar equivalent of
the proceeds from the anticipated sale of a security or a dividend or interest
payment denominated in a foreign currency.

The Funds may also use forward currency contracts to hedge against a decline in
the value of existing investments denominated in foreign currency. Such a hedge
would tend to offset both positive and negative currency fluctuations, but would
not offset changes in security values caused by other factors. A Fund could also
hedge the position by entering into a forward currency contract to sell another
currency expected to perform similarly to the currency in which the Fund's
existing investments are denominated. This type of hedge could offer advantages
in terms of cost, yield or efficiency, but may not hedge currency exposure as
effectively as a simple hedge against U.S. dollars. This type of hedge may
result in losses if the currency used to hedge does not perform similarly to the
currency in which the hedged securities are denominated.

The Funds may also use forward currency contracts in one currency or a basket of
currencies to attempt to hedge against fluctuations in the value of securities
denominated in a different currency if the adviser anticipates that there will
be a positive correlation between the two currencies.

<PAGE>

The cost to a Fund of engaging in forward currency contracts varies with factors
such as the currency involved, the length of the contract period and the market
conditions then prevailing. Because forward currency contracts are usually
entered into on a principal basis, no fees or commissions are involved. When a
Fund enters into a forward currency contract, it relies on the counterparty to
make or take delivery of the underlying currency at the maturity of the
contract. Failure by the counterparty to do so would result in the loss of some
or all of any expected benefit of the transaction.

As is the case with futures contracts, purchasers and sellers of forward
currency contracts can enter into offsetting closing transactions, similar to
closing transactions on futures contracts, by selling or purchasing,
respectively, an instrument identical to the instrument purchased or sold.
Secondary markets generally do not exist for forward currency contracts, with
the result that closing transactions generally can be made for forward currency
contracts only by negotiating directly with the counterparty. Thus, there can be
no assurance that a Fund will in fact be able to close out a forward currency
contract at a favorable price prior to maturity. In addition, in the event of
insolvency of the counterparty, the Fund might be unable to close out a forward
currency contract. In either event, the Fund would continue to be subject to
market risk with respect to the position, and would continue to be required to
maintain a position in securities denominated in the foreign currency or to
maintain cash or liquid assets in a segregated account.

The precise matching of forward currency contract amounts and the value of the
securities, dividends or interest payments involved generally will not be
possible because the value of such securities, dividends or interest payments,
measured in the foreign currency, will change after the forward currency
contract has been established. Thus, a Fund might need to purchase or sell
foreign currencies in the spot (cash) market to the extent such foreign
currencies are not covered by forward currency contracts. The projection of
short-term currency market movements is extremely difficult, and the successful
execution of a short-term hedging strategy is highly uncertain.

Forward currency contracts may substantially change a Fund's investment exposure
to changes in currency exchange rates and could result in losses to the Fund if
currencies do not perform as the adviser anticipates. There is no assurance that
the adviser's and/orsub-adviser's use of forward currency contracts will be
advantageous to a Fund or that it will hedge at an appropriate time.

The Funds may also purchase and sell foreign currency and invest in foreign
currency deposits. Currency conversion involves dealer spreads and other costs,
although commissions usually are not charged.

Combined Positions. A Fund may purchase and write options or futures in
combination with each other, or in combination with futures or forward currency
contracts, to manage the risk and return characteristics of its overall
position. For example, a Fund may purchase a put option and write a call option
on the same underlying instrument, in order to construct a combined position
whose risk and return characteristics are similar to selling a futures contract.
Another possible combined position would involve writing a call option at one
strike price and buying a call option at a lower price, in order to reduce the
risk of the written call option in the event of a substantial price increase.
Because combined options positions involve multiple trades, they result in
higher transaction costs.

Turnover. The Funds' options and futures activities may affect their turnover
rates and brokerage commission payments. The exercise of calls or puts written
by a Fund, and the sale or purchase of futures contracts, may cause it to sell
or purchase related investments, thus increasing its turnover rate. Once a Fund
has received an exercise notice on an option it has written, it cannot effect a

<PAGE>

closing transaction in order to terminate its obligation under the option and
must deliver or receive the underlying securities at the exercise price. The
exercise of puts purchased by a Fund may also cause the sale of related
investments, increasing turnover. Although such exercise is within the Fund's
control, holding a protective put might cause it to sell the related investments
for reasons that would not exist in the absence of the put. A Fund will pay a
brokerage commission each time it buys or sells a put or call or purchases or
sells a futures contract. Such commissions may be higher than those that would
apply to direct purchases or sales.

Swaps, Caps, Floors and Collars. The Funds are authorized to enter into swaps,
caps, floors and collars. Swaps involve the exchange by one party with another
party of their respective commitments to pay or receive cash flows, e.g., an
exchange of floating rate payments for fixed rate payments. The purchase of a
cap or a floor entitles the purchaser, to the extent that a specified index
exceeds in the case of a cap, or falls below in the case of a floor, a
predetermined value, to receive payments on a notional principal amount from the
party selling such instrument. A collar combines elements of buying a cap and
selling a floor.

ILLIQUID SECURITIES -- Securities which do not trade on stock exchanges or in
the over the counter market, or have restrictions on when and how they may be
sold, are generally considered to be "illiquid." An illiquid security is one
that a Fund may have difficulty -- or may even be legally precluded from --
selling at any particular time. The Funds may invest in illiquid securities,
including restricted securities and other investments which are not readily
marketable. A Fund will not purchase any such security if the purchase would
cause the Fund to invest more than 15% of its net assets, measured at the time
of purchase, in illiquid securities. Repurchase agreements maturing in more than
seven days are considered illiquid for purposes of this restriction.

The principal risk of investing in illiquid securities is that a Fund may be
unable to dispose of them at the time desired or at a reasonable price. In
addition, in order to resell a restricted security, a Fund might have to bear
the expense and incur the delays associated with registering the securities with
the SEC, and otherwise obtaining listing on a securities exchange or in the over
the counter market.

RULE 144A SECURITIES -- A Fund also may invest in securities that can be resold
to institutional investors pursuant to Rule 144A under the Securities Act of
1933, as amended (the "1933 Act"). In recent years, a large institutional market
has developed for many Rule 144A Securities. Institutional investors generally
cannot sell these securities to the general public but instead will often depend
on an efficient institutional market in which Rule 144A Securities can readily
be resold to other institutional investors, or on an issuer's ability to honor a
demand for repayment. Therefore, the fact that there are contractual or legal
restrictions on resale to the general public or certain institutions does not
necessarily mean that a Rule 144A Security is illiquid. Institutional markets
for Rule 144A Securities may provide both reliable market values for Rule 144A
Securities and enable a Fund to sell a Rule 144A investment when appropriate.
For this reason, the Company's board of directors has concluded that if a
sufficient institutional trading market exists for a given Rule 144A security,
it may be considered "liquid," and not subject to a Fund's limitations on
investment in illiquid securities. The Company's board of directors has given
INVESCO the day-to-day authority to determine the liquidity of Rule 144A
Securities, according to guidelines approved by the board. The principal risk of
investing in Rule 144A Securities is that there may be an insufficient number of
qualified institutional buyers interested in purchasing a Rule 144A Security
held by a Fund, and the Fund might be unable to dispose of such security
promptly or at reasonable prices.
<PAGE>
REPURCHASE AGREEMENTS -- A Fund may enter into repurchase agreements, or REPOs,
on debt securities that the Fund is allowed to hold in its portfolio. This is a
way to invest money for short periods. A REPO is an agreement under which the
Fund acquires a debt security and then resells it to the seller at an agreed
upon price and date (normally, the next business day). The repurchase price
represents an interest rate effective for the short period the debt security is
held by the Fund, and is unrelated to the interest rate on the underlying debt
security. A repurchase agreement is often considered as a loan collateralized by
securities. The collateral securities acquired by the Fund (including accrued
interest earned thereon) must have a total value in excess of the value of the
repurchase agreement. The collateral securities are held by the Fund's custodian
bank until the repurchase agreement is completed.

The Funds may enter into repurchase agreements with commercial banks, registered
broker-dealers or registered government securities dealers, that are
creditworthy under standards established by the Company's board of directors.
The Company's board of directors has established standards that the investment
adviser and sub-adviser must use to review the creditworthiness of any bank,
broker or dealer that is party to a REPO. REPOs maturing in more than seven days
are considered illiquid securities. A Fund will not enter into repurchase
agreements maturing in more than seven days if as a result more than 15% of the
Fund's net assets would be invested in these repurchase agreements and other
illiquid securities.

As noted above, the Funds use REPOs as a means of investing cash for short
periods of time. Although REPOs are considered to be highly liquid and
comparatively low-risk, the use of REPOs does involve some risks. For example,
if the other party to the agreement defaults on its obligation to repurchase the
underlying security at a time when the value of the security has declined, the
Fund may incur a loss on the sale of the collateral security. If the other party
to the agreement becomes insolvent and subject to liquidation or reorganization
under the Bankruptcy Code or other laws, a court may determine that the
underlying security is collateral for a loan by the Fund not within the control
of the Fund and therefore the realization by the Fund on such collateral may
automatically be stayed. Finally, it is possible that the Fund may not be able
to substantiate its interest in the underlying security and may be deemed an
unsecured creditor of the other party to the agreement.

SECURITIES LENDING -- The Funds may lend their portfolio securities. The
advantage of lending portfolio securities is that a Fund continues to have the
benefits (and risks) of ownership of the loaned securities, while at the same
time receiving interest from the borrower of the securities. The primary risk in
lending portfolio securities is that a borrower may fail to return a portfolio
security.

SPDRs. The Funds may invest in SPDRs and shares of other investment companies.
SPDRs are traded on the American Stock Exchange. SPDR holders such as a Fund are
paid a "Dividend Equivalent Amount" that corresponds to the amount of cash
dividends accruing to the securities held by the SPDR Trust, net of certain fees
and expenses. The Investment Company Act of 1940 limits investments in
securities of other investment companies, such as the SPDR Trust. These
limitations include, among others, that, subject to certain exceptions, no more
than 10% of a Fund's total assets may be invested in securities of other
investment companies, and, with respect to 75% of a Fund's total assets, no more
than 5% of its total assets may be invested in the securities of any one
investment company. As a shareholder of another investment company, a Fund
wouuld bear its pro rata portion of the other investment company's expenses,
including advisory fees, in addition to the expenses the Fund bears directly in
connection with its own operations.

<PAGE>
U.S. GOVERNMENT SECURITIES -- Each Fund may, from time to time, purchase debt
securities issued by the U.S. government. These securities include treasury
bills, treasury notes, and treasury bonds. Treasury bills have a maturity of one
year or less. Treasury notes generally have a maturity of one to ten years, and
treasury bonds generally have maturities of more than ten years.

U.S. government debt securities also include securities issued or guaranteed by
agencies or instrumentalities of the U.S. government. Some obligations of United
States government agencies, which are established under the authority of an act
of Congress, such as Government National Mortgage Association ("GNMA")
participation certificates, are supported by the full faith and credit of the
United States Treasury. GNMA Certificates are mortgage-backed securities
representing part ownership of a pool of mortgage loans. These loans -- issued
by lenders such as mortgage bankers, commercial banks and savings and loan
associations -- are either insured by the Federal Housing Administration or
guaranteed by the Veterans Administration. A "pool" or group of such mortgages
is assembled and, after being approved by GNMA, is offered to investors through
securities dealers. Once approved by GNMA, the timely payment of interest and
principal on each mortgage is guaranteed by GNMA and backed by the full faith
and credit of the U.S. government. The market value of GNMA Certificates is not
guaranteed. GNMA Certificates are different from bonds because principal is paid
back monthly by the borrower over the term of the loan rather than returned in a
lump sum at maturity, as is the case with a bond. GNMA Certificates are called
"pass-through" securities because both interest and principal payments
(including prepayments) are passed through to the holder of the GNMA
Certificate.

Other United States government debt securities, such as securities of the
Federal Home Loan Banks, are supported by the right of the issuer to borrow from
the Treasury. Others, such as bonds issued by Fannie Mae, a federally chartered
private corporation, are supported only by the credit of the corporation. In the
case of securities not backed by the full faith and credit of the United States,
the Fund must look principally to the agency issuing or guaranteeing the
obligation in the event the agency or instrumentality does not meet its
commitments. A Fund will invest in securities of such instrumentalities only
when its investment adviser and sub-advisers are satisfied that the credit risk
with respect to any such instrumentality is comparatively minimal.

WHEN-ISSUED/DELAYED DELIVERY -- Ordinarily, the Funds buy and sell securities on
an ordinary settlement basis. That means that the buy or sell order is sent, and
a Fund actually takes delivery or gives up physical possession of the security
on the "settlement date," which is three business days later. However, the Funds
also may purchase and sell securities on a when-issued or delayed delivery
basis.

When-issued or delayed delivery transactions occur when securities are purchased
or sold by a Fund and payment and delivery take place at an agreed-upon time in
the future. The Funds may engage in this practice in an effort to secure an
advantageous price and yield. However, the yield on a comparable security
available when delivery actually takes place may vary from the yield on the
security at the time the when-issued or delayed delivery transaction was entered
into. When a Fund engages in when-issued and delayed delivery transactions, it
relies on the seller or buyer to consummate the sale at the future date. If the
seller or buyer fails to act as promised, that failure may result in the Fund
missing the opportunity of obtaining a price or yield considered to be
advantageous. No payment or delivery is made by a Fund until it receives
delivery or payment from the other party to the transaction. However,
fluctuation in the value of the security from the time of commitment until
delivery could adversely affect a Fund.
<PAGE>

INVESTMENTS RESTRICTIONS AND STRATEGIES

The Funds operate under certain investment restrictions. For purposes of the
following restrictions, all percentage limitations apply immediately after a
purchase or initial investment. Any subsequent change in a particular percentage
resulting from fluctuations in value does not require elimination of any
security from a Fund.

The following restrictions are fundamental and may not be changed with respect
to a Fund without prior approval of a majority of the outstanding voting
securities of a Fund, as defined in the Investment Company Act of 1940, as
amended (the "1940 Act"). Each Fund, unless otherwise indicated, may not:

1. Purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government or any of its agencies or instrumentalities or
municipal securities) if, as a result, more than 25% of the Fund's total assets
would be invested in the securities of companies whose principal business
activities are in the same industry, except that: (i) Utilities Fund may invest
more than 25% of the value of its total assets in one or more industries
relating to the utilities industry; (ii) Health Sciences Fund may invest more
than 25% of the value of its total assets in one or more industries relating to
health care; (iii) Technology Fund may invest more than 25% of the value of its
total assets in one or more industries relating to technology; (iv) Realty Fund
may invest more than 25% of the value of its total assets in one or more
industries relating to the real estate industry; (v) Financial Services Fund may
invest more than 25% of the value of its total assets in one or more industries
relating to financial services; and (vi) Telecommunications Fund may invest more
than 25% of the value of its total assets in one or more industries relating to
telecommunications.

2. with respect to 75% of the Fund's total assets,purchase the securities of any
issuer (other than securities issued or guaranteed by the U.S. government or any
of its agencies or instrumentalities, or securities of other investment
companies) if, as a result, (i) more than 5% of the Fund's total assets would be
invested in the securities of that issuer, or (ii) the Fund would hold more than
10% of the outstanding voting securities of that issuer;

<PAGE>

3. underwrite securities of other issuers, except insofar as it may be deemed to
be an underwriter under the Securities Act of 1933, as amended, in connection
with the disposition of the Fund's portfolio securities;

4. borrow money,except that the Fund may borrow money in an amount not exceeding
33 1/3% of its total assets (including the amount borrowed) less liabilities
(other than borrowings);

5. issue senior securities, except as permitted under the Investment Company Act
of 1940;

6. lend any security or make any loan if, as a result, more than 33 1/3% of its
total assets would be lent to other parties, but this limitation does not apply
to the purchase of debt securities or to repurchase agreements;

7. purchase or sell physical commodities; however, this policy shall not prevent
the Fund from purchasing and selling foreign currency, futures contracts,
options, forward contracts, swaps, caps, floors, collars and other financial
instruments; or

8. purchase or sell real estate unless acquired as a result of ownership of
securities or other instruments (but this shall not prevent the Fund from
investing in securities or other instruments backed by real estate or securities
of companies engaged in the real estate business). This restriction shall not
prohibit the Realty Fund from directly holding real estate if such real estate
is acquired by the Fund as a result of a default on debt securities held by the
Fund.

9. Each Fund may, notwithstanding any other fundamental investment policy or
limitation, invest all of its assets in the securities of a single open-end
management investment company managed by INVESCO Funds Group, Inc. or an
affiliate or a successor thereof, with substantially the same fundamental
investment objective, policies and limitations as the Fund.

In addition, each Fund has the following non-fundamental policies, which may be
changed without shareholder approval:

<PAGE>

A. The Fund may not sell securities short (unless it owns or has the right to
obtain securities equivalent in kind and amount to the securities sold short) or
purchase securities on margin, except that (i) this policy does not prevent the
Fund from entering into short positions in foreign currency, futures contracts,
options, forward contracts, swaps, caps, floors, collars and other financial
instruments, (ii) the Fund may obtain such short-term credits as are necessary
for the clearance of transactions, and (iii) the Fund may make margin payments
in connection with futures contracts, options, forward contracts, swaps, caps,
floors, collars and other financial instruments.

B. The Fund may borrow money only from a bank or from an open-end management
investment company managed by INVESCO Funds Group, Inc. or an affiliate or a
successor thereof for temporary or emergency purposes (not for leveraging or
investing) or by engaging in reverse repurchase agreements with any party
(reverse repurchase agreements will be treated as borrowings for purposes of
fundamental limitation (4)).

C. The Fund does not currently intend to purchase any security if, as a result,
more than 15% of its net assets would be invested in securities that are deemed
to be illiquid because they are subject to legal or contractual restrictions on
resale or because they cannot be sold or disposed of in the ordinary course of
business at approximately the prices at which they are valued.

D. The Fund may invest in securities issued by other investment companies to the
extent that such investments are consistent with the Fund's investment objective
and policies and permissible under the 1940 Act.

E. With respect to fundamental limitation (1), domestic and foreign banking will
be considered to be different industries.

In addition, with respect to a Fund that may invest in municipal obligations,
the following non-fundamental policy applies, which may be changed without
shareholder approval:

Each state (including the District of Columbia and Puerto Rico), territory and
possession of the United States, each political subdivision, agency,
instrumentality and authority thereof, and each multi-state agency of which a
state is a member is a separate "issuer." When the assets and revenues of an
agency, authority, instrumentality or other political subdivision are separate
from the government creating the subdivision and the security is backed only by
assets and revenues of the subdivision, such subdivision would be deemed to be
the sole issuer. Similarly, in the case of an Industrial Development Bond or
Private Activity bond, if that bond is backed only by the assets and revenues of
the non-governmental user, then that non-governmental user would be deemed to be
the sole issuer. However, if the creating government or another entity
guarantees a security, then to the extent that the value of all securities
issued or guaranteed by that government or entity and owned by a Fund exceeds
10% of the Fund's total assets, the guarantee would be considered a separate
security and would be treated as issued by that government or entity.

In order to enable California investors to allocate variable annuity
or variable life insurance contract values to one or more of the Funds, the
Company has committed to comply with the following guidelines: (i) the borrowing
limits for any Fund are (a) 10% of net asset value when borrowing for any
general purpose and (b) 25% of net asset value when borrowing as a temporary
measure to facilitate redemptions (for purposes of this clause, the net asset
value of a Fund is the market value of all investments or assets owned less
outstanding liabilities of the Fund at the time that any new or additional
borrowing is undertaken); and (ii) if a Fund invests in foreign companies, the
foreign country diversification guidelines to be followed by the Fund are as
follows:
<PAGE>
(a) The Fund will be invested in a minimum of five different foreign
countries at all times. However, this minimum is reduced to four when foreign
country investments comprise less than 80% of the Fund's net asset value, to
three when less than 60% of such value, to two when less than 40% and to one
when less than 20%.

(b) Except as set forth in items (c) and (d) below, the Fund will have
no more than 20% of its net asset value invested in securities of issuers
located in any one country.

(c) The Fund may have an additional 15% of its net asset value
invested in securities of issuers located in any one of the following countries:
Australia, Canada, France, Japan, the United Kingdom, or Germany.

(d) The Fund's investments in United States issuers are not subject to
the foreign country diversification guidelines.

State insurance laws and regulations may impose additional limitations
on lending securities and the use of options, futures and other derivative
instruments.

MANAGEMENT OF THE FUNDS

THE INVESTMENT ADVISER

INVESCO Funds Group, Inc., a Delaware corporation ("INVESCO"), is the Company's
investment adviser. INVESCO was founded in 1932 and serves as an investment
adviser to:

INVESCO Bond Funds, Inc. (formerly, INVESCO Income Funds, Inc.)
INVESCO Combination Stock & Bond Funds, Inc.
(formerly, INVESCO Flexible Funds, Inc.)
INVESCO DiversifieD Funds, Inc.
INVESCO Emerging Opportunity Funds, Inc.
INVESCO Growth Funds, Inc. (formerly, INVESCO Growth Fund, Inc.)
INVESCO Industrial Income Fund, Inc.
INVESCO International Funds, Inc.
INVESCO Money Market Funds, Inc.
INVESCO Sector Funds, Inc. (formerly, INVESCO Strategic Portfolios, Inc.)
INVESCO Specialty Funds, Inc.
INVESCO Stock Funds, Inc. (formerly, INVESCO Equity Funds, Inc.)
INVESCO Tax-Free Income Funds, Inc.
INVESCO Treasurer's Series Funds, Inc.
(formerly, INVESCO Treasurer's Series Trust)
INVESCO Value Trust
INVESCO Variable Investment Funds, Inc.

As of May 31, 1999, INVESCO managed 15 mutual funds having combined assets of
$22.7 billion, consisting of 50 separate portfolios, on behalf of more than
900,000 shareholders.

INVESCO is an indirect wholly owned subsidiary of AMVESCAP PLC, a publicly
traded holding company. Through its subsidiaries, AMVESCAP PLC engages in the
business of investment management on an international basis. AMVESCAP PLC is one
of the largest independent investment management businesses in the world, with
approximately $281 billion in assets under management on March 31, 1999.

AMVESCAP PLC's North American subsidiaries include:

INVESCO Retirement and Benefit Services, Inc. ("IRBS"), Atlanta, Georgia,
develops and provides domestic and international defined contribution
retirement plan services to plan sponsors, institutional retirement plan
sponsors, institutional plan providers and foreign governments.

INVESCO Retirement Plan Services ("IRPS"), Atlanta, Georgia, a division of
IRBS, provides record keeping and investment selection services to defined
contribution plan sponsors of plans with between $2 million and $200 million
in assets. Additionally, IRPS provides investment consulting services to
institutions seeking to provide retirement plan products and services.
<PAGE>
Institutional Trust Company, doing business as INVESCO Trust Company
("ITC"), Denver, Colorado, a division of IRBS, provides retirement account
custodian and/or trust services for individual retirement accounts ("IRAs")
and other retirement plan accounts. This includes services such as record
keeping, tax reporting and compliance. ITC acts as trustee or custodian to
these plans. ITC accepts contributions and provides, through INVESCO,
complete transfer agency functions: correspondence, sub-accounting,
telephone communications and processing of distributions.

INVESCO Capital Management, Inc., Atlanta, Georgia, manages institutional
investment portfolios, consisting primarily of discretionary employee
benefit plans for corporations and state and local governments, and
endowment funds. INVESCO Capital Management, Inc. is the sole shareholder of
INVESCO Services, Inc., a registered broker-dealer.

INVESCO Management & Research, Inc., Boston, Massachusetts, primarily
manages pension and endowment accounts.

PRIMCO Capital Management, Inc., Louisville, Kentucky, specializes in
managing stable return investments, principally on behalf of Section 401(k)
retirement plans.

INVESCO Realty Advisors, Inc., Dallas, Texas, is responsible for providing
advisory services in the U.S. real estate markets for AMVESCAP PLC's clients
worldwide. Clients include corporate pension plans and public pension funds
as well as endowment and foundation accounts.

INVESCO (NY), Inc., New York, is an investment adviser for separately
managed accounts, such as corporate and municipal pension plans,
Taft-Hartley Plans, insurance companies, charitable institutions and private
individuals. INVESCO NY also offers the opportunity for its clients to
invest both directly and indirectly through partnerships in primarily
private investments or privately negotiated transactions. INVESCO NY further
serves as investment adviser to several closed-end investment companies, and
as sub-adviser with respect to certain commingled employee benefit trusts.
INVESCO NY specializes in the fundamental research investment approach, with
the help of quantitative tools.

A I M Advisors, Inc., Houston, Texas, provides investment advisory and
administrative services for retail and institutional mutual funds.

A I M Capital Management, Inc., Houston, Texas provides investment
advisory services to individuals, corporations, pension plans and other
private investment advisory accounts and also serves as a sub-adviser to
certain retail and institutional mutual funds, one Canadian mutual fund and
one portfolio of an open-end registered investment company that is offered
to separate accounts of variable insurance companies.

A I M Distributors, Inc. and Fund Management Company, Houston, Texas are
registered broker-dealers that act as the principal underwriters for retail
and institutional mutual funds.

The corporate headquarters of AMVESCAP PLC are located at 11 Devonshire Square,
London, EC2M4YR, England.

<PAGE>

THE INVESTMENT ADVISORY AGREEMENT

INVESCO serves as investment adviser to the Funds under an investment advisory
agreement dated February 28, 1997 (the "Agreement") with the Company, which was
last approved by the board of directors for a term expiring May 15, 2000. The
board vote was cast in person, at a meeting called for this purpose, by a
majority of the directors of the Company, including a majority of the directors
who are not "interested persons" of the Company or INVESCO ("Independent
Directors"). Shareholders of the High Yield, Equity Income, Total Return and
Utilities Funds approved the Agreement on January 31, 1997. With respect to Blue
Chip Growth, Dynamics and Small Company Growth Funds, the Agreement was approved
by INVESCO on August 22, 1997. With respect to Health Sciences and Technology
Funds, the Agreement was approved by INVESCO on May 21, 1997. With respect to
Realty Fund, the Agreement was approved by INVESCO on March 31, 1998. With
respect to Financial Services and Telecommunications Funds, the Agreement was
approved by INVESCO on __________________, 1999.

The Agreement may be continued from year to year if each such continuance is
specifically approved at least annually by the board of directors of the
Company, or by a vote of the holders of a majority, as defined in the 1940 Act,
of the outstanding shares of each Fund. Any continuance also must be approved by
a majority of the Company's Independent Directors, cast in person at a meeting
called for the purpose of voting on such continuance. The Agreement may be
terminated at any time without penalty by either party upon sixty (60) days'
written notice and terminates automatically in the event of an assignment to the
extent required by the 1940 Act and the rules thereunder.

The Agreement requires that INVESCO manage the investment portfolio of each Fund
in a way that conforms with each Fund's investment policies. INVESCO may
directly manage a Fund itself, or may hire a sub-adviser, which may be an
affiliate of INVESCO, to do so. Specifically, INVESCO is responsible for:

* managing the investment and reinvestment of all the assets of the Funds,
and executing all purchases and sales of portfolio securities;

* maintaining a continuous investment program for the Funds, consistent with
(i) each Fund's investment policies as set forth in the Company's Bylaws
and Registration Statement, as from time to time amended, under the 1940
Act, and in any prospectus and/or statement of additional information of
the Funds, as from time to time amended and in use under the 1933 Act, and
(ii) the Company's status as a regulated investment company under the
Internal Revenue Code of 1986, as amended;

* determining what securities are to be purchased or sold for the Funds,
unless otherwise directed by the directors of the Company, and executing
transactions accordingly;

* providing the Funds the benefit of all of the investment analysis and
research, the reviews of current economic conditions and trends, and the
consideration of a long-range investment policy now or hereafter generally
available to the investment advisory customers of the Adviser or any
Sub-Adviser;

* determining what portion of each Fund's assets should be invested in the
various types of securities authorized for purchase by the Fund; and

* making recommendations as to the manner in which voting rights, rights to
consent to Fund action and any other rights pertaining to a Fund's
portfolio securities shall be exercised.
<PAGE>
INVESCO also performs all of the following services for the Funds:

* administrative

* internal accounting (including computation of net asset value)

* clerical and statistical

* secretarial

* all other services necessary or incidental to the administration of the
affairs of the Funds

* supplying the Company with officers, clerical staff and other employees

* furnishing office space, facilities, equipment, and supplies; providing
personnel and facilities required to respond to inquiries related to
shareholder accounts

* conducting periodic compliance reviews of the Funds' operations;
preparation and review of required documents, reports and filings by
INVESCO's in-house legal and accounting staff or in conjunction with
independent attorneys and accountants (including the prospectus, statement
of additional information, proxy statements, shareholder reports, tax
returns, reports to the SEC, and other corporate documents of the Funds)

* supplying basic telephone service and other utilities

* preparing and maintaining certain of the books and records required to be
prepared and maintained by the Funds under the 1940 Act.

Expenses not assumed by INVESCO are borne by the Funds. As full compensation for
its advisory services to the Company, INVESCO receives a monthly fee from each
Fund. The fee is calculated at the annual rate of:

Equity Income and Total Return Funds

* 0.75% on the first $500 million of each Fund's average net assets;

* 0.65% on the next $500 million of each Fund's average net assets;

* 0.55% on each Fund's average net assets in excess of $1 billion;

* 0.45% on each Fund's average net assets in excess of $2 billion;

* 0.40% on each Fund's average net assets in excess of $4 billion;

* 0.375% on each Fund's average net assets in excess of $6 billion; and

* 0.35% on each Fund's average net assets in excess of $8 billion.

High Yield and Utilities Funds

* 0.60% on the first $500 million of each Fund's average net assets;

* 0.55% on the next $500 million of each Fund's average net assets;

* 0.45% on each Fund's average net assets in excess of $1 billion;

* 0.40% on each Fund's average net assets in excess of $4 billion;

* 0.375% on each Fund's average net assets in excess of $6 billion; and

* 0.35% on each Fund's average net assets in excess of $8 billion.

<PAGE>
Small Company Growth, Health Sciences and Technology Funds

* 0.75% on the first $350 million of each Fund's average net assets;

* 0.65% on the next $350 million of each Fund's average net assets;

* 0.55% on each Fund's average net assets in excess of $700 million;

* 0.45% on each Fund's average net assets in excess of $2 billion;

* 0.40% on each Fund's average net assets in excess of $4 billion;

* 0.375% on each Fund's average net assets in excess of $6 billion; and

* 0.35% on each Fund's average net assetes in excess of $8 billion.

Dynamics Fund

* 0.60% on the first $350 million of the Fund's average net assets;

* 0.55% on the next $350 million of the Fund's average net assets;

* 0.50% on the Fund's average net assets in excess of $700 million;

* 0.45% on the Fund's average net assets in excess of $2 billion;

* 0.40% on the Fund's average net assets in excess of $4 billion;

* 0.375% on the Fund's average net assets in excess of $6 billion; and

* 0.35% on the Fund's average net assets in excess of $8 billion;

Blue Chip Growth Fund

* 0.85% on the first $500 million of the Fund's average net assets;

* 0.75% on the next $500 million of the Fund's average net assets;

* 0.65% on the Fund's average net assets in excess of $1 billion;

* 0.45% on the Fund's average net assets in excess of $2 billion;

* 0.40% on the Fund's average net assets in excess of $4 billion;

* 0.375% on the Fund's average net assets in excess of $6 billion; and

* 0.35% on the Fund's average net assets in excess of $8 billion.

Realty Fund

* 0.90% on the first $500 million of the Fund's average net assets;

* 0.75% on the next $500 million of the Fund's average net assets;

* 0.65% on the Fund's average net assets in excess of $1 billion;

* 0.45% on the Fund's average net assets in excess of $2 billion;

* 0.40% on the Fund's average net assets in excess of $4 billion;

* 0.375% on the Fund's average net assets in excess of $6 billion; and

* 0.35% on the Fund's average net assets in excess of $8 billion.

[ADVISORY FEES FOR FINANCIAL SERVICES AND TELECOMMUNICATIONS FUNDS TO BE ADDED
WHEN THEY ARE DECIDED UPON.]

<PAGE>
During the fiscal years ended December 31, 1998, 1997 and 1996, the Funds paid
INVESCO advisory fees in the dollar amounts shown below. If applicable, the fees
were reduced voluntarily in the amounts shown below, so that INVESCO's fees are
not in excess of the voluntary expense limitations shown below, which have been
agreed to by the Company and INVESCO.

<TABLE>
<CAPTION>
Advisory Total Expense Total Expense
Fee Dollars Reimbursements Limitations
----------- -------------- -----------
<S> <C> <C> <C>
Blue Chip Growth Fund
1998 $2,589 $32,023 1.50%
1997 781 26,170 1.25%
1996 N/A N/A N/A

Dynamics Fund
1998 $1,652 $36,773 1.15%
1997 554 31,429 0.90%
1996 N/A N/A N/A

Equity Income Fund
1998 $377,741 $245 1.15%
1997 223,880 16,285 0.90%
1996 105,932 34,295 0.90%

Health Sciences Fund
1998 $9,945 $39,165 1.25%
1997 1,191 33,488 1.00%
1996 N/A N/A N/A

High Yield Fund
1998 $224,864 $0 1.05%
1997 117,624 20,919 0.80%
1996 50,693 38,708 0.80%

Realty Fund
1998 $2,558 $18,881 1.35%
1997 N/A N/A N/A
1996 N/A N/A N/A

Small Company Growth Fund
1998 $2,726 $39,139 1.25%
1997 684 32,621 1.00%
1996 N/A N/A N/A

Technology Fund
1998 $5,670 $38,752 1.25%
1997 1,318 33,352 1.00%
1996 N/A N/A N/A

Total Return Fund
1998 $219,888 $196 1.15%
1997 126,159 30,247 0.90%
1996 77,890 37,492 0.90%

Utilities Fund
1998 $32,195 $28,048 1.15%
1997 19,549 35,201 0.90%
1996 5,716 39,955 0.90%
</TABLE>
<PAGE>
THE SUB-ADVISORY AGREEMENT

With respect to the Realty Fund, INVESCO Realty Advisors, Inc. ("IRAI") serves
as sub-adviser to the Realty Fund pursuant to a sub-advisory agreement dated
February 28, 1997 (the " Realty Sub-Agreement") with INVESCO which was approved
on November 6, 1996, by a vote cast in person by a majority of the directors of
the Company, including a majority of the directors who are not "interested
persons" of the Company, INVESCO or IRAI, at a meeting called for such purpose.
The Realty Sub-Agreement was approved on January 31, 1997, by the shareholders
of the Realty Fund for an initial term expiring February 28, 1999. On May 13,
1998, this period was extended by the Company's board of directors through May
15, 2000.

With respect to the Total Return Fund, INVESCO Capital Management ("ICM") serves
as sub-adviser to the Total Return Fund pursuant to a sub-advisory agreement
dated February 28, 1997 (the "Total Return Sub-Agreement") with INVESCO which
was approved on November 6, 1996 by a vote cast in person by a majority of the
directors of the Company, including a majority of the directors who are not
"interested persons" of the Company, INVESCO or ICM, at a meeting called for
such purpose. The Total Return Sub-Agreement was approved on January 31, 1997 by
the shareholders of the Total Return Fund for an initial term expiring on
February 28, 1999. On May 13, 1998, this period was extended by the Company's
board of directors through May 15, 2000.

Thereafter, the Realty Sub-Agreement and Total Return Sub-Agreement (the
"Sub-Agreements") may be continued from year to year as to each Fund as long as
each such continuance is specifically approved by the board of directors of the
Company, or by a vote of the holders of a majority of the outstanding shares of
the Fund, as defined in the 1940 Act. Each such continuance also must be
approved by a majority of the directors who are not parties to the
Sub-Agreements or interested persons (as defined in the 1940 Act) of any such
party, cast in person at a meeting called for the purpose of voting on such
continuance. The Sub-Agreements may be terminated at any time without penalty by
either party or the Company upon sixty (60) days' written notice. Each
terminates automatically in the event of an assignment to the extent required by
the 1940 Act and the rules thereunder.

The Sub-Agreements provide that IRAI and ICM, as applicable, subject to the
supervision of INVESCO, shall manage the investment portfolios of the Realty and
Total Return Funds in conformity with each Fund's investment policies. These
management services include: (a) managing the investment and reinvestment of all
the assets, now or hereafter acquired, of each Fund, and executing all purchases
and sales of portfolio securities; (b) maintaining a continuous investment
program for the Funds, consistent with (i) each Fund's investment policies as
set forth in the Company's Articles of Incorporation, Bylaws and Registration
Statement, as from time to time amended, under the 1940 Act, as amended, and in
any prospectus and/or statement of additional information of the Company, as
from time to time amended and in use under the 1933 Act, and (ii) the Company's
status as a regulated investment company under the Internal Revenue Code of
1986, as amended; (c) determining what securities are to be purchased or sold
for each Fund, unless otherwise directed by the directors of the Company or
INVESCO, and executing transactions accordingly; (d) providing the Funds the
benefit of all of the investment analysis and research, the reviews of current
economic conditions and trends, and the consideration of long-range investment
policy now or hereafter generally available to investment advisory customers of
IRAI or ICM; (e) determining what portion of each applicable Fund's assets
should be invested in the various types of securities authorized for purchase by
such Fund; and (f) making recommendations as to the manner in which voting
rights, rights to consent to Company action and any other rights pertaining to
the portfolio securities of each applicable Fund shall be exercised.
<PAGE>

The Sub-Agreements provide that, as compensation for their services, IRAI and
ICM shall receive from INVESCO, at the end of each month, a fee based upon the
average daily value of the applicable Fund's net assets. With respect to the
Realty Fund, the fee is calculated at the following annual rates: prior to
January 1, 1998, 0.30% on the first $500 million of the Fund's average net
assets; 0.25% on the next $500 million of the Fund's average net assets; and
0.2167% on the Fund's average net assets in excess of $1 billion; and effective
January 1, 1998, 0.36% on the first $500 million; 0.30% on the next $500 million
and 0.26% on the Fund's net assets in excess of $1 billion. In addition,
effective May 13, 1999, the following additional contractual breakpoints are in
effect: 0.18% on the Fund's average net assets from $2 billion; 0.16% on the
Fund's average net assets from $4 billion, 0.15% on the Fund's average net
assets from $6 billion, 0.14% on the Fund's average net assets from $8 billion.
With respect to the Total Return Fund, the fee is computed at the following
annual rates: prior to January 1, 1998, 0.25% on the first $500 million of the
Fund's average net assets; 0.2167% on the next $500 million of the Fund's
average net assets; and 0.1833% on the Fund's average net assets in excess of $1
billion; and effective January 1, 1998, 0.30% on the first $500 million; 0.26%
on the next $500 million and 0.22% on the Fund's average net assets in excess of
$1 billion. In addition, effective May 13, 1999, the following additional
contractual breakpoints are in effect: 0.18% on the Fund's average net assets
from $2 billion; 0.16% on the Fund's average net assets from $4 billion, 0.15%
on the Fund's average net assets from $6 billion, 0.14% on the Fund's average
net assets from $8 billion. The sub-advisory fees are paid by INVESCO, NOT the
Funds.

ADMINISTRATIVE SERVICES AGREEMENT

INVESCO, either directly or through affiliated companies, provides certain
administrative, sub-accounting, and recordkeeping services to the Funds pursuant
to an Administrative Services Agreement dated February 28, 1997. The
Administrative Services Agreement was approved on November 6, 1996, at a meeting
called for that purpose, by a vote cast in person by all of the directors of the
Company, including a majority of the Independent Directors of the Company or
INVESCO.

The Administrative Services Agreement was for an initial term expiring in one
year and has been extended by action of the board of directors through May 15,
2000. The Administrative Services Agreement may be continued from year to year
as long as each such continuance is specifically approved by the board of
directors of the Company, including a majority of the Company's Independent
Directors. The Administrative Services Agreement may be terminated at any time
without penalty by INVESCO on sixty (60) days' written notice, or by the Funds
upon thirty (30) days' written notice, and ends automatically in the event of an
assignment unless the Company's board of directors, including a majority of the
Company's Independent Directors, approves such assignment.

The Administrative Services Agreement requires INVESCO to provide the following
services to the Funds:

* such sub-accounting and recordkeeping services and functions as are
reasonably necessary for the operation of the Funds; and

* such sub-accounting, recordkeeping, and administrative services and
functions, which may be provided by affiliates of INVESCO, as are
reasonably necessary for the operation of Fund shareholder accounts
maintained by certain retirement plans and employee benefit plans for the
benefit of participants in such plans.

The Administrative Services Agreement provides that each Fund pay INVESCO an
annual base fee per Fund of $10,000, plus an additional incremental fee computed
daily and paid monthly by each Fund, at an annual rate of 0.015% of the average
net assets of each Fund, plus an additional 0.25% per year of new assets accrued
after July 8, 1998.
<PAGE>
TRANSFER AGENCY AGREEMENT

INVESCO also performs transfer agent, dividend disbursing agent, and registrar
services for the Funds pursuant to a Transfer Agency Agreement dated February
28, 1997, which was approved by the board of directors of the Company on
November 6, 1996 for an initial term expiring in one year and has been extended
by action of the board of directors through May 15, 2000. The Transfer Agency
Agreement may be continued from year to year as long as such continuance is
specifically approved at least annually by the board of directors of the
Company, including a majority of the Company's Independent Directors, or by a
vote of the holders of a majority of the outstanding voting securities of the
Funds. The Transfer Agency Agreement may be terminated at any time without
penalty by either party upon sixty (60) days' written notice and terminates
automatically in the event of assignment.

The Transfer Agency Agreement provides that each Fund pay INVESCO an annual fee
of $5,000. This fee is paid monthly at the rate of 1/12 of the annual fee.

FEES PAID TO INVESCO

For the fiscal years ended December 31, 1998, 1997 and 1996, the Funds paid the
following fees to INVESCO (prior to the voluntary absorption of certain Fund
expenses by INVESCO):

BLUE CHIP GROWTH FUND

Type of Fee 1998 1997 1996
- ------------------------ ---- ---- ----
Advisory $2,589 $781 N/A
Administrative Services 10,047 6,680 N/A
Transfer Agency 5,000 3,333 N/A

DYNAMICS FUND

Type of Fee 1998 1997 1996
- ------------------------ ---- ---- ----
Advisory $1,652 $554 N/A
Administrative Services 10,042 10,014 N/A
Transfer Agency 5,000 5,000 N/A

EQUITY INCOME FUND

Type of Fee 1998 1997 1996
- ------------------------ ---- ---- ----
Advisory $377,741 $223,880 $105,932
Administrative Services 25,519 14,478 12,119
Transfer Agency 5,000 5,000 5,000

HEALTH SCIENCES FUND

Type of Fee 1998 1997 1996
- ------------------------ ---- ---- ----
Advisory $9,945 $1,191 N/A
Administrative Services 11,874 10,024 N/A
Transfer Agency 5,000 5,000 N/A

HIGH YIELD FUND

Type of Fee 1998 1997 1996
- ------------------------ ---- ---- ----
Advisory $224,864 $117,624 $50,693
Administrative Services 26,312 12,941 11,267
Transfer Agency 5,000 5,000 5,000
<PAGE>
REALTY FUND

Type of Fee 1998 1997 1996
- ------------------------ ---- ---- ----
Advisory $2,558 N/A N/A
Administrative Services 7,669 N/A N/A
Transfer Agency 3,750 N/A N/A

SMALL COMPANY GROWTH FUND

Type of Fee 1998 1997 1996
- ------------------------ ---- ---- ----
Advisory $2,726 $684 N/A
Administrative Services 10,192 10,014 N/A
Transfer Agency 5,000 5,000 N/A

TECHNOLOGY FUND

Type of Fee 1998 1997 1996
- ------------------------ ---- ---- ----
Advisory $5,670 $1,318 N/A
Administrative Services 11,005 10,026 N/A
Transfer Agency 5,000 5,000 N/A

TOTAL RETURN FUND

Type of Fee 1998 1997 1996
- ------------------------ ---- ---- ----
Advisory $219,888 $126,159 $77,890
Administrative Services 19,501 12,534 11,558
Transfer Agency 5,000 5,000 5,000

UTILITIES FUND

Type of Fee 1998 1997 1996
- ------------------------ ---- ---- ----
Advisory $32,195 $19,549 $5,716
Administrative Services 11,535 10,489 10,143
Transfer Agency 5,000 5,000 5,000

DIRECTORS AND OFFICERS OF THE COMPANY

The overall direction and supervision of the Company come from the board of
directors. The board of directors is responsible for making sure that the Funds'
general investment policies and programs are carried out and that the Funds are
properly administered.

The board of directors has an audit committee comprised of four of the directors
who are not affiliated with INVESCO (the "Independent Directors"). The committee
meets quarterly with the Company's independent accountants and officers to
review accounting principles used by the Company, the adequacy of internal
controls, the responsibilities and fees of the independent accountants, and
other matters.

The Company has a management liaison committee which meets quarterly with
various management personnel of INVESCO in order to facilitate better
understanding of management and operations of the Company, and to review legal
and operational matters which have been assigned to the committee by the board
of directors, in furtherance of the board of directors' overall duty of
supervision.
<PAGE>
The Company has a soft dollar brokerage committee. The committee meets
periodically to review soft dollar and other brokerage transactions by the
Funds, and to review policies and procedures of the Funds' adviser with respect
to brokerage transactions. It reports on these matters to the Company's board of
directors.

The Company has a derivatives committee. The committee meets periodically to
review derivatives investments made by the Funds. It monitors derivatives usage
by the Funds and the procedures utilized by the Funds' adviser to ensure that
the use of such instruments follows the policies on such instruments adopted by
the Company's board of directors. It reports on these matters to the Company's
board of directors.

The officers of the Company, all of whom are officers and employees of INVESCO,
are responsible for the day-to-day administration of the Company and the Funds.
The officers of the Company receive no direct compensation from the Company for
their services as officers. The investment adviser for the Funds has the primary
responsibility for making investment decisions on behalf of the Funds. These
investment decisions are reviewed by the investment committee of INVESCO.

All of the officers and directors of the Company hold comparable positions with
the following funds, which, with the Company, are collectively referred to as
the "INVESCO Funds":

INVESCO Bond Funds, Inc. (formerly, INVESCO Income Funds, Inc.)
INVESCO Combination Stock & Bond Funds, Inc.
(formerly, INVESCO Flexible Funds, Inc.)
INVESCO Diversified Funds, Inc.
INVESCO Emerging Opportunity Funds, Inc.
INVESCO Growth Funds, Inc. (formerly, INVESCO Growth Fund, Inc.)
INVESCO Industrial Income Fund, Inc.
INVESCO International Funds, Inc.
INVESCO Money Market Funds, Inc.
INVESCO Sector Funds, Inc. (formerly, INVESCO Strategic Portfolios, Inc.)
INVESCO Specialty Funds, Inc.
INVESCO Stock Funds, Inc. (formerly, INVESCO Equity Funds, Inc.)
INVESCO Tax-Free Income Funds, Inc.
INVESCO Treasurer's Series Funds, Inc.
(formerly, INVESCO Treasurer's Series Trust)
INVESCO Value Trust
INVESCO Variable Investment Funds, Inc.

The table below provides information about each of the Company's directors and
officers. Unless otherwise indicated, the address of the directors and officers
is P.O. Box 173706, Denver, CO 80217-3706 . Their affiliations represent their
principal occupations.

<PAGE>
Position(s) Held Principal
Name, Address, and Age With Company Occupation(s) During
Past Five Years

Charles W. Brady *+ Director and Chairman of the Board
1315 Peachtree St., N.E. Chairman of the Board of INVESCO Global
Atlanta, Georgia Health Sciences Fund;
Age: 63 Chief Executive Officer
and Director of AMVESCAP
PLC, London, England and
various subsidiaries of
AMVESCAP PLC.

Fred A. Deering +# Director and Vice Trustee of INVESCO Glo-
Security Life Center Chairman of the Board bal Health Sciences
1290 Broadway Fund; formerly
Denver, Colorado Chairman of the
Age: 71 Executive Committee and
Chairman of the Board of
Security Life of Denver
Insurance Company;
Director of ING American
Holdings Company and First
ING Life Insurance
Company of New York.

Mark H. Williamson *+ President, Chief President, Chief Execu-
7800 E. Union Avenue Executive Officer tive Officer and
Denver, Colorado and Director Director of INVESCO
Age: 47 Distributors, Inc.;
Chairman of the Board,
President and Chief
Executive Officer of
INVESCO Funds Group, Inc.;
President and Chief
Operating Officer of
INVESCO Global Health
Sciences Fund; formerly,
Chairman and Chief Exec-
utive Officer of Nations-
Banc Advisors, Inc.;
formerly, Chairman of
NationsBanc Investments,
Inc.

Victor L. Andrews, Ph.D. Director Professor Emeritus,
**! Chairman Emeritus and
34 Seawatch Drive Chairman of the CFO
Savannah, Georgia Roundtable of the
Age: 68 Department of Finance of
Georgia State University;
President, Andrews Finan-
cial Associates, Inc. (con
sulting firm); formerly,
member of the faculties of
the Harvard Business
School and the Sloan
School of Management of
MIT; Director of The
Sheffield Funds, Inc.
<PAGE>
Position(s) Held Principal Occupation(s)
Name, Address, and Age With Company During Past Five Years

Bob R. Baker +** Director President and Chief
AMC Cancer Research Executive Officer of
Center AMC Cancer Research
1600 Pierce Street Center, Denver,
Lakewood, Colorado Colorado, since
Age: 62 January 1989; until
December 1988, Vice
Chairman of the Board of
First Columbia Financial
Corporation, Englewood,
Colorado; formerly, Chair-
man of the Board and Chief
Executive Officer of First
Columbia Financial
Corporation.

Lawrence H. Budner #@ Director Trust Consultant;
7608 Glen Albens Circle prior to June 1987,
Dallas, Texas Senior Vice President
Age: 68 and Senior Trust
Officer of InterFirst
Bank, Dallas, Texas.

Wendy L. Gramm**! Director Self-employed (since
4201 Yuma Street, N.W. 1993); Professor of
Washington, DC Economics and Public
Age: 54 Administration,
University of Texas at
Arlington; for merly,
Chairman, Commodity
Future Trading
Commission; Administrator
for Information and
Regulatory Affairs at the
Office of Management and
Budget; Executive Direc-
tor of the Presidential
Task Force on Regulatory
Relief; Director of the
Federal Trade Commis-
sion's Bureau of Econom-
ics; also, Director of
Chicago Mercantile
Exchange, Enron Corpora-
tion, IBP Inc., State Farm
Insurance Company, Inde-
pendent Women's Forum,
International Republic
Institute, and the Republi
can Women's Federal Forum.
Also, Member of Board of
Visitors, College of
Business Administration,
University of Iowa, and
Member of Board of
Visitors, Center for Study
of Public Choice, George
Mason University.
<PAGE>
Position(s) Held Principal Occupation(s)
Name, Address, and Age With Company During Past Five Years

Kenneth T. King +#@ Director Retired. Formerly,
4080 North Circulo Chairman of the Board
Manzanillo of The Capitol Life
Tucson, Arizona Insurance Company,
Age: 73 Providence Washington
Insurance Company and
Director of numerous U.S.
subsidiaries thereof;
formerly, Chairman of the
Board of The Providence
Capitol Companies in the
United Kingdom and
Guernsey; Chairman of the
Board of the Symbion
Corporation until 1987.

John W. McIntyre +#@ Director Retired. Formerly,
7 Piedmont Center Vice Chairman of the
Suite 100 Board of Directors of
Atlanta, Georgia The Citizens and
Age: 68 Southern Corporation and
Chairman of the Board and
Chief Execu tive Officer
of The Citi zens and
Southern Georgia Corp. and
The Citizens and Southern
National Bank; Trustee of
INVESCO Global Health
Sciences Fund, Gables
Residential Trust,
Employee's Retirement
System of GA, Emory
University, and J.M. Tull
Charitable Foundation;
Director of Kaiser Foun-
dation Health Plans of
Georgia, Inc.

Larry Soll, Ph.D.!** Director Retired. Formerly,
345 Poorman Road Chair man of the Board
Boulder, Colorado (1987 to 1994), Chief
Age: 57 Executive Officer (1982 to
1989 and 1993 to 1994) and
President (1982 to 1989)
of Synergen Inc.; Director
of Synergen since
incorporation in 1982;
Director of Isis
Pharmaceuticals, Inc.;
Trustee of INVESCO Global
Health Sciences Fund.
<PAGE>

Position(s) Held Principal Occupation(s)
Name, Address, and Age With Company During Past Five Years

Glen A. Payne Secretary Senior Vice President,
7800 E. Union Avenue General Counsel and
Denver, Colorado Secretary of INVESCO
Age: 51 Funds Group, Inc.,
Senior Vice President,
Secretary and General
Counsel of INVESCO
Distributors, Inc.,
Secretary, INVESCO
Global Health Sciences
Fund. Formerly,
General Counsel of
INVESCO Trust Company
(1989 to 1998).
Formerly, employee of
a U.S. regulatory
agency, Washington,
D.C. (1973 to 1989).

Ronald L. Grooms Chief Accounting Senior Vice President
7800 E. Union Avenue Officer, Chief Finan and Treasurer of
Denver, Colorado cial Officer and INVESCO Funds Group,
Age: 52 Treasurer Inc.; Senior Vice
President and Trea-
surer of INVESCO Dis-
tributors, Inc.;
Treasurer, Principal
Financial and
Accounting Officer of
INVESCO Global Health
Sciences Fund;
formerly, Senior Vice
President and
Treasurer of INVESCO
Trust Company (1988 to
1998).

William J. Galvin, Jr. Assistant Secretary Senior Vice President
7800 E. Union Avenue of INVESCO Funds
Denver, Colorado Group, Inc.; Senior
Age: 41 Vice President of INVESCO
Distributors, Inc.;
formerly, Trust Officer of
INVESCO Trust Company
(1995-1998), Vice
President of INVESCO Funds
Group, Inc. and Trust
Officer of INVESCO Trust
Company; formerly, Vice
President of 440
Financial Group; Assistant
Vice President of Putnam
Companies.
<PAGE>

Position(s) Held Principal Occupation(s)
Name, Address, and Age With Company During Past Five Years

Pamela J. Piro Assistant Treasurer Vice President of
7800 E. Union Avenue INVESCO Funds Group,
Denver, Colorado Inc.; formerly,
Age: 38 Assistant Vice
President (1996 to
1997), Director -
Portfolio Accounting
(1994 to 1996),
Portfolio Accounting
Manager (1993 to 1994)
and Assistant
Accounting Manager
(1990 to 1993).

Alan I. Watson Assistant Secretary Vice President of
7800 E.Union Avenue INVESCO Funds Group,
Denver, Colorado Inc.; formerly, Trust
Age: 57 Officer of INVESCO
Trust Company.

Judy P. Wiese Assistant Secretary Vice President of
7800 E. Union Avenue INVESCO Funds Group,
Denver, Colorado Inc.; formerly, Trust
Age: 51 Officer of INVESCO
Trust Company;
formerly, Assistant
Treasurer of INVESCO
Funds Group, Inc.
(1984 to 1999).

Member of the audit committee of the Company.

+ Member of the executive committee of the Company. On occasion, the executive
committee acts upon the current and ordinary business of the Company between
meetings of the board of directors. Except for certain powers which, under
applicable law, may only be exercised by the full board of directors, the
executive committee may exercise all powers and authority of the board of
directors in the management of the business of the Company. All decisions are
subsequently submitted for ratification by the board of directors.

* These directors are "interested persons" of the Company as defined in the
1940 Act.

** Member of the management liaison committee of the Company.

@ Member of the soft dollar brokerage committee of the Company.

! Member of the derivatives committee of the Company.

The following table shows the compensation paid by the Company to its
Independent Directors for services rendered in their capacities as directors of
the Company; the benefits accrued as Company expenses with respect to the
Defined Benefit Deferred Compensation Plan discussed below; and the estimated
annual benefits to be received by these directors upon retirement as a result of
their service to the Company, all for the fiscal year ended December 31, 1998.

In addition, the table sets forth the total compensation paid by all of the
INVESCO Funds and INVESCO Global Health Sciences Fund (collectively, the
"INVESCO Complex") to these direc-tors for services rendered in their capacities
as directors or trustees during the year ended December 31, 1998. As of December
31, 1998, there were 16 funds in the INVESCO Complex.
<PAGE>

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
Name of Person Aggregate Benefits Estimated Total
and Position Compensation Accrued As Annual Compensation
From Company(1) Part of Benefits Upon From INVESCO
Company Retirement(3) Complex Paid To
Expenses(2) Directors(6)
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Fred A. Deering, $8,748 $386 $261 $103,700
Vice Chairman
of the Board
- -------------------------------------------------------------------------------------------
Victor L. Andrews 8,714 369 287 80,350
- -------------------------------------------------------------------------------------------
Bob R. Baker 8,738 330 385 84,000
- -------------------------------------------------------------------------------------------
Lawrence H. Budner 8,708 369 287 79,350
- -------------------------------------------------------------------------------------------
Daniel D. Chabris(4) 6,437 377 236 70,000
- -------------------------------------------------------------------------------------------
Wendy Gramm 8,705 0 0 79,000
- -------------------------------------------------------------------------------------------
Kenneth T. King 8,697 394 236 77,050
- -------------------------------------------------------------------------------------------
John W. McIntyre 8,709 0 0 98,500
- -------------------------------------------------------------------------------------------
Larry Soll 8,699 0 0 96,000
- -------------------------------------------------------------------------------------------
Total 76,155 2,225 1,692 767,950
- -------------------------------------------------------------------------------------------
% of Net Assets 0.0505%(5) 0.0015%(5) 0.0035%(6)
- -------------------------------------------------------------------------------------------
</TABLE>

(1) The vice chairman of the board,the chairmen of the Funds' committees who are
Independent Directors and the members of the Funds' committees who are
Independent Directors, each receive compensation for serving in such capacities
in addition to the compensation paid to all Independent Directors.

(2) Represents benefits accrued with respect to the Defined Benefit Deferred
Compensation Plan discussed below, and not compensation deferred at the election
of the directors.

(3) These amounts represent the Company's share of the estimated annual benefits
payable by the INVESCO Funds upon the directors' retirement, calculated using
the current method of allocating director compensation among the INVESCO Funds.
These estimated benefits assume retirement at age 72 and further assume that the
basic retainer payable to the directors will be adjusted periodically for
inflation, for increases in the number of funds in the INVESCO Funds, and for
other reasons during the period in which retirement benefits are accrued on
behalf of the respective directors. This results in lower estimated benefits for
directors who are closer to retirement and higher estimated benefits for
directors who are further from retirement. With the exception of Drs. Soll and
Gramm, each of these directors has served as a director/trustee of one or more
of the funds in the INVESCO Funds for the minimum five-year period required to
be eligible to participate in the Defined Benefit Deferred Compensation Plan.
Although Mr. McIntyre became eligible to participate in the Defined Benefit
Deferred Compensation Plan as of November 1, 1998, he will not be included in
the calculation of retirement benefits until November 1, 1999.
<PAGE>
(4) Mr. Chabris retired as a director of the Company on September 30, 1998.

(5) Totals as a percentage of the Company's net assets as of December 31, 1998.

(6) Total as a percentage of the net assets of the INVESCO Complex as of
December 31, 1998.

Messrs. Brady and Williamson, as "interested persons" of the Company, and the
INVESCO Funds, receive compensation as officers or employees of INVESCO or its
affiliated companies, and do not receive any director's fees or other
compensation from the Company or the other funds in the INVESCO Funds for their
service as directors.

The boards of directors/trustees of the mutual funds in the INVESCO Funds have
adopted a Defined Benefit Deferred Compensation Plan (the "Plan") for the
Independent Directors and Trustees of the funds. Under this Plan, each director
or trustee who is not an interested person of the funds (as defined in Section
2(a)(19) of the 1940 Act) and who has served for at least five years (a
"Qualified Director") is entitled to receive, upon termination of service as a
director (normally, at the retirement age of 72 or the retirement age of 73 or
74, if the retirement date is extended by the boards for one or two years, but
less than three years), continuation of payment for one year (the "First Year
Retirement Benefit") of the annual basic retainer and annualized board meeting
fees payable by the funds to the Qualified Director at the time of his/her
retirement (the "Basic Benefit"). Commencing with any such director's second
year of retirement, and commencing with the first year of retirement of any
director whose retirement has been extended by the board for three years, a
Qualified Director shall receive quarterly payments at an annual rate equal to
50% of the Basic Benefit. These payments will continue for the remainder of the
Qualified Director's life or ten years, whichever is longer (the "Reduced
Benefit Payments"). If a Qualified Director dies or becomes disabled after age
72 and before age 74 while still a director of the funds, the First Year
Retirement Benefit and Reduced Benefit Payments will be made to him/her or to
his/her beneficiary or estate. If a Qualified Director becomes disabled or dies
either prior to age 72 or during his/her 74th year while still a director of the
funds, the director will not be entitled to receive the First Year Retirement
Benefit; however, the Reduced Benefit Payments will be made to his/her
beneficiary or estate. The Plan is administered by a committee of three
directors who are also participants in the Plan and one director who is not a
Plan participant. The cost of the Plan will be allocated among the INVESCO Funds
in a manner determined to be fair and equitable by the committee. The Company
began making payments under the Plan to Mr. Chabris as of October 1, 1998. The
Company has no stock options or other pension or retirement plans for management
or other personnel and pays no salary or compensation to any of its officers.

The Independent Directors have contributed to a deferred compensation plan,
pursuant to which they have deferred receipt of a portion of the compensation
which they would otherwise have been paid as directors of certain of the INVESCO
Funds. Certain of the deferred amounts have been invested in the shares of all
of the INVESCO Funds. Each Independent Director may, therefore, be deemed to
have an indirect interest in shares of each such INVESCO Fund, in addition to
any INVESCO Fund shares the Independent Director may own either directly or
beneficially.

CONTROL PERSONS AND PRINCIPAL SHAREHOLDER

As of May 31, 1999, the following persons owned more than 5% of the outstanding
shares of the Funds indicated below. This level of share ownership is considered
to be a "principal shareholder" relationship with a Fund under the 1940 Act.
Shares that are owned "of record" are held in the name of the person indicated.
Shares that are owned "beneficially" are held in another name, but the owner has
the full economic benefit of ownership of those shares:

<PAGE>
Blue Chip Growth Fund
- ----------------------------------------------------------------------------
Name and Address Basis of Ownership Percentage Owned
(Record/Beneficial)
============================================================================

INVESCO Funds Group, Inc. Record 95.05%
Attn. Sheila Wendland
P.O. Box 173706
Denver, CO 80217-3706

- ----------------------------------------------------------------------------

Dynamics Fund
- ----------------------------------------------------------------------------
Name and Address Basis of Ownership Percentage Owned
(Record/Beneficial)
============================================================================

INVESCO Funds Group, Inc. Record 94.72%
Attn. Sheila Wendland
P.O. Box 173706
Denver, CO 80217-3706

- ----------------------------------------------------------------------------

Equity Income Fund
- ----------------------------------------------------------------------------
Name and Address Basis of Ownership Percentage Owned
(Record/Beneficial)
============================================================================

Great-West Life & Annuity Record 39.80%
Unit Valuations 2T2
8515 E. Orchard Road
Englewood, CO 80111-5002
- ----------------------------------------------------------------------------
Security Life Record 18.22%
Separate Account L1
Attn. Chris Smythe
Unit Valuations 2T2
8515 E. Orchard Road
Englewood, CO 80111-5002
- ----------------------------------------------------------------------------
Security Life Record 12.90%
Separate Account A1
Attn. Chris Smythe
Unit Valuations 2T2
8515 E. Orchard Road
Englewood, CO 80111-5002
- ----------------------------------------------------------------------------
Annuity Investors Life
Insurance Company Record 7.12%
250 East Fifth Street
Cincinnati, OH 45202-4119
- ----------------------------------------------------------------------------
Separate Account VA5 of Record 5.92%
Transamerica Occidental
Life Insurance Company
Attn. Variable Annuity Dept.
P.O. Box 33849
Charlotte, NC 28233-3849
- ----------------------------------------------------------------------------

<PAGE>
Health Sciences Fund
- ----------------------------------------------------------------------------
Name and Address Basis of Ownership Percentage Owned
(Record/Beneficial)
============================================================================

Fortis Benefits Insurance Co. Record 77.44%
Attn. Brian Perkins
P.O. Box 64284
St. Paul, MN 55164-0284
- ----------------------------------------------------------------------------
INVESCO Funds Group, Inc. Record 16.89%
Attn. Sheila Wendland
P.O. Box 173706
Denver, CO 80217-3706
- ----------------------------------------------------------------------------
First Fortis Life Insurance
Co. NY Record 5.64%
Separate Account A
PO Box 64284
St. Paul, MN 55164-0284
- ----------------------------------------------------------------------------

High Yield Fund
- ----------------------------------------------------------------------------
Name and Address Basis of Ownership Percentage Owned
(Record/Beneficial)
============================================================================

Great-West Life & Annuity Record 49.02%
Unit Valuations 2T2
8515 E. Orchard Road
Englewood, CO 80111-5002
- ----------------------------------------------------------------------------
Security Life Record 19.33%
Separate Account L1
Attn. Chris Smythe
Unit Valuations 2T2
8515 E. Orchard Road
Englewood, Co 80111-5002
- ----------------------------------------------------------------------------
Security Life Record 13.02%
Separate Account A1
Attn. Chris Smythe
Unit Valuations 2T2
8515 E. Orchard Road
Englewood, Co 80111-5002
- ----------------------------------------------------------------------------
Conseco Variable Insurance Co. Record 8.18%
Attn. Separate Accounts C1B
11825 North Pennsylvania Street
Carmel, IN 46032-4555
- ----------------------------------------------------------------------------

<PAGE>
Realty Fund
- ----------------------------------------------------------------------------
Name and Address Basis of Ownership Percentage Owned
(Record/Beneficial)
============================================================================

Safeco Mutual Funds Record 63.16%
Attn. Steve Ballagh
P.O. Box 34890
Seattle, WA 98124-1890
- ----------------------------------------------------------------------------
INVESCO Funds Group, Inc. Record 36.70%
Attn. Sheila Wendland
P.O. Box 173706
Denver, CO 80217-3706
- ----------------------------------------------------------------------------

Small Company Growth Fund
- ----------------------------------------------------------------------------
Name and Address Basis of Ownership Percentage Owned
(Record/Beneficial)
============================================================================

Security Life Record 82.50%
Separate Account L1
Attn. Chris Smythe
Unit Valuations 2T2
8515 E. Orchard Road
Englewood, CO 80111-5002
- ----------------------------------------------------------------------------
INVESCO Funds Group, Inc. Record 17.44%
Attn. Sheila Wendland
P.O. Box 173706
Denver, CO 80217-3706
- ----------------------------------------------------------------------------

Technology Fund
- ----------------------------------------------------------------------------
Name and Address Basis of Ownership Percentage Owned
(Record/Beneficial)
============================================================================

Fortis Benefits Insurance Co. Record 84.24%
Attn. Brian Perkins
P.O. Box 64284
St. Paul, MN 55164-0284
- ----------------------------------------------------------------------------
INVESCO Funds Group, Inc. Record 13.22%
Attn. Sheila Wendland
P.O. Box 173706
Denver, CO 80217-3706
- ----------------------------------------------------------------------------

Total Return Fund
- ----------------------------------------------------------------------------
Name and Address Basis of Ownership Percentage Owned
(Record/Beneficial)
============================================================================

Great-West Life & Annuity Record 43.66%
Unit Valuations 2T2
8515 E. Orchard Road
Englewood, CO 80111-5002
- ----------------------------------------------------------------------------
Security Life Record 26.93%
Separate Account L1
Attn. Chris Smythe
Unit Valuations 2T2
8515 E. Orchard Road
Englewood, CO 80111-5002
- ----------------------------------------------------------------------------

<PAGE>
- ----------------------------------------------------------------------------
Name and Address Basis of Ownership Percentage Owned
(Record/Beneficial)
============================================================================

Security Life Record 16.46%
Separate Account A1
Attn. Chris Smythe
Unit Valuations 2T2
8515 E. Orchard Road
Englewood, CO 80111-5002
- ----------------------------------------------------------------------------
Annuity Investors Life Record 7.09%
Insurance Company
250 East Fifth Street
Cincinnati, OH 45202-4119
- ----------------------------------------------------------------------------

Utilities Fund
- ----------------------------------------------------------------------------
Name and Address Basis of Ownership Percentage Owned
(Record/Beneficial)
============================================================================

Security Life Record 54.13%
Separate Account A1
Attn. Chris Smythe
Unit Valuations 2T2
8515 E. Orchard Road
Englewood, CO 80111-5002
- ----------------------------------------------------------------------------
Security Life Record 36.43%
Separate Account L1
Attn. Chris Smythe
Unit Valuations 2T2
8515 E. Orchard Road
Englewood, CO 80111-5002
- ----------------------------------------------------------------------------

As of June 7, 1999, officers and directors of the Company, as a group,
beneficially owned less than 1% of any Fund's outstanding shares.

DISTRIBUTOR

INVESCO Distributors, Inc. ("IDI"), a wholly-owned subsidiary of INVESCO, is the
distributor of the Funds. IDI receives no compensation and bears all expenses,
including the cost of printing and distributing prospectuses, incident to
marketing of the Funds' shares.

OTHER SERVICE PROVIDERS

INDEPENDENT ACCOUNTANTS

PricewaterhouseCoopers LLP, 950 Seventeenth Street, Suite 2500, Denver,
Colorado, are the independent accountants of the Company. The independent
accountants are responsible for auditing the financial statements of the Funds.
<PAGE>
CUSTODIAN

State Street Bank and Trust Company, P.O. Box 351, Boston, Massachusetts, is the
custodian of the cash and investment securities of the Company. The custodian is
also responsible for, among other things, receipt and delivery of each Fund's
investment securities in accordance with procedures and conditions specified in
the custody agreement with the Company. The custodian is authorized to establish
separate accounts in foreign countries and to cause foreign securities owned by
the Funds to be held outside the United States in branches of U.S. banks and, to
the extent permitted by applicable regulations, in certain foreign banks and
securities depositories.

TRANSFER AGENT

INVESCO Funds Group, Inc., 7800 E. Union Avenue, Denver, Colorado is the
Company's transfer agent, registrar, and dividend disbursing agent. Services
provided by INVESCO include the issuance, cancellation and transfer of shares of
the Funds, and the maintenance of records regarding the ownership of such
shares.

LEGAL COUNSEL

The firm of Kirkpatrick & Lockhart LLP, 1800 Massachusetts Avenue, N.W., 2nd
Floor, Washington, D.C., is legal counsel for the Company. The firm of Moye,
Giles, O'Keefe, Vermeire & Gorrell, 1225 17th Street, Suite 2900, Denver,
Colorado, acts as special counsel to the Company.

BROKERAGE ALLOCATION AND OTHER PRACTICES

As the investment adviser to the Funds, INVESCO places orders for the purchase
and sale of securities with broker-dealers based upon an evaluation of the
financial responsibility of the broker-dealers and the ability of the
broker-dealers to effect transactions at the best available prices.

While INVESCO seeks reasonably competitive commission rates, the Funds do not
necessarily pay the lowest commission or spread available. INVESCO is permitted
to, and does, consider qualitative factors in addition to price in the selection
of brokers. Among other things, INVESCO considers the quality of executions
obtained on a Fund's portfolio transactions, viewed in terms of the size of
transactions, prevailing market conditions in the security purchased or sold,
and general economic and market conditions. INVESCO has found that a broker's
consistent ability to execute transactions is at least as important as the price
the broker charges for those services.

In seeking to ensure that the commissions charged a Fund are consistent with
prevailing and reasonable commissions, INVESCO monitors brokerage industry
practices and commissions charged by broker-dealers on transactions effected for
other institutional investors like the Funds.

Consistent with the standard of seeking to obtain favorable execution on
portfolio transactions, INVESCO may select brokers that provide research
services to INVESCO and the Company, as well as other INVESCO mutual funds and
other accounts managed by INVESCO. Research services include statistical and
analytical reports relating to issuers, industries, securities and economic
factors and trends, which may be of assistance or value to INVESCO in making
informed investment decisions. Research services prepared and furnished by
brokers through which a Fund effects securities transactions may be used by
INVESCO in servicing all of its accounts and not all such services may be used
by INVESCO in connection with a particular Fund. Conversely, a Fund receives
benefits of research acquired through the brokerage transactions of other
clients of INVESCO.

In order to obtain reliable trade execution and research services, INVESCO may
utilize brokers that charge higher commissions than other brokers would charge
for the same transaction. This practice is known as "paying up." However, even
when paying up, INVESCO is obligated to obtain favorable execution of a Fund's
transactions.
<PAGE>
Portfolio transactions also may be effected through brokers and dealers that
recommend the Funds to their clients, or that act as agent in the purchase of a
Fund's shares for their clients. When a number of brokers and dealers can
provide comparable best price and execution on a particular transaction, INVESCO
may consider the sale of a Fund's shares by a broker or dealer in selecting
among qualified broker-dealers.

The aggregate dollar amount of brokerage commissions paid by each Fund for the
fiscal years ended December 31, 1998, 1997 and 1996 were:

Name of Fund 1998 1997 1996
- ------------ ---- ---- ----

Blue Chip Growth Fund $ 1,746 $ 267 N/A

Dynamics Fund 574 335 N/A

Equity Income Fund 278,819 239,249 151,867

Financial Services Fund N/A N/A N/A

Health Sciences Fund 5,650 563 N/A

High Yield Fund 178,000 143,282 $ 114,443

Realty Fund 179 N/A N/A

Small Company Growth Fund 4,907 712 N/A

Technology Fund 14,920 5,012 N/A

Telecommunications Fund N/A N/A N/A

Total Return Fund 484 6,797 7,686

Utilities Fund 9,136 13,372 9,953

For the fiscal year ended December 31, 1998, brokers providing research services
received $83,245 in commissions on portfolio transactions effected for the
Funds. The aggregate dollar amount of such portfolio transactions was
$51,987,166. Commissions totaling $78 were allocated to certain brokers in
recognition of their sales of shares of the Funds on portfolio transactions of
the Funds effected during the fiscal year ended December 31, 1998.

<PAGE>
At December 31, 1998, each Fund held debt and/or equity securities of its
regular brokers or dealers, or their parents, as follows:

- ---------------------------------------------------------------------
Fund Broker or Dealer Value of Securities
at December 31, 1998
======================================================================
Blue Chip Growth State Street Capital $3,000
Markets
- ---------------------------------------------------------------------
Dynamics State Street Capital $3,000
Markets
- ---------------------------------------------------------------------
Equity Income State Street Capital $3,159,000
markets
Chase Securities $653,000
- ---------------------------------------------------------------------
Financial Services N/A N/A
- ---------------------------------------------------------------------
Health Sciences State Street Capital $337,000
Markets
- ---------------------------------------------------------------------
High Yield State Street Capital $1,883,000
Markets
- ---------------------------------------------------------------------
Realty N/A N/A
- ---------------------------------------------------------------------
Small Company Growth State Street Capital $216,000
Markets
- ---------------------------------------------------------------------
Technology State Street Capital $206,000
Markets
- ---------------------------------------------------------------------
Telecommunications N/A N/A
- ---------------------------------------------------------------------
Total Return State Street Capital $3,474,000
Markets
Morgan Stanley & Co., $223,000
Inc.
NationsBanc/Montgomery $105,000
Securities
- ---------------------------------------------------------------------
Utilities State Street Capital $857,000
Markets
- ---------------------------------------------------------------------

Neither INVESCO nor any affiliate of INVESCO receives any brokerage commissions
on portfolio transactions effected on behalf of the Funds, and there is no
affiliation between INVESCO or any person affiliated with INVESCO or the Funds
and any broker or dealer that executes transactions for the Funds.

<PAGE>
CAPITAL STOCK

The Company is authorized to issue up to one billion shares of common stock with
a par value of $0.01 per share. As of May 31, 1999, the following shares of each
Fund were outstanding:

Blue Chip Growth Fund 25,600
Dynamics Fund 25,363
Equity Income Fund 3,473,477
Financial Services Fund N/A
Health Sciences Fund 188,263
High Yield Fund 3,978,373
Realty Fund 66,219
Small Company Growth Fund 141,268
Technology Fund 156,773
Telecommunications Fund N/A
Total Return Fund 2,204,489
Utilities Fund 412,595

All shares of each Fund are of one class with equal rights as to voting,
dividends and liquidation. All shares issued and outstanding are, and all shares
offered hereby, when issued, will be, fully paid and nonassessable. The board of
directors has the authority to designate additional classes of common stock
without seeking the approval of shareholders and may classify and reclassify any
authorized but unissued shares.

Shares have no preemptive rights and are freely transferable on the books of
each Fund.

All shares of the Company have equal voting rights based on one vote for each
share owned. The Company is not generally required, and does not expect, to hold
regular annual meetings of shareholders. However, when requested to do so in
writing by the holders of 10% or more of the outstanding shares of the Company
or as may be required by applicable law or the Company's Articles of
Incorporation, the board of directors will call special meetings of
shareholders.

Directors may be removed by action of the holders of a majority of the
outstanding shares of the Company. The Funds will assist shareholders in
communicating with other shareholders as required by the Investment Company Act
of 1940.

Fund shares have noncumulative voting rights, which means that the holders of a
majority of the shares of the Company voting for the election of directors of
the Company can elect 100% of the directors if they choose to do so. If that
occurs, the holders of the remaining shares voting for the election of directors
will not be able to elect any person or persons to the board of directors.
Directors may be removed by action of the holders of a majority of the
outstanding shares of the Company.

TAX CONSEQUENCES OF OWNING SHARES OF THE FUND

Each Fund intends to continue to conduct its business and satisfy the applicable
diversification of assets, distribution and source of income requirements to
qualify as a regulated investment company under Subchapter M of the Internal
Revenue Code of 1986, as amended. Each Fund qualified as a regulated investment
company in the fiscal year ended December 31, 1998, and intends to continue to
qualify during its current fiscal year. It is the policy of each Fund to
distribute all investment company taxable income and net capital gains. As a
result of this policy and the Funds' qualification as regulated investment
companies, it is anticipated that none of the Funds will pay federal income or
excise taxes and that all of the Funds will be accorded conduit or "pass
through" treatment for federal income tax purposes. Therefore, any taxes that a
Fund would ordinarily owe are paid by its shareholders on a pro-rata basis. If a
Fund does not distribute all of its net investment income or net capital gains,
it will be subject to income tax on the amount that is not distributed. If a
Fund does not qualify as a regulated investment company, it will be subject to
corporate tax on its net investment income and net capital gains at the
corporate tax rates.
<PAGE>
If it invests in foreign securities, a Fund may be subject to the withholding of
foreign taxes on dividends or interest it receives on foreign securities.
Foreign taxes withheld will be treated as an expense of the Fund unless the Fund
meets the qualifications and makes the election to enable it to pass these taxes
through to shareholders for use by them as a foreign tax credit or deduction.
Tax conventions between certain countries and the United States may reduce or
eliminate such taxes.

A Fund may invest in the stock of "passive foreign investment companies"
("PFICs"). A PFIC is a foreign corporation that, in general, meets either of the
following tests: (1) at least 75% of its gross income is passive or (2) an
average value of at least 50% of its assets produce, or are held for the
production of, passive income. Each Fund intends to "mark to market" its stock
in any PFIC. In this context, "marking to market" means including in ordinary
income for each taxable year the excess, if any, of the fair market value of the
PFIC stock over the Fund's adjusted basis in the PFIC stock as of the end of the
year. In certain circumstances, a Fund will also be allowed to deduct from
ordinary income the excess, if any, of its adjusted basis in PFIC stock over the
fair market value of the PFIC stock as of the end of the year. The deduction
will only be allowed to the extent of any PFIC mark-to-market gains recognized
as ordinary income in prior years (for tax years beginning after December 31,
1997). A Fund's adjusted tax basis in each PFIC stock for which it makes this
election will be adjusted to reflect the amount of income included or deduction
taken under the election.

Gains or losses (1) from the disposition of foreign currencies, (2) from the
disposition of debt securities denominated in foreign currencies that are
attributable to fluctuations in the value of the foreign currency between the
date of acquisition of each security and the date of disposition, and (3) that
are attributable to fluctuations in exchange rates that occur between the time a
Fund accrues interest, dividends or other receivables or accrues expenses or
other liabilities denominated in a foreign currency and the time the Fund
actually collects the receivables or pays the liabilities, generally will be
treated as ordinary income or loss. These gains or losses may increase or
decrease the amount of a Fund's investment company taxable income to be
distributed to its shareholders.

You should consult your contract prospectus and your own tax adviser regarding
specific questions about federal, state and local tax issues relating to your
contract.

PERFORMANCE

THE FUNDS' TOTAL RETURNS DO NOT REFLECT FEES AND EXPENSES APPLICABLE TO YOUR
VARIABLE ANNUITY OR VARIABLE LIFE INSURANCE CONTRACT. If those fees and expenses
were reflected, the returns would be lower. Consult your contract prospectus for
the amounts of those contract fees and charges. To keep shareholders and
potential investors informed, INVESCO will occasionally advertise the Funds'
total return for one-, five-, and ten-year periods (or since inception). Total
return figures show the rate of return on a $10,000 investment in a Fund,
assuming reinvestment of all dividends and capital gain distributions for the
periods cited.
<PAGE>

Cumulative total return shows the actual rate of return on an investment for the
period cited; average annual total return represents the average annual
percentage change in the value of an investment. Both cumulative and average
annual total returns tend to "smooth out" fluctuations in a Fund's investment
results, because they do not show the interim variations in performance over the
periods cited. More information about the Funds' recent and historical
performance is contained in the Company's Annual Report to Shareholders. You can
get a free copy by calling or writing to INVESCO using the phone number or
address on the back cover of the Funds' Prospectus.

When we quote mutual fund rankings published by Lipper, Inc., we may compare a
Fund to others in its appropriate Lipper category, as well as the broad-based
Lipper general fund groupings. These rankings allow you to compare a Fund to its
peers. Other independent financial media also produce performance- or
service-related comparisons, which you may see in our promotional materials.

Performance figures are based on historical earnings and are not intended to
suggest future performance.

Average annual total return performance for the one-, five-, and since inception
periods ended December 31, 1998, was:

Name of Fund 1 Year 5 Year Since Inception*
<S> <C> <C> <C>
Blue Chip Growth Fund 38.99% N/A 33.98%*
Dynamics Fund 19.35% N/A 16.81%*
Equity Income Fund 15.30% N/A 21.63%*
Financial Services Fund N/A N/A N/A
Health Sciences Fund 42.85% N/A 32.62%*
High Yield Fund 1.42% N/A 11.82%*
Realty Fund (15.88%) N/A (20.51%)*
Small Company Growth Fund 16.38% N/A 11.11%*
Technology Fund 25.69% N/A 25.46%*
Telecommunications Fund N/A N/A N/A
Total Return Fund 9.56% N/A 14.87%*
Utilities Fund 25.48% N/A 17.50%*
</TABLE>
<PAGE>

*Inception dates were as follows:
Blue Chip Growth August 25, 1997
Dynamics August 25, 1997
Equity Income August 10, 1994
Financial Services Fund August __, 1999
Health Sciences May 22, 1997
High Yield May 27, 1994
Realty April 1, 1998
Small Company Growth August 25, 1997
Technology May 21, 1997
Telecommunications Fund August __, 1999
Total Return June 2, 1994
Utilities January 3, 1995

Average annual total return performance for each of the periods indicated was
computed by finding the average annual compounded rates of return that would
equate the initial amount invested to the ending redeemable value, according to
the following formula:
P(1 + T)n = ERV

where: P = a hypothetical initial payment of $10,000
T = average annual total return
n = number of years
ERV = ending redeemable value of initial payment

The average annual total return performance figures shown above were determined
by solving the above formula for "T" for each time period indicated.

In conjunction with performance reports, comparative data between a Fund's
performance for a given period and other types of investment vehicles, including
certificates of deposit, may be provided to prospective investors and
shareholders.

In conjunction with performance reports and/or analyses of shareholder services
for a Fund, comparative data between that Fund's performance for a given period
and recognized indices of investment results for the same period, and/or
assessments of the quality of shareholder service, may be provided to
shareholders. Such indices include indices provided by Dow Jones & Company,
Standard & Poor's, Lipper, Inc., Lehman Brothers, National Association of
Securities Dealers Automated Quotations, Frank Russell Company, Value Line
Investment Survey, the American Stock Exchange, Morgan Stanley Capital
<PAGE>

International, Wilshire Associates, the Financial Times Stock Exchange, the New
York Stock Exchange, the Nikkei Stock Average and Deutcher Aktienindex, all of
which are unmanaged market indicators. In addition, rankings, ratings, and
comparisons of investment performance and/or assessments of the quality of
shareholder service made by independent sources may be used in advertisements,
sales literature or shareholder reports, including reprints of, or selections
from, editorials or articles about the Fund. These sources utilize information
compiled (i) internally; (ii) by Lipper Analytical Services, Inc.; or (iii) by
other recognized analytical services. The Lipper Analytical Services, Inc.
mutual fund rankings and comparisons which may be used by the Fund in
performance reports will be drawn from the following mutual fund groupings, in
addition to the broad-based Lipper general fund groupings:

Lipper Mutual
Fund Fund Category
---- -------------
Blue Chip Growth Growth
Dynamics Capital Appreciation
Equity Income Equity Income
Financial Services ___________________
Health Sciences Health Biotechnology
High Yield High Current Yield
Realty Real Estate
Small Company Growth Small Company Growth
Technology Science and Technology
Telecommunications ____________________
Total Return Flexible Portfolio
Utilities Utility

<PAGE>

Sources for Fund performance information and articles about the Funds include,
but are not limited to, the following:

American Association of Individual Investors' Journal
Banxquote
Barron's
Business Week
CDA Investment Technologies
CNBC
CNN
Consumer Digest
Financial Times
Financial World
Forbes
Fortune
Ibbotson Associates, Inc.
Institutional Investor
Investment Company Data, Inc.
Investor's Business Daily
Kiplinger's Personal Finance
Lipper Analytical Services, Inc.'s Mutual Fund
Performance Analysis
Money
Morningstar
Mutual Fund Forecaster
No-Load Analyst
No-Load Fund X
Personal Investor
Smart Money
The New York Times
The No-Load Fund Investor
U.S. News and World Report
United Mutual Fund Selector
USA Today
The Wall Street Journal
Wiesenberger Investment Companies Services
Working Woman
Worth

FINANCIAL STATEMENTS

The financial statements for the Company for the fiscal year ended December 31,
1998, are incorporated herein by reference from the Company's Annual Report to
Shareholders dated December 31, 1998.

<PAGE>

APPENDIX A

BOND RATINGS

The following is a description of Moody's and S&P's bond ratings:

Moody's Corporate Bond Ratings

Aaa - Bonds rated Aaa are judged to be of the best quality. They carry the
smallest degree of investment risk and are generally referred to as
"gilt-edged." Interest payments are protected by a large or by an exceptionally
stable margin, and principal is secure. While the various protective elements
are likely to change, such changes as can be visualized are most unlikely to
impair the fundamentally strong position of such issues.

Aa - Bonds rated Aa are judged to be of high quality by all standards. Together
with the Aaa group, they comprise what are generally known as high grade bonds.
They are rated lower than the best bonds because margins of protection may not
be as large as in Aaa securities or fluctuation of protective elements may be of
greater amplitude or there may be other elements present which make the long
term risk appear somewhat larger than in Aaa securities.

A - Bonds rated A possess many favorable investment attributes, and are to be
considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present which
suggest a susceptibility to impairment sometime in the future.

Baa - Bonds rated Baa are considered as medium grade obligations, i.e., they are
neither highly protected nor poorly secured. Interest payments and principal
security appear adequate for the present but certain protective elements may be
lacking or may be characteristically unreliable over any great length of time.
Such bonds lack outstanding investment characteristics and in fact have
speculative characteristics as well.

Ba - Bonds rated Ba are judged to have speculative elements. Their future cannot
be considered as well assured. Often the protection of interest and principal
payments may be very moderate and thereby not well safeguarded during both good
and bad times over the future. Uncertainty of position characterizes bonds in
this class.

B - Bonds rated B generally lack characteristics of the desirable investment.
Assurance of interest and principal payments or maintenance of other terms of
the contract over any longer period of time may be small.

Caa - Bonds rated Caa are of poor standing. Such issues may be in default or
there may be present elements of danger with respect to principal or interest.
S&P Corporate Bond Ratings

AAA - This is the highest rating assigned by Standard & Poor's to a debt
obligation and indicates an extremely strong capacity to pay principal and
interest.

AA - Bonds rated AA also qualify as high-quality debt obligations. Capacity to
pay principal and interest is very strong, and in the majority of instances they
differ from AAA issues only in small degree.

A - Bonds rated A have a strong capacity to pay principal and interest, although
they are somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than bonds in higher rated categories.

BBB - Bonds rated BBB are regarded as having an adequate capability to pay
principal and interest. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay principal and interest for bonds in
this category than for bonds in higher rated categories.
<PAGE>
BB - Bonds rated BB have less near-term vulnerability to default than other
speculative issues. However, they face major ongoing uncertainties or exposure
to adverse business, financial, or economic conditions which could lead to
inadequate capacity to meet timely interest and principal payments.

B - Bonds rated B have a greater vulnerability to default but currently have the
capacity to meet interest payments and principal repayments. Adverse business,
financial, or economic conditions will likely impair capacity or willingness to
pay interest and repay principal.

CCC - Bonds rated CCC have a currently identifiable vulnerability to default and
are dependent upon favorable business, financial, and economic conditions to
meet timely payment of interest and repayment of principal. In the event of
adverse business, financial, or economic conditions, they are not likely to have
the capacity to pay interest and repay principal.
<PAGE>

PART C. OTHER INFORMATION

ITEM 23. EXHIBITS

(a) (1) Articles of Incorporation filed August 19, 1993.(2)

(2) Articles of Amendment of the Articles of Incorporation
filed October 21, 1993.(2)

(3) Articles Supplementary to Articles of Incorporation filed
October 22, 1993.(2)

(4) Articles Supplementary to Articles of Incorporation
filed February 11, 1997.(2)

(5) Articles Supplementary to Articles of Incorporation dated
January 5, 1998.(5)

(b) Bylaws as of July 21, 1993.(3)

(d) (1) Investment Advisory Agreement between Company and
INVESCO Funds, Group, Inc. dated February 28, 1997.(2)

(i) Amendment to Investment Advisory Agreement
dated May 21, 1997.(7)

(ii) Amendment to Investment Advisory Agreement
dated August 22, 1997.(7)

(iii) Amendment to Investment Advisory
Agreement dated February 6, 1998.(7)

(2) Sub-Advisory Agreement between INVESCO Funds Group,
Inc. and INVESCO Capital Management, Inc. dated
February 28, 1997.(2)

(i) Amendment dated January 1, 1998 to Sub-Advisory
Agreement dated February 28, 1997.(7)

(3) Sub-Advisory Agreement between INVESCO Funds Group,
Inc. and INVESCO Realty Advisors, Inc. dated
February 28, 1997.(7)

(i) Amendment dated January 1, 1998 to Sub-Advisory
Agreement dated February 28, 1997.(7)

(e) (1) General Distribution Agreement between Company and
INVESCO Funds Group, Inc. dated February 28, 1997.(2

(2) General Distribution Agreement between Company and
INVESCO Funds Group, Inc. dated September 30, 1997.(3)

(f) (1) Defined Benefit Deferred Compensation Plan for
Non-InterestedDirectors and Trustees. (2)

(2) Amended Defined Benefit Deferred Compensation Plan for
Non-Interested Directors and Trustees.(6)

(g) (1) Custody Agreement between Company and State Street Bank
and Trust Company dated October 20, 1993.(3)

(2) Amendment to Custody Agreement dated October 25, 1995.(2)

(3) Data Access Services Addendum.(3)

(4) Additional Fund Letter dated November 13, 1997.(5)

(h) (1) Transfer Agency Agreement between Company and INVESCO
Funds Group, Inc. dated February 28, 1997.(2)
<PAGE>
(2) Administrative Services Agreement between Company and
INVESCO Funds Group, Inc. dated February 28, 1997.(2)

(i) Amendment to Administrative Services Agreement
dated July 1, 1998.(6)

(3) Participation Agreement, dated March 22, 1994, among
Registrant, INVESCO Funds Group, Inc., Transamerica Occidental
Life Insurance Company and Charles Schwab & Co., Inc.(4)

(4) Participation Agreement, dated August 26, 1994, among
Registrant, INVESCO Funds Group, Inc. and Security Life of
Denver Insurance Company.(3)

(5) Participation Agreement, dated September 19, 1994
among Registrant, INVESCO Funds Group, Inc. and First ING
Life Insurance Company of New York.(4)

(i) Second Amendment to Participation Agreement (6)

(6) Participation Agreement, dated December 1, 1994, among
Registrant, INVESCO Funds Group, Inc., First Transamerica Life
Insurance Company and Charles Schwab & Co., Inc.(4)

(7) Participation Agreement, dated September 14, 1995,
among Registrant, INVESCO Funds Group, Inc. and Southland
Life Insurance Company.(1)

(8) Participation Agreement, dated October 31, 1995, among
Registrant, INVESCO Funds Group, Inc. and American Partners
Life Insurance Company.(1)

(9) Participation Agreement, dated April 15, 1996, among
Registrant, INVESCO Funds Group, Inc. and Allmerica Financial
Life Insurance and Annuity Company.(2)

(10) Participation Agreement, dated December 4, 1996,
among Registrant, INVESCO Funds Group, Inc. and American
Centurion Life Assurance Company.(3)

(11) Participation Agreement, dated April 15, 1997, among
Registrant, INVESCO Funds Group, Inc. and Prudential
Insurance Company of America.(3)

(12) Participation Agreement, dated May 30, 1997, among
Registrant, INVESCO Funds Group, Inc. and Annuity Investors
Life Insurance Company.(3)

(13) Participation Agreement, dated August 17, 1998,
among Registrant, INVESCO Funds Group, Inc. and Metropolitan
Life Insurance Company.(6)

(14) Participation Agreement, dated October 1, 1998,
among Registrant, INVESCO Funds Group, Inc. and Business
Mens' Assurance Company of America.(6)

(15) Service Agreement dated September 28, 1998, among
Registrant, INVESCO Funds Group, Inc. and Security life of
Denver Insurance Company.(6)

(16) Participation Agreement dated July 8, 1997, among
Registrant, INVESCO Funds Group, Inc., First Great-West Life &
Annuity Insurance Company and Charles Schwab & Co. Inc.(6)

(17) Participation Agreement dated February 8, 1999,
among Registrant, INVESCO Funds Group, Inc., INVESCO
Distributors, Inc. and Nationwide Life Insurance Company
and/or Nationwide Life and Annuity Insurance Company.(6)

(18) Participation Agreement dated June 19, 1996, among
Registrant, INVESCO Funds Group and Great American Reserve
Insurance Company.(6)
<PAGE>
(i) Opinion and consent of counsel as to the legality of the
securities being registered, indicating whether they will, when
sold, be legally issued, fully paid and non-assessable.(3)

(j) Consent of Independent Accountants.

(k) Not applicable.

(l) Not applicable.

(m) Not Applicable.

(n) (1) Financial Data Schedule for the year ended Decembert 31,
1998 for the Blue Chip Growth Fund.

(2) Financial Data Schedule for the year ended December 31,
1998 for the Dynamics Fund.

(3) Financial Data Schedule for the year ended December 31,
1998 for the Health Sciences Fund.

(4) Financial Data Schedule for the year ended December 31,
1998 for the High Yield Fund.

(5) Financial Data Schedule for the year ended December 31,
1998 for the Industrial Income Fund.

(6) Financial Data Schedule for the period ended December 31,
1998 for the Realty Fund.

(7) Financial Data Schedule for the year ended December 31,
1998 for the Small Company Growth Fund.

(8) Financial Data Schedule for the year ended December 31,
1998 for the Technology Fund.

(9) Financial Data Schedule for the year ended December 31,
1998 for the Total Return Fund.

(10) Financial Data Schedule for the year ended December 31,
1998 for the Utilities Fund.

(o) Not Applicable

(1) Previously filed on EDGAR with Post-Effective Amendment No. 4 to the
Registration Statement on April 11, 1996, and incorporated by reference herein.

(2) Previously filed on EDGAR with Post-Effective Amendment No. 6 to the
Registration Statement on February 14, 1997, and incorporated by reference
herein.

(3) Previously filed on EDGAR with Post-Effective Amendment No. 7 to the
Registration Statement on November 12, 1997, and incorporated by reference
herein.

(4) Previously filed on EDGAR with Post-Effective Amendment No. 8 to the
Registration Statement on November 24, 1997, and incorporated by reference
herein.

(5) Previously filed on EDGAR with Post-Effective Amendment No. 10 to the
Registration Statement on February 27, 1998, and incorporated by reference
herein.

(6) Previously filed on EDGAR with Post-Effective Amendment No. 13 to the
Registration Statement on February 22, 1999, and incorporated by reference
herein.
<PAGE>

(7) Previously filed on EDGAR with Post-Effective Amendment No. 14 to the
Registration Statement on April 30, 1999, and incorporated by reference
herein.

ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE FUND

No person is presently controlled by or under common control with the Fund.

Item 25. INDEMNIFICATION

Indemnification provisions for officers, directors and employees of Registrant
are set forth in Article X of the Amended Bylaws and Article Seventh (3) of the
Articles of Restatement of the Articles of Incorporation, and are hereby
incorporated by reference. See Item 24(b)(1) and (2) above. Under these
Articles, directors and officers will be indemnified to the fullest extent
permitted to directors by the Maryland General Corporation Law, subject only to
such limitations as may be required by the Investment Company Act of 1940, as
amended, and the rules thereunder. Under the Investment Company Act of 1940,
Fund directors and officers cannot be protected against liability to the Fund or
its shareholders to which they would be subject because of willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties of their office.
The Fund also maintains liability insurance policies covering its directors and
officers.

Item 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER

See "The Fund and Its Management" in the Fund's Prospectus and in the Statement
of Additional Information for information regarding the business of the
investment adviser, INVESCO.

Following are the names and principal occupations of each director and officer
of the investment adviser, INVESCO. Certain of these persons hold positions with
IDI, a subsidiary of INVESCO, and, during the past two fiscal years, have held
positions with Institutional Trust Company d.b.a. INVESCO Trust Company, an
affiliate of INVESCO.

- --------------------------------------------------------------------------------
Name Position with Principal Occupation and
Adviser Company Affiliation
- --------------------------------------------------------------------------------
Mark H. Williamson Chairman, President & Chief Executive
Director and Officer
Officer INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------

Raymond Roy Cunningham Officer Senior Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237

- --------------------------------------------------------------------------------
William J. Galvin, Jr. Officer Senior Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Ronald L. Grooms Officer Senior Vice President & Treasurer
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
Richard W. Healey Officer Senior Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------

William Ralph Keithler Officer Senior Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237

- --------------------------------------------------------------------------------
Charles P. Mayer Officer & Senior Vice President
Director INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Timothy J. Miller Officer Senior Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Donovan J. (Jerry) Paul Officer Senior Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Glen A. Payne Officer Senior Vice President, Secretary
& General Counsel
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
John R. Schroer, II Officer Senior Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Marie E. Aro Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Ingeborg S. Cosby Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Stacie Cowell Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Dawn Daggy-Mangerson Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Elroy E. Frye, Jr. Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Linda J. Gieger Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
Mark D. Greenberg Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Brian B. Hayward Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Richard R. Hinderlie Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Thomas M. Hurley Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Patricia F. Johnston Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------

Campbell C. Judge Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237

- --------------------------------------------------------------------------------
Peter M. Lovell Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
James F. Lummanick Officer Vice President & Assistant
General Counsel
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Thomas A. Mantone, Jr. Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Trent E. May Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------

Corey M. McClintock Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237

- --------------------------------------------------------------------------------
Douglas J. McEldowney Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
Frederick R. (Fritz) Meyer Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Stephen A. Moran Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- -------------------------------------------------------------------------------
Jeffrey G. Morris Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Laura M. Parsons Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Jon B. Pauley Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Pamela J. Piro Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------

Anthony R. Rogers Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237

- --------------------------------------------------------------------------------
Gary L. Rulh Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------

James B. Sandidge Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237

- --------------------------------------------------------------------------------
John S. Segner Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Terri B. Smith Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Tane T. Tyler Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
Thomas R. Wald Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Alan I. Watson Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Judy P. Wiese Officer Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Thomas H. Scanlan Officer Regional Vice President
INVESCO Funds Group, Inc.
12028 Edgepark Court
Potomac, MD 20854
- --------------------------------------------------------------------------------
Reagan A. Shopp Officer Regional Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Michael D. Legoski Officer Assistant Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Donald R. Paddack Officer Assistant Vice President
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Kent T. Schmeckpeper Officer Assistant Vice President
Account Relationship Manager
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------
Jeraldine E. Kraus Officer Assistant Secretary
INVESCO Funds Group, Inc.
7800 East Union Avenue
Denver, CO 80237
- --------------------------------------------------------------------------------

Item 27. a) Principal Underwriters

INVESCO Bond Funds, Inc.
INVESCO Combination Stock & Bond Funds, Inc.
INVESCO Diversified Funds, Inc.
INVESCO Emerging Opportunity Funds, Inc.
INVESCO Growth Funds, Inc.
INVESCO Industrial Income Fund, Inc.
INVESCO International Funds, Inc.
INVESCO Money Market Funds, Inc.
INVESCO Sector Funds, Inc.
INVESCO Specialty Funds, Inc.
INVESCO Stock Funds, Inc.
INVESCO Tax-Free Income Funds, Inc.
INVESCO Treasurer's Series Funds, Inc.
INVESCO Value Trust
INVESCO Variable Investment Funds, Inc.

<PAGE>
b)
Positions and
Name and Principal Offices with Offices with
Business Address Underwriter the Company
- ------------------ ------------ -------------
William J. Galvin, Jr. Senior Vice
7800 E. Union Avenue President &
Denver, CO 80237 Asst. Secretary

Ronald L. Grooms Senior Vice Treasurer,
7800 E. Union Avenue President, Chief Fin'l
Denver, CO 80237 Treasurer, & Officer, and
Director Chief Acctg. Off.

Richard W. Healey Senior Vice
7800 E. Union Avenue President &
Denver, CO 80237 Director

Charles P. Mayer Director
7800 E. Union Avenue
Denver, CO 80237

Timothy J. Miller Director
7800 E. Union Avenue
Denver, CO 80237

Glen A. Payne Senior Vice Secretary
7800 E. Union Avenue President,
Denver, CO 80237 Secretary &
General Counsel

Judy P. Wiese Vice President Asst. Secretary
7800 E. Union Avenue & Assistant
Denver, CO 80237 Treasurer

Mark H. Williamson Chairman of the Board, President,
7800 E. Union Avenue President, & Chief CEO & Director
Denver, CO 80237 Executive Officer

c)
Not applicable.

Item 28. LOCATION OF ACCOUNTS AND RECORDS

Mark H. Williamson
7800 E. Union Avenue
Denver, CO 80237

Item 29. MANAGEMENT SERVICES

Not applicable.

Item 30. UNDERTAKINGS

Not applicable.

<PAGE>

Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Fund has duly caused this post-effective amendment to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Denver, County of Denver, and State of Colorado, on the 11th day of
June, 1999.

INVESCO Variable Investment Funds,Inc.

/s/ Mark H. Williamson
Attest: __________________________________
/s/ Glen A. Payne Mark H. Williamson, President
- --------------------------------
Glen A. Payne, Secretary

Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed below by the following persons in the capacities and
on the date indicated.

/s/ Mark H. Williamson /s/ Lawrence H. Budner
------------------------------- -----------------------------
Mark H. Williamson, President & Lawrence H. Budner, Director
Director (Chief Executive Officer)

/s/ Ronald L. Grooms /s/ John W. McIntyre
- ---------------------------- -----------------------------
Ronald L. Grooms, Treasurer John W. McIntyre, Director
(Chief Financial and Accounting
Officer)

/s/ Victor L. Andrews /s/ Fred A. Deering
- ------------------------------- -----------------------------
Victor L. Andrews, Director Fred A. Deering, Director

/s/ Bob R. Baker /s/ Larry Soll
- ------------------------------- -----------------------------
Bob R. Baker, Director Larry Soll, Director

/s/ Charles W. Brady /s/ Kenneth T. King
- ------------------------------- -----------------------------
Charles W. Brady, Director Kenneth T. King, Director

/s/ Wendy L. Gramm
- -------------------------------
Wendy L. Gramm, Director
/s/ Glen A. Payne
By*_____________________________ By* _________________________
Edward F. O'Keefe Glen A. Payne
Attorney in Fact Attorney in Fact

* Original Powers of Attorney authorizing Edward F. O'Keefe and Glen A. Payne,
and each of them, to execute this post-effective amendment to the Registration
Statement of the Registrant on behalf of the above-named directors and officers
of the Registrant have been filed with the Securities and Exchange Commission on
July 20, 1989, January 9, 1990, May 22, 1992, September 1, 1993, December 1,
1993, December 21, 1995, December 30, 1996, December 24, 1997 and May 4, 1998.

<PAGE>

Exhibit Index

Page in
Exhibit Number Registration Statement
- -------------- ----------------------

j 89
n(1) 90
n(2) 91
n(3) 92
n(4) 93
n(5) 94
n(6) 95
n(7) 96
n(8) 97
n(9) 98
n(10) 99

EXHIBIT J

CONSENT OF INDEPENDENT ACCOUNTNTS

We hereby consent to the incorporation by reference in Statement of Additional
Information constituting part of this Post-Effective Amendment No. 15 to the
registration statement on Form N-1A (the "Registration Statement") of our report
dated January 29, 1999, relating to the financial statements and financial
highlights appearing in the December 31, 1998 Annual Report to Shareholders of
the INVESCO Variable Investment Funds, Inc., which is also incorporated by
reference into the Registration Statement. We also consent to the reference to
us under the heading "Independent Accountants" in the Statement of Additional
Information.

/s/ PricewaterhouseCoopers LLP
- -------------------------
PricewaterhouseCoopers LLP

Denver, Colorado
June 8, 1999

WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

<ARTICLE> 6
<CIK> 0000912744
<NAME> INVESCO VARIABLE INVESTMENT FUNDS, INC.
<SERIES>
<NUMBER> 9
<NAME> INVESCO VARIABLE GROWTH FUND

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<INVESTMENTS-AT-COST> 255952
<INVESTMENTS-AT-VALUE> 355168
<RECEIVABLES> 325
<ASSETS-OTHER> 161
<OTHER-ITEMS-ASSETS> 17277
<TOTAL-ASSETS> 372881
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1997
<TOTAL-LIABILITIES> 1997
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 258380
<SHARES-COMMON-STOCK> 25600
<SHARES-COMMON-PRIOR> 24905
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<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 13288
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 99216
<NET-ASSETS> 370884
<DIVIDEND-INCOME> 4012
<INTEREST-INCOME> 0
<OTHER-INCOME> (48)
<EXPENSES-NET> 4188
<NET-INVESTMENT-INCOME> (224)
<REALIZED-GAINS-CURRENT> 22394
<APPREC-INCREASE-CURRENT> 81686
<NET-CHANGE-FROM-OPS> 104080
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1336
<DISTRIBUTIONS-OF-GAINS> 7300
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 61
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 634
<NET-CHANGE-IN-ASSETS> 104657
<ACCUMULATED-NII-PRIOR> 1333
<ACCUMULATED-GAINS-PRIOR> (1636)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2589
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 36832
<AVERAGE-NET-ASSETS> 304836
<PER-SHARE-NAV-BEGIN> 10.69
<PER-SHARE-NII> (0.01)
<PER-SHARE-GAIN-APPREC> 4.15
<PER-SHARE-DIVIDEND> 0.05
<PER-SHARE-DISTRIBUTIONS> 0.29
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 14.49
<EXPENSE-RATIO> .02
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0

</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

<ARTICLE> 6
<CIK> 0000912744
<NAME> INVESCO VARIABLE INVESTMENT FUNDS, INC.
<SERIES>
<NUMBER> 5
<NAME> INVESCO VARIABLE DYNAMICS FUND

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<INVESTMENTS-AT-COST> 217550
<INVESTMENTS-AT-VALUE> 277542
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<ASSETS-OTHER> 161
<OTHER-ITEMS-ASSETS> 32345
<TOTAL-ASSETS> 310225
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2009
<TOTAL-LIABILITIES> 2009
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 252344
<SHARES-COMMON-STOCK> 25363
<SHARES-COMMON-PRIOR> 24896
<ACCUMULATED-NII-CURRENT> (2)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (4118)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 59992
<NET-ASSETS> 308216
<DIVIDEND-INCOME> 1047
<INTEREST-INCOME> 13
<OTHER-INCOME> (16)
<EXPENSES-NET> 2802
<NET-INVESTMENT-INCOME> (1758)
<REALIZED-GAINS-CURRENT> (4118)
<APPREC-INCREASE-CURRENT> 55876
<NET-CHANGE-FROM-OPS> 51758
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 587
<DISTRIBUTIONS-OF-GAINS> 3715
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 74
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 393
<NET-CHANGE-IN-ASSETS> 50799
<ACCUMULATED-NII-PRIOR> 586
<ACCUMULATED-GAINS-PRIOR> 3715
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1652
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 40791
<AVERAGE-NET-ASSETS> 275570
<PER-SHARE-NAV-BEGIN> 10.34
<PER-SHARE-NII> (0.07)
<PER-SHARE-GAIN-APPREC> 2.05
<PER-SHARE-DIVIDEND> 0.02
<PER-SHARE-DISTRIBUTIONS> 0.15
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 12.15
<EXPENSE-RATIO> .01
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0

</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

<ARTICLE> 6
<CIK> 0000912744
<NAME> INVESCO VARIABLE INVESTMENT FUNDS, INC.
<SERIES>
<NUMBER> 7
<NAME> INVESCO VARIABLE HEALTH SCIENCES FUND

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<INVESTMENTS-AT-COST> 2119610
<INVESTMENTS-AT-VALUE> 2523351
<RECEIVABLES> 1192
<ASSETS-OTHER> 227
<OTHER-ITEMS-ASSETS> 10415
<TOTAL-ASSETS> 2535185
<PAYABLE-FOR-SECURITIES> 145252
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 12324
<TOTAL-LIABILITIES> 157576
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1982521
<SHARES-COMMON-STOCK> 155482
<SHARES-COMMON-PRIOR> 38318
<ACCUMULATED-NII-CURRENT> 277
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (8930)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 403741
<NET-ASSETS> 2377609
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</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

<ARTICLE> 6
<CIK> 0000912744
<NAME> INVESCO VARIABLE INVESTMENT FUNDS, INC.
<SERIES>
<NUMBER> 1
<NAME> VIF-HIGH YIELD FUND

<S> <C>
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</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

<ARTICLE> 6
<CIK> 0000912744
<NAME> INVESCO VARIABLE INVESTMENT FUNDS, INC.
<SERIES>
<NUMBER> 2
<NAME> VIF-VARIABLE INDUSTRIAL INCOME FUND

<S> <C>
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</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

<ARTICLE> 6
<CIK> 0000912744
<NAME> INVESCO VARIABLE INVESTMENT FUNDS, INC.
<SERIES>
<NUMBER> 10
<NAME> INVESCO VARIABLE REALTY FUND

<S> <C>
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</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

<ARTICLE> 6
<CIK> 0000912744
<NAME> INVESCO VARIABLE INVESTMENT FUNDS, INC.
<SERIES>
<NUMBER> 6
<NAME> INVESCO SMALL COMPANY GROWTH FUND

<S> <C>
<PERIOD-TYPE> YEAR
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<PERIOD-END> DEC-31-1998
<INVESTMENTS-AT-COST> 1004946
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[AVG-DEBT-OUTSTANDING] 0
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</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

<ARTICLE> 6
<CIK> 0000912744
<NAME> INVESCO VARIABLE INVESTMENT FUNDS, INC.
<SERIES>
<NUMBER> 8
<NAME> INVESCO VARIABLE TECHNOLOGY FUND

<S> <C>
<PERIOD-TYPE> YEAR
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<PERIOD-END> DEC-31-1998
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[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0

</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

<ARTICLE> 6
<CIK> 0000912744
<NAME> INVESCO VARIABLE INVESTMENT FUNDS, INC.
<SERIES>
<NUMBER> 3
<NAME> INVESCO VARIABLE TOTAL RETURN FUND

<S> <C>
<PERIOD-TYPE> YEAR
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<PERIOD-END> DEC-31-1998
<INVESTMENTS-AT-COST> 29953156
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[AVG-DEBT-OUTSTANDING] 0
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</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

<ARTICLE> 6
<CIK> 0000912744
<NAME> INVESCO VARIABLE INVESTMENT FUNDS, INC.
<SERIES>
<NUMBER> 4
<NAME> INVESCO VARIABLE UTILITIES FUND

<S> <C>
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</TABLE>