INVESCO Diversified Funds, Inc.
INVESCO Small Company Fund
(November 30, 1994)
INVESCO Dynamics Fund, Inc.
(August 31, 1994)
INVESCO Industrial Income Fund, Inc.
(November 1, 1994, As
Supplemented November 1, 1994)
INVESCO Multiple Asset Funds, Inc.
INVESCO Multi-Asset Allocation Fund
INVESCO Balanced Fund
(November 30, 1994)
Supplement to the Prospectuses of Above Funds,
Dates of Which are Indicated in Parentheses
The fourth paragraph in the section of INVESCO Industrial Income Fund, Inc.'s
Prospectus entitled "How Shares Can Be Purchased," and the fifth paragraph in
the sections of the remaining Funds' Prospectuses entitled "How Shares Can Be
Purchased," are hereby amended to read as follows:
Orders to purchase Fund shares can be placed by telephone. Shares of the
Fund will be issued at the net asset value next determined after receipt
of telephone instructions. Generally, payments for telephone orders must
be received by the Fund within three business days or the transaction may
be cancelled. In the event of such cancellation, the purchaser will be
held responsible for any loss resulting from a decline in the value of the
shares. In order to avoid such losses, purchasers should send payments for
telephone purchases by overnight courier or bank wire. INVESCO has agreed
to indemnify the Fund for any losses resulting from the cancellation of
telephone purchases.
The date of this Supplement is June 1, 1995.
<PAGE>
PROSPECTUS
November 30, 1994
INVESCO MULTI-ASSET ALLOCATION FUND
INVESCO Multi-Asset Allocation Fund (the "Fund") seeks to achieve a high
total return on investment through capital appreciation and current income. It
pursues this objective by allocating its assets among six asset classes: stocks
of large capitalization companies, stocks of small capitalization companies,
fixed income securities, equity real estate securities (primarily equity real
estate investment trusts), international equity securities and cash securities.
Allocations are based on the projected investment returns for each class.
Allocating assets among different asset classes allows the Fund to take
advantage of attractive investment opportunities in various sectors of the
capital markets, while providing diversification to reduce risk.
The Fund is a series of INVESCO Multiple Asset Funds, Inc. (the
"Company"), a diversified, managed, no-load mutual fund consisting of two
separate portfolios of investments. This Prospectus relates to shares of the
Fund. A separate Prospectus is available upon request from INVESCO Funds Group,
Inc. for the Company's other fund, INVESCO Balanced Fund. Investors may purchase
shares of either or both funds. Additional funds may be offered in the future.
This Prospectus provides you with the basic information you should know
before investing in INVESCO Multi-Asset Allocation Fund. You should read it and
keep it for future reference. A Statement of Additional Information containing
further information about the Fund has been filed with the Securities and
Exchange Commission. You can obtain a copy without charge by writing INVESCO
Funds Group, Inc., Post Office Box 173706, Denver, Colorado 80217-3706; or by
calling 1-800- 525-8085.
-----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE. SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, ANY BANK OR OTHER FINANCIAL INSTITUTION. THE SHARES
OF THE FUND ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY.
THE STATEMENT OF ADDITIONAL INFORMATION, DATED NOVEMBER 30, 1994, IS HEREBY
INCORPORATED BY REFERENCE INTO THIS PROSPECTUS.
<PAGE>
TABLE OF CONTENTS Page
ANNUAL FUND EXPENSES 6
FINANCIAL HIGHLIGHTS 7
PERFORMANCE DATA 8
INVESTMENT OBJECTIVE AND POLICIES 8
RISK FACTORS 16
THE FUND AND ITS MANAGEMENT 18
HOW SHARES CAN BE PURCHASED 20
SERVICES PROVIDED BY THE FUND 22
HOW TO REDEEM SHARES 25
DIVIDENDS, CAPITAL GAIN DISTRIBUTIONS, AND TAXES 27
ADDITIONAL INFORMATION 28
ANNUAL FUND EXPENSES
The Fund is no-load; there are no fees to purchase, exchange or redeem
shares. The Fund, however, is authorized to pay a distribution fee pursuant to
Rule 12b-1 under the Investment Company Act of 1940. (See "How Shares Can Be
Purchased--Distribution Expenses.") Lower expenses benefit Fund shareholders by
increasing the Fund's total return.
Shareholder Transaction Expenses None
Sales load "charge" on purchases None
Sales load "charge" on reinvested dividends None
Redemption fees None
Annual Fund Operating Expenses
(as a percentage of average net assets)
Management Fee 0.75%
12b-1 Fees 0.25%
Other Expenses (after absorbed expenses)(1) 0.50%
Transfer Agency Fee 0.28%
General Services, Administrative 0.22%
Services, Registration, Postage (2)
Total Fund Operating Expenses (after absorbed expenses)(1) 1.50%
(1) Certain Fund expenses are being absorbed voluntarily to ensure that
expenses for the Fund will not exceed 1.50% of the Fund's average net assets,
pursuant to an agreement between the Fund, INVESCO Funds Group, Inc. and INVESCO
Management & Research, Inc. under which all expenses of the Fund above that
amount will be split evenly between these two companies. In the absence of such
voluntary expense limitation, the Fund's "Other Expenses" and "Total Fund
Operating Expenses" in the above table would have been 4.14% and 5.14%,
respectively, of the Fund's average net assets, based on the actual expenses for
the fiscal period ended July 31, 1994.
(2) Includes, but is not limited to, fees and expenses of directors,
custodian bank, legal counsel and auditors, a securities pricing service, costs
<PAGE>
of administrative services under an Administrative Services Agreement, costs of
registration of Fund shares under applicable laws, and costs of printing and
distributing reports to shareholders.
Example
A shareholder would pay the following expenses on a $1,000 investment for
the periods shown, assuming (1) a 5% annual return and (2) redemption at the end
of each time period:
1 Year 3 Years 5 Years 10 Years
$15 $47 $82 $180
The purpose of the foregoing table is to assist investors in
understanding the various costs and expenses that an investor in the Fund will
bear directly or indirectly. Such expenses are paid from the Fund's assets. (See
"The Fund and Its Management.") The Fund charges no sales load, redemption fee,
or exchange fee. The Example should not be considered a representation of past
or future expenses, and actual expenses may be greater or less than those shown.
The assumed 5% annual return is hypothetical and should not be considered a
representation of past or future annual returns, which may be greater or less
than the assumed amount.
As a result of the 0.25% Rule 12b-1 fee paid by the Fund, investors who
own Fund shares for a long period of time may pay more than the economic
equivalent of the maximum front-end sales charge permitted for mutual funds by
the National Association of Securities Dealers, Inc., which currently ranges
from 6.25% to 8.5% of the amount invested.
<PAGE>
FINANCIAL HIGHLIGHTS
(For a Fund Share Outstanding throughout the Period)
The following information has been audited by Price Waterhouse LLP,
independent accountants. This information should be read in conjunction with
audited financial statements and the report of independent accountants thereon
appearing in the Fund's 1994 Annual Report to Shareholders and in the Statement
of Additional Information, both of which are available without charge by
contacting INVESCO Funds Group, Inc. at the address or telephone number shown
below.
INVESCO Multiple Asset Funds, Inc.
Financial Highlights
(For a Fund Share Outstanding throughout the Period)
Period Ended July 31, 1994~
Multi-Asset Allocation Fund
PER SHARE DATA
Net Asset Value - Beginning of Period $10.00
-------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.06
Net Losses on Securities
(Both Realized and Unrealized) (0.32)
-------------
Total From Investment Operations (0.26)
-------------
LESS DISTRIBUTIONS
Dividends (from Net Investment Income) (0.06)
-------------
Net Asset Value - End of Period $9.68
=============
TOTAL RETURN (2.60%)+
RATIOS
Net Assets - End of Period ($000 Omitted) $4,958
Ratio of Expenses to Average Net Assets# 1.50%+
Ratio of Net Investment Income to
Average Net Assets# 2.23%*
Portfolio Turnover Rate 42%+
~ From December 1, 1993 commencement of operations to July 31, 1994.
+ These amounts are based on operations for the period shown and, accordingly,
are not representative of a full year of operations.
# Various expenses of the fund were voluntarily absorbed for the period ended
July 31, 1994. If such expenses had not been voluntarily absorbed, annualized
ratio of expenses to average net assets would have been 5.14% and annualized
ratio of net investment (loss) to average net assets would have been (1.41%).
* Annualized
Further information about the performance of the Fund is contained in the
Company's annual report to shareholders, which may be obtained without charge by
writing INVESCO Funds Group, Inc., P.O. Box 173706, Denver, Colorado 80217-3706;
or by calling 1-800-525-8085.
<PAGE>
PERFORMANCE DATA
From time to time, the Fund advertises its total return performance. These
figures are based upon historical earnings and are not intended to indicate
future performance. The "total return" of the Fund refers to the average annual
rate of return of an investment in the Fund. This figure is computed by
calculating the percentage change in value of an investment of $1,000, assuming
reinvestment of all income dividends and capital gain distributions, to the end
of a specified period.
Statements of the Fund's total return performance are based upon
investment results during a specified period and assume reinvestment of all
dividends and capital gains, if any, paid during that period. Thus, any given
report of total return performance should not be considered as representative of
future performance. The Fund charges no sales load, redemption fee, or exchange
fee which would affect the total return computation.
In conjunction with performance reports and/or analyses of shareholder
service for the Fund, comparative data between the 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 Analytical Services, Inc., Lehman Brothers, National
Association of Securities Dealers Automated Quotations, Frank Russell Company,
Value Line Investment Survey, the American Stock Exchange, Morgan Stanley
Capital International, Wilshire Associates, the Financial Times-Stock Exchange,
the New York Stock Exchange, the Nikkei Stock Average and the 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 appearing in publications such as Money,
Forbes, Kiplinger's Personal Finance, Morningstar, and similar sources which
utilize information compiled (i) internally; (ii) by Lipper Analytical Services,
Inc.; or (iii) by other recognized analytical services, may be used in
advertising. 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 "Flexible Portfolio Funds" Lipper mutual fund grouping, in addition to
the broad-based Lipper general fund grouping.
INVESTMENT OBJECTIVE AND POLICIES
The Fund seeks to achieve a high total return on investment through
capital appreciation and current income. It pursues this objective by investing
in a combination of equity securities (consisting of common stocks and, to a
lesser degree, preferred stocks and securities convertible into common stock)
and fixed income securities. The Fund's investment objective is fundamental and
may not be changed without a vote of the Fund's shareholders.
In pursuing its investment objective, the Fund allocates its assets among
six asset classes: stocks of large capitalization companies ("large cap
stocks"); stocks of small capitalization companies ("small cap stocks"); fixed
income securities; equity real estate securities, primarily equity real estate
investment trusts ("REITs"); international equity securities; and cash
securities. Allocating assets among different asset classes allows the Fund to
take advantage of attractive investment opportunities in various sectors of the
capital markets, while providing diversification to reduce risk. The Fund is
designed for investors who want to diversify their portfolios among these
various types of investments in a single fund.
The Fund may allocate its assets among these six classes within specified
ranges. Allocations are based on the adviser's or sub-adviser's projections of
the investment returns for each class. The Fund's "benchmark mix" of assets
represents the expected allocation when the projected returns for the six asset
<PAGE>
classes are all normal relative to the others based upon historical investment
returns. If the adviser or sub-adviser (collectively, "Fund Management")
believes that the expected return for a particular asset class is higher than
normal relative to the others, investment in that class is weighted more heavily
than it would be in the Fund's benchmark mix. If the expected return for a
particular asset class is less than normal in relation to the other classes, it
is underweighted relative to the Fund's benchmark mix. The historical
performance of each class is measured by using a comparative index of securities
for the class. The Fund's six asset classes, investment ranges, benchmark mix
and comparative indices are set forth below:
Percentage
of Fund's
Total Benchmark Comparative
Asset Class Assets Mix Index
Large Cap Stocks 0-70% 35% Standard & Poor's 500
Small Cap Stocks 0-30% 10% Russell 2000
Fixed Income 0-50% 25% Lehman Brothers
Aggregate Bond
Real Estate Securities 0-30% 10% NAREIT Equity REIT
Index
International Stocks 0-30% 10% EAFE
Cash Securities 0-30% 10% 90 Day T-bills
Fund Management regularly reviews the Fund's investment allocations, and
will vary the amount invested in each class within the ranges set forth above
depending upon its assessment of business, economic and market conditions.
Because the Fund seeks a high total return over the long term, it will not try
to pinpoint the precise moment when major reallocations should be made. Rather,
asset shifts among classes will be made gradually over time and, under normal
conditions, a single reallocation decision will not involve more than 10% of the
Fund's total assets. While the percentage of the Fund's assets invested in each
class will vary from time to time, the Fund does not anticipate altering the
benchmark mix. However, Fund management reserves the right to add or delete
asset classes, and to adjust the percentage of each class in the benchmark mix
accordingly. The Fund will not add or delete asset classes without giving
shareholders such notice as may be required under the circumstances.
In periods of uncertain economic and market conditions, as determined by
Fund Management, the Fund may depart from its investment objective and invest
all or substantially all of its assets in cash and fixed income securities.
While the Fund invests in this manner, the opportunity to achieve capital growth
will be limited; however, the ability to maintain a defensive position enables
the Fund to seek to avoid capital losses during market downturns. Under normal
market conditions, the Fund does not expect to have a substantial portion of its
assets invested in cash securities.
In managing the equity portions of the Fund's portfolio (large cap stocks,
small cap stocks, equity real estate securities and international stocks), Fund
Management applies a combination of quantitative strategies and traditional
stock selection methods to a very broad universe of stocks in order to uncover
attractive values. Typically, common stocks and, to a lesser degree, preferred
stocks and securities convertible into common stocks, will be examined
quantitatively for their exposure to certain factors which Fund Management
believes are helpful in selecting equities that can be expected to have superior
future performance. These factors may include earnings-to-price and book
value-to-price ratios, earnings estimate revision momentum, relative market
strength compared to competitors, inventory/sales trend, and financial leverage.
A stock's expected return is estimated based upon its exposure to these and
other factors, and when combined with proprietary estimates of trading costs, a
<PAGE>
suggested portfolio is generated using computer technology which seeks to
maximize expected return at a controlled level of risk. Once an initial
suggested portfolio has been generated through this computer optimization
process, traditional fundamental analysis is used to provide a final review
before stocks are selected for purchase by the Fund.
Large Cap Stocks. The Fund may invest in the equity securities of the
largest 1,000 publicly-traded U.S. companies based on market capitalization (the
market value of all equity securities issued by a company) ("large cap
companies"). These securities are traded principally on the national securities
exchanges in the United States, but also may be traded on regional stock
exchanges or in the over-the-counter ("OTC") market. These stocks are more
likely to pay regular dividends than the stocks of smaller companies.
Small Cap Stocks. The Fund also may invest in small cap stocks (i.e., those
issued by companies having market capitalizations smaller than those of the
largest 1,000 publicly-traded U.S. companies). These securities typically pay no
or only minimal dividends and may involve greater risks than securities of
larger, more established companies. See "Risk Factors."
Fixed Income Securities. The fixed income securities in which the Fund may
invest include securities issued by the U.S. government, its agencies and
instrumentalities, investment grade corporate bonds (those rated at least Baa by
Moody's Investors Service, Inc. ("Moody's" ) or at least BBB by Standard &
Poor's Ratings Group ("S&P"), Fitch Investors Service, Inc. or Duff & Phelps,
Inc. or, if unrated, securities determined by Fund Management to be of
equivalent quality), mortgage and asset-backed securities, zero coupon bonds and
municipal obligations. Securities rated Baa or BBB by Moody's and S&P,
respectively, are considered to be of medium grade by these services and may
have speculative characteristics. The Fund also may invest up to 25% of its
total assets in fixed income securities issued by foreign companies. The risks
involved in investing in foreign securities are discussed below under "Risk
Factors." The fixed income securities in which the Fund invests offer a wide
range of maturities (from less than one year to thirty years) and yields. These
securities include short-term bonds or notes (maturing in less than three
years), intermediate-term bonds or notes (maturing in three to ten years) and
long-term bonds (maturing in more than ten years). The average maturity of the
Fund's investments in fixed income securities will vary depending upon economic
and market conditions. Fund Management will seek to adjust the portfolio of
fixed income securities held by the Fund to maximize total return. However,
because the Fund does not invest in securities rated below investment grade,
from which a higher level of current income might be derived, the Fund's ability
to achieve a high total return is limited in comparison to mutual funds that
invest in securities that present a greater credit risk.
Real Estate Securities. The Fund may invest in equity REITs, real estate
development and real estate operating companies, and other real estate related
businesses. The Fund intends to invest the real estate portion of its portfolio
primarily in equity REITs, which are trusts that sell shares to investors and
use the proceeds to invest in real estate or interests in real estate. A REIT
may focus on particular projects, such as apartment complexes, or geographic
regions, such as the Southeastern United States, or both. Health care REITs
invest primarily in hospitals, nursing homes and similar facilities, and are
usually nationwide in scope. The Fund's sub-adviser has developed a REIT
securities database which it uses to evaluate REITs on the basis of value,
growth potential and credit quality. Fund Management also evaluates potential
investments based on the markets for various kinds of real estate projects in
major U.S. cities.
International Stocks. The Fund may invest in international equity
securities directly or through American Depository Receipts ("ADRs"). Up to 25%
of the Fund's total assets, measured at the time of purchase, may be invested
directly in foreign equity securities. Securities of Canadian issuers and
securities
<PAGE>
purchased by means of ADRs are not subject to this 25% limitation. ADRs are
receipts, typically issued by a U.S. bank or trust company, evidencing ownership
of the underlying foreign securities. ADRs are denominated in U.S. dollars and
trade in the U.S. securities markets. The Fund generally uses the same
techniques to select foreign equity securities as it uses in selecting domestic
equity securities, but also considers the risks of currency fluctuations and the
risks of investing in particular foreign countries. These and other risks
involved in investing in foreign securities are discussed below under "Risk
Factors."
Cash Securities. The cash securities in which the Fund may invest include
domestic certificates of deposit and banker's acceptances, repurchase
agreements, commercial paper and U.S. government and agency securities and
investment grade corporate bonds with remaining maturities of one year or less.
Futures and Options. In order to hedge its portfolio, the Fund may
purchase and write options on securities (including index options and options on
foreign securities), and may invest in futures contracts for the purchase or
sale of foreign currencies, fixed income securities and instruments based on
financial indices (collectively, "futures contracts"), options on futures
contracts, forward contracts and interest rate swaps and swap-related products.
Interest rate swaps involve the exchange by the Fund with another party of their
respective commitments to pay or receive interest, e.g., an exchange of floating
rate payments for fixed rate payments. These practices and their risks are
discussed below under "Risk Factors" and in the Statement of Additional
Information.
Comparative Indices
Set forth below is a brief description of the indices used to measure the
historical investment performance of the Fund's asset classes:
Index Description
S&P 500 Composed of 500 widely held common stocks listed on the New York or
American Stock Exchanges or on NASDAQ
Russell 2000
Composed of the 2,000 publicly
traded U.S. companies that are
next in size after the largest
1,000 publicly traded U.S.
companies, in each case
measured by market
capitalization
Lehman Brothers Aggregate
Bond
Composed of fixed rate,
investment grade domestic
corporate debt issues, U.S.
government treasury and agency
securities, yankee bonds (U.S.
traded debt issued or
guaranteed by foreign
governments) and mortgage-
backed securities
NAREIT Equity REIT Index Composed of all tax-qualified equity REITs listed on
the New York and American Stock Exchanges and the NASDAQ National Market System
<PAGE>
EAFE
Composed of European,
Australian and Far Eastern
companies
Additional information on certain of the types of securities in which the
Fund may invest is set forth below:
U.S. Government and Agency Securities
Investments in U.S. government securities may consist of securities issued
or guaranteed by the U.S. government and any agency or instrumentality of the
U.S. government. In some cases, these securities are direct obligations of the
U.S. government, such as U.S. Treasury bills, notes and bonds. In other cases,
these securities are obligations guaranteed by the U.S. government, such as
Government National Mortgage Association obligations, or obligations of U.S.
government authorities, agencies or instrumentalities, such as the Federal
National Mortgage Association, Federal Home Loan Bank, Federal Financing Bank
and Federal Farm Credit Bank, which are supported only by the assets of the
issuer.
Municipal Obligations
The Fund may invest in investment grade municipal obligations, the
interest from which is exempt from federal income taxes, when Fund Management
believes that the potential total return on the investment is better than the
return that otherwise would be achieved by investing in fixed-income securities
issued by corporations or the U.S. government or its agencies, the interest from
which is not exempt from federal income taxes. Municipal debt obligations are
issued by or on behalf of states, territories and possessions of the United
States and the District of Columbia, and their political subdivisions, agencies
and instrumentalities, to obtain funds for various public purposes, including:
the construction of a wide range of public facilities such as airports, bridges,
highways, housing, hospitals, mass transportation, schools, streets, and water
and sewer works; refunding outstanding obligations; and obtaining funds for
general operating expenses.
When-Issued Securities
The Fund may make commitments in an amount of up to 10% of the value of
its total assets at the time any commitment is made to purchase or sell
securities on a when-issued or delayed delivery basis (i.e., securities may be
purchased or sold by the Fund with settlement taking place in the future, often
a month or more later). The payment obligation and, in the case of debt
securities, the interest rate that will be received on the securities are fixed
at the time the Fund enters into the commitment. During the period between
purchase and settlement, no payment is made by the Fund and no interest accrues
to the Fund. At the time of settlement, the market value of the security may be
more or less than the purchase price, and the Fund bears the risk of such market
value fluctuations. The Fund maintains cash, U.S. government securities, or
other high-grade debt obligations readily convertible into cash having an
aggregate value equal to the amount of such purchase commitments in a segregated
account with its custodian, until payment is made.
Illiquid and Rule 144A Securities
The Fund is authorized to invest in securities which are illiquid because they
are subject to restrictions on their resale ("restricted securities") or
because, based upon their nature or the market for such securities, they are not
readily marketable. However, the 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 will be considered as illiquid for purposes of
this restriction. Investments in illiquid securities involve certain risks to
the extent that the
<PAGE>
Fund may be unable to dispose of such a security at the time desired or at a
reasonable price. In addition, in order to resell a restricted security, the
Fund might have to bear the expense and incur the delays associated with
effecting registration.
Certain restricted securities that are not registered for sale to the general
public, but that can be resold to institutional investors ("Rule 144A
Securities"), may be purchased without regard to the foregoing 15% limitation if
an institutional trading market exists. The liquidity of the Fund's investments
in Rule 144A Securities could be impaired if dealers or institutional investors
become uninterested in purchasing these securities. The Company's board of
directors has delegated to the adviser the authority to determine the liquidity
of Rule 144A Securities pursuant to guidelines approved by the board. The Fund
has agreed with certain states that no more than 5% of its total assets will be
invested in restricted securities which are not eligible for resale pursuant to
Rule 144A. For more information concerning Rule 144A Securities, see the
Statement of Additional Information.
Repurchase Agreements
The Fund may enter into repurchase agreements with respect to debt
instruments eligible for investment by the Fund. These agreements are entered
into with member banks of the Federal Reserve System, registered broker-dealers,
and registered government securities dealers, which are deemed creditworthy. A
repurchase agreement is a means of investing monies for a short period. In a
repurchase agreement, the Fund acquires a debt instrument (generally a security
issued by the U.S. government or an agency thereof, a banker's acceptance, or a
certificate of deposit) subject to resale to the seller at an agreed upon price
and date (normally, the next business day). In the event that the original
seller defaults on its obligation to repurchase the security, the Fund could
incur costs or delays in seeking to sell such security. To minimize risk, the
securities underlying each repurchase agreement will be maintained with the
Fund's custodian in an amount at least equal to the repurchase price under the
agreement (including accrued interest), and such agreements will be effected
only with parties that meet certain creditworthiness standards established by
the Company's board of directors. The Fund will not enter into a repurchase
agreement maturing in more than seven days if as a result more than 15% of its
net assets would be invested in such repurchase agreements and other illiquid
securities. The Fund has not adopted any limit on the amount of its net assets
that may be invested in repurchase agreements maturing in seven days or less.
Securities Lending
The Fund also may lend its securities to qualified brokers, dealers,
banks, or other financial institutions. This practice permits the Fund to earn
income, which, in turn, can be invested in additional securities to pursue the
Fund's investment objective. Loans of securities by the Fund will be
collateralized by cash, letters of credit, or securities issued or guaranteed by
the U.S. government or its agencies equal to at least 100% of the current market
value of the loaned securities, determined on a daily basis. Lending securities
involves certain risks, the most significant of which is the risk that a
borrower may fail to return a portfolio security. The Fund monitors the
creditworthiness of borrowers in order to minimize such risks. The Fund will not
lend any security if, as a result of the loan, the aggregate value of securities
then on loan would exceed 33-1/3% of the Fund's total assets (taken at market
value).
Portfolio Turnover
There are no fixed limitations regarding portfolio turnover for either the
equity or fixed income portions of the Fund's portfolio. Although the Fund does
not trade for short-term profits, securities may be sold without regard to the
time they have been held in the Fund when, in the opinion of Fund Management,
<PAGE>
investment considerations warrant such action. As a result, while it is
anticipated that the portfolio turnover rates for the equity and fixed income
portions of the Fund's portfolio generally will not exceed 100%, under certain
market conditions these portfolio turnover rates may exceed 100%. Increased
portfolio turnover would cause the Fund to incur greater brokerage costs than
would otherwise be the case, and may result in the acceleration of capital gains
which are taxable when distributed to shareholders. The Fund's portfolio
turnover rates are set forth under "Financial Highlights" and, along with the
Fund's brokerage allocation policies, are discussed in the Statement of
Additional Information.
Investment Restrictions
The Fund is subject to a variety of restrictions regarding its investments
that are set forth in this Prospectus and in the Statement of Additional
Information. Certain of the Fund's investment restrictions are fundamental, and
may not be altered without the approval of the Fund's shareholders. Such
fundamental investment restrictions include the restrictions which prohibit the
Fund from: lending more than 33-1/3% of its total assets to other parties
(excluding purchases of commercial paper, debt securities and repurchase
agreements); with respect to 75% of its total assets, purchasing the securities
of any one issuer (other than cash items and government securities) if the
purchase would cause the Fund to have more than 5% of its total assets invested
in the issuer or to own more than 10% of the outstanding voting securities of
the issuer; investing more than 25% of its total assets in any one industry
(other than government securities); and borrowing money except that the Fund may
borrow money for temporary or emergency purposes (not for leveraging or
investment) and may enter into reverse repurchase agreements in an aggregate
amount not exceeding 33-1/3% of its total assets. However, unless otherwise
noted, the Fund's investment restrictions and its investment policies are not
fundamental and may be changed by action of the Company's board of directors.
Unless otherwise noted, all percentage limitations contained in the Fund's
investment policies and restrictions apply at the time an investment is made.
Thus, subsequent changes in the value of an investment after purchase or in the
value of the Fund's total assets will not cause any such limitation to have been
violated or to require the disposition of any investment, except as otherwise
required by law. If the credit ratings of an issuer are lowered below those
specified for investment by the Fund, the Fund is not required to dispose of the
obligations of that issuer. The determination of whether to sell such an
obligation will be made by the investment adviser or sub-adviser based upon an
assessment of credit risk and the prevailing market price of the investment. If
the Fund borrows money, its share price may be subject to greater fluctuation
until the borrowing is repaid. As a fundamental policy in addition to the above,
the Fund may, notwithstanding any other investment policy or limitation (whether
or not fundamental), invest all of its assets in the securities of a single
open-end management investment company with substantially the same fundamental
investment objectives, policies and limitations as the Fund. See "Additional
Information-Master/Feeder Option."
RISK FACTORS
While the Fund seeks to achieve a high total return on investment through
capital appreciation and current income by investing in a combination of equity
and fixed income securities, there can be no assurance that the Fund will
achieve its objective. Although the Fund diversifies its investments across
asset types more than most mutual funds, no one mutual fund can provide an
appropriate, balanced investment plan for all investors. The Fund's investments
in common stocks and other equity securities may, of course, decline in value.
The Fund's investments in fixed income securities generally are subject to both
credit risk and market risk. Credit risk relates to the ability of the issuer to
meet interest or principal payments, or both, as they come due. Adverse economic
conditions or changing circumstances are more likely to weaken the capacity of
issuers of securities rated Baa or BBB to make principal or interest payments
than
<PAGE>
would be the case for issuers of higher rated bonds. Market risk relates to the
fact that the market values of the debt securities in which the Fund invests
generally will be affected by changes in the level of interest rates. An
increase in interest rates will tend to reduce the market values of debt
securities, whereas a decline in interest rates will tend to increase their
values. The Fund seeks to reduce these risks by investing only in investment
grade debt securities (those rated at least Baa by Moody's or at least BBB by
S&P) or, if unrated, securities determined by Fund Management to be of
equivalent quality.
Foreign Securities
For U.S. investors, the returns on foreign securities are influenced not
only by the returns on the foreign investments themselves, but also by currency
risk (i.e., changes in the value of the currencies in which the securities are
denominated relative to the U.S. dollar). In a period when the U.S. dollar
generally rises against foreign currencies, the returns on foreign securities
for a U.S. investor are diminished. By contrast, in a period when the U.S.
dollar generally declines, the returns on foreign securities generally are
enhanced.
Other risks and considerations of international investing include the
following: differences in accounting, auditing and financial reporting standards
which may result in less publicly available information than is generally
available with respect to U.S. issuers; generally higher commission rates on
foreign portfolio transactions and longer settlement periods; the smaller
trading volumes and generally lower liquidity of foreign stock markets, which
may result in greater price volatility; foreign withholding taxes payable on the
Fund's foreign securities, which may reduce dividend income payable to
shareholders; the possibility of expropriation or confiscatory taxation; adverse
changes in investment or exchange control regulations; political instability
which could affect U.S. investment in foreign countries; potential restrictions
on the flow of international capital; and the possibility of the Fund
experiencing difficulties in pursuing legal remedies and collecting judgments.
Certain of these risks, as well as currency risks, also apply to Canadian
securities, which are not subject to the Fund's 25% of total assets limitation
on investing directly in foreign equity securities. The Fund's investments in
foreign securities may include investments in developing countries. Many of
these securities are speculative and their prices may be more volatile than
those of securities issued by companies located in more developed countries.
ADRs may be issued in sponsored or unsponsored programs. In sponsored
programs, the issuer makes arrangements to have its securities traded in the
form of ADRs; in unsponsored programs, the issuer may not be directly involved
in the creation of the program. Although the regulatory requirements with
respect to sponsored and unsponsored programs are generally similar, the issuers
of unsponsored ADRs are not obligated to disclose material information in the
United States and, therefore, such information may not be reflected in the
market value of the ADRs. ADRs are subject to certain of the same risks as
direct investments in foreign securities, including the risk that changes in the
value of the currency in which the security underlying an ADR is denominated
relative to the U.S. dollar may adversely affect the value of the ADR.
Small Cap Stocks
The Fund's investments in small cap stocks may include companies that have
limited operating histories, product lines, and financial and managerial
resources. These companies may be insignificant factors in their industries and
may be subject to intense competition from larger companies. Small cap stocks
may be subject to more abrupt or erratic market movements than the stocks of
larger, more established companies, both because the securities typically are
traded in lower volumes and because the issuers may be more vulnerable to
changes in their earnings or prospects. Due to these and other factors, small
cap companies may suffer significant losses as well as realize substantial
growth.
<PAGE>
Real Estate Securities
The Fund's investments in real estate securities may be subject to certain of
the same risks associated with the direct ownership of real estate. These risks
include: declines in the value of real estate; risks related to general and
local economic conditions, overbuilding and competition; increases in property
taxes and operating expenses; and variations in rental income. In addition,
equity REITs may be dependent upon management skill, may not be diversified, and
may be subject to the risks of obtaining adequate financing for projects on
favorable terms. Equity REITs also are subject to the possibility of failing to
qualify for tax-free pass-through of income under the Internal Revenue Code and
failing to maintain exemption from the Investment Company Act of 1940.
Futures, Options and Other Derivative Instruments
The use of futures, options, forward contracts and swaps exposes the Fund
to additional investment risks and transaction costs. If Fund Management seeks
to protect the Fund against potential adverse movements in the securities,
foreign currency or interest rate markets using these instruments, and such
markets do not move in a direction adverse to the Fund, the Fund could be left
in a less favorable position than if such strategies had not been used. Risks
inherent in the use of futures, options, forward contracts and swaps include (1)
the risk that interest rates, securities prices and currency markets will not
move in the directions anticipated; (2) imperfect correlation between the price
of futures, options and forward contracts and movements in the prices of the
securities or currencies being hedged; (3) the fact that skills needed to use
these strategies are different from those needed to select portfolio securities;
(4) the possible absence of a liquid secondary market for any particular
instrument at any time; and (5) the possible need to defer closing out certain
hedged positions to avoid adverse tax consequences. Further information on the
use of futures, options, forward foreign currency contracts and swaps and
swap-related products, and the associated risks, is contained in the Statement
of Additional Information.
THE FUND AND ITS MANAGEMENT
The Company is a no-load mutual fund, registered with the Securities and
Exchange Commission as an open-end, diversified, management investment company.
It was incorporated on August 19, 1993, under the laws of Maryland. The overall
supervision of the Fund is the responsibility of the Company's board of
directors.
Pursuant to an agreement with the Company, INVESCO Funds Group, Inc.
("INVESCO"), 7800 E. Union Avenue, Denver, Colorado, serves as the Fund's
investment adviser. INVESCO is primarily responsible for providing the Fund with
various administrative services and supervising the Fund's daily business
affairs. These services are subject to review by the Company's board of
directors.
The following individual serves as the lead portfolio manager for the Fund
and is primarily responsible for determining the allocation of the Fund's
investments among the six asset classes described above:
Bob Slotpole Lead portfolio manager of the Fund since 1994; portfolio
manager of INVESCO Small Company Fund; portfolio manager
for INVESCO Management & Research, Inc. since 1993;
began investment career in 1975; formerly employed in
proprietary options department at Lehman Brothers (1983-
1984); developed program trading department at First
Boston (1985-1992); B.S., State University of New York
at Buffalo; M.B.A., Stanford University.
Mr. Slotpole heads a team of specialists in the various asset classes in
which the Fund may invest. These specialists are responsible for managing
security selection for their assigned classes' shares of the Fund's portfolio
<PAGE>
within the overall asset allocation parameters and security selection
methodologies established by INVESCO Management & Research, Inc., sub-adviser to
the Fund.
INVESCO is an indirect wholly-owned subsidiary of INVESCO PLC. INVESCO PLC
is a financial holding company which, through its subsidiaries, engages in the
business of investment management on an international basis. INVESCO was
established in 1932 and, as of July 31, 1994, managed 13 mutual funds,
consisting of 34 separate portfolios, with combined assets of approximately $9.6
billion on behalf of over 860,000 shareholders.
Pursuant to an agreement with INVESCO, INVESCO Management & Research, Inc.
("INVESCO Management"), 101 Federal Street, Boston, Massachusetts, serves as the
sub-adviser to the Fund. INVESCO Management, formerly Gardner and Preston Moss,
Inc., also is an indirect, wholly-owned subsidiary of INVESCO PLC, and offers
investment services to U.S. institutions and wealthy individuals. Its products
include actively managed equity, fixed income and balanced portfolios. INVESCO
Management also acts as sub-adviser to INVESCO Small Company Fund. INVESCO
Management, subject to the supervision of INVESCO, is primarily responsible for
selecting and managing the Fund's investments. Although the Company is not a
party to the sub-advisory agreement, the agreement has been approved by INVESCO
as the then sole shareholder of the Company.
The Fund pays INVESCO a monthly advisory fee which is based upon a
percentage of the average net assets of the Fund, determined daily. The maximum
advisory fee is computed at the annual rate of 0.75% of the first $500 million
of the Fund's average net assets; 0.65% of the next $500 million of the Fund's
average net assets; and 0.50% of the Fund's average net assets over $1 billion.
While the portion of the advisory fee which is equal to 0.75% of the Fund's
average net assets is higher than the advisory fees incurred by most other
mutual funds, this fee is not higher than the advisory fees paid by most other
asset allocation funds on comparable levels of assets. For the fiscal period
ended July 31, 1994, the investment advisory fees paid by the Fund amounted to
0.75% of the Fund's average net assets (annualized).
Out of its advisory fee which it receives from the Fund, INVESCO pays
INVESCO Management, as sub-adviser to the Fund, a monthly fee, which is computed
at the annual rate of 0.375% of the first $500 million of the Fund's average net
assets; 0.325% of the next $500 million of the Fund's average net assets; and
0.25% of the Fund's average net assets in excess of $1 billion. No fee is paid
by the Fund to INVESCO Management.
The Company also has entered into an Administrative Services Agreement
(the "Administrative Agreement") with INVESCO. Pursuant to the Administrative
Agreement, INVESCO performs certain administrative, recordkeeping and internal
sub-accounting services, including without limitation, maintaining general
ledger and capital stock accounts, preparing a daily trial balance, calculating
net asset value daily, providing selected general ledger reports and providing
sub-accounting and recordkeeping services for Fund shareholder accounts
maintained by certain retirement and employee benefit plans for the benefit of
participants in such plans. For such services, the Fund pays INVESCO a fee
consisting of a base fee of $10,000 per year, plus an additional incremental fee
computed at the annual rate of 0.015% per year of the average net assets of the
Fund. INVESCO also is paid a fee by the Fund for providing transfer agent
services. See "Additional Information."
The Fund's expenses, which are accrued daily, are generally deducted from
the Fund's total income before dividends are paid. Total expenses of the Fund
for the fiscal period ended July 31, 1994, including investment advisory fees
(but excluding brokerage commissions which are included as a cost of acquiring
securities), amounted to 1.50% of the Fund's average net assets. In the absence
of the voluntary expense limitation applicable to the Fund, total expenses of
the
<PAGE>
Fund, including investment advisory fees (but excluding brokerage commissions)
would have been 5.14% of the Fund's average net assets (annualized).
INVESCO, as the Company's investment adviser, or INVESCO Management, as
the Company's sub-adviser, places orders for the purchase and sale of portfolio
securities with brokers and dealers based upon INVESCO's evaluation of their
financial responsibility coupled with their ability to effect transactions at
the best available prices. The Company may market shares of the Fund through
intermediary brokers or dealers that have entered into Dealer Agreements with
INVESCO, as the Company's Distributor, under which such intermediary brokers or
dealers generally are compensated through the payment of continuing quarterly
fees at an annual rate of up to 0.25% of the average aggregate net asset value
of outstanding Fund shares sold by such entities, measured on each business day
during a calendar quarter. The Fund may place orders for portfolio transactions
with qualified broker/dealers which recommend the Fund, or sell shares of the
Fund to clients, or act as agent in the purchase of Fund shares for clients, if
management of the Fund believes that the quality of execution of the transaction
and level of commission are comparable to those available from other qualified
brokerage firms.
HOW SHARES CAN BE PURCHASED
Shares of the Fund are sold on a continuous basis by INVESCO, as the
Fund's Distributor, at the net asset value per share next calculated after
receipt of a purchase order in good form. No sales charge is imposed upon the
sale of shares of the Fund. To purchase shares of the Fund, send a check made
payable to INVESCO Funds Group, Inc., together with a completed application
form, to:
INVESCO Funds Group, Inc.
Post Office Box 173706
Denver, Colorado 80217-3706
Purchase orders must specify the Fund in which the investment is to be
made.
The minimum initial purchase must be at least $1,000, with subsequent
investments of not less than $50, except that: (1) those shareholders
establishing an EasiVest or direct payroll purchase account, as described below
in the Prospectus section entitled "Services Provided by the Fund," may open an
account without making any initial investment if they agree to make regular,
minimum purchases of at least $50; (2) Fund management may permit a lesser
amount to be invested in the Fund under a federal income tax-sheltered
retirement plan (other than an IRA Account), or under a group investment plan
qualifying as a sophisticated investor; (3) those shareholders investing in an
Individual Retirement Account (IRA), or through omnibus accounts where
individual shareholder recordkeeping and sub-accounting are not required, may
make initial minimum purchases of $250; and (4) Fund management reserves the
right to reduce or waive the minimum purchase requirements in its sole
discretion where it determines such action is in the best interests of the Fund.
The purchase of Fund shares can be expedited by placing bank wire,
overnight courier or telephone orders. Overnight courier orders must meet the
above minimum requirements. In no case can a bank wire order or telephone order
be in an amount less than $1,000. For further information, the purchaser may
call the Fund's office by using the telephone number on the cover of this
Prospectus. Orders sent by overnight courier, including Express Mail, should be
sent to the street address, not Post Office Box, of INVESCO Funds Group, Inc.,
at 7800 E. Union Avenue, Denver, CO 80237.
Orders to purchase shares of the Fund can be placed by telephone. Shares
of the Fund will be issued at the net asset value per share next determined
after receipt of telephone instructions. Payments for telephone orders must be
received by the Fund within seven business days of the transaction. In the event
payment
<PAGE>
is not received, the shares will be redeemed by INVESCO and the purchaser will
be held responsible for any loss resulting from a decline in the value of the
shares. INVESCO has agreed to indemnify the Fund for any losses resulting from
such cancellations.
If your check does not clear, or if a telephone purchase must be cancelled
due to nonpayment, you will be responsible for any related loss the Fund or
INVESCO incurs. If you are already a shareholder in the INVESCO funds, the Fund
has the option to redeem shares from any identically registered account in the
Fund or any other INVESCO fund as reimbursement for any loss incurred. You also
may be prohibited or restricted from making future purchases in any of the
INVESCO funds.
Persons who invest in the Fund through a securities broker may be charged a
commission or transaction fee for the handling of the transaction if the broker
so elects. Any investor may deal directly with the Fund in any transaction. In
that event, there is no such charge.
The Fund reserves the right in its sole discretion to reject any order for
purchase of its shares (including purchases by exchange) when, in the judgment
of management, such rejection is in the best interest of the Fund.
Net asset value per share is computed once each day that the New York
Stock Exchange is open as of the close of regular trading on that Exchange
(presently 4:00 p.m., New York time) and also may be computed on other days
under certain circumstances. Net asset value per share of the Fund is calculated
by dividing the market value of the Fund's securities plus the value of its
other assets (including dividends and interest accrued but not collected), less
all liabilities (including accrued expenses), by the number of outstanding
shares of the Fund. If market quotations are not readily available, a security
or other asset will be valued at fair value as determined in good faith by the
board of directors. Debt securities with remaining maturities of 60 days or less
will be valued at amortized cost, absent unusual circumstances, so long as the
Company's board of directors believes that such value represents fair value.
Distribution Expenses. The Fund is authorized under a Plan and Agreement
of Distribution pursuant to Rule 12b-1 under the Investment Company Act of 1940
(the "Plan") to use its assets to finance certain activities relating to the
distribution of its shares to investors. Under the Plan, monthly payments may be
made by the Fund to INVESCO to reimburse it for particular expenditures incurred
by INVESCO during the rolling 12-month period in which that month falls in
connection with the distribution of the Fund's shares to investors. These
expenditures may include the payment of compensation (including incentive
compensation and/or continuing compensation based on the amount of customer
assets maintained in the Fund) to securities dealers and other financial
institutions and organizations to obtain various distribution-related and/or
administrative services for the Fund. Such services may include, among other
things, processing new shareholder account applications, preparing and
transmitting to the Fund's Transfer Agent computer processable tapes of all
transactions by customers, and serving as the primary source of information to
customers in answering questions concerning the Fund and their transactions with
the Fund.
In addition, other reimbursable expenditures include those incurred for
advertising, the preparation and distribution of sales literature, the cost of
printing and distributing prospectuses to prospective investors, and such other
services and promotional activities for the Fund as may from time to time be
agreed upon by the Company and its board of directors, including public
relations efforts and marketing programs to communicate with investors and
prospective investors.
Under the Plan, the Company's reimbursement to INVESCO on behalf of the
Fund is limited to an amount computed at an annual rate of 0.25 of 1% of the
Fund's
<PAGE>
average net assets during the month. INVESCO is not entitled to reimbursement
for overhead expenses under the Plan, but may be reimbursed for all or a portion
of the compensation paid for salaries and other employee benefits for the
personnel of INVESCO whose primary responsibilities involve marketing shares of
the INVESCO funds, including the Fund. Payment amounts by the Fund under the
Plan, for any month, may only be made to reimburse or pay expenditures incurred
during the rolling 12-month period in which that month falls; therefore, any
reimbursable expenses incurred by INVESCO in excess of the limitation described
above are not reimbursable and will be borne by INVESCO. No further payments
will be made by the Fund under the Plan in the event of its termination. Also,
any payments made by the Fund may not be used to finance the distribution of
shares of any other fund of the Company or other mutual fund advised by INVESCO.
Payments made by the Fund under the Plan for compensation of marketing
personnel, as noted above, are based on an allocation formula designed to ensure
that all such payments are appropriate.
SERVICES PROVIDED BY THE FUND
Shareholder Accounts. INVESCO maintains a share account that reflects the
current holdings of each shareholder. Share certificates will be issued only
upon specific request. Since certificates must be carefully safeguarded, and
must be surrendered in order to exchange or redeem Fund shares, most
shareholders do not request share certificates in order to facilitate such
transactions. Each shareholder is sent a detailed confirmation of each
transaction in shares of the Fund. Shareholders whose only transactions are
through the EasiVest, direct payroll purchase, automatic monthly exchange or
periodic withdrawal programs, or are reinvestments of dividends or capital gains
in the same or another fund, will receive confirmations of those transactions on
their quarterly statements. These programs are discussed below. For information
regarding a shareholder's account and transactions, the shareholder may call the
Fund's office by using the telephone number on the cover of this Prospectus.
Reinvestment of Distributions. Income dividends and capital gain
distributions are automatically reinvested in additional shares of the Fund at
the net asset value per share of the Fund in effect on the ex-dividend date. A
shareholder may, however, elect to reinvest dividends and capital gain
distributions in certain of the other no-load mutual funds advised and
distributed by INVESCO, or to receive payment of all dividends and distributions
in excess of $10.00 by check by giving written notice to INVESCO at least two
weeks prior to the record date on which the change is to take effect. Further
information concerning these options can be obtained by contacting INVESCO.
Periodic Withdrawal Plan. A Periodic Withdrawal Plan is available to
shareholders who own or purchase shares of any mutual funds advised by INVESCO
having a total value of $10,000 or more; provided, however, that at the time the
Plan is established, the shareholder owns shares having a value of at least
$5,000 in the fund from which the withdrawals will be made. Under the Periodic
Withdrawal Plan, INVESCO, as agent, will make specified monthly or quarterly
payments of any amount selected (minimum payment of $100) to the party
designated by the shareholder. Notice of all changes concerning the Periodic
Withdrawal Plan must be received by INVESCO at least two weeks prior to the next
scheduled check. Further information regarding the Periodic Withdrawal Plan and
its requirements and tax consequences can be obtained by contacting INVESCO.
Exchange Privilege. Shares of the Fund may be exchanged for shares of any
other fund of the Company, as well as for shares of any of the following other
no-load mutual funds, which are also advised and distributed by INVESCO, on the
basis of their respective net asset values at the time of the exchange: INVESCO
Diversified Funds, Inc., INVESCO Dynamics Fund, Inc., INVESCO Emerging Growth
Fund, Inc., INVESCO Growth Fund, Inc., INVESCO Income Funds, Inc., INVESCO
Industrial Income Fund, Inc., INVESCO International Funds, Inc., INVESCO Money
<PAGE>
Market Funds, Inc., INVESCO Specialty Funds, Inc., INVESCO Strategic Portfolios,
Inc., INVESCO Tax-Free Income Funds, Inc., and INVESCO Value Trust.
An exchange involves the redemption of shares in the Fund and investment
of the redemption proceeds in shares of another fund of the Company or in shares
of one of the funds listed above. Exchanges will be made at the net asset value
per share next determined after receipt of an exchange request in proper order.
Any gain or loss realized on such an exchange is recognizable for federal income
tax purposes by the shareholder. Exchange requests may be made either by
telephone or by written request to INVESCO Funds Group, Inc., using the
telephone number or address on the cover of this Prospectus. Exchanges made by
telephone must be in an amount of at least $250, if the exchange is being made
into an existing account of one of the INVESCO funds. All exchanges that
establish a new account must meet the Fund's applicable minimum initial
investment requirements. Written exchange requests into an existing account have
no minimum requirements other than the Fund's applicable minimum subsequent
investment requirements.
The privilege of exchanging Fund shares by telephone is available to
shareholders automatically unless expressly declined. By signing the new account
Application, a Telephone Transaction Authorization Form or otherwise utilizing
telephone exchange privileges, the investor has agreed that the Fund will not be
liable for following instructions communicated by telephone that it reasonably
believes to be genuine. The Fund employs procedures, which it believes are
reasonable, designed to confirm that exchange instructions are genuine. These
may include recording telephone instructions and providing written confirmations
of exchange transactions. As a result of this policy, the investor may bear the
risk of any loss due to unauthorized or fraudulent instructions; provided,
however, that if the Fund fails to follow these or other reasonable procedures,
the Fund may be liable.
In order to prevent abuse of this privilege to the disadvantage of other
shareholders, the Fund reserves the right to terminate the exchange privilege of
any shareholder who requests more than four exchanges in a year. The Fund will
determine whether to do so based on a consideration of both the number of
exchanges any particular shareholder or group of shareholders has requested and
the time period over which those exchange requests have been made, together with
the level of expense to the Fund which will result from effecting additional
exchange requests. The exchange privilege also may be modified or terminated at
any time. Except for those limited instances where redemptions of the exchanged
security are suspended under Section 22(e) of the Investment Company Act of
1940, or where sales of the fund into which the shareholder is exchanging are
temporarily stopped, notice of all such modifications or termination of the
exchange privilege will be given at least 60 days prior to the date of
termination or the effective date of the modification.
Before making an exchange, the shareholder should review the prospectuses
of the funds involved and consider their differences, and should be aware that
the exchange privilege may only be available in those states where exchanges
legally may be made, which will require that the shares being acquired are
registered for sale in the shareholder's state of residence. Shareholders
interested in exercising the exchange privilege may contact INVESCO for
information concerning their particular exchanges.
Automatic Monthly Exchange. Shareholders who have accounts in any one or
more of the mutual funds distributed by INVESCO may arrange for a fixed dollar
amount of their fund shares to be automatically exchanged for shares of any
other INVESCO mutual fund listed under "Exchange Privilege" on a monthly basis.
The minimum monthly exchange in this program is $50.00. This automatic exchange
program can be changed by the shareholder at any time by notifying INVESCO at
least two weeks prior to the date the change is to be made. Further information
regarding this service can be obtained by contacting INVESCO.
<PAGE>
EasiVest. For shareholders who want to maintain a schedule of monthly
investments, EasiVest uses various methods to draw a preauthorized amount from
the shareholder's bank account to purchase Fund shares. This automatic
investment program can be changed by the shareholder at any time by writing to
INVESCO at least two weeks prior to the date the change is to be made. Further
information regarding this service can be obtained by contacting INVESCO.
Direct Payroll Purchase. Shareholders may elect to have their employers
make automatic purchases of Fund shares for them, by deducting a specified
amount from their regular paychecks. This automatic investment program can be
modified or terminated at any time by the shareholder, by notifying the
employer. Further information regarding this service can be obtained by
contacting INVESCO.
Tax-Sheltered Retirement Plans. Shares of the Fund may be purchased for
self-employed retirement plans, individual retirement accounts (IRAs),
simplified employee pension plans and corporate retirement plans. In addition,
shares can be used to fund tax qualified plans established under Section 403(b)
of the Internal Revenue Code by educational institutions, including public
school systems and private schools, and certain kinds of non-profit
organizations, which provide deferred compensation arrangements for their
employees.
Prototype forms for the establishment of these various plans, including,
where applicable, disclosure statements required by the Internal Revenue
Service, are available from INVESCO. INVESCO Trust Company, a subsidiary of
INVESCO, is qualified to serve as trustee or custodian under these plans and
provides the required services at competitive rates. Retirement plans (other
than IRAs) receive monthly statements reflecting all transactions in their Fund
accounts. IRAs receive the confirmations and quarterly statements described
under "Shareholder Accounts." For complete information, including prototype
forms and service charges, call INVESCO at the telephone number listed on the
cover of this Prospectus or send a written request to: Retirement Services,
INVESCO Funds Group, Inc., Post Office Box 173706, Denver, Colorado 80217-3706.
HOW TO REDEEM SHARES
You may redeem all or any portion of the shares in your account at any
time by telephone or mail as described below. Shares of the Fund will be
redeemed at their current net asset value per share next determined after a
request in proper form is received at the Fund's office. (See "How Shares Can Be
Purchased.") Net asset value per share at the time of redemption may be more or
less than the price you paid to purchase your shares, depending primarily upon
the Fund's investment performance.
If the shares to be redeemed are represented by stock certificates, a
written request for redemption signed by the registered shareholder(s) and the
certificates must be forwarded to INVESCO Funds Group, Inc., Post Office Box
173706, Denver, Colorado 80217-3706. Redemption requests sent by overnight
courier, including Express Mail, should be sent to the street address, not Post
Office Box, of INVESCO Funds Group, Inc. at 7800 E. Union Avenue, Denver, CO
80237. If no certificates have been issued, a written redemption request signed
by each registered owner of the account may be submitted to INVESCO at the
address noted above. If shares are held in the name of a corporation, additional
documentation may be necessary. Call or write for specifics. If payment for the
redeemed shares is to be made to someone other than the registered owner(s), the
signature(s) must be guaranteed by a financial institution which qualifies as an
eligible guarantor institution. Redemption procedures with respect to accounts
registered in the names of broker/dealers may differ from those applicable to
other shareholders.
Be careful to specify the account from which the redemption is to be made.
Shareholders have a separate account for each Fund in which they invest.
<PAGE>
Payment of redemption proceeds will be mailed within seven days following
receipt of the required documents. However, payment may be postponed under
unusual circumstances, such as when normal trading is not taking place on the
New York Stock Exchange, an emergency as defined by the Securities and Exchange
Commission exists, or the shares to be redeemed were purchased by check and that
check has not yet cleared; provided, however, that all redemption proceeds will
be paid out promptly upon clearance of the purchase check (which may take up to
15 days).
Because of the high relative costs of handling small accounts, should the
value of any shareholder's account fall below $250 as a result of shareholder
action, the Fund reserves the right to effect the involuntary redemption of all
shares in such account, in which case the account would be liquidated and the
proceeds forwarded to the shareholder. Prior to any such redemption, a
shareholder will be notified and given 60 days to increase the value of the
account to $250 or more.
Fund shareholders (other than shareholders holding Fund shares in accounts
of IRA plans) may request expedited redemption of shares having a minimum value
of $250 (or redemption of all shares if their value is less than $250) held in
accounts maintained in their name by telephoning redemption instructions to
INVESCO, using the telephone number on the cover of this Prospectus. The
redemption proceeds, at the shareholder's option, either will be mailed to the
address listed for the shareholder's Fund account, or wired (minimum of $1,000)
or mailed to the bank which the shareholder has designated to receive the
proceeds of telephone redemptions. The Fund charges no fee for effecting such
telephone redemptions. Unless the Fund's management permits a larger redemption
request to be placed by telephone, a shareholder may not place a redemption
request by telephone in excess of $25,000. These telephone redemption privileges
may be modified or terminated in the future at the discretion of the Fund's
management.
For INVESCO Trust Company-sponsored federal income tax-sheltered
retirement plans, the term "shareholders" is defined to mean plan trustees that
file a written request to be able to redeem Fund shares by telephone.
Shareholders should understand that, while the Fund will attempt to process all
telephone redemption requests on an expedited basis, there may be times,
particularly in periods of severe economic or market disruption, when (a) they
may encounter difficulty in placing a telephone redemption request, and (b)
processing telephone redemptions will require up to seven days following receipt
of the redemption request, or additional time because of the unusual
circumstances set forth above.
The privilege of redeeming Fund shares by telephone is available to
shareholders automatically unless expressly declined. By signing a new account
Application, a Telephone Transaction Authorization Form or otherwise utilizing
telephone redemption privileges, the shareholder has agreed that the Fund will
not be liable for following instructions communicated by telephone that it
reasonably believes to be genuine. The Fund employs procedures, which it
believes are reasonable, designed to confirm that telephone instructions are
genuine. These may include recording telephone instructions and providing
written confirmation of transactions initiated by telephone. As a result of this
policy, the investor may bear the risk of any loss due to unauthorized or
fraudulent instructions; provided, however, that if the Fund fails to follow
these or other reasonable procedures, the Fund may be liable.
DIVIDENDS, CAPITAL GAIN DISTRIBUTIONS, AND TAXES
Dividends. In addition to any increase in the value of your shares which
may occur from increases in the values of the Fund's investments, the Fund may
earn income in the form of dividends and interest on its investments. Dividends
paid by the Fund will be based solely on the income earned by it. The Fund's
policy is to distribute substantially all of this income, less expenses, to
shareholders
<PAGE>
on a quarterly basis at the discretion of the Company's board of directors.
Dividends are automatically reinvested in additional shares of the Fund at the
net asset value on the ex-dividend date, unless otherwise requested. See
"Services Provided by the Fund - Reinvestment of Distributions."
Capital Gains. Capital gains or losses are the result of the Fund's sale
of its securities at prices that are higher or lower than the prices paid by the
Fund to purchase such securities. Total gains from such sales, less any losses
from such sales (including losses carried forward from prior years), represent
net realized capital gains. The Fund distributes its net realized capital gains,
if any, to its shareholders at least annually, usually in December. Capital gain
distributions are automatically reinvested in additional shares of the Fund at
the net asset value per share on the ex-dividend date, unless otherwise
requested. See "Services Provided by the Fund - Reinvestment of Distributions."
Taxes. The Fund intends to distribute substantially all of its net
investment income and capital gains, if any, to shareholders, and to continue to
qualify for tax treatment under Subchapter M of the Internal Revenue Code as a
regulated investment company. Thus, it is not expected that the Fund will be
required to pay any federal income taxes. Shareholders (other than those exempt
from income tax) normally will have to pay federal income taxes, and any state
and local income taxes, on the dividends and distributions they receive from the
Fund, whether such dividends and distributions are received in cash or
reinvested in additional shares of the same or another fund. Shareholders of the
Fund are advised to consult their own tax advisers with respect to these
matters.
Dividends paid by the Fund from net investment income, as well as
distributions of net realized short-term capital gains, are, for federal income
tax purposes, taxable as ordinary income to shareholders. At the end of each
calendar year, shareholders are sent full information on dividends and capital
gain distributions, including information as to the portions taxable as ordinary
income and long-term capital gains. Information concerning the amount of
dividends eligible for the dividends-received deduction available for
corporations is contained in the Company's annual report or may be obtained upon
request by calling INVESCO.
The Fund is required to withhold and remit to the U.S. Treasury 31% of
dividend payments, capital gain distributions, and redemption proceeds for any
account on which the owner provides an incorrect taxpayer identification number,
no number, or no certified number.
ADDITIONAL INFORMATION
Voting Rights. All shares of the Fund and the other fund of the Company
have equal voting rights, based on one vote for each share owned. Voting with
respect to certain matters, such as ratification of independent accountants and
the election of directors, will be by all funds of the Company voting together.
In other cases, such as voting upon an investment advisory contract, voting is
on a fund-by-fund basis. When not all funds are affected by a matter to be voted
upon, only shareholders of the fund or funds affected by the matter will be
entitled to vote thereon. The Company is not generally required, and does not
expect, to hold regular annual meetings of shareholders. However, the board of
directors will call special meetings of shareholders for the purpose, among
other reasons, of voting upon the question of removal of a director or directors
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 Company will assist shareholders in
communicating with other shareholders as required by the Investment Company Act
of 1940. Directors may be removed by action of the holders of a majority or more
of the outstanding shares of the Company.
<PAGE>
Master/Feeder Option. The Company may in the future seek to achieve the
Fund's investment objective by investing all of the Fund's assets in another
investment company having the same investment objective and substantially the
same investment policies and restrictions as those applicable to the Fund. It is
expected that any such investment company would be managed by INVESCO in
substantially the same manner as the existing Fund. If permitted by applicable
laws and policies then in effect, any such investment may be made in the sole
discretion of the Company's board of directors without further approval of the
shareholders of the Fund. However, Fund shareholders will be given at least 30
days prior notice of any such investment. Such investment would be made only if
the Company's board of directors determines it to be in the best interests of
the Fund and its shareholders. In making that determination, the board will
consider, among other things, the benefits to shareholders and/or the
opportunity to reduce costs and achieve operational efficiencies. No assurance
can be given that costs will be materially reduced if this option is
implemented.
Shareholder Inquiries. All inquiries regarding the Fund should be directed
to the Fund at the telephone number or mailing address set forth on the cover
page of this Prospectus.
Transfer and Dividend Disbursing Agent. INVESCO Funds Group, Inc., 7800 E.
Union Ave., Denver, Colorado 80237, acts as registrar, transfer agent, and
dividend disbursing agent for the Fund pursuant to a Transfer Agency Agreement
which provides that the Fund will pay a fee of $14.00 per shareholder account or
omnibus account participant per year. The transfer agency fee is not charged to
each shareholder's or participant's account, but is an expense of the Fund to be
paid from the Fund's assets. In addition, registered broker-dealers, third party
administrators of tax-qualified retirement plans and other entities may provide
sub-transfer agency services to the Fund which reduce or eliminate the need for
identical services to be provided on behalf of the Fund by INVESCO. In such
cases, INVESCO is authorized to pay the third party an annual sub-transfer
agency fee of up to $14.00 per participant in the third party's omnibus account
out of the transfer agency fee which is paid to INVESCO by the Fund.
<PAGE>
INVESCO MULTI-ASSET ALLOCATION FUND A
no-load mutual fund seeking capital
appreciation and current income
PROSPECTUS
November 30, 1994
To receive general information and prospectuses on any of INVESCO's funds or
retirement plans, or to obtain current account or price information, call toll-
free:
1-800-525-8085
To reach PAL, your 24-hour Personal Account Line, call:
1-800-424-8085
Or write to:
INVESCO Funds Group, Inc., Distributor
Post Office Box 173706
Denver, Colorado 80217-3706
If you're in Denver, visit one of our convenient Investor Centers:
Cherry Creek
155-B Fillmore Street
Denver Tech Center
7800 East Union Avenue
Lobby Level
