ANNUAL REPORT
July 31, 1997
INVESCO
MULTIPLE
ASSET
FUNDS,
INC.
Balanced Fund
Multi-Asset Allocation Fund
No-load mutual funds seeking
capital appreciation and current income.
INVESCO FUNDS
<PAGE>
Market Overview August 1997
We are currently in the greatest bull market of all time, and wealth has
been created on a scale that has never been seen before. The strength and
longevity of this market have surprised even the staunchest market advocates. A
preemptive strike against inflation by the Federal Reserve Board in March -- a
25 basis point increase in the Fed Fund's Rate -- produced a pullback in the
stock market. However, several large-capitalization stock indexes have produced
approximately 15% to 20% returns since the minor correction.
Recently, however, volatility has crept back into the stock markets
dampening investment returns. This increased volatility can be attributed to
investor nervousness about inflation and an overheating economy. Consequently,
day-to-day swings in equity prices remain severe, and may continue in the near
future.
Nonetheless, it's worth noting that:
o The Dow Jones Industrial Average (an index composed of 30 domestic
large-capitalization stocks) has doubled in 30 months for only the
fifth time this century, and only the second time in 62 years.
o The broad market has had 18 consecutive quarters in which companies
have reported significantly more positive than negative earnings
surprises.
o The wealth created by the domestic stock market in the last 10 years is
the most in history.
The driving force behind the strength of the market during the last 10 years
has been low inflation, strong economic growth, and increased worker
productivity. These factors have led to above-average increases in corporate
profits and earnings, sending stock prices higher. Meanwhile, prices across the
economy (as measured by the Gross Domestic Product price deflator) rose only
1.8% in 1996 the smallest gain since 1964. Currently, the inflation rate for the
U.S. economy is at 2.2%, and producer prices actually declined over the first
seven months in 1997.
Gains in worker productivity have helped curb inflation. Over the last 10
years, corporate restructuring, downsizing, and investments in technology have
increased the efficiency of American companies and workers. These gains have
outpaced wage increases. Coupled with increased international competition,
improved productivity has put downward pressure on prices -- which is beneficial
for the economy as it stimulates consumer demand.
As a result, the U.S. economy has re-established itself as the global
leader. In turn, the demand for skilled labor has risen, and unemployment in
July 1997 was at 4.8% (the lowest level since 1973). Some naysayers suggest that
the tight labor market will eventually lead to increased wages and inflation,
which may have negative consequences for corporate stock prices.
The fixed-income market, although producing gains over the last seven
months, has not enjoyed the jubilance experienced in the equity markets.
Concerns over potential wage inflation, a slowing economy, and an increase in
the Fed Funds Rate have tempered fixed-income returns. Within this environment,
credit analysis has played a more important role in evaluating fixed-income
<PAGE>
securities than interest-rate analysis -- this was especially true for
high-yield securities.
This is a good time for shareholders to re-evaluate their expectations.
Historically speaking, markets do not return 25% every year. A long-run average
return on equities of 10% to 11% is more realistic.
INVESCO Multiple Asset Funds, Inc.
The line graphs below illustrate the value of a $10,000 investment in each
of the INVESCO Multiple Asset Funds, plus reinvested dividends and capital gain
distributions, from inception (12/93) through 7/31/97. The charts and other
total return figures cited reflect the funds' operating expenses, but the
indexes do not have expenses, which would, of course, have lowered their
performance.(1)(2)
While past performance is not a guarantee of future results, $10,000
invested in Balanced Fund upon inception (12/93) would have been worth $20,058
on 7/31/97, including reinvestment of dividends and capital gains. A $10,000
investment in Multi-Asset Allocation Fund made on the same date would have grown
to $16,348. (Of course, past performance is not a guarantee of future
results.)(2)
Balanced Fund
The Fund received the prestigious 5-star risk-adjusted rating from
Morningstar, both overall and for the three-year period ended 7/31/97, among
2,040 equity funds.(4)
Lipper Analytical Services ranked Balanced Fund #2 of 193 balanced funds,
based on total return unadjusted for commissions for the three-year period ended
7/31/97. For the one-year period, the fund was ranked #153 of 317 funds.(2)(3)
Balanced Fund
Average Annual Total Return as of 7/31/97 (2)
---------------------------------------------
1 Year 29.27%
---------------------------------------------
Since Inception (12/93) 20.90%
---------------------------------------------
For the one-year period ended 7/31/97, INVESCO Balanced Fund achieved a
total return of 29.27%, compared to a total return of 52.02% for the S&P 500,
and 10.78% for the Lehman Government/Corporate Bond Index. (Of course, past
performance is not a guarantee of future results.)(1)(2)
As of 7/31/97, the fund's portfolio was allocated between 61% equities and
33% fixed-income securities, respectively. (Approximatley 6% of the fund's total
net assets were in the form of cash and cash equivalents.)
Equity Strategy
During the last year, large-capitalization stocks continued their strong
performance. This was especially true for large-cap pharmaceuticals which
provided strong performance for the fund. Companies like Warner-Lambert Co. and
<PAGE>
Bristol-Myers Squibb continued to benefit from increased emphasis on health care
by emerging and developing nations, changing demographics (the graying of
America), and the introduction of new drugs to the market. These trends,
combined with an improved regulatory environment, have significantly aided the
profitability of large-cap pharmaceuticals. In fact, Warner-Lambert Co. -- our
largest holding as of 7/31/97 -- experienced strong price appreciation as the
firm's two new drugs, Lipitor and Rezulin, were well-received by the market.
Graph:
This line graph compares the value of a $10,000 investment in INVESCO Balanced
Fund to the value of a $10,000 investment in the S&P 500 Index and the Lehman
Government/Corporate Bond Index, assuming in each case reinvestment of all
dividends and capital gain distributions, for the period from inception
(12/1/93) through 7/31/97.
The capital goods sector also has been a profitable market segment for the
fund. Expanding global economies have increased the demand for capital goods. In
addition, companies are becoming more efficient through corporate restructuring,
industry consolidation, and increased worker productivity. As a result, we
remain heavily weighted towards this sector.
Looking forward, we plan to increase our weighting towards consumer
cyclicals, as we feel that consumer spending is likely to increase later this
year. We will continue to selectively look for market-leading companies with the
potential for accelerating earnings. Retailers that we include excited about for
the future are Federated Department Stores, and Tandy Corp.
Fixed-Income Strategy
Timing the interest rate market can be difficult, particularly in recent
years. Instead, we prefer to create value through credit analysis. By using our
years of experience and in-depth research, we seek to identify fixed-income
securities that are mispriced by the market.
This type of in-depth fundamental research continues to benefit the fund.
For example seven months ago the fund was overweighted in mortgage-backed
securities. These securities provided strong returns over most of the 1997.
However, interest rate spreads then tightened, and we have reduced our exposure
to these obligations, feeling they were fully priced by the market.
Presently, our research suggests that similar opportunities may now exist in
two more areas: putable bonds and the electric utilities industry. Putable bonds
are debt obligations that allow a holder to redeem the issue at specified
intervals before maturity and receive full face value. These bonds provide
strong performance for the fund, while offering reduced volatility compared to
other debt obligations. And deregulation has lead to positive structural changes
in the electric utilities industry. This may lead to credit upgrades on existing
debt for selected electric companies.
<PAGE>
Going Forward
We will continue to manage the fund somewhat conservatively, keeping the
fixed-income portion relatively high. This conservative approach has produced a
fund that features a lower beta than the S&P 500, higher earnings' growth rate,
and a lower price-to-earnings ratio.
Fund Management
INVESCO Balanced Fund is managed by three industry veterans. Senior Vice
President and Director of Investments Charles P. Mayer and Vice President Albert
M. Grossi co-manage the equity portfolio. With 28 years of professional
experience, Charlie earned an MBA from St. John's University and a BA from St.
Peter's College. Previously, Charlie was with Westinghouse Pension Investments
Corporation.
Al Grossi began his career as a securities analyst in 1974. Previously, he
served as a portfolio manager/senior analyst with Westinghouse Pension
Investments Corporation. He holds both an MBA and a BA from Rutgers University.
Senior Vice President Donovan "Jerry" Paul has served as co-portfolio
manager of the fund since 1994, concentrating on fixed-income securities. Jerry
began his investment career in 1976; before joining INVESCO, he worked for
Stein, Roe & Farnham Inc., as well as Quixote Investment Management. He earned
an MBA from the University of Northern Iowa, and a BBA from the University of
Iowa. He is a Chartered Financial Analyst and Certified Public Accountant.
Multi-Asset Allocation Fund
For the one-year period ended 7/31/97, INVESCO Multi-Asset Allocation Fund
had a total return of 31.41%, compared to a total return of 52.02% for the S&P
500 and 10.78% for the Lehman Government/Corporate Bond Index. (Of course, past
performance is not a guarantee of future results.)(1)(2)
Graph:
This line graph compares the value of a $10,000 investment in INVESCO
Multi-Asset Allocation Fund to the value of a $10,000 investment in the S&P 500
Index and the Lehman Government/Corporate Bond Index, assuming in each case
reinvestment of all dividends and capital gain distributions, for the period
from inception (12/1/93) through 7/31/97.
The fund's broad diversification helped produce superior competitive
returns. Over the one-year period ended 7/31/97, the fund had a total return of
31.41%, while the Lipper Flexible Portfolio objective had an average fund return
of 29.71% over the same 12 months. (Lipper Analytical Services, Inc. is an
independent mutual fund analyst, which tracks fund performance by total return
unadjusted for commissions. Of course, past performance is not a guarantee of
future results.)(2)
Multi-Asset Allocation Fund's holdings are diversified across
large-capitalization stocks, small-cap stocks, fixed-income obligations,
international equities, equity real estate securities, and cash. Over the last
<PAGE>
year, the fund's exposure to large-cap stocks was the key factor in performance.
This asset class produced superior returns compared to others. However, we feel
that many of these stocks may now be fully- or over-valued and are taking a
cautious approach going forward.
In contrast, we are excited about the possibilities for small-cap stocks and
international equities. Many small-caps are presently trading at prices below
their intrinsic value. For international equities, the strong U.S. dollar has
increased foreign companies' competitive advantage in international markets.
Both asset classes have gone through a period of underperformance, and these
securities presently appear undervalued with strong growth possibilities.
Multi-Asset Allocation Fund
Average Annual Total Return as of 7/31/97 (2)
---------------------------------------------
1 Year 31.41%
---------------------------------------------
Since Inception (12/93) 14.35%
---------------------------------------------
We plan to keep a neutral weighting toward real estate and fixed-income
securities, as we remain concerned about the potential for an increase in
interest rates by the Federal Reserve Board.
The fund has lagged the broad U.S. stock indexes during the extended bull
market. However, we believe that the combination of asset classes overseen by
experienced management may prove advantageous to investors over a full cycle.
Fund Management
INVESCO Multi-Asset Allocation Fund is managed by a team, which is led by
Bob Slotpole. He earned an MBA from Stanford University, as well as a BS from
the State University of New York-Buffalo. Now a senior vice president and
director of equities for INVESCO Management & Research, Inc., Bob began his
investment career in 1975. Previously, he was associated with First Boston and
Lehman Brothers.
(1)The S&P 500 and Lehman Government/Corporate Bond Index are unmanaged indexes
of securities considered to be representative of the broad domestic equity and
domestic fixed-income markets, respectively.
(2)Total return assumes reinvestment of dividends and capital gain distributions
for the periods indicated. Past performance is not a guarantee of future
results. Investment return and principal value will fluctuate so that, when
redeemed, an investor's shares may be worth more or less than when purchased.
(3)Lipper rankings are provided for one-, five-, and 10-year periods, except for
funds introduced more recently, and are based on total return unadjusted for
commissions.
<PAGE>
(4)Morningstar's proprietary rankings reflect historical risk-adjusted
performance and are subject to change every month. Ratings are calculated for
the fund's three-, five-, and 10-year average annual returns (based on available
track records) in excess of 90-day Treasury bill returns. The top 10% of funds
in an investment category receive 5 stars; the next 22.5%,4;and the next 35%, 3.
INVESCO Fund Codes
These two-digit codes appear after your account number on Investment
Summaries and confirmations. You may also use them to request information about
specific funds on PAL(R), your Personal Account Line.
Money Market Funds
44 U.S. Government Money Fund
25 Cash Reserves
40 Tax-Free Money Fund
Tax-Exempt Funds
36 Tax-Free Intermediate Bond
35 Tax-Free Long-Term Bond
Income Funds
33 Short-Term Bond
32 U.S. Government Securities
47 Intermediate Government Bond
30 Select Income
31 High Yield
Growth & Income Fund
71 Balanced
70 Multi-Asset Allocation
48 Total Return
15 Industrial Income
46 Value Equity
Capital Appreciation Funds
10 Growth
20 Dynamics
74 Small Company Value
60 Small Company Growth
Sector Funds
50 Energy
59 Environmental Services
57 Financial Services
51 Gold
52 Health Sciences
53 Leisure
42 Realty
55 Technology
58 Utilities
<PAGE>
38 Worldwide Capital Goods
39 Worldwide Communications
International Funds
49 International Growth
41 Asian Growth
56 European
37 European Small Company
34 Latin American Growth
54 Pacific Basin
For more information about any of the INVESCO Funds, including management fees
and expenses, please call us at 1-800-525-8085 for a prospectus. Read it
carefully before you invest or send money.
INVESCO Multiple Asset Funds, Inc.
Ten Largest Common Stock Holdings
July 31, 1997
Description Value
- --------------------------------------------------------------------------------
BALANCED Fund
Warner-Lambert Co $2,793,750
General Cable 2,560,625
Novartis AG Registered Shrs 2,407,579
Tandy Corp 2,377,500
SmithKline Beecham PLC ADR
Representing Ord A Shrs 2,334,000
Northrop Grumman 2,302,500
Exxon Corp 2,248,750
Owens-Illinois Inc 2,208,000
Dollar General 2,200,000
Sundstrand Corp 2,170,000
MULTI-ASSET ALLOCATION Fund
General Electric $280,750
Coca-Cola Co 207,750
Merck & Co 187,087
International Business Machines 179,775
AT&T Corp 176,700
Intel Corp 165,262
SBC Communications 142,050
Bristol-Myers Squibb 141,187
Chase Manhattan 139,455
Abbott Laboratories 124,331
Composition of holdings is subject to change.
<PAGE>
INVESCO Multiple Asset Funds, Inc.
Statement of Investment Securities
July 31, 1997
Shares or
Principal
Description Amount Value
- --------------------------------------------------------------------------------
BALANCED Fund
COMMON STOCKS 58.81%
AEROSPACE & DEFENSE 2.70%
Northrop Grumman 20,000 $2,302,500
Sundstrand Corp 35,000 2,170,000
------------
4,472,500
------------
BANKS 1.64%
Bank of New York 35,000 1,699,687
Fleet Financial Group 15,000 1,018,125
------------
2,717,812
------------
CHEMICALS 3.41%
Ferro Corp 50,000 1,853,125
Hoechst AG* 20,000 940,222
OM Group 43,000 1,486,188
Praxair Inc 25,000 1,378,125
------------
5,657,660
------------
COMMUNICATIONS - EQUIPMENT &
MANUFACTURING 0.97%
Motorola Inc 20,000 1,606,250
------------
COMPUTER RELATED 5.24%
America Online* 30,000 2,025,000
Ceridian Corp* 37,000 1,618,750
Cisco Systems* 19,000 1,511,687
CompUSA Inc* 72,700 1,953,812
International Business Machines 15,000 1,586,250
------------
8,695,499
------------
CONTAINERS 1.33%
Owens-Illinois Inc* 64,000 2,208,000
------------
<PAGE>
ELECTRICAL EQUIPMENT 3.29%
Emerson Electric 30,000 1,770,000
General Cable* 85,000 2,560,625
Honeywell Inc 15,000 1,120,313
------------
5,450,938
------------
ELECTRONICS - SEMICONDUCTOR 0.89%
Xilinx Inc* 31,000 1,468,625
------------
ENGINEERING & CONSTRUCTION 0.88%
Chicago Bridge & Iron NV 64,000 1,464,000
------------
FINANCIAL 1.92%
ACNielsen Corp* 75,000 1,612,500
MBNA Corp 35,000 1,575,000
------------
3,187,500
------------
FOODS 1.63%
Flowers Industries 50,000 871,875
Kellogg Co 20,000 1,837,500
------------
2,709,375
------------
GOLD & PRECIOUS METALS MINING 0.72%
ASARCO Inc 35,000 1,190,000
------------
HEALTH CARE DRUGS PHARMACEUTICALS 7.51%
Abbott Laboratories 25,000 1,635,937
Bristol-Myers Squibb 26,000 2,039,375
Johnson & Johnson 20,000 1,246,250
Novartis AG Registered Shrs 1,500 2,407,579
SmithKline Beecham PLC ADR
Representing Ord A Shrs 24,000 2,334,000
Warner-Lambert Co 20,000 2,793,750
------------
12,456,891
------------
HEALTH CARE RELATED 1.33%
Sulzer Medica AG Registered Shrs* 2,000 569,407
Sulzer Medica Sponsored ADR* 5,000 142,500
Tenet Healthcare* 50,000 1,496,875
------------
2,208,782
------------
<PAGE>
INSURANCE 2.50%
Berkley (W R) Corp 25,000 1,443,750
Chubb Corp 21,700 1,529,850
St Paul Cos 15,000 1,176,563
------------
4,150,163
------------
INVESTMENT BANK/BROKER FIRM 0.95%
Morgan Stanley Dean Witter
Discover & Co 30,000 1,569,375
------------
LEISURE TIME 0.68%
Brunswick Corp 35,000 1,128,750
------------
LODGING - HOTELS 0.95%
Hilton Hotels 50,000 1,571,875
------------
MACHINERY 0.87%
Kennametal Inc 30,000 1,445,625
------------
MANUFACTURING 2.73%
Allied Signal 20,000 1,845,000
Minnesota Mining & Manufacturing 15,000 1,421,250
Premark International 40,000 1,262,500
------------
4,528,750
------------
NATURAL GAS 1.44%
Coastal Corp 25,000 1,359,375
Columbia Gas System 15,000 1,031,250
------------
2,390,625
------------
OFFICE EQUIPMENT & SUPPLIES 0.92%
Xerox Corp 18,600 1,529,850
------------
OIL & GAS RELATED 2.68%
Exxon Corp 35,000 2,248,750
Phillips Petroleum 20,000 921,250
United Meridian* 40,000 1,277,500
------------
4,447,500
------------
<PAGE>
PAPER & FOREST PRODUCTS 0.75%
Champion International 20,000 1,240,000
------------
REAL ESTATE INVESTMENT TRUST 0.67%
Boston Properties* 40,000 1,115,000
------------
RETAIL 6.99%
Dayton Hudson 25,000 1,615,625
Dollar General 50,000 2,200,000
Federated Department Stores* 45,000 1,971,562
Sears Roebuck 20,000 1,266,250
TJX Cos 72,200 2,156,975
Tandy Corp 40,000 2,377,500
------------
11,587,912
------------
TELECOMMUNICATIONS - LONG DISTANCE 1.59%
Deutsche Telekom AG 65,000 1,542,900
Qwest Communications International* 35,300 1,098,713
------------
2,641,613
------------
TELEPHONE 0.88%
Bell Atlantic 20,000 1,451,250
------------
TOBACCO 0.75%
Fortune Brands 35,000 1,240,313
------------
TOTAL COMMON STOCKS
(Cost $78,176,045) 97,532,433
------------
PREFERRED STOCKS 0.63%
NATURAL GAS 0.63%
Enron Corp, 6.250%, Redeemable
Exchangable Pfd
(Cost $1,096,750) 50,000 1,040,625
------------
FIXED INCOME SECURITIES 32.52%
US Government Obligations 3.79%
US Treasury Notes
6.875%, 5/15/2006 5,000,000 5,273,440
6.250%, 2/15/2007 1,000,000 1,014,375
------------
TOTAL US GOVERNMENT OBLIGATIONS
(Cost $6,022,287) 6,287,815
------------
<PAGE>
US Government Agency Obligations 11.47%
Federal Home Loan Mortgage
Gold, Participation Certificates
6.500%, 6/1/2011 9,268,184 9,233,428
6.500%, 9/1/2011 9,327,730 9,292,751
Student Loan Marketing
Association, Notes, Series CQ
5.360%, 3/7/2001 500,000 498,774
------------
TOTAL US GOVERNMENT AGENCY OBLIGATIONS
(Cost $18,563,685) 19,024,953
------------
Corporate Bonds 16.18%
AUTOMOBILES 0.61%
General Motors Acceptance
Medium-Term Notes
6.700%, 4/25/2001 1,000,000 1,014,312
------------
COMPUTER RELATED 1.21%
International Business Machines Deb,
6.220%, 8/1/2027 2,000,000 2,005,580
------------
ELECTRIC UTILITIES 8.53%
Boston Edison, Deb
7.800%, 3/15/2023 1,925,000 1,974,211
Carolina Power & Light
1st Mortgage
8.625%, 9/15/2021 1,000,000 1,193,950
6.875%, 8/15/2023 1,000,000 960,767
DQU-II Funding, Collateral Lease
8.700%, 6/1/2016 2,000,000 2,210,386
Enersis SA, Notes
6.900%, 12/1/2006 1,000,000 1,009,435
Jersey Central Power & Light, 1st
Mortgage, 7.500%, 5/1/2023 1,000,000 1,011,781
Metropolitan Edison
Medium-Term Secured Notes
8.150%, 1/30/2023 2,000,000 2,149,030
Pennsylvania Power & Light, 1st
Mortgage, 8.500%, 5/1/2022 1,500,000 1,661,983
South Carolina Electric & Gas
1st Mortgage, 8.875%, 8/15/2021 1,750,000 1,970,193
------------
14,141,736
------------
<PAGE>
ENTERTAINMENT 0.60%
Time Warner, Deb
6.850%, 1/15/2026 1,000,000 998,152
------------
HEALTH CARE DRUGS - PHARMACEUTICALS 1.08%
McKesson Corp, Sub Deb
4.500%, 3/1/2004 2,000,000 1,798,442
------------
OFFICE EQUIPMENT & SUPPLIES 0.61%
Xerox Corp, Medium-Term
Notes, Series D
6.250%, 11/15/2026 1,000,000 1,003,443
------------
OIL & GAS RELATED 1.35%
Sun Inc, Deb, 9.375%, 6/1/2016 2,000,000 2,230,186
------------
PAPER & FOREST PRODUCTS 1.58%
Champion International, Deb
6.400%, 2/15/2026 1,000,000 990,290
Quno Corp, Sr Notes
9.125%, 5/15/2005 1,500,000 1,635,000
------------
2,625,290
------------
REAL ESTATE INVESTMENT TRUST 0.61%
Fisher Brothers Financial Realty
Secured Notes
10.750%, 12/17/2000 1,000,000 1,012,500
------------
TOTAL CORPORATE BONDS
(Cost $26,409,783) 26,829,641
------------
Foreign Government Agency Obligations 1.08%
Ferrovie dello Stato Gtd Bonds,
9.125%, 7/6/2009
(Cost $1,767,259) 1,500,000 1,796,250
------------
TOTAL FIXED INCOME SECURITIES
(Cost $52,763,014) 53,938,659
------------
SHORT-TERM INVESTMENTS -
REPURCHASE AGREEMENTS 8.04%
Repurchase Agreement with State Street
Bank & Trust Co dated 7/31/1997
<PAGE>
due 8/1/1997 at 5.670%, repurchased
at $13,337,100 (Collateralized by
US Treasury Bonds due 2/15/2023 at
7.125%, value $14,000,104)
(Cost $13,335,000) 13,335,000 13,335,000
------------
TOTAL INVESTMENT SECURITIES AT VALUE 100.00%
(Cost $145,370,809) (Cost for
Income Tax Purposes
$145,457,052) 165,846,717
============
MULTI-ASSET ALLOCATION Fund
COMMON STOCKS 67.31%
AEROSPACE & DEFENSE 0.65%
Coltec Industries* 500 11,000
Lockheed Martin+ 0 10
Northrop Grumman 800 92,100
UNC Inc* 600 8,700
------------
111,810
------------
AIR FREIGHT 0.16%
Yellow Corp* 1,000 27,000
------------
AIRLINES 0.51%
America West Holdings Class B* 600 8,287
British Airways PLC SponsoreD
ADR Representing Ord Shrs 400 43,975
Delta Air Lines 400 35,550
------------
87,812
------------
AUTO PARTS 0.74%
Arvin Industries 500 17,406
Autoliv Inc 1 35
Borg-Warner Automotive 1,400 78,050
Detroit Diesel* 1,200 31,200
------------
126,691
------------
AUTOMOBILES 0.83%
Chrysler Corp 3,100 115,087
Volvo AB Sponsored ADR 1,000 27,000
------------
142,087
-----------
<PAGE>
BANKS 5.35%
BankAmerica Corp 1,400 105,700
CCB Financial 100 8,325
Chase Manhattan 1,228 139,455
Cullen Frost Bankers 500 23,375
Den Danske Bank ADR 400 42,295
Deposit Guaranty 600 19,650
Deutsche Bank AG Sponsored ADR 700 47,448
Development Bank of Singapore Ltd
Sponsored ADR 800 41,550
First Michigan Bank 231 7,536
First of America Bank 1,950 108,225
HSBC Holdings PLC Sponsored ADR 200 69,745
Istituto Mobiliare Italiano SpA
Sponsored ADR 1,400 40,250
Magna Group 900 33,187
National Australia Bank Ltd Sponsored ADR 800 58,400
Provident Bankshares 315 15,002
Riggs National 400 8,650
Societe Generale Sponsored ADR 2,000 52,838
Southtrust Corp 1,900 89,538
US Trust 200 10,525
------------
921,694
------------
BEVERAGES 1.42%
Coca-Cola Co 3,000 207,750
Kirin Brewery Ltd ADR 400 36,800
------------
244,550
------------
BROADCASTING 0.59%
Carlton Communications PLC Sponsored ADR 1,000 40,625
King World Productions* 1,500 60,562
------------
101,187
------------
BUILDING MATERIALS 0.26%
Centex Corp 200 11,150
Martin Marietta Materials 325 11,233
Medusa Corp 500 23,125
------------
45,508
------------
<PAGE>
CABLE 0.17%
CableVision Systems Class A* 500 29,687
------------
CHEMICALS 2.31%
Akzo Nobel NV Sponsored ADR 700 54,513
Bayer AG Sponsored ADR 1,000 42,139
Dexter Corp 800 31,850
du Pont (E I) de Nemours 1,800 120,487
Fuller (H B) Co 500 25,812
Minerals Technologies 900 36,900
Morton International 1,100 36,781
Rohm & Haas 500 49,000
------------
397,482
------------
COMMUNICATIONS - EQUIPMENT &
MANUFACTURING 0.19%
Boston Technology* 400 10,625
Davox Corp* 200 6,500
Octel Communications* 500 15,125
------------
32,250
------------
COMPUTER RELATED 4.05%
Adobe Systems 1,400 52,325
BancTec Inc* 1,000 24,437
Cadence Design Systems* 1,100 48,881
Compaq Computer* 750 42,844
Computer Task Group 700 31,412
Data General* 500 15,094
Harbinger Corp* 200 6,475
Hyperion Software* 300 8,062
International Business Machines 1,700 179,775
Manugistics Group* 400 17,300
Microsoft Corp* 600 84,900
National Data 200 8,125
Network Appliance* 300 13,087
Periphonics Corp* 500 6,844
Stratus Computer* 300 16,350
Structural Dynamics Research* 300 8,250
Symantec Corp* 400 9,625
Technology Solutions* 200 7,850
Transaction System Architects Class A* 200 7,400
<PAGE>
Western Digital* 2,800 107,800
------------
696,836
------------
CONSUMER FINANCE 0.58%
Imperial Credit Industries* 400 9,300
Student Loan Marketing Association 600 89,963
------------
99,263
------------
ELECTRIC UTILITIES 1.52%
Central Louisiana Electric 400 10,750
CILCORP Inc 300 12,581
Commonwealth Energy
Systems SBI 400 10,225
Empresa Nacional de
Electricidad SA Sponsored ADR 500 42,188
GPU Inc 1,100 38,156
Hawaiian Electric Industries 300 11,175
MidAmerican Energy Holdings 2,400 41,550
Minnesota Power & Light 200 6,575
PacifiCorp 1,800 40,162
PowerGen PLC Sponsored ADR 750 36,469
SIGCORP Inc 450 11,756
------------
261,587
------------
ELECTRICAL EQUIPMENT 2.62%
General Electric 4,000 280,750
Hitachi Ltd Sponsored ADR 400 45,050
Kent Electronics* 800 31,200
Kyocera Corp Sponsored ADR 250 42,656
Matsushita Electric Industrial Ltd
Sponsored ADR 200 41,500
Molecular Dynamics* 500 10,375
------------
451,531
------------
ELECTRONICS 0.41%
Belden Inc 400 15,500
Brown & Sharpe Manufacturing Class A* 700 9,275
Level One Communications* 300 12,750
Logicon Inc 400 28,350
Southern Electronics* 300 4,575
------------
70,450
------------
<PAGE>
ELECTRONICS - SEMICONDUCTOR 1.33%
Actel Corp* 500 9,625
Burr-Brown Corp* 300 10,444
Dallas Semiconductor 800 31,250
Intel Corp 1,800 165,262
Unitrode Corp* 200 11,888
------------
228,469
------------
ENGINEERING & CONSTRUCTION 0.47%
JLG Industries 3,500 38,719
Pulte Corp 800 32,650
Stone & Webster 200 9,400
------------
80,769
------------
ENTERTAINMENT 0.05%
Metromedia International Group 700 7,875
------------
FOODS 1.75%
Associated British Foods PLC ADR 6,000 52,171
Dean Foods 2,300 110,831
Earthgrains Co 1,000 36,625
Nestle SA Sponsored ADR Representing
Registered Shrs 900 57,109
Unilever NV New York Shrs 200 43,600
------------
300,336
------------
GAMING 0.01%
Primadonna Resorts* 100 1,763
------------
GOLD & PRECIOUS METALS MINING 0.31%
Getchell Gold* 100 3,337
Rio Tinto Ltd Sponsored ADR* 800 49,775
------------
53,112
------------
HEALTH CARE DRUGS - PHARMACEUTICALS 5.31%
Abbott Laboratories 1,900 124,331
Agouron Pharmaceuticals* 100 9,575
Amylin Pharmaceuticals* 1,900 24,937
Astra AB Sponsored ADR Representing
Series A Shrs 3,500 63,875
<PAGE>
Bindley Western Industries 500 11,719
Bristol-Myers Squibb 1,800 141,187
Carter-Wallace Inc 1,500 27,094
Glaxo Wellcome PLC Sponsored ADR 1,000 42,500
ICN Pharmaceuticals 300 10,256
Johnson & Johnson 1,400 87,237
Merck & Co 1,800 187,087
Novartis AG Sponsored ADR
Representing Registered Shrs 700 56,177
Novo-Nordisk A/S Sponsored ADR 900 47,813
Perrigo Co* 700 9,100
Pfizer Inc 1,200 71,550
------------
914,438
------------
HEALTH CARE RELATED 1.27%
ATL Ultrasound* 400 16,100
Hillenbrand Industries 1,000 45,875
Integrated Health Services 800 27,300
Kinetic Concepts 800 15,200
NovaCare Inc* 600 7,762
OEC Medical Systems* 400 6,850
Safeskin Corp* 600 19,838
Sofamor Danek Group* 200 8,988
TheraTech Inc* 1,000 11,500
Trigon Healthcare* 700 16,669
Universal Health Services Class B* 400 16,250
West Co 900 26,438
------------
218,770
------------
HOMEBUILDING 0.04%
Nortek Inc* 300 7,369
HOUSEHOLD FURNITURE & APPLIANCES 0.27%
Ethan Allen Interiors 500 26,500
Furniture Brands International* 1,000 20,562
------------
47,062
------------
HOUSEHOLD PRODUCTS 0.53%
Procter & Gamble 600 91,275
------------
INSURANCE 3.76%
ACE Ltd 1,300 106,600
American Bankers Insurance Group 100 6,769
<PAGE>
CIGNA Corp 500 99,750
Commerce Group 600 15,637
Frontier Insurance Group 880 27,445
Guarantee Life 600 15,450
HCC Insurance Holdings 1,100 34,719
Horace Mann Educators 2,100 113,531
ING Groep NV Sponsored ADR 1,000 49,188
Life Re 200 10,950
Loews Corp 1,100 118,937
Orion Capital 400 16,725
Presidential Life 800 15,600
Reliance Group Holdings 1,200 15,675
------------
646,976
------------
INVESTMENT BANK/BROKER FIRM 1.24%
Bear Stearns 2,600 106,112
Interra Financial 700 30,012
Morgan Stanley Dean Witter Discovery & Co 1,485 77,684
------------
213,808
------------
IRON & STEEL 0.24%
Commercial Metals 300 9,525
National Steel Class B* 500 7,656
Quanex Corp 800 24,900
------------
42,081
------------
LEISURE TIME 0.15%
Carmike Cinemas Class A* 800 25,300
------------
LODGING - HOTELS 0.34%
HFS Inc* 1,000 58,250
------------
MACHINERY 0.55%
Danaher Corp 800 44,350
Graco Inc 600 19,762
IDEX Corp 400 14,050
Manitowoc Co 450 17,325
------------
95,487
------------
MANUFACTURING 0.81%
Cognex Corp* 300 10,200
<PAGE>
Dionex Corp* 200 9,125
Foamex International* 800 9,200
Mueller Industries* 1,000 44,875
RWE AG Sponsored ADR Representing Ord Shrs 750 33,401
Robbins & Myers 600 20,700
Tredegar Industries 200 12,450
------------
139,951
------------
NATURAL GAS 0.61%
Coastal Corp 800 43,500
MCN Corp 1,100 34,856
New Jersey Resources 400 12,650
ONEOK Inc 400 14,000
------------
105,006
------------
OFFICE EQUIPMENT & SUPPLIES 0.63%
US Office Products* 300 8,663
Wallace Computer Services 3,000 100,313
------------
108,976
------------
OIL & GAS RELATED 4.69%
Amoco Corp 700 65,800
Camco International 200 12,925
Elf Aquitaine SA Sponsored ADR 800 45,800
Energen Corp 400 14,500
Exxon Corp 1,400 89,950
Global Marine* 2,900 83,012
HS Resources* 600 8,400
Mobil Corp 1,400 107,100
Newpark Resources* 400 13,825
Norsk Hydro AS Sponsored ADR 800 41,800
Parker & Parsley Petroleum 600 22,538
Phillips Petroleum 2,200 101,338
Repsol SA Sponsored ADR 1,000 40,250
Royal Dutch Petroleum New York
Registry 5 Gldr Shrs 1,000 55,938
Vastar Resources 2,900 104,400
------------
807,576
------------
PAPER & FOREST PRODUCTS 0.42%
Fort Howard* 1,300 72,475
------------
<PAGE>
PHOTOGRAPHY & IMAGING 0.37%
Fuji Photo Film Ltd ADR 1,500 63,188
------------
PUBLISHING 0.92%
Central Newspapers Class A 1,500 104,719
Gannett Co 400 39,725
Media General Class A 400 14,200
------------
158,644
------------
REAL ESTATE INVESTMENT TRUST 9.62%
Ambassador Apartments 1,200 28,425
American General Hospitality 2,700 72,900
Arden Realty Group 1,600 43,500
Bay Apartment Communities 900 34,594
Beacon Properties 1,800 65,925
CBL & Associates Properties 2,200 56,100
Cali Realty 1,100 40,219
Chelsea GCA Realty 400 15,775
Duke Realty Investments 500 22,219
Equity Office Properties Trust SBI* 400 11,600
Equity Residential Properties Trust SBI 1,262 63,652
Essex Property Trust 1,600 52,500
Excel Realty Trust 900 26,775
FelCor Suite Hotels 2,200 85,800
First Industrial Realty Trust 2,300 71,156
Gables Residential Trust SBI 1,100 29,356
General Growth Properties 700 24,631
Glenborough Realty Trust 400 9,525
Healthcare Realty Trust 600 17,325
Highwoods Properties 1,100 36,712
JP Realty 600 15,187
Kilroy Realty 1,600 40,200
Kimco Realty 1,550 52,700
Koger Equity 3,500 68,031
Liberty Property Trust SBI 2,400 63,300
MGI Properties 1,900 41,919
Merry Land & Investment 1,800 39,375
Nationwide Health Properties 900 22,106
Parkway Properties 600 17,288
Patriot American Hospitality 3,099 77,272
Prentiss Properties Trust 1,600 41,600
Price REIT 700 26,513
Public Storage 1,900 56,406
<PAGE>
RFS Hotel Investors 1,400 25,550
Security Capital Industrial Trust SBI 700 15,794
Shurgard Storage Centers Class A 1,200 33,975
Simon DeBartolo Group 1,300 41,600
Spieker Properties 600 22,313
Starwood Lodging Trust 700 32,638
Sun Communities 600 21,713
Sun Hung Kai Properties Ltd Sponsored ADR 2,500 31,401
Sunstone Hotel Investors 1,200 16,800
TriNet Corporate Realty Trust 1,200 42,675
------------
1,655,045
------------
RESTAURANTS 0.29%
Applebee's International 400 12,000
Brinker International* 800 12,550
CKE Restaurants 750 25,969
------------
50,519
------------
RETAIL 2.30%
Cash America International 900 10,181
Costco Cos* 2,300 87,112
Dillard's Inc Class A 1,500 56,719
Federated Department Stores* 1,500 65,719
Lands' End* 1,000 29,625
Pier 1 Imports 1,050 18,506
Shopko Stores 200 5,775
Sports Authority* 800 14,300
TJX Cos 3,600 107,550
------------
395,487
------------
SAVINGS & LOAN 0.77%
Ahmanson (H F) & Co 1,300 69,144
Astoria Financial 400 19,300
FirstFed Financial* 300 10,350
Sovereign Bancorp 800 12,675
St Paul Bancorp 900 21,431
------------
132,900
------------
SERVICES 0.95%
Banta Corp 600 16,575
Catalina Marketing* 400 17,050
<PAGE>
Dai Nippon Printing Ltd ADR 200 45,777
DeVRY Inc* 600 17,625
G&K Services Class A 700 23,712
Gerber Scientific 400 8,450
Information Resources* 600 9,037
Norrell Corp 800 25,300
------------
163,526
------------
TELECOMMUNICATIONS - CELLULAR &
WIRELESS 0.17%
Centennial Cellular Class A* 1,500 22,500
HighwayMaster Communications* 500 7,250
------------
29,750
------------
TELECOMMUNICATIONS - LONG DISTANCE 1.88%
AT&T Corp 4,800 176,700
British Telecommunications PLC Sponsored ADR 800 6,650
Portugal Telecom SA Sponsored ADR 1,000 40,250
Telecom Italia SpA Sponsored ADR 800 50,750
------------
324,350
------------
TELEPHONE 1.47%
GTE Corp 1,200 55,800
SBC Communications 2,400 142,050
Telefonica de Espana SA Sponsored ADR 700 55,125
------------
252,975
------------
TEXTILE - APPAREL MANUFACTURING 1.05%
Interface Inc Class A 400 11,050
Kellwood Co 200 6,212
Nautica Enterprises* 300 8,250
Unifi Inc 1,000 38,188
VF Corp 1,300 116,675
------------
180,375
------------
TEXTILE - HOME FURNISHINGS 0.11%
Springs Industries Class A 400 19,350
------------
TOBACCO 0.16%
Universal Corp 800 27,550
------------
<PAGE>
TRUCKERS 0.11%
Heartland Express* 750 18,562
------------
TOTAL COMMON STOCKS (Cost $9,183,164) 11,586,770
------------
PREFERRED STOCKS 0.59%
CONSUMER FINANCE 0.23%
Home Ownership Funding 13.331%^^,
Stepdown Pfd^ 40 39,850
------------
REAL ESTATE INVESTMENT TRUST 0.36%
Lazara Properties 13.547%^^,
Stepdown Pfd^ 30 30,150
Tier I Properties 11.095%^^,
Stepdown Pfd^ 30 30,788
------------
60,938
------------
TOTAL PREFERRED STOCKS (Cost $100,000) 100,788
------------
FIXED INCOME SECURITIES 20.05%
US Government Obligations 10.24%
US Treasury Bonds
8.750%, 5/15/2017 100,000 126,750
7.875%, 2/15/2021 235,000 277,447
7.500%, 11/15/2016 50,000 56,328
US Treasury Notes
7.250%, 8/15/2004 275,000 294,508
6.875%, 5/15/2006 280,000 295,313
6.250%, 5/31/2000 175,000 177,023
6.125%, 9/30/2000 175,000 176,477
5.875%, 8/15/1998 150,000 150,328
5.750%, 8/15/2003 70,000 69,322
5.125%, 11/30/1998 140,000 138,994
------------
TOTAL US GOVERNMENT
OBLIGATIONS
(Cost $1,697,361) 1,762,490
------------
US Government Agency Obligations 4.09%
Federal Home Loan Bank
6.075%, 1/22/1999 100,000 99,984
Federal Home Loan Mortgage Gold,
Participation Certificates
9.000%, 1/1/2007 29,054 30,143
8.000%, 8/1/2017 32,155 33,151
<PAGE>
Federal Home Loan Mortgage Association,
Participation Cerfiticates,
9.000%, 1/1/2005 23,905 24,914
Federal National Mortgage Association,
Gtd Pass-Through Certificates
7.500%, 12/31/2027~~ 100,000 101,594
6.500%, 12/31/2027~~# 70,000 68,425
6.000%, 4/1/2024 44,187 42,428
Federal National Mortgage Association,
Gtd REMIC Pass-Through Certificates
7.500%, 11/25/2006 75,000 77,033
7.000%, 5/25/2006 105,000 105,792
6.000%, 6/25/2009 46,934 45,464
Government National Mortgage
Association I, REMIC Pass-Through
Certificates, 7.000%, 1/16/2007 75,000 75,736
------------
TOTAL US GOVERNMENT
AGENCY OBLIGATIONS
(Cost $697,426) 704,664
------------
Asset-Backed Securities 1.46%
CONSUMER FINANCE 1.46%
FirstPlus Home Loan Trust, Notes
Series 1997-1 Notes, Class A-2
6.280%, 9/10/2006 75,000 75,231
Nationsbank Auto Owner Trust Notes,
Series 1996-A, Class A-3
6.375%, 7/15/2000 75,000 75,592
Premier Auto Trust, Notes Series 1996-4,
Class A-3
6.200%, 11/6/2000 100,000 100,594
------------
TOTAL ASSET-BACKED SECURITIES
(Cost $250,517) 251,417
------------
Mortgage-Backed Securities 1.17%
CONSUMER FINANCE 0.73%
Contimortgage Home Equity Loan Trust,
Pass-Through Certificates, Series 1997-1
Class A3, 6.480%, 1/15/2012 125,000 125,674
------------
FINANCAL 0.44%
IMC Home Equity Loan Trust Pass-Through
Certificates Series 1997-3, Class A3
6.710%, 1/20/2012 75,000 75,640
------------
<PAGE>
TOTAL MORTGAGE-BACKED SECURITIES
(Cost $199,998) 201,314
------------
Corporate Bonds 3.09%
COMMUNICATIONS - EQUIPMENT &
MANUFACTURING 0.53%
Motorola Inc, Deb
8.400%, 8/15/2031 75,000 92,006
------------
CONSUMER FINANCE 0.34%
Beneficial Corp, Deb
8.400%, 5/15/2008 50,000 57,820
------------
FINANCIAL 0.33%
General Electric Capital Medium-Term
Step-Up Notes ++
5.800%, 4/1/2008 50,000 55,867
------------
REAL ESTATE INVESTMENT TRUST 0.83%
Kimko Realty, Medium-Term Notes,
7.060%, 7/14/2009 50,000 51,031
Spieker Properties LP Notes
7.125%, 12/1/2006 50,000 50,857
Weingarten Realty Investors Series A,
Medium-Term Notes
6.900%, 11/24/2008 40,000 40,688
------------
142,576
------------
TELECOMMUNICATIONS - LONG DISTANCE 0.29%
BellSouth Telecommunications
Deb, 5.850%, 11/15/2045 50,000 50,100
------------
TELEPHONE 0.77%
GTE Corp, Deb
10.250%, 11/1/2020 50,000 57,677
US WEST Capital Funding, Notes
6.310%, 11/1/2005 75,000 75,034
------------
132,711
------------
TOTAL CORPORATE BONDS (Cost $513,557) 531,080
------------
<PAGE>
TOTAL FIXED INCOME SECURITIES
(Cost $3,358,859) 3,450,965
------------
SHORT-TERM INVESTMENTS 12.05%
US Government Obligations 1.88%
US Treasury Notes
5.375%, 5/31/1998
(Cost $323,773) 325,000 324,390
Repurchase Agreements 10.17%
Repurchase Agreement with
State Street Bank & Trust Co
dated 7/31/1997 due 8/1/1997
at 5.670%, repurchased at
$1,750,276 (Collateralized
by US Treasury Notes due
6/30/2001 at 6.625%, value
$1,798,260)
(Cost $1,750,000) 1,750,000 1,750,000
------------
TOTAL SHORT-TERM INVESTMENTS
(Cost $2,073,773) 2,074,390
------------
TOTAL INVESTMENT SECURITIES AT VALUE 100.00%
(Cost $14,715,796) (Cost for Income
Tax Purposes $14,748,791) 17,212,913
============
* Security is non-income producing.
+ Shares represent a fractional position of 0.09 of one share.
^^ Security is a perpetual stepdown. Step down securities are obligations which
decrease the interest payment rate at a specific point in time. Rate shown
reflects current rate which will step down at a future date.
^ Securities are registered pursuant to Rule 144A and may be deemed to be
restricted for resale to institutional investors.
~~ Security is a To-Be-Announced (TBA) security.
# Security is subject to a dollar roll transaction.
++ Step up bonds are obligations which increase the interest payment rate at a
specific point in time. Rate shown reflects current rate which may step up at a
future date.
See Notes to Financial Statements
<PAGE>
INVESCO Multiple Asset Funds, Inc.
Statement of Assets and Liabilities
July 31, 1997
Balanced Multi-Asset
Fund Allocation Fund
------------------------------------
ASSETS
Investment Securities:
At Cost~ $145,370,809 $14,715,796
====================================
At Value~ 165,846,717 17,212,913
Cash 1,572,754 42,766
Receivables:
Investment Securities Sold 1,238,234 29,021
Fund Shares Sold 245,145 10,148
Dividends and Interest 818,168 70,725
Prepaid Expenses and Other Assets 36,237 10,942
------------------------------------
TOTAL ASSETS 169,757,255 17,376,515
------------------------------------
LIABILITIES
Payables:
Distributions to Shareholders 49,796 2,017
Investment Securities Purchased 7,488,920 221,514
Fund Shares Repurchased 239,520 16,777
Accrued Distribution Expenses 33,727 3,659
Accrued Expenses and Other Payables 24,571 15,206
------------------------------------
TOTAL LIABILITIES 7,836,534 259,173
------------------------------------
Net Assets at Value 161,920,721 17,117,342
====================================
NET ASSETS
Paid-in Capital* 129,832,395 13,360,302
Accumulated Undistributed Net
Investment Income (See Note 1) 148,050 10,855
Accumulated Undistributed Net
Realized Gain on Investment
Securities and Foreign Currency
Transactions 11,464,650 1,249,068
Net Appreciation of Investment
Securities and Foreign Currency
Transactions (See Note 1) 20,475,626 2,497,117
------------------------------------
Net Assets at Value 161,920,721 17,117,342
====================================
<PAGE>
Shares Outstanding 10,211,984 1,245,329
Net Asset Value, Offering and
Redemption Price per Share 15.86 13.75
====================================
~ Investment securities at cost and value at July 31, 1997 include repurchase
agreements of $13,335,000 and $1,750,000 for Balanced and Multi-Asset Allocation
Funds, respectively.
* The Fund has 500 million authorized shares of common stock, par value of $0.01
per share. Of such shares, 100 million have been allocated to each individual
Fund.
See Notes to Financial Statements
<PAGE>
INVESCO Multiple Asset Funds, Inc.
STATEMENT OF OPERATIONS
Year Ended July 31, 1997
Balanced Multi-Asset
Fund Allocation Fund
------------------------------------
INVESTMENT INCOME
INCOME
Dividends $1,385,725 $228,200
Interest 3,571,802 271,665
Foreign Taxes Withheld (24,582) (3,697)
------------------------------------
TOTAL INCOME 4,932,945 496,168
------------------------------------
EXPENSES
Investment Advisory Fees 797,409 100,445
Distribution Expenses 332,273 33,482
Transfer Agent Fees 397,860 44,706
Administrative Fees 29,935 12,009
Custodian Fees and Expenses 52,604 15,558
Directors' Fees and Expenses 13,035 8,125
Professional Fees and Expenses 23,520 14,435
Registration Fees and Expenses 79,860 25,344
Reports to Shareholders 52,073 6,759
Other Expenses 8,217 3,266
------------------------------------
TOTAL EXPENSES 1,786,786 264,129
Fees and Expenses Absorbed by
Investment Adviser (69,052) (56,923)
Fees and Expenses Paid Indirectly (53,691) (5,257)
------------------------------------
NET EXPENSES 1,664,043 201,949
------------------------------------
NET INVESTMENT INCOME 3,268,902 294,219
------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENT SECURITIES
Net Realized Gain on Investment
Securities and Foreign Currency
Transactions 12,406,672 1,555,676
Change in Net Appreciation of
Investment Securities and Foreign
Currency Transactions 19,416,347 1,745,166
------------------------------------
<PAGE>
NET GAIN ON INVESTMENT SECURITIES 31,823,019 3,300,842
------------------------------------
Net Increase in Net Assets
from Operations $ 35,091,921 $ 3,595,061
====================================
See Notes to Financial Statements
<PAGE>
INVESCO Multiple Asset Funds, Inc.
Statement of Changes in Net Assets
Year Ended July 31
<TABLE>
<CAPTION>
Balanced Multi-Asset
Fund Allocation Fund
-------------------------- -------------------------------
1997 1996 1997 1996
<S> <C> <C> <C> <C>
OPERATIONS
Net Investment Income $ 3,268,902 $ 2,834,839 $ 294,219 $224,940
Net Realized Gain on Investment Securities
and Foreign Currency Transactions 12,406,672 11,022,562 1,555,676 665,235
Change in Net Appreciation (Depreciation)
of Investment Securities and Foreign
Currency Transactions 19,416,347 (1,554,333) 1,745,166 18,014
-------------------------- -------------------------------
NET INCREASE IN NET
ASSETS FROM OPERATIONS 35,091,921 12,303,068 3,595,061 908,189
-------------------------- -------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
Net Investment Income (3,256,031) (2,832,865) (292,965) (225,039)
Net Realized Gain on Investment
Securities and Foreign Currency
Transactions (7,920,456) (5,048,134) (828,800) (147,924)
-------------------------- -------------------------------
TOTAL DISTRIBUTIONS (11,176,487) (7,880,999) (1,121,765) (372,963)
-------------------------- -------------------------------
FUND SHARE TRANSACTIONS
Proceeds from Sales of Shares 157,332,062 201,328,435 42,685,783 13,724,833
Reinvestment of Distributions 10,886,903 7,491,818 1,101,635 366,691
-------------------------- -------------------------------
168,218,965 208,820,253 43,787,418 14,091,524
<PAGE>
Amounts Paid for Repurchases of Shares (145,279,529)(135,399,982) (38,716,952) (12,831,534)
NET INCREASE IN NET ASSETS
FROM FUND SHARE TRANSACTIONS 22,939,436 73,420,271 5,070,466 1,259,990
-------------------------- --------------------------------
Total Increase in Net Assets 46,854,870 77,842,340 7,543,762 1,795,216
NET ASSETS
Beginning of Period 115,065,851 37,223,511 9,573,580 7,778,364
-------------------------- --------------------------------
End of Period $161,920,721 $115,065,851 $17,117,342 $9,573,580
========================== ================================
Accumulated Undistributed Net Investment
Income Included in Net Assets at
End of Period (See Note 1) 148,050 10,019 10,855 1,204
FUND SHARE TRANSACTIONS
Shares Sold 10,958,657 14,985,724 3,446,561 1,194,602
Shares Issued from Reinvestment
of Distributions 779,085 564,187 91,434 32,203
-------------------------- --------------------------------
11,737,742 15,549,911 3,537,995 1,226,805
Shares Repurchased (10,136,122) (10,019,968) (3,121,290) (1,115,680)
-------------------------- --------------------------------
Net Increase in Fund Shares 1,601,620 5,529,943 416,705 111,125
========================== ================================
See Notes to Financial Statements
</TABLE>
<PAGE>
INVESCO Multiple Asset Funds, Inc.
Notes to Financial Statements
NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES. INVESCO Multiple
Asset Funds, Inc. (the "Fund"), is incorporated in Maryland and presently
consists of two separate Funds: Balanced Fund and Multi-Asset Allocation Fund.
The investment objectives of each Fund are to achieve a high total return on
investment through capital appreciation and current income. The Fund is
registered under the Investment Company Act of 1940 (the "Act") as a
diversified, open-end management investment company.
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of income and expenses during the reporting period. Actual
results could differ from those estimates.
A. SECURITY VALUATION - Equity securities traded on national securities
exchanges or in the over-the-counter market are valued at the last sales
price in the market where such securities are primarily traded. If last
sales prices are not available, securities are valued at the highest
closing bid price obtained from one or more dealers making a market for
such securities or by a pricing service approved by the Fund's board of
directors.
Debt securities are valued at evaluated bid prices as determined by a
pricing service approved by the Fund's board of directors. If evaluated bid
prices are not available, debt securities are valued by averaging the bid
prices obtained from one or more dealers making a market for such
securities.
Foreign securities are valued at the closing price on the principal
stock exchange on which they are traded. In the event that closing prices
are not available for foreign securities, prices will be obtained from the
principal stock exchange at or prior to the close of the New York Stock
Exchange. Foreign currency exchange rates are determined daily prior to the
close of the New York Stock Exchange.
Options are valued at the last sales price on the principal exchange
on which the options are traded. If there is no last sales price reported,
then the bid price will be used.
If market quotations or pricing service valuations are not readily
available, securities are valued at fair value as determined in good faith
by the Fund's board of directors.
Short-term securities are stated at amortized cost (which approximates
market value) if maturity is 60 days or less at the time of purchase, or
market value if maturity is greater than 60 days.
Assets and liablities initially expressed in terms of foreign
currencies are translated into U.S. dollars at the prevailing market rates
as quoted by one or more banks or dealers on the date of valuation. The
cost of securities is translated into U.S. dollars at the rates of
<PAGE>
exchange prevailing when such securities are acquired. Income and
expenses are translated into U.S. dollars at rates of exchange prevailing
when accrued.
B. TO-BE-ANNOUNCED SECURITIES - To-Be-Announced ("TBA") securities held by the
Fund are fully collateralized by other securities and such collateral is in
the possession of the Fund's custodian. The collateral is evaluated daily
to ensure its market value exceeds the current market value of the TBA
securities.
C. REPURCHASE AGREEMENTS - Repurchase agreements held by the Fund are fully
collateralized by U.S. Government securities and such collateral is in the
possession of the Fund's custodian. The collateral is evaluated daily to
ensure its market value exceeds the current market value of the repurchase
agreements including accrued interest. In the event of default on the
obligation to repurchase, the Fund has the right to liquidate the
collateral and apply the proceeds in satisfaction of the obligation. In the
event of default or bankruptcy by the other party to the agreement,
realization and/or retention of the collateral or proceeds may be subject
to legal proceedings.
D. OPTIONS - The Fund may hold options for investment purposes with the intent
to hedge the portfolio against ongoing exposure to market value and
interest rate fluctuations.
The use of such instruments may involve certain risks as a result of
unanticipated movements in the market. A lack of correlation between the
value of an instrument underlying an option and the asset being hedged, or
unexpected adverse price movements, could render the Fund's hedging
strategy unsuccessful. In addition, there can be no assurance that a liquid
secondary market will exist for any option purchased or sold. Realized
gains or losses on purchased option transactions are included in Net
Realized Gain (Loss) on Investment Securities and Foreign Currency
Transactions in the Statement of Operations.
E. DOLLAR ROLL TRANSACTIONS - The Fund may enter into mortgage "dollar rolls"
in which it sells securities for delivery in the current month and
simultaneously contracts with the same counterparty to repurchase similar
(same type, coupon and maturity) but not identical securities on a
specified future date. The Fund would benefit to the extent of any
difference bewtween the price received for the securities sold and the
lower forward price for the future purchase plus any fee income received.
These amounts are included in interest income. The Fund maintains
segregated assets, the dollar value of which meets or exceeds its
obligations with respect to dollar rolls.
F. SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME - Security transactions
are accounted for on the trade date and dividend income is recorded on the
ex dividend date. Certain dividends from foreign securities will be
recorded as soon as the Fund is informed of the dividend if such
information is obtained subsequent to the ex dividend date. Interest
income, which may be comprised of stated coupon rate, market discount,
original issue discount and amortized premium, is recorded on the accrual
basis. Discounts and premiums on debt securities purchased are amortized
over the life of the respective security as adjustments to interest income.
Cost is determined on the specific identification basis.
<PAGE>
Effective September 1, 1996, the Fund began accruing income using the
effective interest method which includes amortizing premiums on purchases
of portfolio securities as adjustments to income. This method of recording
income more closely reflects the economics of holding and disposing of debt
instruments. Prior to September 1, 1996, the Fund accrued coupon interest
income, market discount and original issue discount and accounted for
purchased premiums as capital gains or losses when realized upon
disposition of the associated security. The cumulative effect of applying
this accounting change was to decrease accumulated undistributed net
investment income and increase net unrealized appreciation of investment
securities by $1,947 and $642 for Balanced and Multi- Asset Allocation
Funds, respectively. Such accounting change had no effect on net asset
value per share.
The Fund may have elements of risk due to concentrated investments in
foreign issuers located in a specific country. Such concentrations may
subject the Fund to additional risks resulting from future political or
economic conditions and/or possible impositions of adverse foreign
governmental laws or currency exchange restrictions. Net realized and
unrealized gain or loss from investments includes fluctuations from
currency exchange rates and fluctuations in market value.
The Fund's use of short-term forward foreign currency contracts may
subject it to certain risks as a result of unanticipated movements in
foreign exchange rates. The Fund does not hold short-term forward foreign
currency contracts for trading purposes. The Fund may hold foreign currency
in anticipation of settling foreign security transactions and not for
investment purposes.
Investments in securities of governmental agencies may only be
guaranteed by the respective agency's limited authority to borrow from the
U.S. Government and may not be guaranteed by the full faith and credit of
the United States.
G. FEDERAL AND STATE TAXES - The Fund has complied and continues to comply
with the provisions of the Internal Revenue Code applicable to regulated
investment companies and, accordingly, has made or intends to make
sufficient distributions of net investment income and net realized capital
gains, if any, to relieve it from all federal and state income taxes and
federal excise taxes.
To the extent future capital gains are offset by capital loss
carryovers, such gains will not be distributed to shareholders.
Dividends paid by the Fund from net investment income and
distributions of net realized short-term capital gains are, for federal
income tax purposes, taxable as ordinary income to shareholders. Of the
ordinary income distributions declared for the year ended July 31, 1997,
9.97% for Balanced Fund and 31.26% for Multi- Asset Allocation Fund
qualified for the dividends received deduction available to the Fund's
corporate shareholders.
Investment income received from foreign sources may be subject to
foreign withholding taxes. Dividend and interest income is shown gross of
foreign withholding taxes in the accompanying financial statements.
H. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS - Dividends and distributions
to shareholders are recorded by the Fund on the ex dividend/distribution
date. The Fund distributes net realized capital gains, if any, to its
<PAGE>
shareholders at least annually, if not offset by capital loss
carryovers. Income distributions and capital gain distributions are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles. These differences are primarily
due to differing treatments for mortgage-backed securities, market
discounts, amortized premiums, foreign currency transactions, nontaxable
dividends, net operating losses and expired capital loss carryforwards. For
the year ended July 31, 1997, Balanced Fund reclassified $127,107 from
accumulated undistributed net realized gain on investment securities to
accumulated undistributed net investment income. For the year ended July
31, 1997, Multi-Asset Allocation Fund reclassified $9,039 from accumulated
undistributed net realized gain on investment securities to accumulated
undistributed net investment income. Net investment income, net realized
gains and net assets were not affected.
I. EXPENSES - Each of the Funds bears expenses incurred specifically on its
behalf and, in addition, each Fund bears a portion of general expenses,
based on the relative net assets of each Fund.
Under an agreement between each Fund and the Fund's Custodian, agreed
upon Custodian Fees and Expenses are reduced by credits granted by the
Custodian from any temporarily uninvested cash. Similarly, Transfer Agent
Fees are reduced by credits earned by each portfolio from security
brokerage transactions under certain broker/service arrangements with third
parties. Such credits are included in Fees and Expenses Paid Indirectly in
the Statement of Operations.
For the year ended July 31, 1997, Fees and Expenses Paid Indirectly
consisted of the following:
Custodian Fee Transfer Distribution
Portfolio and Expenses Agent Fees Expenses
- --------------------------------------------------------------------------------
Balanced Fund $53,657 $24 10
Multi-Asset Allocation Fund 5,257 0 0
NOTE 2 - INVESTMENT ADVISORY AND OTHER AGREEMENTS. INVESCO Funds Group, Inc.
("IFG") serves as the Fund's investment adviser. As compensation for its
services to the Fund, IFG receives an investment advisory fee which is accrued
daily at the applicable rate and paid monthly. For Balanced Fund, the fee is
based on the annual rate of 0.60% on the first $350 million of average net
assets; reduced to 0.55% on the next $350 million of average net assets; and
0.50% on average net assets in excess of $700 million. For Multi-Asset
Allocation Fund, the fee is based on the annual rate of 0.75% on the first $500
million of average net assets; reduced to 0.65% on the next $500 million of
average net assets; and 0.50% on average net assets in excess of $1 billion.
In accordance with a Sub-Advisory Agreement between IFG and INVESCO Trust
Company ("ITC"), a wholly owned subsidiary of IFG, investment decisions of
Balanced Fund are made by ITC. In a separate Sub-Advisory Agreement between IFG
and INVESCO Management & Research, Inc. ("IMR"), an affiliate of IFG, provides
<PAGE>
that investment decisions of Multi-Asset Allocation Fund are made by IMR. Fees
for such sub-advisory services are paid by IFG.
In accordance with an Administrative Agreement, each Fund pays IFG an annual
fee of $10,000, plus an additional amount computed at an annual rate of 0.015%
of average net assets to provide administrative, accounting and clerical
services. The fee is accrued daily and paid monthly.
IFG receives a transfer agent fee at an annual rate of $20.00 per
shareholder account, or, where applicable, per participant in an omnibus
account, per year.
IFG may pay such fee for participants in omnibus accounts to affiliates or
third parties. The fee is paid monthly at one-twelfth of the annual fee and is
based upon the actual number of accounts in existence during each month.
A plan of distribution pursuant to Rule 12b-1 of the Act provided for
reimbursement of marketing and advertising expenditures to IFG (the
"Distributor") to a maximum of 0.25% of average annual net assets. Effective
January 1, 1997, the Rule 12b-1 distribution plan was modified by action of the
Board of Directors so that the Fund compensates IFG for permisible activities
and service in connection with the distribution of the Fund's shares. For the
year ended July 31, 1997, Balanced and Multi-Asset Allocation Funds paid the
Distributor $323,776 and $31,979, respectively, for reimbursement of expenses
incurred. Accordingly, the above amounts reflect reimbursements under the plan
for the five months ended December 31, 1996 and compensation under the plan for
the seven months ended July 31, 1997. Effective September 29, 1997, INVESCO
Distributors, Inc., a wholly owned subsidiary of IFG, will replace IFG as
Distributor.
IFG and ITC have voluntarily agreed, in some instances, to absorb certain
fees and expenses incurred by Balanced Fund and IFG and IMR have voluntarily
agreed, in some instances, to absorb certain fees and expenses incurred by
Multi-Asset Allocation Fund.
NOTE 3 - PURCHASES AND SALES OF INVESTMENT SECURITIES. For the year ended July
31, 1997, the aggregate cost of purchases and proceeds from sales of investment
securities (excluding all U.S. Government securities and short-term securities)
were as follows:
Fund Purchases Sales
- --------------------------------------------------------------------------------
Balanced Fund $194,737,437 $165,109,982
Multi-Asset Allocation Fund 11,302,407 8,706,624
For the year ended July 31, 1997, the aggregate cost of purchases and proceeds
from sales of U.S. Government securities were as follows:
Fund Purchases Sales
- --------------------------------------------------------------------------------
Balanced Fund $ 10,653,750 $21,557,667
Multi-Asset Allocation Fund 3,508,127 3,322,324
<PAGE>
NOTE 4 - APPRECIATION AND DEPRECIATION. At July 31, 1997, the gross appreciation
of securities in which there was an excess of value over tax cost, the gross
depreciation of securities in which there was an excess of tax cost over value
and the resulting net appreciation by Fund were as follows:
Gross Gross Net
Fund Appreciation Depreciation Appreciation
- --------------------------------------------------------------------------------
Balanced Fund $20,770,007 $380,342 $20,389,665
Multi-Asset Allocation Fund 2,558,393 94,271 2,464,122
NOTE 5 - TRANSACTIONS WITH AFFILIATES. Certain of the Fund's officers and
directors are also officers and directors of IFG, ITC or IMR.
The Fund has adopted an unfunded deferred compensation plan covering all
independent directors of the Fund who will have served as an independent
director for at least five years at the time of retirement. Benefits under this
plan are based on an annual rate equal to 40% of the retainer fee at the time of
retirement.
Pension expenses for the year ended July 31, 1997, included in Directors'
Fees and Expenses in the Statement of Operations, and unfunded accrued pension
costs and pension liability included in Prepaid Expenses and Accrued Expenses,
respectively, in the Statement of Assets and Liabilities were as follows:
Unfunded
Pension Accrued Pension
Fund Expenses Pension Costs Liability
- ------------------------------------------------------------------------------
Balanced Fund $1,390 $1,797 $3,940
Multi-Asset Allocation Fund 361 91 520
NOTE 6 - LINE OF CREDIT. The Fund has available a Redemption Line of Credit
Facility ("LOC"), from a consortium of national banks, to be used for temporary
or emergency purposes to fund redemptions of investor shares. The LOC permits
borrowings to a maximum of 10% of the Net Assets at Value of each respective
Fund. Each Fund agrees to pay annual fees and interest on the unpaid principal
balance based on prevailing market rates as defined in the agreement. At July
31, 1997, there were no such borrowings.
<PAGE>
INVESCO Multiple Asset Funds, Inc.
Financial Highlights
(For a Fund Share Outstanding Throughout Each Period)
<TABLE>
<CAPTION>
Period
Ended
Year Ended July 31 July 31
-------------------------------------------- --------
1997 1996 1995 1994^
<S> <C> <C> <C> <C>
Balanced Fund
PER SHARE DATA
Net Asset Value - Beginning of Period $13.36 $12.08 $10.30 $10.00
-------------------------------------------- --------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.34 0.37 0.29 0.12
Net Gains on Securities (Both Realized and Unrealized) 3.37 2.12 2.03 0.30
-------------------------------------------- --------
Total from Investment Operations 3.71 2.49 2.32 0.42
-------------------------------------------- --------
LESS DISTRIBUTIONS
Dividends from Net Investment Income 0.34 0.37 0.29 0.12
Distributions from Capital Gains 0.87 0.84 0.25 0.00
-------------------------------------------- --------
Total Distributions 1.21 1.21 0.54 0.12
-------------------------------------------- --------
Net Asset Value - End of Period 15.86 13.36 12.08 10.30
============================================ ========
TOTAL RETURN 29.27% 20.93% 23.18% 4.16%*
<PAGE>
RATIOS
Net Assets - End of Period ($000 Omitted) $161,921 $115,066 $37,224 $4,252
Ratio of Expenses to Average Net Assets# 1.29%@ 1.29%@ 1.25% 1.25%~
Ratio of Net Investment Income to
Average Net Assets# 2.46% 3.03% 3.12% 2.87%~
Portfolio Turnover Rate 155% 259% 255% 61%*
Average Commission Rate Paid^^ $ 0.1304 - - -
</TABLE>
^ From December 1, 1993, commencement of investment operations, to July 31,
1994.
* Based on operations for the period shown and, accordingly, are not
representative of a full year.
# Various expenses of the Fund were voluntarily absorbed by IFG and ITC for the
years ended July 31, 1997, 1996 and 1995 and for the period ended July 31, 1994.
If such expenses had not been voluntarily absorbed, ratio of expenses to average
net assets would have been 1.34%, 1.29%, 1.59% and 4.37% (annualized),
respectively, and ratio of net investment income to average net assets would
have been 2.41%, 3.03%, 2.77% and (0.25%) (annualized), respectively.
@ Ratio is based on Total Expenses of the Fund, less Expenses Absorbed by
Investment Adviser, which is before any expense offset arrangements.
~ Annualized
^^ The average commission rate paid is the total brokerage commissions paid on
applicable purchases and sales of securities for the period divided by the total
number of related shares purchased or sold which is required to be disclosed for
fiscal years beginning September 1, 1995 and thereafter.
<PAGE>
INVESCO Multiple Asset Funds, Inc.
Financial Highlights (Continued)
(For a Fund Share Outstanding Throughout Each Period)
<TABLE>
<CAPTION>
Period
Ended
Year Ended July 31 July 31
-------------------------------------------- --------
1997 1996 1995 1994^
<S> <C> <C> <C> <C>
Multi-Asset Allocation Fund
PER SHARE DATA
Net Asset Value - Beginning of Period $11.55 $10.84 $9.68 $10.00
-------------------------------------------- --------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.25 0.28 0.28 0.06
Net Gains or (Losses) on Securities
(Both Realized and Unrealized) 3.18 0.89 1.16 (0.32)
-------------------------------------------- --------
Total from Investment Operations 3.43 1.17 1.44 (0.26)
-------------------------------------------- --------
LESS DISTRIBUTIONS
Dividends from Net Investment Income 0.25 0.28 0.28 0.06
Distributions from Capital Gains 0.98 0.18 0.00 0.00
-------------------------------------------- --------
Total Distributions 1.23 0.46 0.28 0.06
-------------------------------------------- --------
Net Asset Value - End of Period $13.75 $11.55 $10.84 $9.68
============================================ ========
TOTAL RETURN 31.41% 10.96% 15.11% (2.60%)*
<PAGE>
RATIOS
Net Assets - End of Period ($000 Omitted) $17,117 $9,574 $7,778 $4,958
Ratio of Expenses to Average Net Assets# 1.55%@ 1.62%@ 1.50% 1.50%~
Ratio of Net Investment Income to
Average Net Assets# 2.19% 2.43% 2.99% 2.23%~
Portfolio Turnover Rate 98% 92% 79% 42%*
Average Commission Rate Paid^^ $0.0555 - - -
</TABLE>
^ From December 1, 1993, commencement of investment operations, to July 31,
1994.
* Based on operations for the period shown and, accordingly, are not
representative of a full year.
# Various expenses of the Fund were voluntarily absorbed by IFG and IMR for the
years ended July 31, 1997, 1996 and 1995 and for the period ended July 31, 1994.
If such expenses had not been voluntarily absorbed, ratio of expenses to average
net assets would have been 1.97%, 2.24%, 2.47% and 5.14% (annualized),
respectively, and ratio of net investment income to average net assets would
have been 1.77%, 1.81%, 2.02% and (1.41%) (annualized), respectively.
@ Ratio is based on Total Expenses of the Fund, less Expenses Absorbed by
Investment Adviser, which is before any expense offset arrangements.
~ Annualized
^^ The average commission rate paid is the total brokerage commissions paid on
applicable purchases and sales of securities for the period divided by the total
number of related shares purchased or sold which is required to be disclosed for
fiscal years beginning September 1, 1995 and thereafter.
<PAGE>
Report of Independent Accountants
To the Shareholders and Board of Directors of
INVESCO Multiple Asset Funds, Inc.
In our opinion, the accompanying statement of assets and liabilities, including
the statement of investment securities, and the related statements of operations
and of changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of INVESCO Balanced Fund and INVESCO
Multi-Asset Allocation Fund (constituting INVESCO Multiple Asset Funds, Inc.,
hereafter referred to as the "Fund") at July 31, 1997, the results of each of
their operations for the year then ended, the changes in each of their net
assets for each of the two years in the period then ended and the financial
highlights for each of the periods indicated, in conformity with generally
accepted accounting principles. These financial statements and financial
highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at July 31, 1997 by
correspondence with the custodian and brokers and the application of alternative
auditing procedures for unsettled security transactions, provide a reasonable
basis for the opinion expressed above.
Price Waterhouse LLP
Denver, Colorado
September 2, 1997
<PAGE>
INVESCO FUNDS
We're easy to stay in touch with:
Investor Services Representatives,
1-800-525-8085
PAL(R), your Personal Account Line,
1-800-424-8085
On the World Wide Web:
http://www.invesco.com
Denver Investor Centers:
Cherry Creek, 155-B Fillmore Street;
Denver Tech Center, 7800 E. Union Avenue,
Lobby Level
INVESCO Funds Group, Inc.,(SM) Distributor
(As of 9/29/97, INVESCO Distributors, Inc., Distributor)
Post Office Box 173706
Denver, Colorado 80217-3706
This information must be preceded or
accompanied by a current prospectus.
