KNOWLEDGE DISCIPLINE SERVICE CHOICE
YOU SHOULD KNOW WHAT INVESCO KNOWS (TM)
COMBINATION STOCK
& BOND FUNDS, INC.
No-load mutual funds seeking capital appreciation and current income.
BALANCED FUND
MULTI-ASSET ALLOCATION FUND
SEMIANNUAL
INVESCO
SEMIANNUAL REPORT/January 31, 1999
<PAGE>
SHAREHOLDERS IN BALANCED FUND AND MULTIPLE-ASSET ALLOCATION FUND WILL BE
RECEIVING IMPORTANT PROXY INFORMATION SHORTLY. PLEASE BE SURE TO READ THE PROXY
CAREFULLY AND VOTE PROMPTLY ON ALL ISSUES.
"MAINTAINING DIVERSITY WHILE PROMOTING SELECTIVITY WILL REMAIN OUR GOAL."
- -- PAGE 4
"IT TAKES ANOTHER KIND OF RESTRAINT NOT TO BECOME AN INDEX FUND IN
DISGUISE." PETE LOVELL ON THE BALANCED FUND -- PAGE 5
The line graphs illustrate the value of a $10,000 investment, plus reinvested
dividends and capital gain distributions, since inception through 1/31/99. The
chart and other total return figures cited reflect the fund's operating
expenses, but the index does not have expenses, which would, of course, have
lowered its performance. (Of course, past performance is not a guarantee of
future results.)(1)(2)
BALANCED FUND
AVERAGE ANNUAL TOTAL RETURN,
PERIOD ENDED 1/31/99(2)
1 year 18.57%
-----------------------------------
5 years 19.12%
-----------------------------------
Since inception (12/93) 19.14%
-----------------------------------
Graph: Balanced Fund Total Return from Inception(12/93) through 1/31/99
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 (12/93) through 1/31/99.
MULTI-ASSET ALLOCATION FUND
AVERAGE ANNUAL TOTAL RETURN,
PERIOD ENDED 1/31/99(2)
1 year 8.01%
-----------------------------------
5 years 12.69%
-----------------------------------
Since inception (12/93) 12.42%
-----------------------------------
Graph: Multi-Asset Allocation Fund Total Return from Inception(12/93)
through 1/31/99
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 (12/93) through 1/31/99.
<PAGE>
FUND PERFORMANCE
Dear Shareholder:
Over the past six months, the market richly rewarded favored sectors in the
economy, while ignoring or punishing others. The unusual length of the current
American economic expansion, financial troubles overseas, and other factors have
made investors somewhat wary--and much more selective in their choices of
companies and industries. This past year, they favored large, rapidly growing
companies in dynamic industries such as health care and technology.
As diversified portfolios, both of INVESCO's combination stock and bond
funds are designed in part to weather rapid swings in investor sentiment. Yet
the two funds we offer, Balanced Fund and Multi-Asset Allocation Fund, performed
quite differently over this period. Investors in Balanced Fund enjoyed a healthy
total return of 9.20%. Because the fund holds both stocks and bonds, this
performance predictably did not match that of the large stocks on the S&P 500
Index, which gained 15.01%, but it easily beat that of the Lehman
Government/Corporate Bond Index, which rose 5.75%. Multi-Asset Allocation Fund,
on the other hand, rose 3.58% over the same period. (Of course, past performance
is not a guarantee of future results.)(2),(3)
THE IMPACT OF THE FLIGHT TO QUALITY
The divergence in the funds' results can largely be explained by their
different investment strategies. Multi-Asset Allocation Fund employs a broader
approach to diversification. The fund invests in both small and large companies,
foreign and domestic firms, real estate investment trusts (REITs), fixed-income
securities, and cash. We adjust the mix of these investments in response to
market conditions. Unfortunately, many of the components of the portfolio,
including real estate trusts, many small companies, and foreign firms, performed
poorly over the period.
While remaining well-diversified, Balanced Fund employs a more select
approach. Investing in corporate-grade bonds and large-capitalization companies,
most of which were enjoying solid earnings growth, the fund was well-positioned
to take advantage of the "flight to quality" following the market turmoil of
last summer. As the broader markets fell, our holdings in high-grade corporate
bonds cushioned the portfolio. When the markets began to rebound late in the
fall, the fund was able to take advantage of attractive prices on certain
stocks. Generally, its investments in large, leading firms allowed the fund to
enjoy strong gains at the end of the year. (Of course, past performance is not a
guarantee of future results.)
STRIKING A BALANCE
As the year advances, we will continue to balance two key criteria in
formulating our combination stock and bond management strategies. On the one
hand, we continue to believe that a wide diversification of assets provides
protection in volatile markets. On the other, we realize the opportunities that
lie in those sectors and companies likely to enjoy the strongest growth and
profits in the future. Maintaining diversity while promoting selectivity will
remain our goal.
I look forward to reporting to you again in six months.
/s/ Charles P. Mayer
- ---------------------------------
Charles P. Mayer
Senior Vice President
Director of Investments and Co-manager of Balanced Fund
<PAGE>
CHARLES P. MAYER Balanced Fund-Equity
Senior Vice President and Director, INVESCO Funds Group, BA, St. Peter's
College; MBA, St. John's University. Began investment career in 1969. Joined
INVESCO in 1993.
DONOVAN J. (JERRY) PAUL, CFA, CPA Balanced Fund -
Fixed-Income
Senior Vice President, INVESCO Funds Group. BBA, University of Iowa, MBA,
University of Northern Iowa. Began investment career in 1976. Joined INVESCO in
1994.
PETER LOVELL Balanced Fund-Equity
Vice President, INVESCO Funds Group. BA, Colorado State University. MBA in
Finance and Accounting, Regis University. Began investment career in 1992.
Joined INVESCO in 1994.
ROBERT SLOTPOLE Multi-Asset Allocation Fund
Senior Vice President and Director of Equities, INVESCO Management and Research,
Inc. BS, State University of New York at Buffalo, MBA, Stanford University.
Began investment career in 1975. Joined INVESCO in 1993.
- --------------------------------------------------------------------------------
INVESCO SEMIANNUAL REPORT January 31, 1999
MOVING FORWARD
- --------------------------------------------------------------------------------
MARKET HEADLINES:
AUGUST 1998-JANUARY 1999
The latter half of 1998 was a period few market veterans will forget. Just
when the danger seemed to have passed, the tidal wave of the Asian economic
crisis finally pounded foreign shores in late summer, swamping financial
markets. The gloom deepened as the headlines warned of one global economic
calamity after another: Russian loan default, the ominous near-collapse of a
prominent hedge fund, tumbling currencies in Latin America, and a perilous
banking situation in Japan.
Following the gut-wrenching declines, however, markets in the United States
and Europe began an equally dizzying rebound in October. A series of three
interest rate cuts by the Federal Reserve Board, along with those of other
central banks, pumped liquidity and confidence into the international financial
system. Despite profit warnings from large multinational corporations, investors
began to focus on the many sectors of strength within the American and European
economies: robust consumer spending, low interest rates and unemployment, and
subdued inflation.
Other overseas markets struggled to recover. Hoping the worst was behind
them, investors in some Asian nations, most notably South Korea, bid up their
markets; and indeed, the first small signs of recovery began to appear across
the region's economies. Other Asian markets remained mired in the profound
structural and financial problems confronting the region, however. Although
seemingly facing less intractable problems than Asia, Latin America was unable
to maintain a short rally, and by winter, its markets had returned to the lows
of the previous summer.
In Europe and the United States, the optimists seemed to be vindicated by
January as the advanced Western economies continued strong, and stocks headed
higher. Yet the mixed economic picture resulted in mixed market performance for
the six-month period, as large-cap stocks in favored industries continued to
dramatically outperform the broader markets.
<PAGE>
A REVIEW AND STRATEGY
SESSION WITH PETE LOVELL,
CO-MANAGER OF BALANCED FUND
What does a "balanced fund" mean to you?
Well, it means three things:
o First, it is allocated between equities and bonds. In our case, that
means that a healthy portion, between 25 and 50 percent of the
portfolio, is always in fixed-income securities.
o Second, it means that we have a meaningful exposure to all the major
sectors of the economy--this is not a closet technology or health-care
fund, for example, although those are two of my favorite sectors.
o Third, it means that we never let one stock become more than three
percent of the portfolio, no matter how well it has done for us.
It sounds as though restraint is a keynote to your approach.
In a way, but it takes another kind of restraint not to become an index
fund in disguise. I usually hold only 50 to 60 stocks, so they are all names I
really believe in. And I do choose to concentrate in those sectors that interest
me--like most of my fellow diversified fund managers here, I tend to pick the
brains of our sector teams.
Your timing was pretty fortuitous last summer; how did that reflect your
strategy?
I should first say that we don't pretend to have any special insight into
the direction of the markets; if I thought I (or anyone else, for that matter)
did, I wouldn't be running this kind of fund. But the large component of
relatively safe fixed-income securities we hold does provide us some leeway to
step back a bit when stocks appear overvalued. There were plenty of signs of
that last summer, and they were visible to everyone -- but we were able to take
action.
You are particularly interested in the Y2K phenomenon. Why?
Well, I think it will have an impact, but not of the type or scale that
many are envisioning. One factor that concerns me is that some small vendors
might not have invested the resources to make their systems compliant, and this
will make it difficult to communicate with their customers. As a result, some
large companies may experience some hiccups on their revenue line, but some of
their smaller suppliers may suffer more serious consequences. Overall, though, I
am impressed with the amount of resources that have been invested in stopping
the problem before it starts. This is another factor that makes me more
comfortable investing in large companies as we go forward.
(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 figures include reinvested dividends and capital gain
distributions. 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.
<PAGE>
YEAR 2000 COMPUTER ISSUE.
Many computer systems in use today may not be able to recognize any date
after December 31, 1999. If these systems are not fixed by that date, it is
possible that they could generate erroneous information or fail altogether.
INVESCO has committed substantial resources in an effort to make sure that its
own major computer systems will continue to function on and after January 1,
2000. Of course, INVESCO cannot fix systems that are beyond its control. If
INVESCO's own systems, or the systems of third parties upon which it relies, do
not perform properly after December 31, 1999, the Funds could be adversely
affected.
In addition, the markets for, or values of, securities in which the Funds
invest may possibly be hurt by computer failures affecting portfolio investments
or trading of securities beginning January 1, 2000. For example, improperly
functioning computer systems could result in securities trade settlement
problems and liquidity issues, production issues for individual companies and
overall economic uncertainties. Individual issuers may incur increased costs in
making their own systems Year 2000 compliant. The combination of market
uncertainty and increased costs means that there is a possibility that Year 2000
computer issues may adversely affect the Funds' investments. At this time, it is
generally believed that foreign issuers, particularly those in emerging and
other markets, may be more vulnerable to the Year 2000 problems than will be
issuers in the U.S.
TEN LARGEST COMMON STOCK HOLDINGS
INVESCO Combination Stock and Bond Funds, Inc.
January 31, 1999
UNAUDITED
DESCRIPTION VALUE
-----------------------------------------------------------------------------
BALANCED FUND
Dayton Hudson $ 5,794,875
America Online 4,866,544
Microsoft Corp 4,830,000
General Electric 4,729,862
Motorola Inc 4,407,250
Lilly (Eli) & Co 4,290,888
Merck & Co 4,109,000
International Business Machines 3,976,525
Tandy Corp 3,969,000
Compaq Computer 3,762,375
MULTI-ASSET ALLOCATION FUND
Microsoft Corp $ 367,500
General Electric 314,625
International Business Machines 274,875
Merck & Co 234,800
Dell Computer 220,000
Intel Corp 211,406
AT&T Corp 199,650
SBC Communications 189,000
Ford Motor 178,169
Philip Morris 164,500
Composition of holdings is subject to change.
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF INVESTMENT SECURITIES
INVESCO Combination Stock and Bond Funds, Inc.
January 31,1999
UNAUDITED
================================================================================================
SHARES OR
PRINCIPAL
AMOUNT
% DESCRIPTION VALUE
================================================================================================
<S> <C> <C>
BALANCED FUND
66.38 COMMON STOCKS
2.25 AEROSPACE & DEFENSE
General Dynamics 54,300 $ 3,156,187
Sundstrand Corp 63,800 2,839,100
================================================================================================
5,995,287
1.17 AUTOMOBILES
General Motors 34,800 3,123,300
================================================================================================
6.46 BANKS
Bank of New York 78,100 2,772,550
Chase Manhattan 42,000 3,231,375
Fleet Financial Group 71,000 3,146,187
Mellon Bank 44,600 2,988,200
Morgan (J P) & Co 25,000 2,637,500
Summit Bancorp 60,000 2,448,750
================================================================================================
17,224,562
1.33 BEVERAGES
Anheuser-Busch Cos 50,300 3,555,581
================================================================================================
1.21 BROADCASTING
Clear Channel Communications(a) 52,000 3,217,500
================================================================================================
1.38 CABLE
MediaOne Group(a) 65,500 3,672,094
================================================================================================
1.65 COMMUNICATIONS -- EQUIPMENT & MANUFACTURING
Motorola Inc 61,000 4,407,250
================================================================================================
4.72 COMPUTER RELATED
Compaq Computer 79,000 3,762,375
International Business Machines 21,700 3,976,525
Microsoft Corp(a) 27,600 4,830,000
================================================================================================
12,568,900
0.91 ELECTRIC UTILITIES
Unicom Corp 68,300 2,433,188
================================================================================================
1.77 ELECTRICAL EQUIPMENT
General Electric 45,100 4,729,862
================================================================================================
3.93 ELECTRONICS -- SEMICONDUCTOR
Applied Materials(a) 48,500 3,064,594
Intel Corp 25,900 $ 3,650,281
Texas Instruments 38,000 3,757,250
================================================================================================
10,472,125
<PAGE>
================================================================================================
SHARES OR
PRINCIPAL
AMOUNT
% DESCRIPTION VALUE
================================================================================================
1.27 ENTERTAINMENT
Time Warner 54,000 3,375,000
================================================================================================
1.47 FOODS
General Mills 30,900 2,593,669
Tasty Baking 100,000 1,312,500
================================================================================================
3,906,169
7.28 HEALTH CARE DRUGS -- PHARMACEUTICALS
American Home Products 23,500 1,379,156
Bristol-Myers Squibb 24,100 3,089,319
Lilly (Eli) & Co 45,800 4,290,888
Merck & Co 28,000 4,109,000
Pharmacia & Upjohn 25,000 1,437,500
SmithKline Beecham PLC Sponsored ADR
Representing 5 Ord Shrs 37,000 2,509,063
Warner-Lambert Co 35,900 2,591,531
================================================================================================
19,406,457
2.21 HEALTH CARE RELATED
Guidant Corp 52,000 3,064,750
Medtronic Inc 35,414 2,822,072
================================================================================================
5,886,822
1.10 HOUSEHOLD PRODUCTS
Colgate-Palmolive Co 36,500 2,935,969
================================================================================================
3.04 INSURANCE
Allmerica Financial 47,900 2,583,606
CIGNA Corp 38,900 3,204,387
Mercury General 61,000 2,318,000
================================================================================================
8,105,993
1.11 LODGING -- HOTELS
Marriott International Class A 84,000 2,950,500
================================================================================================
0.85 NATURAL GAS
Coastal Corp 75,800 2,259,787
================================================================================================
3.90 OIL & GAS RELATED
BP Amoco PLC Sponsored ADR Representing 6 Ord Shrs 37,300 3,025,963
Exxon Corp 51,000 3,592,312
Halliburton Co 63,100 1,873,281
Unocal Corp 67,000 1,909,500
================================================================================================
10,401,056
0.97 PAPER & FOREST PRODUCTS
Weyerhaeuser Co 47,800 2,587,175
================================================================================================
<PAGE>
================================================================================================
SHARES OR
PRINCIPAL
AMOUNT
% DESCRIPTION VALUE
================================================================================================
1.17 RAILROADS
Kansas City Southern Industries 65,900 $ 3,130,250
================================================================================================
7.11 RETAIL
AnnTaylor Stores(a) 75,000 2,906,250
CVS Corp 50,000 2,737,500
Dayton Hudson 90,900 5,794,875
Tandy Corp 73,500 3,969,000
Wal-Mart Stores 41,300 3,551,800
================================================================================================
18,959,425
3.08 SERVICES
America Online(a) 27,700 4,866,544
Omnicom Group 52,400 3,353,600
================================================================================================
8,220,144
3.86 TELEPHONE
GTE Corp 50,000 3,375,000
SBC Communications 64,000 3,456,000
US WEST 56,000 3,454,500
================================================================================================
10,285,500
1.18 TOBACCO
Philip Morris 66,700 3,134,900
================================================================================================
TOTAL COMMON STOCKS (Cost $132,204,023) 176,944,796
================================================================================================
28.92 FIXED INCOME SECURITIES
4.49 US Government Obligations
US Treasury Notes, 5.625%, 5/15/2008
(Cost $11,870,382) $ 11,250,000 11,981,250
================================================================================================
5.79 US Government Agency Obligations
Freddie Mac, Gold, Participation Certificates
6.500%, 6/1/2011 $ 7,536,778 7,671,385
6.500%, 9/1/2011 $ 7,140,933 7,268,470
Student Loan Marketing Association, Notes,
Series CQ 4.672%, 3/7/2001 $ 500,000 495,413
================================================================================================
TOTAL US GOVERNMENT AGENCY OBLIGATIONS
(Cost $14,791,215) 15,435,268
================================================================================================
18.64 Corporate Bonds
0.74 AIRLINES
Delta Air Lines, Deb, 10.375%, 12/15/2022 $ 1,500,000 1,961,581
================================================================================================
0.61 BUILDING MATERIALS
USG Corp, Sr Notes, 8.500%, 8/1/2005 $ 1,500,000 1,635,000
================================================================================================
1.02 CABLE
Tele-Communications Inc, Sr Deb,
9.800%, 2/1/2012 $ 2,000,000 2,713,566
================================================================================================
0.20 COMPUTER RELATED
International Business Machines, Deb,
6.220%, 8/1/2027 $ 500,000 522,792
================================================================================================
<PAGE>
================================================================================================
SHARES OR
PRINCIPAL
AMOUNT
% DESCRIPTION VALUE
================================================================================================
8.56 ELECTRIC UTILITIES
Boston Edison, Deb, 7.800%, 3/15/2023 $ 1,925,000 $ 2,055,477
Carolina Power & Light, 1st Mortgage,
8.625%, 9/15/2021 $ 1,000,000 1,257,802
Commonwealth Edison, 1st Mortgage,
Series 76, 8.250% 10/1/2006 $ 1,000,000 1,150,669
Consumers Energy, 1st Refunding Mortgage,
7.375% 9/15/2023 $ 2,000,000 2,119,028
DQU-II Funding, Collateral Lease,
8.700%, 6/1/2016 $ 1,989,000 2,246,595
Detroit Edison, Secured Medium-Term Notes,
Series C 8.300%, 1/13/2023 $ 1,000,000 1,104,872
Gulf States Utilities, 1st Mortgage,
8.700%, 4/1/2024 $ 1,000,000 1,108,759
Jersey Central Power & Light, 1st Mortgage,
7.500% 5/1/2023 $ 1,000,000 1,048,469
Metropolitan Edison, Secured Medium-Term
Notes, Series B, 8.150%, 1/30/2023 $ 2,000,000 2,173,406
New York State Electric & Gas, 1st Mortgage,
8.300% 12/15/2022 $ 1,500,000 1,632,744
Niagara Mohawk Power, 1st Mortgage,
9.750%, 11/1/2005 $ 1,000,000 1,205,089
Pacific Gas & Electric, 1st & Refunding Mortgage
Series 91A, 8.800%, 5/1/2024 $ 1,000,000 1,307,321
Series 92B, 8.375%, 5/1/2025 $ 1,050,000 1,165,880
Series 93D, 7.250%, 8/1/2026 $ 1,500,000 1,597,885
Pennsylvania Power & Light, 1st Mortgage,
8.500%, 5/1/2022 $ 1,500,000 1,652,616
================================================================================================
22,826,612
1.19 ENTERTAINMENT
Paramount Communications, Sr Deb,
8.250%, 8/1/2022 $ 2,900,000 3,185,777
================================================================================================
0.81 FINANCIAL
Associates Corp of North America,
Sr Unsecured Medium-Term Notes,
Series 8, 7.375%, 6/11/2007(b) $ 2,000,000 2,155,018
================================================================================================
1.07 INSURANCE
Equitable Cos, Sr Notes, 9.000%, 12/15/2004 $ 2,500,000 2,846,955
================================================================================================
0.37 LODGING -- HOTELS
Hilton Hotels, Sr Notes, 7.200%, 12/15/2009 $ 1,000,000 982,567
================================================================================================
1.93 OIL & GAS RELATED
Atlantic Richfield, Deb
10.875%, 7/15/2005 $ 1,500,000 1,917,861
9.875%, 3/1/2016 $ 1,500,000 2,061,649
Sun Inc, Deb, 9.375%, 6/1/2016 $ 1,000,000 1,154,000
================================================================================================
5,133,510
1.15 TELECOMMUNICATIONS -- LONG DISTANCE
Sprint Capital, Gtd Sr Notes,
6.125%, 11/15/2008 $ 3,000,000 3,073,323
================================================================================================
0.99 TELEPHONE
Centel Capital, Deb, 9.000%, 10/15/2019 $ 1,000,000 1,244,634
GTE Corp, Deb, 7.900%, 2/1/2027 $ 1,250,000 $ 1,393,430
================================================================================================
<PAGE>
================================================================================================
SHARES OR
PRINCIPAL
AMOUNT
% DESCRIPTION VALUE
================================================================================================
2,638,064
TOTAL CORPORATE BONDS ($48,843,317) 49,674,765
================================================================================================
TOTAL FIXED INCOME SECURITIES (Cost $75,504,914) 77,091,283
================================================================================================
4.70 SHORT-TERM INVESTMENTS -- REPURCHASE AGREEMENTS
Repurchase Agreement with State Street dated 1/29/1999
due 2/1/1999 at 4.670%, repurchased at $12,541,879
(Collateralized by US Treasury Notes, due 10/31/2000,
at 5.750%, value $12,809,057)
(Cost $12,537,000) $ 12,537,000 12,537,000
================================================================================================
100.00 TOTAL INVESTMENT SECURITIES AT VALUE
(Cost $220,245,937)
(Cost for Income Tax Purposes $220,282,509) $ 266,573,079
================================================================================================
MULTI-ASSET ALLOCATION FUND
80.52 COMMON STOCKS
0.66 AEROSPACE & DEFENSE
Esterline Technologies(a) 900 $ 17,044
GenCorp Inc 500 11,688
Lockheed Martin 1,400 49,350
United Technologies 500 59,719
================================================================================================
137,801
0.03 AIR FREIGHT
Airborne Freight 200 7,000
================================================================================================
0.75 AIRLINES
AMR Corp 1,300 76,375
America West Holdings Class B(a) 1,100 23,650
Amtran Inc(a) 500 12,031
British Airways PLC Sponsored ADR
Representing 10 Ord Shrs 700 44,800
================================================================================================
156,856
0.36 AUTO PARTS
Arvin Industries 800 31,650
Borg-Warner Automotive 300 14,438
Detroit Diesel(a) 400 8,275
Standard Products 1,100 21,244
================================================================================================
75,607
1.34 AUTOMOBILES
Ford Motor 2,900 178,169
General Motors Class H(a) 500 24,625
Volvo AB Sponsored ADR Representing Class B Shrs 2,900 78,300
================================================================================================
281,094
<PAGE>
================================================================================================
SHARES OR
PRINCIPAL
AMOUNT
% DESCRIPTION VALUE
================================================================================================
5.99 BANKS
BancWest Corp 700 $ 31,412
Bank One 1,200 62,850
Chase Manhattan 1,556 119,715
Commerce Bancorp 656 29,613
Den Danske Bank ADR Representing Ord Shrs 500 63,975
Deutsche Bank AG Sponsored ADR Representing Ord Shrs 1,400 79,256
First Bancorp Puerto Rico 500 13,500
First Republic Bank(a) 600 14,625
First Union 300 15,788
Fleet Financial Group 1,200 53,175
HSBC Holdings PLC Sponsored ADR Representing 10 Ord Shrs 460 114,573
HUBCO Inc 412 13,339
Imperial Bancorp(a) 1,600 29,400
KeyCorp 1,200 38,250
Mellon Bank 2,000 134,000
National Australia Bank Ltd Sponsored ADR
Representing 5 Ord Shrs 800 67,250
PNC Bank 600 30,713
San Paolo-IMI SpA Sponsored ADR
Representing 2 Ord Shrs(a) 1,783 59,619
Silicon Valley Bancshares(a) 1,100 20,694
Societe Generale Sponsored ADR
Representing 1/5 Ord Shr 3,700 132,777
TR Financial 400 15,125
US Bancorp 1,200 40,425
US Trust 1,000 73,000
================================================================================================
1,253,074
0.77 BEVERAGES
Canandaigua Brands Class A(a) 600 35,175
Coca-Cola Co 600 39,262
Coca-Cola Enterprises 1,100 38,912
Kirin Brewery Ltd ADR Representing 10 Ord Shrs 400 47,925
================================================================================================
161,274
0.10 BIOTECHNOLOGY
MedImmune Inc(a) 400 19,800
================================================================================================
0.36 BROADCASTING
Carlton Communications PLC Sponsored ADR
Representing 5 Ord Shrs 1,500 74,250
================================================================================================
0.88 BUILDING MATERIALS
Centex Construction Products 900 33,581
Elcor Corp 500 17,313
Lowe's Cos 700 40,819
Owens Corning 1,200 42,900
Texas Industries 600 15,900
USG Corp 600 34,050
================================================================================================
184,563
<PAGE>
================================================================================================
SHARES OR
PRINCIPAL
AMOUNT
% DESCRIPTION VALUE
================================================================================================
0.24 CABLE
United Video Satellite Group Class At(a) 1,800 $ 50,400
================================================================================================
1.57 CHEMICALS
AKZO Nobel NV Sponsored ADR Representing Ord Shrs 1,800 71,775
BASF AG ADR Representing Ord Shrs 2,300 84,888
Bayer AG Sponsored ADR Representing Ord Shrs 1,000 38,214
Dow Chemical 900 79,256
NL Industries 1,800 22,275
Spartech Corp 1,300 31,037
================================================================================================
327,445
0.74 COMMUNICATIONS -- EQUIPMENT & MANUFACTURING
Lucent Technologies 900 101,306
Metromedia Fiber Network Class A Shrs(a) 800 36,650
Superior Telecom 400 17,700
================================================================================================
155,656
7.11 COMPUTER RELATED
Acclaim Entertainment(a) 1,600 14,800
Aspect Development(a) 400 11,550
Avid Technology(a) 400 11,650
BancTec Inc(a) 1,000 13,000
BroadVision Inc(a) 300 12,563
Cisco Systems(a) 1,100 122,719
Compuware Corp(a) 700 46,375
Dell Computer(a) 2,200 220,000
EMC Corp(a) 900 97,987
Electronics For Imaging(a) 400 14,400
Excite Inc(a) 200 23,700
GeoTel Communications(a) 600 23,438
Hewlett-Packard Co 600 47,025
IMRglobal Corp(a) 400 10,150
International Business Machines 1,500 274,875
Legato Systems(a) 300 18,113
Lycos Inc(a) 200 27,400
Macromedia Inc(a) 600 21,038
Micron Electronics(a) 400 6,150
MICROS Systems(a) 300 9,600
Microsoft Corp(a) 2,100 367,500
Network Appliance(a) 800 42,400
Progress Software(a) 400 13,450
Rational Software(a) 600 19,725
<PAGE>
================================================================================================
SHARES OR
PRINCIPAL
AMOUNT
% DESCRIPTION VALUE
================================================================================================
Xircom Inc(a) 400 $ 18,100
================================================================================================
1,487,708
0.11 CONSUMER -- JEWELRY, NOVELTIES & GIFTS
Zale Corp(a) 700 22,969
================================================================================================
0.52 CONTAINERS
AptarGroup Inc 700 19,119
Ball Corp 2,000 90,000
================================================================================================
109,119
0.03 DISTRIBUTION
CHS Electronics(a) 400 5,975
================================================================================================
2.29 ELECTRIC UTILITIES
CILCORP Inc 300 17,288
Cleco Corp 400 12,600
Commonwealth Energy Systems SBI 400 15,700
Endesa SA Sponsored ADR Representing Ord Shrs 3,600 101,250
GPU Inc 1,500 63,937
Hawaiian Electric Industries 300 11,231
MidAmerican Energy Holdings 2,400 64,350
Minnesota Power 200 8,088
PacifiCorp 1,100 22,619
PowerGen PLC Sponsored ADR Representing 4 Ord Shrs 1,500 84,375
SIGCORP Inc 450 14,681
Scottish Power PLC Sponsored ADR Representing 4 Ord Shrs 1,500 63,375
================================================================================================
479,494
2.20 ELECTRICAL EQUIPMENT
C&D Technologies 1,100 26,263
General Electric 3,000 314,625
Hitachi Ltd Sponsored ADR Representing 10 Shrs 900 64,462
Kyocera Corp Sponsored ADR Representing 2 Shrs 1,000 54,437
================================================================================================
459,787
0.24 ELECTRONICS
General Cable 1,400 26,425
Level One Communications(a) 600 23,700
================================================================================================
50,125
1.28 ELECTRONICS -- SEMICONDUCTOR
Applied Micro Circuits(a) 200 8,400
Dallas Semiconductor 300 11,006
Intel Corp 1,500 211,406
Jabil Circuit(a) 300 21,431
TranSwitch Corp(a) 400 15,700
================================================================================================
267,943
<PAGE>
================================================================================================
SHARES OR
PRINCIPAL
AMOUNT
% DESCRIPTION VALUE
================================================================================================
0.51 ENGINEERING & CONSTRUCTION
Fluor Corp 1,800 $ 68,625
Insituform Technologies Class A(a) 800 12,000
Jacobs Engineering Group(a) 600 25,163
================================================================================================
105,788
0.55 ENTERTAINMENT
Disney (Walt) Co 1,800 59,400
International Speedway Class A 300 12,750
Viacom Inc Class B(a) 500 42,500
================================================================================================
114,650
1.72 FINANCIAL
American Express 1,100 113,162
Associates First Capital Class A 1,690 68,551
Citigroup Inc 1,000 56,062
Doral Financial 1,000 20,031
Fannie Mae 900 65,587
Freddie Mac 600 37,200
================================================================================================
360,593
2.31 FOODS
Associated British Foods PLC ADR Representing Ord Shrs 6,000 51,994
Dole Food 2,300 69,719
Groupe Danone Sponsored ADR Representing 1/5 Shr 400 22,550
Heinz (H J) Co 400 22,525
Hershey Foods 400 22,500
IBP Inc 1,100 26,538
Nestle SA Sponsored ADR Representing 1/20 Registered Shr 700 63,991
Pilgrim's Pride Class B 700 16,363
Sara Lee 2,600 66,300
Unigate PLC ADR Representing Ord Shrs 4,500 29,459
Unilever NV New York Registered Shrs 1,200 91,800
================================================================================================
483,739
0.05 FOOTWEAR
Cole (Kenneth) Productions Class A(a) 500 11,313
================================================================================================
0.08 GAMING
Lakes Gaming(a) 425 4,117
Park Place Entertainment(a) 1,700 11,581
================================================================================================
15,698
0.33 GOLD & PRECIOUS METALS MINING
Rio Tinto Ltd Sponsored ADR Representing 4 Ord Shrs 1,000 49,491
Stillwater Mining(a) 750 19,688
================================================================================================
69,179
<PAGE>
================================================================================================
SHARES OR
PRINCIPAL
AMOUNT
% DESCRIPTION VALUE
================================================================================================
5.15 HEALTH CARE DRUGS -- PHARMACEUTICALS
Abbott Laboratories 1,300 $ 60,369
ALPHARMA Inc Class A 1,100 38,088
Astra AB Sponsored ADR Representing Series A Shrs 4,300 94,062
Bindley Western Industries 933 23,558
Biomatrix Inc(a) 500 30,188
Bristol-Myers Squibb 400 51,275
Glaxo Wellcome PLC Sponsored ADR Representing 2 Ord Shrs 1,000 67,875
Johnson & Johnson 1,100 93,500
Merck & Co 1,600 234,800
Novartis AG Sponsored ADR Representing 1/20 Shr 1,000 93,564
Novo-Nordisk A/S Sponsored ADR
Representing 1/2 Class B Shr 1,200 74,100
Pfizer Inc 200 25,725
Roberts Pharmaceutical(a) 1,000 19,500
Schering-Plough Corp 1,000 54,500
Warner-Lambert Co 1,600 115,500
================================================================================================
1,076,604
2.30 HEALTH CARE RELATED
Assisted Living Concepts(a) 1,100 13,681
Baxter International 800 56,750
Becton Dickinson & Co 1,500 53,625
Covance Inc(a) 700 22,050
Express Scripts Class A(a) 1,800 118,350
Hanger Orthopedic Group(a) 700 17,500
Hillenbrand Industries 1,000 47,000
Hooper Holmes 600 17,100
Maxxim Medical(a) 300 8,138
McKesson HBOC 500 37,562
MedQuist Inc(a) 700 24,238
MiniMed Inc(a) 300 32,587
OEC Medical Systems(a) 400 11,250
Priority Healthcare Class B(a) 418 16,249
VISX Inc(a) 100 6,100
================================================================================================
482,180
0.34 HOMEBUILDING
MDC Holdings 1,100 23,100
NVR Inc(a) 900 40,162
Nortek Inc(a) 300 8,325
================================================================================================
71,587
0.36 HOUSEHOLD FURNITURE & APPLIANCES
Ethan Allen Interiors 200 9,550
Furniture Brands International(a) 400 9,400
<PAGE>
================================================================================================
SHARES OR
PRINCIPAL
AMOUNT
% DESCRIPTION VALUE
================================================================================================
Maytag Corp 900 $ 56,869
================================================================================================
75,819
0.52 HOUSEHOLD PRODUCTS
Colgate-Palmolive Co 600 48,262
Procter & Gamble 400 36,350
Recoton Corp(a) 1,300 23,725
================================================================================================
108,337
1.77 INSURANCE
Allstate Corp 600 22,538
CIGNA Corp 1,500 123,562
Delphi Financial Group(a) 408 20,451
Fidelity National Financial 1,100 29,288
First American Financial 700 21,394
Guarantee Life 600 11,850
ING Groep NV Sponsored ADR Representing Ord Shrs 1,300 76,944
LandAmerica Financial Group 300 14,981
Presidential Life 700 13,038
Reliance Group Holdings 3,300 36,300
================================================================================================
370,346
0.64 INVESTMENT BANK/BROKER FIRM
Advest Group 700 17,719
Bear Stearns 1,200 56,550
Dain Rauscher 500 15,438
Morgan Stanley Dean Witter & Co 500 43,406
================================================================================================
133,113
0.19 IRON & STEEL
AK Steel Holding 900 18,731
USX-US Steel Group 800 20,850
================================================================================================
39,581
0.09 LEISURE TIME
Premier Parks 600 19,013
================================================================================================
0.81 LODGING -- HOTELS
Host Marriott 7,200 80,100
Marriott International Class A 1,300 45,662
MeriStar Hospitality 2,288 44,044
================================================================================================
169,806
0.11 MACHINERY
NACCO Industries Class A 100 8,469
Terex Corp(a) 600 14,775
================================================================================================
23,244
1.18 MANUFACTURING
RWE AG Sponsored ADR Representing Ord Shrs 1,300 61,858
<PAGE>
================================================================================================
SHARES OR
PRINCIPAL
AMOUNT
% DESCRIPTION VALUE
================================================================================================
Textron Inc 300 $ 22,331
Tyco International Ltd 2,100 161,831
================================================================================================
246,020
0.77 NATURAL GAS
Coastal Corp 2,900 86,456
MCN Energy Group 1,700 30,175
NUI Corp 800 18,200
New Jersey Resources 400 14,550
ONEOK Inc 400 11,700
================================================================================================
161,081
1.19 OFFICE EQUIPMENT & SUPPLIES
Canon Inc Sponsored ADR 3,100 65,875
Knoll Inc(a) 800 18,800
Pitney-Bowes Inc 500 34,406
Polycom Inc(a) 1,100 27,913
United Stationers(a) 1,200 28,200
Xerox Corp 600 74,400
================================================================================================
249,594
4.42 OIL & GAS RELATED
Basin Exploration(a) 500 5,875
Daniel Industries 1,400 15,050
ENI SpA Sponsored ADR Representing 10 Ord Shrs 800 48,000
Elf Aquitaine SA Sponsored ADR Representing 1/2 Ord Shrs 1,200 65,550
Energen Corp 800 13,650
Evergreen Resources(a) 500 7,750
Exxon Corp 1,700 119,744
HS Resources(a) 2,100 13,650
Hanover Compressor(a) 300 7,181
Marine Drilling(a) 1,300 9,588
Mobil Corp 1,300 113,994
Norsk Hydro A/S Sponsored ADR Representing Ord Shrs 1,200 43,200
Phillips Petroleum 500 19,313
Repsol SA Sponsored ADR Representing Ord Shrs 1,600 86,900
Royal Dutch Petroleum New York Shrs 900 36,056
SEACOR SMIT(a) 400 17,800
Shell Transport & Trading ADR Representing 10 Ord Shrs 1,800 54,900
Tesoro Petroleum(a) 1,600 17,400
Texaco Inc 2,000 94,750
USX-Marathon Group 1,500 34,125
Valero Energy New 2,500 47,031
Veritas DGC(a) 500 6,219
<PAGE>
================================================================================================
SHARES OR
PRINCIPAL
AMOUNT
% DESCRIPTION VALUE
================================================================================================
Yacimientos Petroliferos Fiscades SA Sponsored
ADR Representing Class D Shrs 1,500 47,812
================================================================================================
925,538
0.35 PHOTOGRAPHY & IMAGING
Fuji Photo Film Ltd ADR Representing Shrs 2,000 73,500
================================================================================================
0.97 PUBLISHING
American Greetings Class A 900 35,550
Consolidated Graphics(a) 100 7,250
Donnelley (R R) & Sons 900 33,919
Gannett Co 1,100 72,394
Hollinger International 1,300 17,063
The McClatchy Co Class A 600 17,550
Media General Class A 400 20,000
===============================================================================================
203,726
15.11 REAL ESTATE INVESTMENT TRUST
Arden Realty 4,400 99,000
Avalonbay Communities 3,000 96,187
Bedford Property Investors 3,400 52,912
CBL & Associates Properties 3,900 96,037
Camden Property Trust SBI 1,334 33,183
CarrAmerica Realty 4,500 99,000
Crescent Real Estate Equities 2,300 48,731
EastGroup Properties SBI 900 16,481
Equity Office Properties Trust SBI 5,131 130,841
Equity Residential Properties Trust SBI 3,500 142,406
Essex Property Trust 3,500 100,187
FelCor Lodging Trust 705 15,378
First Industrial Realty Trust 5,100 131,006
Gables Residential Trust SBI 2,300 52,756
General Growth Properties 1,000 34,625
Glenborough Realty Trust 2,500 43,906
Highwoods Properties 4,300 103,737
Hospitality Properties Trust 2,400 64,050
JDN Realty 1,800 38,250
JP Realty 600 10,500
Kilroy Realty 2,100 45,806
Kimco Realty 2,250 87,750
Koger Equity 4,500 68,625
Liberty Property Trust SBI 4,300 101,587
MGI Properties 1,900 52,250
Macerich Co 600 14,775
Mack-Cali Realty 3,400 101,575
Meditrust Corp Paired Certificates 7,200 112,950
New Plan Excel Realty Trust 4,080 85,680
Pan Pacific Retail Properties 1,200 23,400
<PAGE>
================================================================================================
SHARES OR
PRINCIPAL
AMOUNT
% DESCRIPTION VALUE
================================================================================================
Parkway Properties REIT 800 25,350
Patriot American Hospitality 10,409 55,948
Philips International Realty 2,000 30,000
Post Properties 900 33,525
Prentiss Properties Trust 6,700 141,956
Prime Group Realty Trust 700 10,281
Public Storage 4,400 111,925
Realty Income 1,300 31,038
SL Green Realty 2,700 54,675
Shurgard Storage Centers Class A 3,800 96,662
Simon Property Group 3,400 89,462
Smith (Charles E) Residential Realty 2,500 75,312
Starwood Hotels & Resorts Worldwide Trust 2,700 67,500
Sunstone Hotel Investors 3,800 31,587
TriNet Corp Realty Trust 1,900 50,587
Vornado Realty Trust SBI 3,500 123,594
Weeks Corp 1,000 27,500
================================================================================================
3,160,473
0.29 REAL ESTATE RELATED
Catellus Development(a) 2,500 38,437
Tower Realty Trust 1,100 21,381
================================================================================================
59,818
0.41 RESTAURANTS
Brinker International(a) 1,400 38,500
CEC Entertainment(a) 400 11,950
Cheesecake Factory(a) 400 9,100
Ruby Tuesday 1,300 25,919
================================================================================================
85,469
2.59 RETAIL
American Eagle Outfitters(a) 100 6,838
Best Buy(a) 600 54,450
Cato Corp Class A 1,400 12,031
Dayton Hudson 1,600 102,000
Gap Inc 1,350 86,653
Marks & Spencer PLC Sponsored ADR Representing 6 Ord Shrs 800 28,604
Musicland Stores(a) 1,100 13,406
Safeway Inc(a) 2,200 123,475
ShopKo Stores(a) 600 19,050
Trans World Entertainment(a) 100 1,475
Wal-Mart Stores 1,100 94,600
================================================================================================
542,582
<PAGE>
================================================================================================
SHARES OR
PRINCIPAL
AMOUNT
% DESCRIPTION VALUE
================================================================================================
0.38 SAVINGS & LOAN
Anchor Bancorp Wisconsin 500 9,344
Downey Financial 1,000 22,063
FirstFed Financial(a) 1,600 25,500
Flagstar Bancorp 500 14,938
WSFS Financial 500 8,250
================================================================================================
80,095
0.79 SERVICES
ADVO Inc(a) 800 20,200
Copart Inc(a) 800 12,400
Gerber Scientific 500 9,594
HA-LO Industries(a) 400 8,650
InaCom Corp(a) 900 11,756
Lason Inc(a) 300 19,275
META Group(a) 900 22,725
Mastech Corp(a) 800 19,450
ProBusiness Services(a) 200 7,225
RemedyTemp Inc Class A(a) 500 9,125
Romac International(a) 800 13,200
Syntel Inc(a) 1,000 12,063
================================================================================================
165,663
0.14 SPECIALTY PRINTING
Dai Nippon Printing Ltd ADR Representing 10 Ord Shrs 200 29,154
================================================================================================
1.61 TELECOMMUNICATION - LONG DISTANCE
AT&T Corp 2,200 199,650
British Telecommunications PLC Sponsored ADR
Representing 10 Ord Shrs 500 77,937
Sprint Corp FON Group 700 58,712
================================================================================================
336,299
3.06 TELEPHONE
Ameritech Corp 2,100 136,762
BellSouth Corp 2,000 89,250
Portugal Telecom SA Sponsored ADR Representing Ord Shrs 1,700 85,106
SBC Communications 3,500 189,000
Telecom Italia SpA Sponsored ADR Representing 10 Ord Shrs 1,200 113,475
Telefonos de Mexico SA de CV Class L Sponsored ADR
Representing 20 Series L Shrs 500 25,563
================================================================================================
639,156
<PAGE>
================================================================================================
SHARES OR
PRINCIPAL
AMOUNT
% DESCRIPTION VALUE
================================================================================================
0.52 TEXTILE-APPAREL MANUFACTURING
Burlington Industries(a) 1,300 8,613
Jones Apparel Group(a) 3,200 100,000
================================================================================================
0.12 TEXTILE-HOME FURNISHING
Springs Industries Class A 600 25,050
================================================================================================
0.87 TOBACCO
Philip Morris 3,500 164,500
Universal Corp 600 18,188
================================================================================================
182,688
0.35 TOYS
Nintendo Ltd ADR Representing 1/8 Shrs 6,300 73,142
================================================================================================
TOTAL COMMON STOCKS (Cost $14,741,305) 16,846,191
================================================================================================
12.75 FIXED INCOME SECURITIES
4.02 US Government Obligations
US Treasury Bonds
7.875%, 2/15/2021(d) $ 200,000 264,500
7.500%, 11/15/2016 $ 40,000 49,963
US Treasury Notes
7.875%, 11/15/2004 $ 225,000 260,789
7.500%, 11/15/2001(d) $ 150,000 161,016
6.375%, 8/15/2002 $ 100,000 105,469
================================================================================================
TOTAL US GOVERNMENT OBLIGATIONS (Cost $825,108) 841,737
================================================================================================
2.99 US Government Agency Obligations
Fannie Mae, Gtd Pass-Through Certificates
9.000%, 12/1/2006 $ 38,655 40,413
9.000%, 8/1/2007 $ 32,479 33,957
6.500%, 1/31/2029(c) $ 195,000 196,767
6.000%, 4/1/2024 $ 38,389 37,964
5.500%, 2/25/2013(c) $ 100,000 98,719
Freddie Mac Gold,
Participation Certificates
9.000%, 1/1/2005 $ 13,612 14,178
9.000%, 1/1/2007 $ 14,943 15,487
8.000%, 8/1/2017 $ 20,386 21,014
Multiclass Mortgage, GTD Participation
Certificates
Series 1449, Class E, 6.000%, 11/15/2005 $ 43,229 43,206
Government National Mortgage Association,
REMIC Pass-Through Certificates, Series
1996-13, Class G, 7.000%, 1/16/2007 $ 33,361 33,522
Government National Mortgage Association I,
Pass-Through Certificates, 7.000%, 12/15/2028 $ 89,029 91,254
================================================================================================
TOTAL US GOVERNMENT AGENCY OBLIGATIONS (Cost $622,262) 626,481
<PAGE>
================================================================================================
SHARES OR
PRINCIPAL
AMOUNT
% DESCRIPTION VALUE
================================================================================================
================================================================================================
0.49 ASSET-BACKED SECURITIES
0.49 CONSUMER FINANCE
Premier Auto Trust, Asset Backed Notes, Series 1998-3,
Class A4, 5.960%, 10/8/2002 (Cost $101,281) $ 100,000 101,584
================================================================================================
0.36 MORTGAGE-BACKED SECURITIES
0.36 CONSUMER FINANCE
IMC Home Equity Loan Trust, PassThrough Certificates,
Series 1998-1, Class A3,
6.410%, 4/20/2018 (Cost $74,986) $ 75,000 75,737
================================================================================================
4.89 CORPORATE BONDS
0.36 AUTOMOBILES
Toyota Motor Credit, Notes, 5.500%, 12/15/2008 $ 75,000 74,412
================================================================================================
0.28 CONSUMER FINANCE
Beneficial Corp, Deb, 8.400%, 5/15/2008 $ 50,000 57,818
================================================================================================
0.55 FINANCIAL
Commercial Credit, Notes, 6.625%, 6/1/2015 $ 75,000 76,563
Norwest Financial, Sr. Notes, 5.625%, 2/3/2009 $ 40,000 39,471
================================================================================================
116,034
0.61 INVESTMENT BANK/BROKER FIRM
Bear Stearns, Sr Notes, 6.625%, 10/1/2004 $ 50,000 51,315
Salomon Inc, Sr Notes, 6.700%, 7/5/2000 $ 75,000 76,178
================================================================================================
127,493
0.40 MANUFACTURING
Tyco International Group SA, Gtd Notes,
7.000%, 6/15/2028 $ 80,000 83,991
================================================================================================
0.75 REAL ESTATE INVESTMENT TRUST
Highwoods/Forsyth LP, Sr. Notes,
7.500%, 4/15/2018 $ 35,000 33,524
Kimko Realty, Medium-Term Notes,
7.060%, 7/14/2009 $ 50,000 46,984
Spieker Properties LP, Deb,
7.500%, 10/1/2027 $ 80,000 76,554
================================================================================================
157,062
0.80 RETAIL
Federated Department Stores, Deb,
7.000%, 2/15/2028 $ 85,000 89,301
Neiman Marcus Group, Deb,
7.125%, 6/1/2028 $ 80,000 78,309
================================================================================================
167,610
0.36 SERVICES
Hertz Corp, Sr Notes, 6.000%, 2/1/2001 $ 75,000 75,621
================================================================================================
0.78 TELEPHONE
BellSouth Telecommunications, Deb,
5.850%, 11/15/2045 $ 50,000 50,754
GTE Corp, Deb, 10.250%, 11/1/2020 $ 100,000 112,248
================================================================================================
163,002
================================================================================================
TOTAL CORPORATE BONDS (Cost $1,008,706) 1,023,042
================================================================================================
TOTAL FIXED INCOME SECURITIES (Cost $2,632,343) 2,668,581
================================================================================================
<PAGE>
================================================================================================
SHARES OR
PRINCIPAL
AMOUNT
% DESCRIPTION VALUE
================================================================================================
6.73 SHORT-TERM INVESTMENTS
0.36 Corporate Bonds
0.36 FINANCIAL
American General Finance, Sr Notes,
6.875%, 1/15/2000
(Cost $75,646) $ 75,000 $ 75,979
================================================================================================
6.37 REPURCHASE AGREEMENTS
Repurchase Agreement with State Street
dated 1/29/1999 due 2/1/1999 at
4.670%, repurchased at $1,332,518
(Collateralized by US Treasury Bonds
due 4/15/2028 at 3.675%, value $1,363,574)
(Cost $1,332,000) $ 1,332,000 1,332,000
===============================================================================================
TOTAL SHORT-TERM INVESTMENTS (Cost $1,407,646) 1,407,979
===============================================================================================
100.00 TOTAL INVESTMENT SECURITIES AT VALUE
(Cost $18,781,294)
(Cost for Income Tax Purposes $18,790,095) $ 20,922,751
</TABLE>
(a) Security is non-income producing.
(b) Security may be redenominated in euro-dollars, the currency of the
European Economic and Monetary Union (EMU).
(c) Security is a To-Be-Announced (TBA) security.
(d) Security is partially designated as collateral for a TBA security.
See Notes to Financial Statements
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------------------------------------
INVESCO Combination Stock & Bond Funds, Inc.
January 31, 1999
UNAUDITED
Balanced Multi-Asset
Fund Allocation Fund
-----------------------------------------------------------------------------------------------------------
ASSETS
<S> <C> <C>
Investment Securities:
At Cost(a) $ 220,245,937 $ 18,781,294
===========================================================================================================
At Value(a) $ 266,573,079 $ 20,922,751
Cash 11,886 0
Receivables:
Investment Securities Sold 2,008,333 245,083
Fund Shares Sold 1,674,534 1,738
Dividends and Interest 1,525,575 71,778
Prepaid Expenses and Other Assets 60,370 70,921
===========================================================================================================
TOTAL ASSETS 271,853,777 21,312,271
===========================================================================================================
LIABILITIES
Payables:
Custodian 0 20,113
Distributions to Shareholders 39,533 465
Investment Securities Purchased 1,422,587 568,661
Fund Shares Repurchased 243,345 21,927
Accrued Distribution Expenses 50,260 4,030
Accrued Expenses and Other Payables 29,670 14,368
===========================================================================================================
TOTAL LIABILITIES 1,785,395 629,564
===========================================================================================================
Net Assets at Value $ 270,068,382 $ 20,682,707
===========================================================================================================
NET ASSETS
Paid-in Capital(b) $ 226,581,524 $ 18,981,415
Accumulated Undistributed Net Investment Income 17,782 1,953
Accumulated Undistributed Net Realized Loss on Investment
Securities and Foreign Currency Transactions (2,858,142) (442,118)
Net Appreciation of Investment Securities and
Foreign Currency Transactions 46,327,218 2,141,457
===========================================================================================================
Net Assets at Value $ 270,068,382 $ 20,682,707
===========================================================================================================
Shares Outstanding 16,580,976 1,686,465
Net Asset Value, Offering and Redemption
Price per Share $ 16.29 $ 12.26
===========================================================================================================
</TABLE>
(a) Investment securities at cost and value at January 31, 1999 include
repurchase agreements of $12,537,000 and $1,332,000 for Balanced and
Multi-Asset Allocation Funds, respectively.
(b) 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>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------------------------------------
INVESCO Combination Stock and Bond Funds, Inc.
Six Months Ended January 31, 1999
UNAUDITED
Balanced Multi-Asset
Fund Allocation Fund
-----------------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
INCOME
Dividends $ 956,159 $ 195,422
Interest 2,730,402 159,070
Foreign Taxes Withheld (4,895) (2,288)
===========================================================================================================
TOTAL INCOME 3,681,666 352,204
===========================================================================================================
EXPENSES
Investment Advisory Fees 690,789 77,804
Distribution Expenses 287,829 25,935
Transfer Agent Fees 267,580 42,081
Administrative Fees 22,270 6,556
Custodian Fees and Expenses 17,547 10,477
Directors' Fees and Expenses 9,932 4,726
Professional Fees and Expenses 14,784 7,682
Registration Fees and Expenses 28,870 17,378
Reports to Shareholders 50,614 8,710
Other Expenses 7,243 2,178
===========================================================================================================
TOTAL EXPENSES 1,397,458 203,527
Fees and Expenses Absorbed by Investment Adviser 0 (43,154)
Fees and Expenses Paid Indirectly (8,234) (4,869)
===========================================================================================================
NET EXPENSES 1,389,224 155,504
===========================================================================================================
NET INVESTMENT INCOME 2,292,442 196,700
===========================================================================================================
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENT SECURITIES
Net Realized Gain (Loss) on:
Investment Securities (2,864,824) (364,176)
Foreign Currency Transactions 19,813 30
===========================================================================================================
Total Net Realized Loss (2,845,011) (364,146)
===========================================================================================================
Change in Net Appreciation (Depreciation) of:
Investment Securities 23,502,646 849,981
Foreign Currency Transactions (4,050) 0
===========================================================================================================
Total Net Appreciation 23,498,596 849,981
===========================================================================================================
NET GAIN ON INVESTMENT SECURITIES AND
FOREIGN CURRENCY TRANSACTIONS 20,653,585 485,835
===========================================================================================================
Net Increase in Net Assets from Operations $ 22,946,027 $ 682,535
===========================================================================================================
</TABLE>
See Notes to Financial Statements
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
- -----------------------------------------------------------------------------------------------------------------
INVESCO Combination Stock and Bond Funds, Inc.
BALANCED FUND
Six Months Year
Ended Ended
January 31 July 31
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1999 1998
UNAUDITED
OPERATIONS
Net Investment Income $ 2,292,442 $ 4,062,659
Net Realized Gain (Loss) on Investment Securities and
Foreign Currency Transactions (2,845,011) 15,660,005
Change in Net Appreciation of Investment Securities
and Foreign Currency Transactions 23,498,596 2,352,996
==============================================================================================================
NET INCREASE IN NET ASSETS FROM OPERATIONS 22,946,027 22,075,660
==============================================================================================================
DISTRIBUTIONS TO SHAREHOLDERS
Net Investment Income (2,289,213) (4,196,252)
Net Realized Gain on Investment Securities and
Foreign Currency Transactions (10,135,262) (17,002,689)
==============================================================================================================
TOTAL DISTRIBUTIONS (12,424,475) (21,198,941)
==============================================================================================================
FUND SHARE TRANSACTIONS
Proceeds from Sales of Shares 115,202,129 158,521,941
Reinvestment of Distributions 12,025,220 20,128,818
==============================================================================================================
127,227,349 178,650,759
Amounts Paid for Repurchases of Shares (84,304,037) (124,824,681)
==============================================================================================================
NET INCREASE IN NET ASSETS FROM
FUND SHARE TRANSACTIONS 42,923,312 53,826,078
==============================================================================================================
Total Increase in Net Assets 53,444,864 54,702,797
NET ASSETS
Beginning of Period 216,623,518 161,920,721
==============================================================================================================
End of Period (Including Accumulated Undistributed
Net Investment Income of $17,782 and $14,553,
respectively) $ 270,068,382 $ 216,623,518
==============================================================================================================
----------------------------------------------------------
FUND SHARE TRANSACTIONS
Shares Sold 7,520,677 10,124,221
Shares Issued from Reinvestment of Distributions 784,566 1,391,923
==============================================================================================================
8,305,243 11,516,144
Shares Repurchased (5,511,135) (7,941,260)
==============================================================================================================
Net Increase in Fund Shares 2,794,108 3,574,884
==============================================================================================================
See Notes to Financial Statements
<PAGE>
- -----------------------------------------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
- -----------------------------------------------------------------------------------------------------------------
INVESCO Combination Stock and Bond Funds, Inc.
MULTI-ASSET
ALLOCATION FUND
Six Months Year
Ended Ended
January 31 July 31
- -----------------------------------------------------------------------------------------------------------------
1999 1998
UNAUDITED
OPERATIONS
Net Investment Income $ 196,700 $ 324,764
Net Realized Gain (Loss) on Investment Securities and
Foreign Currency Transactions (364,146) 2,123,269
Change in Net Appreciation (Depreciation) of Investment
Securities and Foreign Currency Transactions 849,981 (1,205,641)
==============================================================================================================
NET INCREASE IN NET ASSETS FROM OPERATIONS 682,535 1,242,392
==============================================================================================================
DISTRIBUTIONS TO SHAREHOLDERS
Net Investment Income (203,549) (332,439)
Net Realized Gain on Investment Securities and
Foreign Currency Transactions (1,614,716) (1,829,971)
==============================================================================================================
TOTAL DISTRIBUTIONS (1,818,265) (2,162,410)
==============================================================================================================
FUND SHARE TRANSACTIONS
Proceeds from Sales of Shares 6,066,103 20,967,276
Reinvestment of Distributions 1,765,466 2,099,585
==============================================================================================================
7,831,569 23,066,861
Amounts Paid for Repurchases of Shares (6,958,328) (18,318,989)
==============================================================================================================
NET INCREASE IN NET ASSETS FROM
FUND SHARE TRANSACTIONS 873,241 4,747,872
==============================================================================================================
Total Increase (Decrease) in Net Assets (262,489) 3,827,854
NET ASSETS
Beginning of Period 20,945,196 17,117,342
==============================================================================================================
End of Period (Including Accumulated Undistributed Net
Investment Income of $1,953 and $8,802, respectively) $ 20,682,707 $ 20,945,196
==============================================================================================================
----------------------------------------------------------
FUND SHARE TRANSACTIONS
Shares Sold 492,888 1,548,553
Shares Issued from Reinvestment of Distributions 148,695 169,072
==============================================================================================================
641,583 1,717,625
Shares Repurchased (570,485) (1,347,587)
==============================================================================================================
Net Increase in Fund Shares 71,098 370,038
==============================================================================================================
</TABLE>
See Notes to Financial Statements
<PAGE>
- --------------------------------------------------------------------------------
INVESCO Notes to financial statements - INVESCO Combination Stock &
Bond Funds, Inc.
- --------------------------------------------------------------------------------
UNAUDITED
NOTE 1 -- ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES. INVESCO Combination
Stock and Bond Funds, Inc. (formerly known as INVESCO Flexible Funds, Inc.,
formerly 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. On August 4, 1998, the board of directors of the
Fund approved a name change to INVESCO Combination Stock and Bond Funds, Inc.
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.
If market quotations or pricing service valuations are not readily
available, securities are valued at fair value as determined in good faith under
procedures established by the Fund's board of directors.
Short-term securities are stated at amortized cost (which approximates
market value) if maturity is 60 days or less at the time of purchase, or market
value if maturity is greater than 60 days.
Assets and 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.
<PAGE>
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. 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 between 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.
E. 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. Income and expenses on
foreign securities are translated into U.S. dollars at rates of exchange
prevailing when accrued. 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. The cost of
securities is translated into U.S. dollars at the rates of exchange prevailing
when such securities are acquired.
The Fund may have elements of risk due to investments in foreign issuers
located in a specific country. Such investments may subject the Fund to
additional risks resulting from future political or economic conditions and/or
possible impositions of adverse foreign governmental laws or currency exchange
restrictions. Net realized and unrealized gain or loss from investment
securities includes fluctuations from currency exchange rates and fluctuations
in market value.
The Fund's use of short-term forward foreign currency contracts may subject
it to certain risks as a result of unanticipated movements in foreign exchange
rates. The Fund does not hold short-term forward foreign currency contracts for
trading purposes. The Fund may hold foreign currency in anticipation of settling
foreign security transactions and not for investment purposes.
Investments in securities of governmental agencies may only be guaranteed
by the respective agency's limited authority to borrow from the U.S. Government
and may not be guaranteed by the full faith and credit of the U.S. Government.
F. 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.
<PAGE>
Balanced Fund incurred and elected to defer post-October 31 net capital
losses of $124 to the year ended July 31, 1999. 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.
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.
G. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Dividends and
distributions to shareholders are recorded by the Fund on the ex
dividend/distribution date. The Fund distributes net realized capital gains, if
any, to its shareholders at least annually, if not offset by capital loss
carryovers. Income distributions and capital gain distributions are determined
in accordance with income tax regulations which may differ from generally
accepted accounting principles. These differences are primarily due to differing
treatments for mortgage-backed securities, market discounts, amortized premiums,
foreign currency transactions, nontaxable dividends, net operating losses and
expired capital loss carryforwards.
H. 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. Such credits are included in Fees and Expenses
Paid Indirectly in the Statement of Operations.
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
Management & Research, Inc. ("IMR"), an affiliate of IFG, investment decisions
of Multi-Asset Allocation Fund are made by IMR. Fees for such sub-advisory
services are paid by IFG.
A plan of distribution pursuant to Rule 12b-1 of the Act provides for
compensation of marketing and advertising expenditures to INVESCO Distributors,
Inc. ("IDI" or the "Distributor"), a wholly owned subsidiary of IFG, to a
maximum of 0.25% of annual average net assets. For the six months ended January
31, 1999, Balanced and Multi-Asset Allocation Funds paid the Distributor
$284,107 and $26,485, respectively, under the plan of distribution.
IFG receives a transfer agent fee from each Fund 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.
<PAGE>
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 has 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 six months
ended January 31, 1999, 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 $ 152,879,135 $ 127,416,278
Multi-Asset Allocation Fund 7,371,696 5,459,045
For the six months ended January 31, 1999, the aggregate cost of purchases
and proceeds from sales of U.S. Government securities were as follows:
FUND PURCHASES SALES
- -----------------------------------------------------------------------------
Balanced Fund $ 13,462,031 $ 12,468,516
Multi-Asset Allocation Fund 2,518,291 3,174,438
NOTE 4 -- APPRECIATION AND DEPRECIATION. At January 31, 1999, 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 $ 48,858,578 $ 2,568,008 $ 46,290,570
Multi-Asset Allocation Fund 3,280,518 1,147,862 2,132,656
NOTE 5 -- TRANSACTIONS WITH AFFILIATES. Certain of the Funds' officers and
directors are also officers and directors of IFG, IDI or IMR.
Each Fund has adopted an unfunded defined benefit 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 of 50% of the sum of the retainer
fee at the time of retirement plus the annual meeting fee.
Pension expenses for the six months ended January 31, 1999, 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 $ 2,338 $ 5,089 $ 12,156
Multi-Asset Allocation Fund 233 400 1,309
<PAGE>
The independent directors have contributed to a deferred compensation plan,
pursuant to which they have deferred receipt of a portion of the compensation
which they would otherwise have been paid as directors of selected INVESCO
Funds. The deferred amounts may be invested in the shares of any of the INVESCO
or Treasurer's Series Trust Funds.
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 January 31, 1999, there were no such borrowings.
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------------------------------------------
BALANCED FUND
(For a Fund Share Outstanding Throughout Each Period)
SIX MONTHS PERIOD
ENDED ENDED
JANUARY 31 YEAR ENDED JULY 31 JULY 31
- --------------------------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995 1994(a)
<S> <C> <C> <C> <C> <C> <C>
UNAUDITED
PER SHARE DATA
Net Asset Value --
Beginning of Period $ 15.71 $ 15.86 $ 13.36 $ 12.08 $ 10.30 $ 10.00
----------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income 0.15 0.33 0.34 0.37 0.29 0.12
Net Gains on Securities
(Both Realized and Unrealized) 1.24 1.50 3.37 2.12 2.03 0.30
================================================================================================================
Total from Investment
Operations 1.39 1.83 3.71 2.49 2.32 0.42
================================================================================================================
LESS DISTRIBUTIONS
Dividends from Net
Investment Income 0.15 0.35 0.34 0.37 0.29 0.12
Distributions from Capital Gains 0.66 1.63 0.87 0.84 0.25 0.00
================================================================================================================
Total Distributions 0.81 1.98 1.21 1.21 0.54 0.12
================================================================================================================
Net Asset Value --
End of Period $ 16.29 $ 15.71 $ 15.86 $ 13.36 $ 12.08 $ 10.30
================================================================================================================
TOTAL RETURN 9.20%(b) 12.90% 29.27% 20.93% 23.18% 4.16%(b)
RATIOS
Net Assets -- End of Period
($000 Omitted) $ 270,068 $ 216,624 $ 161,921 $ 115,066 $ 37,224 $ 4,252
Ratio of Expenses to Average
Net Assets(c) 0.61%(b)(d) 1.22%(d) 1.29%(d) 1.29%(d) 1.25% 1.25%(e)
Ratio of Net Investment
Income to Average
Net Assets(c) 1.00%(b) 2.18% 2.46% 3.03% 3.12% 2.87%(e)
Portfolio Turnover Rate 64%(b) 108% 155% 259% 255% 61%(b)
<PAGE>
(a)From December 1, 1993, commencement of investment operations, to July 31,
1994.
(b)Based on operations for the period shown and, accordingly, are not
representative of a full year.
(c)Various expenses of the Fund were voluntarily absorbed by IFG for the years
ended July 31, 1997, 1996 and 1995 and 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.
(d)Ratio is based on Total Expenses of the Fund, less Expenses Absorbed by
Investment Adviser, if applicable, which is before any expense offset
arrangements.
(e)Annualized
<PAGE>
- --------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------------------------------------------
MULTI-ASSET ALLOCATION FUND
(For a Fund Share Outstanding Throughout Each Period)
SIX MONTHS PERIOD
ENDED ENDED
JANUARY 31 YEAR ENDED JULY 31 JULY 31
-----------------------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995 1994(a)
UNAUDITED
PER SHARE DATA
Net Asset Value --
Beginning of Period $ 12.97 $ 13.75 $ 11.55 $ 10.84 $ 9.68 $ 10.00
=================================================================================================================
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income 0.11 0.24 0.25 0.28 0.28 0.06
Net Gains or (Losses) on
Securities (Both Realized
and Unrealized) 0.30 0.77 3.18 0.89 1.16 (0.32)
=================================================================================================================
Total from Investment
Operations 0.41 1.01 3.43 1.17 1.44 (0.26)
LESS DISTRIBUTIONS
Dividends from Net Investment
Income 0.12 0.25 0.25 0.28 0.28 0.06
Distributions from Capital Gains 1.00 1.54 0.98 0.18 0.00 0.00
=================================================================================================================
Total Distributions 1.12 1.79 1.23 0.46 0.28 0.06
=================================================================================================================
Net Asset Value--
End of Period $ 12.26 $ 12.97 $ 13.75 $ 11.55 $ 10.84 $ 9.68
=================================================================================================================
TOTAL RETURN 3.58%(b) 8.15% 31.41% 10.96% 15.11% (2.60%)(b)
RATIOS
Net Assets -- End of Period
($000 Omitted) $ 20,683 $ 20,945 $ 17,117 $ 9,574 $ 7,778 $ 4,958
Ratio of Expenses to
Average Net Assets(c) 0.78%(b)(d) 1.54%(d) 1.55%(d) 1.62%(d) 1.50% 1.50%(e)
Ratio of Net Investment Income
to Average Net Assets(c) 0.96%(b) 1.78% 2.19% 2.43% 2.99% 2.23%(e)
Portfolio Turnover Rate 47% 101% 98% 92% 79% 42%(b)
(a)From December 1, 1993, commencement of investment operations, to July 31,
1994.
(b)Based on operations for the period shown, and accordingly, are not
representative of a full year.
(c)Various expenses of the Fund were voluntarily absorbed by IFG and IMR for the
six months ended January 31, 1999, the years ended July 31, 1998, 1997,
1996 and 1995 and the period ended July 31, 1994. If such expenses had not
been voluntarily absorbed, ratio of expenses to average net assets would
have been 0.99% (not annualized), 1.92%, 1.97%, 2.24%, 2.47% and 5.14%
(annualized), respectively, and ratio of net investment income (loss) to
average net assets would have been 0.75% (not annualized), 1.40%, 1.77%,
1.81%, 2.02% and (1.41%) (annualized), respectively.
(d)Ratio is based on Total Expenses of the Fund, less Expenses Absorbed by the
Investment Adviser, which is before any expense offset arrangement.
(e)Annualized
</TABLE>
<PAGE>
INVESCO FAMILY OF FUNDS
Newspaper
Fund Name Fund Code Ticker Symbol Abbreviation
- -------------------------------------------------------------------------------
International
International Blue Chip 09 IIBCX ItlBlChp
International Growth 49 FSIGX IntlGr
Emerging Markets 43 * *
Asian Growth 41 IVAGX AsianGr
Pacific Basin 54 FPBSX PcBas
European 56 FEURX Europ
European Small Company 37 IVECX EuroSmCo
Latin American Growth 34 IVSLX LatinAmGr
- -------------------------------------------------------------------------------
Sector
Energy 50 FSTEX Enrgy
Environmental Services 59 FSEVX Envirn
Financial Services 57 FSFSX FinSvc
Gold 51 FGLDX Gold
Health Sciences 52 FHLSX HlthSc
Leisure 53 FLISX Leisur
Realty 42 IVSRX Realty
Technology - Class II 55 FTCHX Tech
Utilities 58 FSTUX Util
Worldwide Capital Goods 38 ISWGX WldCap
Worldwide Communications 39 ISWCX WldCom
- -------------------------------------------------------------------------------
Stock
Growth & Income 21 IVGIX GRI
Endeavor 61 IVENX Endeavor
Blue Chip Growth 10 FLRFX Grwth
Dynamics 20 FIDYX Dynm
Small Company Growth 60 FIEGX SmCoGth
Value Equity 46 FSEQX ValEq
Small Company Value 74 IDSCX SmCoVal
S&P 500 Index Fund Class II 23 ISPIX SP500II
- -------------------------------------------------------------------------------
Combination Stock & Bond
Industrial Income 15 FIIIX IndInc
Multi-Asset Allocation 70 IMAAX MulAstAl
Total Return 48 FSFLX TotRtn
Balanced 71 IMABX Bal
- -------------------------------------------------------------------------------
Bond
Short-Term Bond 33 INIBX ShTrBd
Intermediate Government Bond 47 FIGBX IntGov
U.S. Government Securities 32 FBDGX USGvt
Select Income 30 FBDSX SelInc
High Yield 31 FHYPX HiYld
- -------------------------------------------------------------------------------
Tax-Exempt
Tax-Free Intermediate Bond 36 IVTIX *
Tax-Free Long-Term Bond 35 FTIFX TxFre
- -------------------------------------------------------------------------------
Money Market
U.S. Government Money Fund 44 FUGXX InvGvtMF
Cash Reserves 25 FDSXX InvCshR
Tax-Free Money Fund 40 FFRXX InvTaxFree
* Not yet available.
For more complete information, including management fees, expenses, and risks,
call or write for a free prospectus.
<PAGE>
INVESCO
YOU SHOULD
KNOW WHAT
INVESCO KNOWS(TM)
We're easy to stay in touch with:
Investor Services: 1-800-525-8085
PAL(R), your Personal Account Line: 1-800-424-8085
On the World Wide Web: www.invesco.com
In Denver, visit one of our convenient Investor Centers:
Cherry Creek, 155-B Fillmore Street
Denver Tech Center, 7800 East Union Avenue, Lobby Level
INVESCO Distributors, Inc. (SM), Distributor
Post Office Box 173706
Denver, Colorado 80217-3706
This information must be preceded or accompanied
by a current prospectus.
