ANNUAL REPORT
July 31, 1995
INVESCO
SPECIALTY
FUNDS,
INC.
Smart choices for seeking capital
appreciation around the globe.
INVESCO FUNDS
<PAGE>
Market Overview August 1995
The U.S. economy may be close to achieving the "soft landing" analysts have
hoped for.
Fearing the long-term corrosive effects of inflation, the Federal Reserve
Board actively sought to slow the U.S. economy in 1994. Over a period of 12
months, they doubled short-term interest rates.
The plan may have worked. After impressive annualized growth rates of
6.3%, 3.3%, 3.8%, 3.4%, and 5.1% in consecutive quarters, GDP advanced just 2.7%
during the first three months of 1995, and was estimated at 1.1% in the second
quarter. Now that they've reined in the galloping expansion, the Fed will act to
keep it at a sustainable trot. In July, they cut short-term interest rates by
0.25%, and further cuts may be made if additional stimulus is required.
Given the advances in the U.S. equities markets in the first half of 1995,
we're likely to see a period when the market "digests" its gains -- as
technology stocks did in mid-July, for instance. However, we do not anticipate a
significant setback in prices over the third and fourth quarters.
International Highlights. With the Japanese economy stuck in low gear, the
Nikkei Dow dropped severely in recent months. This proved to be a drag
throughout the Pacific Basin. Markets now appear to be stabilizing and have the
potential to move higher.
In U.S. dollar terms, most European markets have gained, including
Belgium, the Netherlands, Sweden, Switzerland, and the U.K. Areas of strength
have generally been consumer staples, energy, and technology. Manufacturers of
heavy equipment also have done well.
The devaluation of the Mexican peso on 12/20/94 caused market turmoil
throughout Latin America. Stock markets from Mexico City to Argentina declined
sharply, but recently have rallied as Mexico has stabilized and the peso has
rebounded from its lows.
INVESCO Specialty Funds, Inc.
The line graphs below illustrate the value of a $10,000 investment in each
INVESCO Specialty Fund and the indexes, plus reinvested dividends and capital
gain distributions, if any, for the periods from inception through 7/31/95.*
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.
European Small Company Fund
From the fund's introduction in February 1995 through 7/31/95, INVESCO
European Small Company Fund achieved a cumulative total return of 15.98%. In
comparison, for the same period the regionally focused James Capel Smaller
European Index achieved a total return of 18.30%, while the international
MSCI-EAFE achieved a total return of 13.52%. (Of course, past performance is not
a guarantee of future results.)*
<PAGE>
Graph:
This line graph represents a comparison of the value of a $10,000
investment in INVESCO European Small Company Fund to the value of a
$10,000 investment in the MSCI-EAFE Index and James Capel Smaller European
Index, assuming in each case reinvestment of all dividends and capital
gain distributions, for the period from inception (2/15/95) through
7/31/95.
The fund's modest underperformance against the MSCI-Euro 17 reflects the
fund's emphasis on smaller companies, contrasted to the index which is dominated
by larger-capitalization stocks. In the early stages of a bull market, small
companies tend to lag behind, before catching up with and then potentially
outperforming larger firms.
However, technology stocks -- a traditional small-cap area -- are also
performing well in 1995. At 7/31/95, the fund had a weighting of 5.63% in
computer related issues. Another 4.45% is allocated to medical equipment &
supplies, a market segment which has also outperformed.
Europe's moderate economic growth appears sustainable, and we anticipate a
favorable climate for smaller-cap stocks. These companies are in the best
position to exploit strongly growing niche markets. Increasing corporate
takeover activity may also prove a positive factor.
Our strategy is based on seeking out companies which can produce
above-average earnings growth in the developing economic environment. At
present, we are particularly interested in specialist consumer stocks, auto
components, capital goods, and technology and services.
Latin American Growth Fund
From the fund's introduction in February 1995 through 7/31/95, INVESCO
Latin American Growth Fund achieved a cumulative total return of 17.09%. In
comparison, for the same period the regionally focused MSCI-Latin American Index
achieved a total return of 16.04%. (Of course, past performance is not a
guarantee of future results.)*
Although the Mexican market has shown some signs of resurgence, overall
the bolsa is off over 25% in 1995. We believe that this area holds long-term
potential, despite recurring currency problems. Thus the fund does maintain a
stake in Mexico, with 16.81% of assets invested there as of 7/31/95.
But overall, compared to the Latin American index, Latin American Growth
Fund is more broadly diversified across the region. For instance, on 7/31/95
Chilean stocks represented 12.48% of fund holdings -- and the Chilean market is
up strongly for the year. We are growing more cautious owing to increasingly
high valuations here, and are gradually reducing our weighting.
<PAGE>
In keeping with the fund's investment philosophy, holdings are broadly
diversified across industries. The economies of this region do not march in lock
step, so fund holdings in the various sectors receive different emphasis in our
holdings, depending upon the particular country. Overall, our two largest
concentrations are in utilities and metals & mining. We also have key positions
in telecommunications, as well as construction related companies and food
products & beverages.
Graph:
This line graph represents a comparison of the value of a $10,000
investment in INVESCO Latin American Growth Fund to the value of a $10,000
investment in the MSCI-Latin Index, assuming in each case reinvestment of
all dividends and capital gain distributions, for the period from
inception (2/15/95) through 7/31/95.
Worldwide Capital Goods Fund
For the fiscal year ended 7/31/95, Worldwide Capital Goods Fund had a
total return of negative 1.49%. In contrast, the domestic S&P 500 and
international MSCI-EAFE for the same period achieved positive total returns of
25.99% and 7.18%, respectively. (Of course, past performance is not a guarantee
of future results.)*
Worldwide Capital Goods Fund
Average Annual Total Return
as of 7/31/95*
1 year -1.49%
-----------------------------------
Cumulative year-to-date 8.73%
-----------------------------------
The first six months after the fund's introduction in August 1994 produced
a negative total return. This is partly attributable to early investments in
Mexico, which were strongly depressed after the devaluation of the peso in
December. We have now brought the Mexican portion of the fund down to 1.30%,
compared to 13.48% last November.
Graph:
This line graph represents a comparison of the value of a $10,000
investment in INVESCO Worldwide Capital Goods Fund to the value of a
$10,000 investment in the S&P 500 Index and the MSCI-EAFE Index, assuming
in each case reinvestment of all dividends and capital gain distributions,
for the period from inception (8/1/94) through 7/31/95.
<PAGE>
Investment results have improved significantly in 1995. These recent gains
came from renewed investor interest in capital goods, particularly on the U.S.
market. Holdings in this country now represent 61.95% of the portfolio. Given
the growing belief that the U.S. expansion will continue, albeit at a lower
rate, we expect to continue favoring domestic equities.
On the other hand, Asian markets appear modestly overpriced at current
levels. Singapore, South Korea, Indonesia, Malaysia, and Thailand had an
aggregate weighting of 9.32% at 7/31/95; this may be gradually decreased over
the next several months if market conditions warrant. Due to the state of its
economy, we are avoiding Japan altogether until clear signs of a resurgence
appear. Near-term, we do not expect to increase our weighting in Latin America
until valuations become more reasonable.
We have been actively seeking out "special opportunities" -- such as
Northwestern Steel & Iron, whose price jumped after its only serious competitor
exited the business. Similarly, Hardinge Inc.AEs stock price has jumped as
demand for their customizable machine tools intensified.
As these examples illustrate, the fund is focusing on basic materials and
capital goods & construction stocks. Machinery represented 11.37% of fund
holdings, while metals & mining were weighted at 9.47% on 7/31/95. Chemicals and
steel represented another 5.95%. Paper & paper products have been our largest
sector focus; however, we will be watching carefully for product price weakness,
which would suggest decreasing our exposure.
Worldwide Communications Fund
For the fiscal year ended 7/31/95, Worldwide Communi-cations Fund achieved
a total return of 24.83%. This compares very favorably with total returns
achieved by the domestic S&P 500 and international MSCI-EAFE for the same
period, of 25.99% and 7.18%, respectively. (Of course, past performance is not a
guarantee of future results.)*
Worldwide Communications Fund
Average Annual Total Return
as of 7/31/95*
Since inception (8/94) 24.83%
-----------------------------------
Cumulative year-to-date 18.87%
-----------------------------------
The fund's strong returns reflect our concentration on the United States.
As of 7/31/95, U.S. equities represented 66.64% of common stocks in the
portfolio. Far smaller weightings have been given to the United Kingdom and
Canada, which were 6.41% and 4.48%, respectively, of the total fund. This
reflects a simple fact made clear by the relative performance figures turned in
by the two indexes cited above: The U.S. market has outperformed every other
large market on the global scene.
<PAGE>
Technology stocks have enjoyed a particularly outstanding year. At the end
of this fiscal period, computer related, electronics, and telecommunications
stocks represented 23.07% of holdings -- a factor which allowed the fund to
participate in the advances for these equities. Despite the volatility in
technology stocks this summer, we believe that prices have not peaked.
Graph:
This line graph represents a comparison of the value of a $10,000
investment in INVESCO Worldwide Communications Fund to the value of a
$10,000 investment in the S&P 500 Index and the MSCI-EAFE Index, assuming
in each case reinvestment of all dividends and capital gain distributions,
for the period from inception (8/1/94) through 7/31/95.
Going forward, the fund is defensively postured, with 42.77% of holdings
in short-term investments. We expect to be in a good position to invest in
exceptional opportunities as they arise in wireless and cellular communications,
computer software, and telecommunications equipment firms, among others.
Regional telephone operating companies also look attractive over the
long-term. This area is currently represented in our portfolio by NYNEX Corp.
and U S WEST. Another area poised for rapidly growing earnings is media content
providers.
* Total return assumes reinvestment of dividends and capital gain distributions.
Past performance is not a guarantee of future results. Investment return and
principal value will vary so that, when redeemed, an investor's shares may be
worth more or less than when purchased. The MSCI-EAFE is an unmanaged, weighted
average of stock performance in Europe, Australia, and the Far East. The
MSCI-Latin American Index is an unmanaged index of that region's common stocks,
while the James Capel Smaller European Index reflects European small-cap stock
performance.
<PAGE>
INVESCO Specialty Funds, Inc.
Ten Largest Common Stock Holdings
July 31, 1995
Description Value
------------------------------------------------------
EUROPEAN SMALL COMPANY Fund
Bulgari SpA Sponsored ADR $82,870
Getronics NV 78,576
Eifelohohen Klinik AG 77,338
Bertrand Faure SA 76,158
IHC Caland NV 73,182
Elkjop Norge AS 73,152
Saes Getters Non-Convertible
Savings Shrs 72,714
Nera AS 71,684
Falck Holdings AS 71,322
Zodiac SA 66,940
LATIN AMERICAN GROWTH Fund
Telefonos de Mexico SA de CV
Ord Series L Shrs $271,667
Enersis SA Sponsored ADR 205,000
Madeco SA ADR 194,062
Yacimientos Petroliferos Fiscales SA
Sponsored ADR Representing
Class D Shrs 191,125
Cia Siderurgica Nacional 190,530
Grupo Carso SA de CV Series A1 186,578
Rhodia-Ster SA 186,281
Cia de Telecomunicacion de Chile SA
Sponsored ADR Representing
Series A Shrs 156,500
Antofagasta Holdings PLC 155,050
Desc Sociedad de Fomento Industrial
SA de CV Sponsored ADR
Representing Series C Shrs 155,000
<PAGE>
WORLDWIDE CAPITAL GOODS Fund
AlliedSignal Inc $257,125
Ingersoll-Rand Co 250,500
Hardinge Inc 235,000
Crown Cork & Seal 225,625
Eaton Corp 223,500
Albany International Class A 203,000
Banco Latinoamericano
de Exportaciones SA 200,625
Kaiser Aluminum 195,000
Synopsys Inc 193,500
Zebra Technologies Class A 188,250
WORLDWIDE COMMUNICATIONS Fund
VeriFone Inc $971,250
United Television 745,000
Leitch Technology 590,228
Granada Group PLC 563,363
Olicom A/S 560,000
CBS Inc 543,375
ALLTEL Corp 527,500
Grupo Radio Centro SA de CV
Sponsored ADR Representing
Participation Certificates 515,625
U S WEST 514,500
Philips Electronics NV New York Shrs 492,500
Composition of holdings is subject to change.
<PAGE>
INVESCO Specialty Funds, Inc.
Statement of Investment Securities
July 31, 1995 Shares or
Industry Principal
Description Code Amount Value
----------
EUROPEAN SMALL COMPANY Fund
COMMON STOCKS & RIGHTS 77.05%
BELGIUM 2.93%
Barco NV EL 600 $66,377
Quick Restaurants NPV RT 740 65,179
----------
131,556
----------
DENMARK 2.94%
Coloplast AS Registered B Shrs MS 750 60,777
Falck Holdings AS* SA 670 71,322
----------
132,099
----------
FRANCE 13.14%
Altran Technologies SA EG 256 31,261
Bertrand Faure SA AM 1,800 76,158
Cegedim SA* AD 800 60,155
Christian Dalloz* SA 350 64,439
Eramet SA MM 490 35,408
Grand Optical Photoservice PH 450 42,132
Imetal SA MM 510 62,277
Industrielle de Transports
Automobiles SA* FR 210 33,429
Lapeyre SA CR 905 59,483
Legris Industries SA* MY 750 45,305
Sidel SA CN 35 12,521
Zodiac SA RR 530 66,940
----------
589,508
----------
GERMANY 3.69%
Buderus AG MM 56 27,357
CeWe Color Holding AG PH 180 61,013
Eifelohohen Klinik AG HC 380 77,338
----------
165,708
----------
ITALY 5.46%
Bulgari SpA Sponsored ADR* RT 14,000 82,870
Industrie Natuzzi SpA ADR FM 1,710 61,988
Industrie Zignago (S)
Margherita SpA* DV 5,350 27,470
Saes Getters Non-Convertible
Savings Shrs EL 7,900 72,714
----------
245,042
----------
<PAGE>
NETHERLANDS 8.49%
Aalberts Industries NV MA 900 50,872
Ahrend Groep NV OE 2,140 64,421
Baan Corp NV* CO 890 29,704
Getronics NV CO 1,530 78,576
Hagemeyer NV DV 710 31,189
IHC Caland NV* TR 2,370 73,182
Internatio-Muller NV DV 735 53,273
----------
381,217
----------
NORWAY 4.53%
Elkjop Norge AS EE 3,220 73,152
Nera AS TC 2,580 71,684
Sensonor AS* CI 7,140 58,348
----------
203,184
----------
SPAIN 2.42%
Grupo Anaya SA PR 2,420 59,534
Unipapel SA* PP 1,790 48,862
----------
108,396
----------
SWEDEN 2.79%
Arjo AB MS 1,140 14,317
Autoliv AB AM 860 53,391
Getinge Industrier AB B Frie Shrs MS 1,520 57,590
----------
125,298
----------
SWITZERLAND 5.74%
Danzas Holding AG Registered Shrs TR 20 17,444
Edipresse SA Bearer Shrs PR 175 53,424
Mikron Holding AG Biel
Registered Shrs* MY 550 63,323
Nokia Maillefer Holding* MA 105 57,423
Publicitas Holding SA
Registered Shrs AD 30 32,970
Schweizerhall Holding AG
Registered Shrs* CH 30 32,970
----------
257,554
----------
UNITED KINGDOM 24.92%
ABI Leisure Group PLC RR 12,000 17,857
ABI Leisure Group PLC
Non-Participating Rights* RR 2,666 213
Bluebird Toys PLC RR 7,500 28,082
Burford Holdings PLC RE 20,000 37,282
Carpetright PLC RT 6,500 32,866
Eurocamp PLC RR 11,896 39,973
Eyecare Products PLC CT 40,000 20,481
Fine Decor PLC RT 22,250 38,806
<PAGE>
Games Workshop Group PLC RR 15,000 52,563
Hambro Countrywide PLC RE 50,000 25,601
Hogg Robinson PLC FR 2,592 8,088
International Business
Communications Holdings PLC PR 10,000 47,523
Litho Supplies PLC WH 11,000 35,379
London Forfaiting PLC FR 8,250 23,762
Lowndes Lambert Group
Holdings PLC IN 12,500 34,202
Magnum Power PLC* EE 13,000 30,786
Market Analysis & Information
Database PLC* CO 22,500 29,882
Matthew Clark PLC FD 3,500 36,402
McLeod Russel Holdings PLC CH 10,000 27,042
Norcor Holdings PLC MA 17,500 35,282
P&P PLC RT 30,000 54,723
PTS Group PLC* CR 12,500 22,601
Persimmon PLC CR 9,300 31,250
Psion PLC CO 5,500 38,282
Quality Software Products
Holdings PLC CO 3,100 27,183
RJB Mining PLC MM 6,500 41,083
Ramco Energy PLC OG 5,400 32,921
Richards PLC TA 22,500 19,441
Rutland Trust PLC FR 75,000 34,202
SIG PLC CR 9,000 32,114
Sage Group PLC CO 3,000 49,107
Scotia Holdings PLC* MD 4,850 37,095
Wagon Industrial Holdings PLC* MA 6,100 46,558
Wainhomes PLC CR 30,000 49,443
----------
1,118,075
----------
TOTAL COMMON STOCKS & RIGHTS
(Cost $3,217,362) 3,457,637
----------
PREFERRED STOCKS 9.02%
GERMANY 9.02%
Fielmann AG Non-Voting
Pfd Shrs* RT 1,500 78,764
Fresenius AG Non-Voting
Pfd Shrs MS 90 67,140
Marschollek, Lautenschlaeger
und Partners AG Pfd Shrs IN 95 64,884
Moebel Walther AG Non-Voting
Pfd Shrs RT 110 51,387
Puma AG Rudolf Dassler Sport
Non-Voting Pfd Shrs* TA 270 66,488
Sander (Jil) AG Pfd Shrs TA 105 76,048
----------
TOTAL PREFERRED STOCKS
(Cost $384,072) 404,711
----------
<PAGE>
SHORT-TERM INVESTMENTS --
REPURCHASE AGREEMENTS 13.93%
UNITED STATES 13.93%
Repurchase Agreement with State
Street Bank & Trust Co dated
7/31/1995 due 8/1/1995 at 5.250%,
repurchased at $625,091
(Collateralized by US Treasury
Notes due 6/30/1996 at 6.000%,
value $639,702)(Cost $625,000) RA $625,000 625,000
----------
TOTAL INVESTMENT
SECURITIES AT VALUE 100.00%
(Cost $4,226,434#) $ 4,487,348
==========
LATIN AMERICAN GROWTH Fund
COMMON STOCKS 61.13%
ARGENTINA 12.97%
Astra Cia Argentina de
Petroleo OG 70,000 $124,608
Banco Frances del Rio de la Plata
SA Sponsored ADR BK 4,000 84,000
Buenos Aires Embotelladora SA
Sponsored ADR Representing
Class B Ord Shrs FD 3,000 74,625
Central Costanera SA
Sponsored ADR Representing
Class B Shrs^ UT 2,000 67,004
Cia Naviera Perez Companc SA
Sponsored ADR Representing
Class B Shrs DV 12,000 117,607
MetroGas SA Sponsored ADR
Representing Class B Shrs UT 10,000 97,500
Telecom Argentina STET-France
Telecom SA Sponsored ADR
Representing Class B Shrs TC 2,000 99,250
Telefonica de Argentina SA
Sponsored ADR Representing
Ord Class B Shrs UT 4,500 121,500
Yacimientos Petroliferos
Fiscales SA Sponsored ADR
Representing Class D Shrs OG 11,000 191,125
----------
977,219
----------
BRAZIL 8.40%
Cia Siderurgica Nacional* MM 9,000,000 190,530
Cia Souza Cruz SA TO 20,000 144,346
Rhodia-Ster SA* CH 140,500 186,281
<PAGE>
Usinas Siderurgicas de Minas
Gerais SA Sponsored ADR*^ MM 11,000 111,734
----------
632,891
----------
CHILE 12.48%
Banco O'Higgins
Sponsored ADR BK 6,000 127,500
Cia Chilena de Distribucion
Electrica SA Sponsored ADR^ UT 6,000 103,937
Cia Telecomunicacion de
Chile SA Sponsored ADR
Representing Series A Shrs TC 2,000 156,500
Enersis SA Sponsored ADR DV 8,000 205,000
Madeco SA ADR EE 7,500 194,062
Maderas y Sinteticos SA ADR PP 9,000 153,000
----------
939,999
----------
COLUMBIA 1.34%
Cementos Diamante SA
Sponsored ADR Representing
Class B Shrs*^ CR 4,500 101,250
----------
LUXEMBOURG 1.24%
Quilmes Industrial SA
Registered Shrs* FD 4,500 93,375
----------
MEXICO 16.81%
Cifra SA de CV Series C Shrs RT 115,000 141,161
Desc Sociedad de Fomento
Industrial SA de CV Sponsored
ADR Representing
Series C Shrs* DV 10,000 155,000
Gruma SA de CV
Series B Shrs* FD 40,400 122,191
Grupo Carso SA de CV Series A1* DV 30,000 186,578
Grupo Casa Autrey SA de CV
Sponsored ADR WH 8,000 140,000
Grupo Televisa SA Certificates
of Participation Representing
Series A, Series D &
Series L Shrs* BR 8,500 97,102
Panamerican Beverages Class A FD 5,000 153,125
Telefonos de Mexico SA de CV
Ord Series L Shrs UT 165,000 271,667
----------
1,266,824
----------
PERU 5.83%
CPT Telefonica del Peru SA
B Shrs* TC 60,000 112,037
Cementos Lima SA
Sponsored ADR CR 9,000 146,794
<PAGE>
Cia de Minas Buenaventura SA
C Shrs MM 13,554 79,342
Southern Peru Copper T Shrs* MM 22,000 101,463
----------
439,636
----------
UNITED KINGDOM 2.06%
Antofagasta Holdings PLC MM 30,000 155,050
----------
TOTAL COMMON STOCKS
(Cost $4,582,063) 4,606,244
----------
PREFERRED STOCKS 31.49%
BRAZIL 28.22%
Brasmotor SA Pfd Shrs* HA 600,000 122,533
Cia Cervejaria Brahma
Class A Pfd Receipts* FD 5,513 1,815
Pfd Shrs FD 400,000 133,011
Cia Cimento Portland Itau
Pfd Shrs CR 800,000 238,651
Cia Energetica de Minas Gerais
Pfd Shrs UT 2,999,000 63,360
Sponsored ADR Representing
Non-Voting Pfd Shrs* UT 7,898 166,868
Cia Energetica de Sao Paolo
Pfd Shrs* UT 300,000 13,665
Sponsored ADR Representing
Pfd Shrs*^ UT 15,000 204,970
Cia Vale Do Rio Doce
Pfd Shrs MM 60,000 9,495
Sponsored ADR Representing
Pfd Shrs MM 5,000 197,807
Duratex SA Pfd Shrs* CR 3,000,000 168,243
Iochpe Maxion SA
Sponsored ADR Representing
Pfd Shrs MY 10,000 83,750
Lojas Americanas SA Pfd Shrs* RT 9,000,000 209,871
Telecom de Sao Paulo SA
Pfd Shrs UT 1,500,000 215,716
Telecomunicacoes Brasileiras SA
Sponsored ADR Representing
Pfd Shrs TC 8,000 285,000
Usinas Siderurgicas de Minas
Gerais SA Pfd Shrs MM 12,000,000 12,180
----------
2,126,935
----------
COLUMBIA 3.27%
Banco Industrial Colombiano SA
Sponsored ADR Representing
Pfd Shrs* BK 10,000 141,250
<PAGE>
La Gran Cedena de Almacenes
Colombianos SA Sponsored
ADR Representing Class B
Pfd Shrs*^ RT 6,000 105,000
----------
246,250
----------
TOTAL PREFERRED STOCKS
(Cost $2,392,256) 2,373,185
----------
SHORT-TERM INVESTMENTS 7.38%
Foreign Government Obligations 0.15%
MEXICO 0.15%
Mexican Cetes
Zero Coupon, 8/31/1995
(Cost $11,097) FG $ 6,989 11,063
----------
Repurchase Agreements 7.23%
UNITED STATES 7.23%
Repurchase Agreement with
State Street Bank & Trust Co
dated 7/31/1995 due 8/1/1995
at 5.250%, repurchased at $545,079
(Collateralized by US Treasury
Notes due 6/30/1996 at 6.000%,
value $567,435)(Cost $545,000) RA $545,000 545,000
----------
TOTAL SHORT-TERM INVESTMENTS
(Cost $556,097) 556,063
----------
TOTAL INVESTMENT
SECURITIES AT VALUE 100.00%
(Cost $7,530,416)
(Cost for Income Tax Purposes
$7,535,213) $ 7,535,492
==========
WORLDWIDE CAPITAL GOODS Fund
COMMON STOCKS 95.47%
ARGENTINA 1.40%
Cia Naviera Perez Companc SA
Series B Shrs* DV 30,000 145,209
----------
CANADA 3.95%
Diamond Fields Resources* MM 3,000 160,673
Fletcher Challenge Canada Ltd
Class A PP 5,000 89,263
Magna International Class A AM 3,500 161,000
----------
410,936
----------
<PAGE>
CHILE 1.00%
Madeco SA ADR CR 4,000 103,500
----------
FINLAND 1.28%
Nokia AB Oy Series K Shrs EL 1,000 67,303
Nokia Corp ADR Representing
Ord A Shrs EL 1,000 65,750
----------
133,053
----------
GERMANY 3.85%
Degussa AG MM 300 99,732
Mannesmann AG MY 400 133,787
Veba AG DV 4,000 166,640
----------
400,159
----------
INDONESIA 1.29%
PT Indorama Synthetics TA 40,000 134,400
----------
MALAYSIA 2.63%
Malayan Cement Berhad DV 50,000 94,424
United Engineers Malaysia
Berhad EG 25,000 179,080
----------
273,504
----------
MEXICO 1.30%
Grupo Industrial Alfa SA de CV
ADR DV 10,000 135,514
----------
NETHERLANDS 2.75%
Elsag Bailey Process
Automation NV ADR* CI 6,000 162,750
Philips Electronics NV
New York Shrs EE 2,500 123,125
----------
285,875
----------
PANAMA 1.93%
Banco Latinoamericano de
Exportaciones SA BK 5,000 200,625
----------
PERU 1.08%
Cementos Lima SA Sponsored
ADR Representing Voting Shrs* CR 6,897 112,494
----------
SINGAPORE 2.89%
Asia Pacific Resources
International Holdings Ltd
Class A* PP 15,000 140,625
<PAGE>
Asia Pulp & Paper Ltd
Sponsored ADR* PP 12,500 159,375
----------
300,000
----------
SOUTH KOREA 1.61%
Pohang Iron & Steel Ltd
Sponsored ADR ST 5,000 167,500
----------
SWEDEN 2.71%
ASEA AB
Class B Frie Shrs DV 1,000 88,122
Sponsored ADR DV 1,000 87,750
Mo Och Domsjo AB
B Frie Shrs* PP 1,600 106,258
----------
282,130
----------
THAILAND 0.90%
Italian-Thai Development* CR 7,500 93,315
----------
UNITED KINGDOM 2.95%
Antofagasta Holdings PLC MM 30,000 155,050
Cable & Wireless PLC
Sponsored ADR TC 7,500 151,875
----------
306,925
----------
UNITED STATES 61.95%
Albany International Class A PP 8,000 203,000
AlliedSignal Inc MA 5,500 257,125
ASARCO Inc MM 5,000 158,750
BJ Services* OG 6,000 149,250
Belden Inc TC 6,000 176,250
Bethlehem Steel* ST 7,500 118,125
Boeing Co AE 2,500 167,500
Borg-Warner Automotive AM 4,500 146,250
Capco Automotive Products AM 15,000 114,375
Case Corp MY 5,000 176,250
Crown Cork & Seal* CN 5,000 225,625
Deere & Co MY 1,000 89,875
Eaton Corp AM 4,000 223,500
ENSCO International* OG 10,000 158,750
Goodyear Tire & Rubber TI 4,000 173,500
Greenfield Industries MY 5,000 146,250
Hardinge Inc* MY 10,000 235,000
Harnischfeger Industries MY 4,000 150,000
Ingersoll-Rand Co MY 6,000 250,500
International Paper PP 1,100 92,950
Kaiser Aluminum* MM 12,000 195,000
Linear Technology EL 2,000 155,000
Loews Corp DV 1,000 120,375
Newmont Mining MM 3,500 149,625
Northwestern Steel & Iron* ST 15,000 150,000
<PAGE>
Owens-Illinois Inc* DV 12,500 173,437
PPG Industries CH 4,000 183,000
Phelps Dodge MM 1,000 64,250
Rayonier Inc PP 4,000 155,500
Raytheon Co AE 2,000 165,250
Silicon Graphics* CO 3,000 126,000
Synopsys Inc* CS 3,000 193,500
Tenneco Inc DV 3,000 148,500
Texas Industries BC 3,000 132,375
Time Warner PR 4,000 171,500
Union Pacific TR 2,500 162,812
United Technologies AE 1,500 126,000
Weatherford International* OG 10,000 127,500
Weyerhaeuser Co PP 3,000 140,250
Zebra Technologies Class A* EL 3,000 188,250
----------
6,440,949
----------
TOTAL COMMON STOCKS
(Cost $9,148,484) 9,926,088
----------
PREFERRED STOCKS 1.34%
BRAZIL 1.34%
Aracruz Celulose SA ADR
Representing Class B Pfd Shrs
(Cost $98,061) PP 11,334 138,842
----------
SHORT-TERM INVESTMENTS --
COMMERCIAL PAPER 3.19%
UNITED STATES 3.19%
Associates Corp of North America
5.850%, 8/1/1995 (Cost $332,000) FR $ 332,000 332,000
----------
TOTAL INVESTMENT
SECURITIES AT VALUE 100.00%
(Cost $9,578,545)
(Cost for Income Tax Purposes
$9,584,662) $ 10,396,930
==========
WORLDWIDE COMMUNICATIONS Fund
COMMON STOCKS 57.23%
CANADA 4.48%
BC TELECOM UT 4,700 80,910
Call-Net Enterprises Class B* TC 1,500 10,898
GST Telecommunications* TC 7,000 42,438
Leitch Technology* EL 40,000 590,228
Rogers Cantel Mobile
Communications Class B* TC 20,000 467,500
TELUS Corp TC 7,000 85,437
----------
1,277,411
----------
<PAGE>
DENMARK 1.97%
Olicom A/S* CO 40,000 560,000
----------
HONG KONG 1.94%
Golden Harvest
Entertainment* BR 500,000 99,509
Oriental Press Group Ltd PR 32,000 12,613
Sing Tao Holdings Ltd PR 26,000 15,792
Television Broadcasts Ltd BR 113,000 424,954
----------
552,868
----------
ITALY 0.20%
Telecom Italia Mobile SpA
Savings Shrs* UT 25,000 22,853
Telecom Italia SpA Savings
Shrs UT 25,000 34,808
----------
57,661
----------
MEXICO 1.81%
Grupo Radio Centro SA de CV
Sponsored ADR Representing
Participation Certificates BR 55,000 515,625
----------
NETHERLANDS 1.73%
Philips Electronics NV
New York Shrs EE 10,000 492,500
----------
SPAIN 0.55%
Telefonica de Espana SA
Sponsored ADR UT 3,800 155,325
----------
UNITED KINGDOM 6.41%
Cable & Wireless PLC
Sponsored ADR TC 5,000 101,250
Capital Radio PLC BR 8,850 61,671
Carlton Communications PLC BR 15,000 248,416
Granada Group PLC AV 54,000 563,363
HTV Group PLC BR 75,000 253,216
Pearson PLC PR 2,500 25,362
Scottish Television PLC BR 40,000 289,938
Yorkshire-Tyne Tees Television
Holdings PLC BR 32,000 282,130
----------
1,825,346
----------
UNITED STATES 38.14%
ALLTEL Corp UT 20,000 527,500
American Paging* TC 32,000 246,000
Ampex Corp Deleware Class A* EL 65,000 280,312
ANADIGICS Inc* EE 15,000 420,000
Apertus Technologies* CO 30,000 243,750
Augat Inc EE 8,500 202,937
<PAGE>
CBS Inc BR 7,000 543,375
CIS Technologies* CO 23,600 75,225
Cable Design Technologies* EE 10,000 225,000
Cellular Communications
of Puerto Rico* TC 15,000 465,000
Century Telephone Enterprises UT 3,000 85,500
Cincinnati Bell UT 5,000 133,125
Communication Cable TC 4,030 39,796
Comsat Corp Series 1 TC 5,000 115,625
Comverse Technology* CO 5,000 91,875
DSP Technology* CI 17,000 114,750
Data Broadcasting* FR 43,100 344,800
Electromagnetic Sciences* EE 10,000 137,500
FLIR Systems* EL 5,000 70,625
General Communication
Class A* TC 6,000 24,000
Heftel Broadcasting* BR 5,000 93,750
Individual Investor Group* PR 48,000 276,000
Interface Systems CO 10,000 56,250
King World Productions* BR 7,000 293,125
Lincoln Telecommunications TC 9,000 145,125
M-Wave Inc* EE 7,000 108,500
Microsemi Corp* EL 30,000 363,750
NetWorth Inc* CO 1,500 14,812
NYNEX Corp UT 5,700 235,125
Pacific Telesis Group UT 3,000 84,750
Recoton Corp* EL 10,000 207,500
S3 Inc* EL 5,000 201,250
Southern New England
Telecommunications UT 7,900 270,575
Sterling Software* CO 10,000 410,000
TII Industries* EE 30,000 232,500
Technitrol Inc EE 5,000 75,625
Tele-Communications International
Series A* TC 20,000 312,500
Telescan Inc* CO 10,000 77,500
U S WEST UT 12,000 514,500
United Television BR 10,000 745,000
VMARK Software* CO 20,000 300,000
ValueVision International
Class A* BR 41,300 242,637
VeriFone Inc* CO 35,000 971,250
Vertex Communications* EE 15,000 243,750
----------
10,862,469
----------
TOTAL COMMON STOCKS
(Cost $14,728,958) 16,299,205
----------
<PAGE>
SHORT-TERM INVESTMENTS --
REPURCHASE AGREEMENTS 42.77%
UNITED STATES 42.77%
Repurchase Agreement with State
Street Bank & Trust Co dated
7/31/1995 due 8/1/1995 at 5.750%,
repurchased at $12,180,945
(Collateralized by US Treasury
Notes due 9/30/1996 at 6.500%,
value $12,433,805)
(Cost $12,179,000) RA $12,179,000 12,179,000
----------
TOTAL INVESTMENT
SECURITIES AT VALUE 100.00%
(Cost $26,907,958#) $28,478,205
==========
* Security is non-income producing.
# Also represents cost for income tax purposes.
^ The following are restricted securities at July 31, 1995:
Value as
Acquisition Acquisition % of
Description Dates Cost Net Assets
-------------------------------------------------------------------
LATIN AMERICAN GROWTH Fund
Cementos Diamante SA
Sponsored ADR Representing 4/18/95 -
Class B Shrs 7/11/95 $110,750 1.36%
Central Costanera SA
Sponsored ADR
Representing 3/6/95 -
Class B Shrs 5/18/95 55,900 0.90%
Cia Chilena de
Distribucion
Electrica SA 4/21/95 -
Sponsored ADR 7/10/95 90,625 1.40%
Cia Energetica de Sao
Paolo Sponsored
ADR Representing 3/16/95 -
Pfd Shrs 5/11/95 171,763 2.76%
La Gran Cedena de
Almacenes
Colombianos SA
Sponsored ADR
Representing 4/18/95 -
Class B Pfd Shrs 7/11/95 111,750 1.41%
Usinas Siderurgicas
de Minas Gerais SA 3/2/95 -
Sponsored ADR 7/10/95 135,050 1.51%
-------
9.34%
=======
<PAGE>
Summary of Investments by Industry
% of
Industry Investment
Industry Code Securities Value
----------------------------------------------------------------
European Small Company Fund
Advertising AD 2.07% $ 93,125
Automobile Related AM 2.89 129,549
Chemicals CH 1.34 60,012
Computer Related CO 5.63 252,734
Construction Related CR 4.34 194,891
Containers CN 0.28 12,521
Control Instruments CI 1.30 58,348
Cosmetics & Toiletries CT 0.46 20,481
Diversified DV 2.49 111,932
Electrical Equipment EE 2.32 103,938
Electronics EL 3.10 139,091
Engineering EG 0.70 31,261
Finance Related FR 2.22 99,481
Food Products & Beverages FD 0.81 36,402
Furniture Manufacturing FM 1.38 61,988
Health Care Related HC 1.72 77,338
Insurance IN 2.21 99,086
Machinery MY 2.42 108,628
Manufacturing MA 4.24 190,135
Medical Equipment & Supplies MS 4.45 199,824
Medical Related - Drugs MD 0.83 37,095
Metals & Mining MM 3.70 166,125
Office Equipment OE 1.43 64,421
Oil & Gas Related OG 0.73 32,921
Paper & Paper Products PP 1.09 48,862
Photo Equipment & Supplies PH 2.30 103,145
Printing & Publishing PR 3.58 160,481
Real Estate Related RE 1.40 62,883
Recreation Related RR 4.58 205,628
Repurchase Agreements RA 13.93 625,000
Retail RT 9.02 404,595
Safety Equipment & Services SA 3.02 135,761
Telecommunications TC 1.60 71,684
Textiles & Apparel
Manufacturers TA 3.61 161,977
Transportation TR 2.02 90,626
Wholesale WH 0.79 35,379
---------- ------------
100.00% $4,487,348
========== ============
Latin American Growth Fund
Banking BK 4.68% $352,750
Broadcasting BR 1.29 97,102
Chemicals CH 2.47 186,281
Construction Related CR 8.69 654,938
Diversified DV 8.81 664,185
<PAGE>
Electrical Equipment EE 2.58 194,062
Food Products & Beverages FD 7.67 578,142
Foreign Government Obligations FG 0.15 11,063
Household Appliances HA 1.63 122,533
Machinery MY 1.11 83,750
Metals & Mining MM 11.38 857,601
Oil & Gas Related OG 4.19 315,733
Paper & Paper Products PP 2.03 153,000
Repurchase Agreements RA 7.23 545,000
Retail RT 6.05 456,032
Telecommunications TC 8.66 652,787
Tobacco TO 1.92 144,346
Utilities UT 17.60 1,326,187
Wholesale WH 1.86 140,000
---------- ------------
100.00% $7,535,492
========== ============
Worldwide Capital Goods Fund
Aerospace & Defense AE 4.41% $ 458,750
Automobile Related AM 6.20 645,125
Banking BK 1.93 200,625
Chemicals CH 1.76 183,000
Computer Related CO 3.07 319,500
Construction Related CR 4.25 441,684
Containers CN 2.17 225,625
Control Instruments CI 1.57 162,750
Diversified DV 11.16 1,159,971
Electrical Equipment EE 1.18 123,125
Electronics EL 4.58 476,303
Engineering EG 1.72 179,080
Finance Related FR 3.19 332,000
Machinery MY 11.37 1,181,662
Manufacturing MA 2.47 257,125
Metals & Mining MM 9.46 983,080
Oil & Gas Related OG 4.19 435,500
Paper & Paper Products PP 11.79 1,226,063
Printing & Publishing PR 1.65 171,500
Steel ST 4.19 435,625
Telecommunications TC 3.16 328,125
Textiles & Apparel
Manufacturers TA 1.29 134,400
Tire & Rubber Companies TI 1.67 173,500
Transportation TR 1.57 162,812
---------- ------------
100.00% $10,396,930
========== ============
<PAGE>
Worldwide Communications Fund
Audio/Video AV 1.98% $ 563,363
Broadcasting BR 14.37 4,093,346
Computer Related CO 9.83 2,800,662
Control Instruments CI 0.40 114,750
Electrical Equipment EE 7.51 2,138,312
Electronics EL 6.02 1,713,665
Finance Related FR 1.21 344,800
Printing & Publishing PR 1.16 329,767
Repurchase Agreements RA 42.77 12,179,000
Telecommunications TC 7.22 2,055,569
Utilities UT 7.53 2,144,971
---------- ------------
100.00% $28,478,205
========== ============
See Notes to Financial Statements
<PAGE>
INVESCO Specialty Funds, Inc.
Statement of Assets and Liabilities
July 31, 1995
<TABLE>
<CAPTION>
European Latin American Worldwide Worldwide
Small Company Growth Capital Goods Communications
Fund Fund Fund Fund
------------ ------------ ------------ ------------
ASSETS
Investment Securities:
<S> <C> <C> <C> <C>
At Cost~ $4,226,434 $7,530,416 $9,578,545 $26,907,958
============ ============ ============ ============
At Value~ $4,487,348 $7,535,492 $10,396,930 $28,478,205
Cash 70,121 71,625 757 5,905
Receivables:
Investment Securities Sold 0 0 482,042 140,250
Fund Shares Sold 118,321 34,646 41,149 97,882
Dividends and Interest 5,939 8,438 6,950 23,498
Prepaid Expenses and Other Assets 23,714 25,828 12,879 21,773
------------ ------------ ------------ ------------
TOTAL ASSETS 4,705,443 7,676,029 10,940,707 28,767,513
------------ ------------ ------------ ------------
LIABILITIES
Payables:
Distributions to Shareholders 48 36 95 1,634
Investment Securities Purchased 861,192 212,638 429,284 124,568
Fund Shares Repurchased 11,710 7,881 121,933 1,353,072
Accrued Distribution Expenses 615 1,481 2,100 5,748
Accrued Expenses and Other Payables 30,893 31,427 23,671 28,161
------------ ------------ ------------ ------------
TOTAL LIABILITIES 904,458 253,463 577,083 1,513,183
------------ ------------ ------------ ------------
Net Assets at Value $3,800,985 $7,422,566 $10,363,624 $27,254,330
============ ============ ============ ============
NET ASSETS
Paid-in Capital* $3,538,120 $7,191,927 $9,934,840 $23,727,232
Accumulated Undistributed
Net Investment Income 983 1,189 784 5,200
Accumulated Undistributed
Net Realized Gain (Loss)
on Investment Securities 899 224,463 (390,413) 1,951,578
Net Appreciation of Investment
Securities 260,983 4,987 818,413 1,570,320
------------ ------------ ------------ ------------
Net Assets at Value $3,800,985 $ 7,422,566 $ 10,363,624 $27,254,330
============ ============ ============ ============
Shares Outstanding 328,778 635,049 1,053,711 2,215,366
Net Asset Value, Offering and
Redemption Price per Share $11.56 $ 11.69 $9.84 $12.30
============ ============ ============ ============
<FN>
~ Investment securities at cost and value at July 31, 1995 include repurchase
agreements of $625,000, $545,000, $0 and $12,179,000 for the European Small
Company, Latin American Growth, Worldwide Capital Goods and Worldwide
Communications 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.
</FN>
See Notes to Financial Statements
</TABLE>
<PAGE>
INVESCO Specialty Funds, Inc.
Statement of Operations
Period Ended July 31, 1995 (Note 1)
<TABLE>
<CAPTION>
European Latin American Worldwide Worldwide
Small Company Growth Capital Goods Communications
Fund Fund Fund Fund
------------ ------------ ------------ ------------
INVESTMENT INCOME
INCOME
<S> <C> <C> <C> <C>
Dividends $19,860 $37,027 $ 83,937 $153,500
Interest 7,117 14,654 36,395 377,753
Foreign Taxes Withheld (2,747) (5,058) (8,200) (6,134)
------------ ------------ ------------ ------------
TOTAL INCOME 24,230 46,623 112,132 525,119
------------ ------------ ------------ ------------
EXPENSES
Investment Advisory Fees 4,159 12,530 32,382 101,129
Distribution Expenses 1,386 4,177 12,455 38,896
Transfer Agent Fees 2,300 5,295 20,517 64,043
Administrative Fees 3,417 3,584 10,747 12,334
Custodian Fees and Expenses 3,501 7,025 6,531 7,053
Directors' Fees and Expenses 4 17 26 4,514
Professional Fees and Expenses 30,733 30,752 25,695 28,882
Registration Fees and Expenses 10,717 10,868 34,990 35,280
Reports to Shareholders 45 205 2,386 8,737
Other Expenses 140 632 1,959 2,524
------------ ------------ ------------ ------------
TOTAL EXPENSES 56,402 75,085 147,688 303,392
Fees and Expenses Absorbed
by Investment Adviser (45,311) (41,670) (48,050) 0
------------ ------------ ------------ ------------
NET EXPENSES 11,091 33,415 99,638 303,392
------------ ------------ ------------ ------------
NET INVESTMENT INCOME 13,139 13,208 12,494 221,727
------------ ------------ ------------ ------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENT SECURITIES
Net Realized Gain (Loss) on
Investment Securities 899 224,463 (390,413) 2,030,773
Change in Net Appreciation
of Investment Securities 260,983 4,987 818,413 1,570,320
------------ ------------ ------------ ------------
NET GAIN ON INVESTMENT
SECURITIES 261,882 229,450 428,000 3,601,093
------------ ------------ ------------ ------------
Net Increase in Net
Assets from Operations $275,021 $242,658 $ 440,494 $3,822,820
============ ============ ============ ============
See Notes to Financial Statements
</TABLE>
<PAGE>
INVESCO Specialty Funds, Inc.
Statement of Changes in Net Assets
Period Ended July 31, 1995 (Note 1)
<TABLE>
<CAPTION>
European Latin American Worldwide Worldwide
Small Company Growth Capital Goods Communications
Fund Fund Fund Fund
------------ ------------ ------------ ------------
OPERATIONS
<S> <C> <C> <C> <C>
Net Investment Income $13,139 $13,208 $12,494 $221,727
Net Realized Gain (Loss)
on Investment Securities 899 224,463 (390,413) 2,030,773
Change in Net Appreciation
of Investment Securities 260,983 4,987 818,413 1,570,320
------------ ------------ ------------ ------------
NET INCREASE IN NET ASSETS
FROM OPERATIONS 275,021 242,658 440,494 3,822,820
------------ ------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS
Net Investment Income (12,156) (12,019) (11,710) (216,527)
Net Realized Gain on Investment
Securities 0 0 0 (79,195)
------------ ------------ ------------ ------------
TOTAL DISTRIBUTIONS (12,156) (12,019) (11,710) (295,722)
------------ ------------ ------------ ------------
FUND SHARE TRANSACTIONS
Proceeds from Sales of Shares 5,385,187 10,038,576 23,303,970 48,393,963
Reinvestment of Distributions 12,101 11,970 11,514 292,191
------------ ------------ ------------ ------------
5,397,288 10,050,546 23,315,484 48,686,154
Amounts Paid for Repurchases
of Shares (1,859,168) (2,858,619) (13,430,644) (25,008,922)
------------ ------------ ------------ ------------
NET INCREASE IN NET ASSETS
FROM FUND SHARE TRANSACTIONS 3,538,120 7,191,927 9,884,840 23,677,232
------------ ------------ ------------ ------------
Total Increase in Net Assets 3,800,985 7,422,566 10,313,624 27,204,330
NET ASSETS
Initial Subscription (Note 1) 0 0 50,000 50,000
------------ ------------ ------------ ------------
End of Period $3,800,985 $7,422,566 $10,363,624 $27,254,330
============ ============ ============ ============
Accumulated Undistributed Net
Investment Income Included
in Net Assets at End of Period $983 $ 1,189 $784 $5,200
FUND SHARE TRANSACTIONS
Initial Subscription (Note 1) 0 0 5,000 5,000
Shares Sold 499,857 887,351 2,492,352 4,388,249
Shares Issued from Reinvestment
of Distributions 1,047 1,024 1,170 25,995
------------ ------------ ------------ ------------
500,904 888,375 2,498,522 4,419,244
Shares Repurchased (172,126) (253,326) (1,444,811) (2,203,878)
------------ ------------ ------------ ------------
Net Increase in Fund Shares 328,778 635,049 1,053,711 2,215,366
============ ============ ============ ============
See Notes to Financial Statements
</TABLE>
<PAGE>
INVESCO Specialty Funds, Inc.
Notes to Financial Statements
NOTE 1 -- ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES. INVESCO
Specialty Funds, Inc. (the "Fund"), a Maryland Corporation, was incorporated on
April 12, 1994 and consists of four separate Funds: European Small Company Fund
and Latin American Growth Fund, both of which commenced investment operations on
February 15, 1995, and Worldwide Capital Goods Fund and Worldwide Communications
Fund, both of which commenced investment operations on August 1, 1994. 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.
A. SECURITY VALUATION -- Equity securities traded on national
securities exchanges or in the over-the-counter market are valued at the
last sale price in the market where such securities are primarily traded.
If last sale 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.
Foreign securities are valued at the closing price on the principal
stock exchange on which they are traded. In the event the 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
by the Fund's board of directors. Restricted securities are valued in
accordance with 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
at market value if maturity is greater than 60 days.
B. REPURCHASE AGREEMENTS -- Repurchase agreements held by the Fund are fully
collateralized by U.S. Government securities and such collateral is in the
possession of the Fund's custodian. The collateral is evaluated daily to
ensure its market value exceeds the current market value of the repurchase
agreements including accrued interest.
C. SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME --
Security transactions are accounted for on the trade date and
dividend income is recorded on the ex dividend date. Certain
dividends from foreign securities will be recorded as soon as
the Fund is informed of the ex dividend date. Interest
income, which may be comprised of stated coupon rate, market
discount and original issue discount is recorded on the
accrual basis. Cost is determined on the specific
identification basis.
<PAGE>
The Fund may have elements of risk due to concentrated investments in
foreign issuers located in an emerging country. Such concentrations may
subject the Fund to additional risks resulting from future political or
economic conditions and possible imposition of adverse foreign
governmental laws or currency exchange restrictions.
Restricted securities held by the Fund may not be sold except in exempt
transactions or in a public offering registered under the Securities Act
of 1933. The risk of investing in such securities is generally greater
than the risk of investing in the securities of widely held, publicly
traded companies. Lack of a secondary market and resale restrictions may
result in the inability of the Fund to sell a security at a fair price and
may substantially delay the sale of the security which the Fund seeks to
sell. In addition, these securities may exhibit greater price volatility
than securities for which secondary markets exist.
D. FEDERAL AND STATE TAXES -- The Fund has complied and continues
to comply with the provisions of the Internal Revenue Code
applicable to regulated investment companies and, accordingly,
has made or intends to make sufficient distributions of net
investment income and net realized capital gains, if any, to
relieve it from all federal and state income taxes and federal
excise taxes. At July 31, 1995, Worldwide Capital Goods Fund
had $16,088 in net capital loss carryovers which expire, if
not used, in the year 2003.
Worldwide Capital Goods Fund incurred and elected to defer post-October
31 net capital losses of $368,208 to the year ended July 31, 1996. 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 period ended July 31, 1995, amounts
qualifying for the dividends received deduction available to the Fund's
corporate shareholders were as follows:
Qualifying
Fund Percentage
---------------------------------------------------
European Small Company Fund 0.00%
Latin American Growth Fund 0.00%
Worldwide Capital Goods Fund 100.00%
Worldwide Communications Fund 29.79%
Investment income received by each Fund from foreign sources may be
subject to foreign withholding taxes. Dividend income is shown gross of foreign
withholding taxes in the accompanying financial statements.
<PAGE>
E. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Dividends and
distributions to shareholders are recorded by the Fund on the
ex dividend/distribution date. The Fund distributes net
realized capital gains, if any, to its shareholders at least
annually, if not offset by capital loss carryovers. Income
distributions and capital gain distributions are determined in
accordance with income tax regulations which may differ from
generally accepted accounting principles. These differences
are primarily due to differing treatments for foreign currency
transactions, nontaxable dividends, net operating losses,
expiring capital loss carryforwards and deferral of wash
sales. As of July 31, 1995, there were no such differences.
F. 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.
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. The fee is based on the annual
rate of each Fund's average net assets as follows:
AVERAGE NET ASSETS
$0 to $500 Million Over
$500 to $1 $1
Fund Million Billion Billion
--------------------------------------------------------------------
European Small Company Fund 0.75% 0.65% 0.55%
Latin American Growth Fund 0.75% 0.65% 0.55%
Worldwide Capital Goods Fund 0.65% 0.55% 0.45%
Worldwide Communications Fund 0.65% 0.55% 0.45%
In accordance with a Sub-Advisory Agreement between IFG and INVESCO Trust
Company ("ITC"), a wholly owned subsidiary of IFG, investment decisions of the
Worldwide Capital Goods and Worldwide Communications Funds are made by ITC. In a
separate Sub-Advisory Agreement between IFG and INVESCO MIM International
Limited ("MIL"), an affiliate of IFG, investment decisions of European Small
Company and Latin American Growth Funds are made by MIL. 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 $14.00 per shareholder
account, or per participant in an omnibus account. 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>
A plan of distribution pursuant to Rule 12b-1 of the Act provides for
reimbursement of marketing and advertising expenditures to IFG (the
"Distributor") to a maximum of 0.25% of average annual net assets. Amounts
accrued by the Fund are available to reimburse the Distributor for actual
expenditures incurred within a rolling twenty-four-month period ending March 31,
1997 for European Small Company and Latin American Growth Funds and ending July
31, 1996 for Worldwide Capital Goods and Worldwide Communications Funds, and for
a rolling twelve-month period thereafter. For the period ended, July 31, 1995,
the Fund paid the Distributor $771, $2,696, $10,355 and $33,148, respectively,
for reimbursement of expenses incurred.
IFG has voluntarily agreed, in some instances, to absorb certain fees and
expenses incurred by each Fund.
A 2% redemption fee is retained by the Latin American Growth Fund to offset
transaction costs and other expenses associated with short-term redemptions and
exchanges. The fee is imposed on redemptions or exchanges of shares held less
than twelve months.
The redemption fee is accounted for as an addition to Paid-in Capital. Total
redemption fees received by the Latin American Growth Fund for the period ended
July 31, 1995 were $58,527. NOTE 3 -- PURCHASES AND SALES OF INVESTMENT
SECURITIES. For the period ended July 31, 1995, 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
-------------------------------------------------------------------
European Small Company Fund $ 3,604,190 $3,655
Latin American Growth Fund 7,906,705 1,148,124
Worldwide Capital Goods Fund 18,228,041 8,591,089
Worldwide Communications Fund 31,660,544 18,962,359
There were no purchases or sales of U.S. Government securities.
NOTE 4 -- APPRECIATION AND DEPRECIATION. At July 31, 1995, 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
------------------------------------------------------------------
European Small Company Fund $293,471 $32,557 $260,914
Latin American Growth Fund 296,425 296,146 279
Worldwide Capital Goods Fund 925,495 113,227 812,268
Worldwide Communications Fund 1,898,924 328,677 1,570,247
NOTE 5 -- TRANSACTIONS WITH AFFILIATES. Certain of the Fund's officers and
directors are also officers and directors of IFG, ITC or MIL. At July 31, 1995,
5.33% of outstanding shares of Worldwide Capital Goods Fund were held by IFG.
<PAGE>
The Fund has adopted an unfunded noncontributory defined benefit pension 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 25% of the retainer fee at
the time of retirement. Pension expenses for the period ended July 31, 1995,
were insignificant.
<PAGE>
INVESCO Specialty Funds, Inc.
Financial Highlights
(For a Fund Share Outstanding throughout Each Period)
Period Ended July 31, 1995 (Note 1)
<TABLE>
<CAPTION>
European Latin American Worldwide Worldwide
Small Company Growth Capital Goods Communications
Fund Fund Fund Fund
----------- ----------- ----------- -----------
PER SHARE DATA
<S> <C> <C> <C> <C>
Net Asset Value -- Beginning of Period $10.00 $10.00 $10.00 $10.00
----------- ----------- ----------- -----------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.04 0.02 0.01 0.11
Net Gains or (Losses) on Securities
(Both Realized and Unrealized) 1.56 1.69 (0.16) 2.35
----------- ----------- ----------- -----------
Total from Investment Operations 1.60 1.71 (0.15) 2.46
----------- ----------- ----------- -----------
LESS DISTRIBUTIONS
Dividends from Net Investment Income 0.04 0.02 0.01 0.11
Distributions from Capital Gains 0.00 0.00 0.00 0.05
----------- ----------- ----------- -----------
Total Distributions 0.04 0.02 0.01 0.16
----------- ----------- ----------- -----------
Net Asset Value -- End of Period $11.56 $11.69 $ 9.84 $12.30
=========== =========== =========== ===========
TOTAL RETURN 15.98%* 17.09%* (1.49%) 24.83%
RATIOS
Net Assets -- End of Period
($000 Omitted) $3,801 $7,423 $10,364 $27,254
Ratio of Expenses to Average Net Assets# 2.00%~ 2.00%~ 2.00% 1.95%
Ratio of Net Investment Income
to Average Net Assets# 2.37%~ 0.79%~ 0.25% 1.43%
Portfolio Turnover Rate 0%* 30%* 193% 215%
<FN>
* These amounts are based on operations for the period shown and, accordingly,
are not representative of a full year. Total return for the Latin American
Growth Fund does not reflect the effect of the applicable redemption fees.
# Various expenses of European Small Company, Latin American Growth and
Worldwide Capital Goods Funds were voluntarily absorbed by IFG for the period
ended July 31, 1995. If such expenses had not been voluntarily absorbed,
ratio of expenses to average net assets would have been 10.17% (annualized),
4.49% (annualized) and 2.96%, respectively, and ratio of net investment
income to average net assets would have been (5.80%) (annualized), (1.70%)
(annualized) and (0.71%), respectively.
~ Annualized
</FN>
</TABLE>
<PAGE>
Report of Independent Accountants
To the Board of Directors and Shareholders of
INVESCO Specialty 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 European Small
Company Fund, Latin American Growth Fund, Worldwide Capital Goods Fund, and
Worldwide Communications Fund (constituting the INVESCO Specialty Funds, Inc.,
hereafter referred to as the "Fund") at July 31, 1995, the results of each of
their operations, the changes in each of their net assets 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, 1995 by
correspondence with the custodian 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
August 21, 1995
<PAGE>
INVESCO FUNDS
To receive general information and prospectuses on any of INVESCO's funds or
retirement plans, or to obtain current account or price information,
Call toll-free: 1-800-525-8085
To reach PAL(R), your 24-hour Personal
Account Line, call: 1-800-424-8085
Or write to:
INVESCO Funds Group, Inc., Distributor
Post Office Box 173706
Denver, Colorado 80217-3706
This information must be preceded or accompanied by a current prospectus.
