SEMIANNUAL REPORT
January 31, 1996
INVESCO
SPECIALTY
FUNDS,
INC.
European Small Company Fund
Latin American Growth Fund
Worldwide Capital Goods Fund
Worldwide Communications Fund
Smart choices for seeking capital
appreciation around the globe.
INVESCO FUNDS
<PAGE>
Economic Overview February 1996
1995 will long stand out as a banner year for U.S. investors. The S&P 500
achieved a total return of 37.44% for the 12 months ended 12/31/95, only the
fourth time in fifteen years the broad market returned over 25%. By other
measures, market results were even more exciting: The Dow Jones Industrial
Average broke 5000 for the first time in history, and fixed-income markets
followed suit, with the Lehman Government/Corporate Bond Index gaining
19.24%.(1)
In January 1996 the stock market whipsawed in the wake of stalled federal
budget negotiations. Yet continuing economic easing by the Fed, including a
0.25% short-term interest rate decrease on 1/31/96, helped the S&P 500 rise to
new heights, ending the month up 3.45%.
Despite strong January performance, this year corporate earnings
improvements almost certainly won't see the dramatic gains enjoyed in 1994 and
1995. While a budget settlement in Washington seems uncertain, it is expected
that the Federal Reserve will continue to gradually reduce interest rates. We
believe this will lead to a slow-growth trend for the economy, as well as the
stock and bond markets, during 1996.
International Highlights
Europe. European monetary union as agreed to in the Maastricht Treaty
would almost certainly improve the economies of all involved. Recently, however,
doubts have grown that Europe's highly socialistic governments will reach the
mandated 3% maximum budget deficit by 1997. While various deficit-cutting
proposals have been presented by the participating countries, the securities
markets have treated them with varying degrees of confidence, leading to
roller-coaster returns throughout the Continent.
Pacific Basin. Japan appears to be starting its recovery from a year of
disappointments -- from the Kobe earthquake to the trading scandal at Daiwa
Bank. Other Pacific Basin markets such as Hong Kong, Taiwan and Singapore appear
ready to expand after hitting what seems to have been their cyclical bottom.
However, political stress between Taiwan and mainland China has continued to
hamper these markets' performance.
Latin America. Despite continued financial stress relating to the 1994
devaluation of the Mexican peso, Latin American markets have moved dramatically
upward recently in response to renewed emphasis on social reform and
privatization, combined with relative improvements in inflation, Gross Domestic
Product growth, and export activity.
/s/ R. Dalton Sim
- -------------------------------------
R. Dalton Sim, Chairman and President
INVESCO Trust Company
<PAGE>
INVESCO Specialty Funds, Inc.
The following line graphs 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
1/31/96.(2) The charts and other total return figures cited reflect the funds'
operating expenses. However, the indexes do not have expenses, which would, of
course, have lowered their performance.
International investing is not risk-free. Foreign markets and currencies
fluctuate, and investors may see sudden variations in price per share.
European Small Company Fund
European Small Company Fund
Average Annualized Total Return
as of 1/31/96(2)
Since inception (2/95) 30.63%
-----------------------------------
For the six months ended 1/31/96, INVESCO European Small Company Fund
achieved a cumulative total return of 12.63%.(2) In comparison, for the same
period the regionally focused James Capel Smaller European Index had a total
return of only 4.5%, while the international MSCI-EAFE returned just 1.65%.(1)
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 and James Capel Smaller European
Indexes, assuming in each case reinvestment of all dividends and capital
gain distributions, for the period from inception (2/15/95) through
1/31/96
Strategic Overview
Europe's economies have taken a recent beating in the face of high
unemployment, economic stagnation, and EMU breakdowns. Yet, by U.S. standards,
many European stocks are undervalued, potentially representing greater long-term
opportunity than some of the higher-priced American stocks.
By investing only in smaller-capitalization companies (roughly $1 billion
U.S. or less), European Small Company Fund is positioned to capitalize on
companies with new ideas and attractive products that seem poised to grow
earnings despite the poor economy.
As the fund's strong relative performance indicates, we have used this
strategy to successfully identify strong performers in various sectors. For
example, Fresenius AG, a medical product and supply company, and textile &
apparel manufacturer Wolford AG both exceeded their anticipated return levels as
a result of increasing sales and profits.
<PAGE>
Looking Forward
As 1996 unfolds, we intend to continue to pursue above-average performance
potential. Toward this end, recent additions to the portfolio include Nordtank
Energy Group A/S, a leading producer of wind turbines used for electric power
generation, and Acorn Computer Group PLC, a major player in the risk-based
microprocessor industry through its associate Advanced Risk Machines Ltd.
Fund Managers
INVESCO European Small Company Fund is team-managed in our London offices.
The team is led by INVESCO Fund Manager Claire Griffiths and Investment Director
Andy Crossley. Ms. Griffiths graduated from St. John's College, Cambridge, and
began her investment career in 1989. Mr. Crossley began his career in 1988 after
graduating from Loughborough University.
Latin American Growth Fund
For the six months ended 1/31/96, INVESCO Latin American Growth Fund
achieved a cumulative total return of 10.31%.(2) In comparison, for the same
period, the regionally focused MSCI-Latin American Index achieved a total return
of just 6.5%.(1)
Latin American Growth Fund
Average Annualized Total Return
as of 1/31/96(2)
Since inception (2/95) 29.16%
-----------------------------------
Strategic Overview
After slow growth during the fourth quarter of 1995, Latin American Growth
Fund achieved significantly higher returns during January 1996. This strong
performance was realized primarily in Brazil, where stock prices rose in
anticipation of social reform and increased privatization.
With 40% of the portfolio invested in Brazilian companies as of January
31, our focus has been tilted towards telecommunications, banks, and undervalued
second tier industrial groups. The largest holding, Telecomunicacoes
Brasileires, a telecommunications company, has a positive growth outlook for
1996.
Our second largest allocation is in Mexico, at 19% of the portfolio.
Economic conditions are expected to slowly improve from the excessively
depressed levels of 1995 with inflation falling from over 50% to under 40%, and
growth resuming at a modest 3% rate. However, the fund will remain underweighted
relative to its benchmark, as interest rates may have fallen too far and are
expected to rise in the coming weeks.
The portfolio has also been overweighted in Argentina, Columbia and Peru.
We have increased exposure to smaller stocks such as Argentina's Dragados y
Construccionas Argentina SA, whose prices have the potential for improvements.
<PAGE>
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 1/31/96
Looking Forward
Securities markets throughout Latin America reflect improvements which
we've been tracking for some time. Therefore, we believe the fund is already
weighted to take advantage of continued growth in the region, and intend to
retain current allocation levels.
Fund Manager
The team which manages INVESCO Latin American Growth Fund is led by
Francesco Bertoni, Investment Director of INVESCO Asset Management Ltd.
specializing in international equities. He received his degree in Economics from
the Bocconi University in Milan, Italy, and began his investment career in 1986.
Mr. Bertoni is assisted by Peter Jarvis. He received his BA degree with honors
in Mathematics from St. John's College, Oxford University and began his
investment career with INVESCO in August 1993.
Worldwide Capital Goods Fund
Worldwide Captial Goods Fund
Average Annualized Total Return
as of 1/31/96(2)
1 year 17.91%
-----------------------------------
Since inception (8/94) -0.40%
-----------------------------------
For the six months ended 1/31/96, Worldwide Capital Goods Fund had a total
return of 0.90%.(2) In contrast, the domestic S&P 500 and international
MSCI-EAFE for the same period had positive total returns of 14.46% and 1.65%,
respectively.(1)
Strategic Overview
Results for Worldwide Capital Goods Fund have suffered from a widespread
industrial economic slowdown. This low-growth environment is a typical
"cyclical" event.
Demand for capital goods used by industrial, agricultural, energy, mining
and transportation firms grows during times of broad economic expansion.
However, demand slows during times of economic stagnation like we saw
internationally in 1995.
Also, these cyclical downturns can occur in economies which may appear
stronger due to high stock market returns. This was the case last year in the
U.S., when record-breaking returns were achieved primarily in the technology,
health, and financial markets.
<PAGE>
Graph:
This line graph represents a comparison of the value of a $10,000
investment in INVESCO Worldwide Captial Goods Fund to the value of a
$10,000 investment in the S&P 500 and MSCI-EAFE Indexes, assuming in each
case reinvestment of all dividends and capital gain distributions, for the
period from inception (8/1/94) through 1/31/96
In particular, during the second half of 1995, growing concern regarding
recession led to reduced production in an effort to deplete inventories. While
this concern was somewhat offset by the January 1996 short-term interest rate
reduction, we have not seen any indication that demand for economic inputs will
increase significantly in the near-term.
Looking Forward
The fundamental long-term potential for the fund remains strong. As the
world's economies move towards capitalism, the need for improved transportation,
communication, construction, and other aids to free trade tend to increase. And
an expanded requirement for infrastructure translates into increased demand for
the capital goods required for its production.
In pursuing our goal of participating in this process of global
modernization, we continue to focus on companies from relatively strong
economies worldwide which provide the potential for superior performance, based
on strong fundamentals and demand for their products.
Fund Manager
Worldwide Capital Goods fund is managed by Albert M. Grossi, who joined in
INVESCO in 1995. He was previously a portfolio manager/senior analyst at
Westinghouse Pension Investments Corporation. Mr. Grossi earned both a BA and an
MBA from Rutgers University.
Mr. Grossi is assisted by Amy Selner, who joined INVESCO in 1991. She is a
graduate of Creighton University, Omaha, where she earned a BSBA in finance and
marketing.
Worldwide Communications Fund
Worldwide Communications Fund
Average Annualized Total Return
as of 1/31/96(2)
1 year 30.17%
-----------------------------------
Since inception (8/94) 23.17%
-----------------------------------
For the six months ended 1/31/96, Worldwide Communications Fund achieved a
total return of 9.51%.(2) As this is a fund which invests globally, the
performance reflects returns below the domestic S&P 500 and substantially above
the international MSCI-EAFE for the same period, of 14.46% and .65%,
respectively.(1)
<PAGE>
Based on the fund's strong performance, U.S. News & World Report called it
one of the "Best International/Global Equity Funds of 1995" in its 1/29/96
issue, ranking the fund #9 of 669 international/global equity funds for the
one-year period ended 12/31/95.(3)
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 and MSCI-EAFE Indexes, assuming in each
case reinvestment of all dividends and capital gain distributions, for the
period from inception (8/1/94) through 1/31/96
Strategic Overview
Worldwide Communications Fund subscribes to a management philosophy
emphasizing increasing earnings, attractive valuations, and, when possible,
superior dividend growth.
Domestically, the recently passed Telecommunications Bill has provided
momentum for the fund, with stocks reacting to the bill's anticipated passage
for several months. With expanding ownership opportunities, we expect
deregulation to bring merger and acquisition activity to the market. As in any
industry, consolidation could generate synergies allowing cost-cutting and
expansion of services, potentially resulting in increased profits.
In 1995, the fund focused on U.S. stocks, benefiting from a superior market
environment. This year, the fund is actively pursuing global opportunities, with
the highest investment weighting (following the U.S.) in the United Kingdom.
This diversification is due to our belief that the U.K. currently provides a
strong environment for growth and that the stocks are priced well relative to
U.S. counterparts. Additionally, we are seeing expansion of services associated
with recent liberalization of ownership regulations, and resulting industry
consolidation.
Looking Forward
In the face of volatile U.S. stock market returns during 1996, the fund
increased its short-term investment position to 32% of the portfolio as of
1/31/96. We believe that this defensive position, combined with our disciplined
stock selection criteria, will help us weather any temporary storms while
seeking to maximize returns from communications-related growth around the world.
Fund Manager
Worldwide Communications Fund is managed by INVESCO Vice President Brian
F. Kelly. He is a Certified Public Accountant, and holds an MBA and JD from the
University of Iowa, as well as a BA from the University of Notre Dame. Before
joining INVESCO in 1993, Brian was with the pension department of Sears,
Roebuck.
<PAGE>
(1) The S&P 500 and Dow Jones Industrial Average are unmanaged indexes
considered representative of the performance of the broad U.S. stock market. The
Lehman Government/Corporate Index is an unmanaged index illustrating the broad
fixed-income market. 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. The James Capel
Smaller European Index reflects European small-cap stock performance.
(2) Total return assumes reinvestment of dividends and capital gain
distributions for the periods indicated. Investment return and principal value
will fluctuate so that, when redeemed, an investor's shares may be worth more or
less than when purchased. Of course, past performance is not a guarantee of
future results.
(3) U.S. News & World Report's recommendation in its 1996 Annual Mutual Fund
Guide is based on unrounded 1995 total returns assuming reinvestment of
dividends and distributions. Funds had to be one-year old as of 12/31/95, with
assets of $25 million or more on 11/30.
<PAGE>
INVESCO Specialty Funds, Inc.
Ten Largest Common Stock Holdings
January 31, 1996
Description Value
- ------------------------------------------------------------------------
EUROPEAN SMALL COMPANY FUND
Bulgari SpA Sponsored ADR $215,268
Tomra Systems AS 209,117
Christian Dalloz 209,092
Wolford AG Bearer Shrs 207,035
Appleyard Group PLC 202,096
De Rigo SpA ADR 197,500
Aalberts Industries NV 197,251
Altran Technologies SA 193,606
Quick Restaurants NPV 190,918
Seatex AS 188,298
LATIN AMERICAN GROWTH Fund
Telecomunicacoes Brasileiras SA Sponsored ADR $975,625
Usinas Siderurgicas de Minas Gerais SA (Usiminas)
Sponsored ADR 600,756
Telefonos de Mexico SA de CV Ord Series L Shrs 546,771
Grupo Carso SA de CV Series A-1 532,249
Cemex SA de CV Series B Shrs 428,904
Souza Cruz SA 425,419
Sociedad Comercial del Plata SA 420,056
Yacimientos Petroliferos Fiscades SA Sponsored
ADR Representing Class D Shrs 407,250
Rhodia-Ster SA 401,526
Enersis SA Sponsored ADR 357,500
<PAGE>
WORLDWIDE CAPITAL GOODS Fund
General Electric $268,625
Olin Corp 205,937
First Brands 197,500
Raytheon Co 196,500
Stolt-Nielsen S
Representing Class B Shrs 186,250
Whitman Corp 170,625
Union Pacific 166,563
Pall Corp 162,000
NYNEX Corp 160,875
United Technologies 153,937
WORLDWIDE COMMUNICATIONS Fund
U S WEST Communications
Group $1,756,250
Granada Group PLC 1,436,885
TII Industries 1,330,000
Southern New England Telecommunications 1,320,000
Pacific Telesis Group 1,239,000
ALLTEL Corp 941,250
SBC Communications 906,000
PanAmSat Corp 850,000
Century Telephone Enterprises 785,900
BCE Inc 722,500
<PAGE>
INVESCO Specialty Funds, Inc.
Statement of Investment Securities
January 31, 1996
UNAUDITED
Shares or
Industry Principal
Description Code Amount Value
- ------------------------------------------------------------------------------
EUROPEAN SMALL COMPANY Fund
COMMON STOCKS 83.07%
AUSTRIA 1.72%
Wolford AG Bearer Shrs TA 1,200 $207,035
----------
BELGIUM 2.79%
Barco NV EL 1,170 145,149
Quick Restaurants SA RT 1,950 190,918
----------
336,067
----------
DENMARK 6.96%
Coloplast A/S Registered B Shrs MS 1,900 181,486
Falck Holding A/S* SA 1,200 164,223
Martin Gruppen A/S* EL 2,750 136,115
Nordtank Energy Group A/S* MA 2,400 170,892
Oticon Holdings A/S Series A Shrs MS 1,750 186,913
----------
839,629
----------
FINLAND 1.35%
Tietotehdas Oy Series B Shrs CO 5,000 162,508
----------
FRANCE 11.05%
Altran Technologies SA EG 1,100 193,606
Cegedim SA* AD 1,150 95,687
Christian Dalloz* SA 800 209,092
Grand Optical Photoservice PH 1,500 135,675
Groupe Axime* CO 875 81,285
Industrielle de Transports
Automobiles SA* FR 210 38,153
Penauille Polyservices CS 1,900 181,898
Radiall SA EE 1,600 178,550
Skis Rossignol SA RR 350 113,885
Zodiac SA RR 600 104,781
----------
1,332,612
----------
GERMANY 2.55%
CeWe Color Holding AG PH 560 175,012
Eifelhohen Klinik AG HC 750 133,073
----------
308,085
----------
<PAGE>
ITALY 7.68%
Bulgari SpA Sponsored ADR* RT 22,800 215,268
De Rigo SpA ADR* MS 7,900 197,500
Gucci Group NV New York
Registered Shrs* TA 4,200 170,625
Industrie Natuzzi SpA ADR FM 3,570 174,037
Saes Getters Non-Convertible
Savings Shrs EL 20,760 169,215
----------
926,645
----------
NETHERLANDS 8.60%
Aalberts Industries NV MM 3,100 197,251
Ahrend Groep NV OE 5,100 178,786
Axxicon Group NV* MA 8,000 159,914
BE Semiconductor Industries NV
New York Registered Shrs* SE 8,350 107,506
Baan Corp NV* CO 1,940 84,147
Getronics NV CO 3,590 188,131
IHC Caland NV* EG 3,400 121,028
----------
1,036,763
----------
NORWAY 7.51%
Ark A/S* CO 11,250 181,366
Nera A/S TC 4,000 136,034
Seatex A/S* CI 33,600 188,298
Sensonor A/S* CI 9,940 76,308
Sysdeco Group A/S* CO 4,000 115,153
Tomra Systems A/S MY 22,700 209,117
----------
906,276
----------
SPAIN 0.41%
Azkoyen SA MY 870 49,899
----------
SWEDEN 4.95%
Althin Medical AB Series B Shrs MS 3,000 59,590
Assa Abloy AB Series B Shrs* MA 12,239 106,580
Elekta AB Series B Shrs MS 4,600 174,135
Frontec AB Series B Shrs* CO 5,600 175,718
Hoganasgruppen AB Series B Shrs MM 3,200 81,065
----------
597,088
----------
SWITZERLAND 0.72%
Lem Holdings SA Bearer Shrs EE 260 86,588
----------
UNITED KINGDOM 26.78%
ABI Leisure Group PLC RR 28,000 38,077
Acorn Computer Group PLC* CO 25,000 79,328
Anglian Group PLC BC 33,000 70,307
Antonov PLC* AM 36,500 58,461
Appleyard Group PLC AM 125,000 202,096
<PAGE>
Ashbourne PLC HC 50,000 101,237
Bluebird Toys PLC RR 7,500 39,550
British-Borneo Petroleum
Syndicate PLC OG 20,000 125,413
Burford Holdings PLC RE 62,000 104,924
Compel Group PLC RT 20,000 59,533
Countryside Properties PLC BC 125,000 122,769
Eurocamp PLC RR 31,245 107,642
EuroDollar Holdings PLC TR 40,000 63,462
Games Workshop Group PLC RR 18,000 82,410
Greenway Holdings PLC PC 50,000 62,707
Hambro Countrywide PLC RE 175,000 101,804
IBC Group PLC PR 10,000 43,215
Kenwood Appliances PLC HA 12,000 49,138
Litho Supplies PLC WH 20,000 64,973
London Forfaiting PLC FR 27,000 95,057
Lowndes Lambert Group Holdings PLC IN 27,000 62,011
MAID PLC* CO 32,500 93,304
Memory Corp PLC* CO 15,000 95,873
Northern Leisure PLC RR 75,000 112,192
P&P PLC RT 30,000 62,555
PTS Group PLC BC 27,000 52,220
Pet City Holdings PLC* RT 15,000 86,580
Psion PLC CO 10,500 118,674
Quality Software Products
Holdings PLC CO 7,490 44,025
RJB Mining PLC MM 10,000 80,838
Rutland Trust PLC FR 175,000 104,448
Sage Group PLC CO 15,000 77,061
Scotia Holdings PLC* MD 4,850 44,703
Specialty Shops PLC RE 45,000 67,315
Tring International Group PLC WH 58,125 36,887
Trocadero PLC* RR 52,000 42,429
Vibroplant PLC FR 6,250 9,160
VideoLogic Group PLC* CO 100,000 107,281
Wainhomes PLC BC 65,769 88,445
Westminster Health Care PLC HC 35,000 172,405
----------
3,230,509
----------
TOTAL COMMON STOCKS
(Cost $9,010,154 ) 10,019,704
----------
PREFERRED STOCKS 8.97%
GERMANY 8.97%
Berentzen Gruppe AG Non-
Voting Pfd Shrs FD 5,000 194,906
Fielmann AG Non-Voting
Pfd Shrs RT 3,770 209,036
Fresenius AG Non-Voting
Pfd Shrs MS 2,050 185,311
Marschollek, Lautenschlaeger
und Partners AG Pfd Shrs IN 175 144,667
<PAGE>
Moebel Walther AG Non-
Voting Pfd Shrs RT 3,000 99,805
PUMA AG Rudolf Dassler Sport
Non-Voting Pfd Shrs TA 270 76,215
Sander (Jil) AG Pfd Shrs TA 230 171,584
----------
TOTAL PREFERRED STOCKS
(Cost $995,330 ) 1,081,524
----------
SHORT-TERM INVESTMENTS -
REPURCHASE AGREEMENTS 7.96%
UNITED STATES 7.96%
Repurchase Agreement with
State Street Bank & Trust Co
dated 1/31/1996 due 2/1/1996
at 5.000%, repurchased at
$960,133 (Collateralized by
US Treasury Bonds due
5/15/2017 at 8.750%,
value $983,969) (Cost $960,000) RA 960,000 960,000
----------
TOTAL INVESTMENT SECURITIES AT VALUE 100.00%
(Cost $10,965,484)
(Cost for Income Tax Purposes
$10,965,613) 12,061,228
----------
LATIN AMERICAN GROWTH Fund
COMMON STOCKS 63.84%
ARGENTINA 12.24%
Astra Cia Argentina de Petroleo SA OG 180,000 347,446
Banco Frances del Rio de la Plata
SA Sponsored ADR BK 9,900 289,575
Buenos Aires Embotelladora SA
Sponsored ADR Representing
Class B Ord Shrs FD 3,000 63,750
Central Costanera SA Sponsored ADR
Representing Class B Shrs^ UT 9,500 332,544
Cresud SA Series B Shrs* AG 20,000 33,604
Dragados y Construcciones Argentina
SA Series B Shrs BC 47,000 197,426
Sociedad Comercial del Plata SA* DV 120,000 420,056
Telecom Argentina STET-France
Telecom SA Sponsored ADR
Representing Class B Shrs TC 2,000 106,750
Telefonica de Argentina SA
Sponsored ADR Representing
Class B Shrs UT 8,000 256,000
Yacimientos Petroliferos Fiscades
SA Sponsored ADR Representing
Class D Shrs OG 18,000 407,250
----------
2,454,401
----------
<PAGE>
BRAZIL 15.18%
Cia Siderurgica Nacional* ST 6,000,000 158,508
Light Servicos de Eletricidade SA* UT 800,000 257,643
Rhodia-Ster SA TA 370,500 401,526
Souza Cruz SA TO 57,000 425,419
Telecomunicacoes Brasileiras SA
Sponsored ADR TC 17,500 975,625
Usinas Siderurgicas de Minas Gerais
SA (Usiminas) Sponsored ADR*^ ST 52,000 600,756
White Martins Produtos de Carbono SA CH 180,000,000 224,460
----------
3,043,937
----------
CHILE 7.45%
Chilgener SA Sponsored ADR UT 7,000 164,500
Cia de Telecomunicaciones de Chile
SA Sponsored ADR TC 3,000 240,375
Empresa Nacional de Electricidad
Chile SA Sponsored ADR UT 3,000 60,750
Enersis SA Sponsored ADR UT 13,000 357,500
Madeco SA Sponsored ADR BC 7,500 202,500
Maderas y Sinteticos SA MASISA
Sponsored ADR PP 9,000 178,875
Santa Isabel SA Sponsored ADR* RT 4,000 91,500
Sociedad Quimica y Minera de Chile
SA Sponsored ADR Representing
Series B Shrs CH 4,000 198,500
----------
1,494,500
----------
COLUMBIA 2.27%
Carulla & Cia SA Sponsored ADR
Representing Class B Shrs*^ RT 31,500 211,822
Cementos Diamante SA Sponsored ADR
Representing Class B Shrs*^ BC 12,500 243,570
----------
455,392
----------
LUXEMBOURG 1.31%
Quilmes Industrial SA FD 14,000 263,200
----------
MEXICO 18.96%
Alfa SA de CV Series A DV 10,000 134,590
Apasco SA de CV BC 41,000 213,002
Cemex SA de CV Series B Shrs BC 105,000 428,904
Cifra SA de CV Series C Shrs* RT 240,000 301,050
Corporacion GEO SA de CV Series
B Shrs* BC 90,000 297,982
Desc SA de CV Sponsored ADR
Representing Series C Shrs* DV 12,000 192,000
Empresas la Moderna SA de CV
Sponsored ADR Representing Ord
Class A Participation Certi TO 16,000 288,000
<PAGE>
Gruma SA de CV* FD 40,400 130,498
Grupo Carso SA de CV Series A-1* DV 78,000 532,249
Grupo Casa Autrey SA de CV
Sponsored ADR WH 18,000 294,750
Grupo Financiero Banamex-Accival
SA de CV Series B Shrs BK 90,000 175,640
Grupo Televisa SA Participation
Certificates Representing
Series A, Series D & Series L BR 19,000 265,950
Telefonos de Mexico SA de CV Ord
Series L Shrs TC 325,000 546,771
----------
3,801,386
----------
PANAMA 1.38%
Panamerican Beverages Non
Voting Class A FD 7,000 276,500
----------
PERU 4.27%
CPT Telefonica del Peru SA
Series B Shrs TC 80,000 177,929
Cementos Lima SA Sponsored ADR BC 19,000 253,549
Cia de Minas Buenaventura SA C Shrs MM 25,000 196,733
Credicorp Ltd* FR 7,000 129,500
Southern Peru Copper* MM 5,500 97,625
----------
855,336
----------
UNITED KINGDOM 0.78%
Antofagasta Holdings PLC MM 30,000 156,389
----------
TOTAL COMMON STOCKS
(Cost $11,982,300) 12,801,041
----------
PREFERRED STOCKS 26.38%
BRAZIL 24.90%
Banco Bradesco SA Non Voting
Pfd Shrs BK 50,631,000 579,725
Banco Itau SA Non Voting Pfd Shrs BK 500,000 173,807
Brasmotor SA Pfd Shrs HA 700,000 193,948
Centrais Eletricas Brasileiras
SA-ELETROBRAS Class B Non
Voting Pfd Shrs UT 2,000,000 603,214
Cia Cervejaria Brahma Non Voting
Pfd Shrs FD 705,513 343,676
Cia Cimento Portland Itau Non
Voting Pfd Shrs BC 1,100,000 309,275
Cia Energetica de Minas Gerais
Pfd Shrs UT 14,999,000 374,165
Cia Energetica de Minas Gerais
Sponsored ADR Representing
Non Voting Pfd Shrs* UT 7,898 192,909
Cia Energetica de Sao Paolo Non
Voting Conv Pfd Shrs* UT 300,000 8,864
<PAGE>
Cia Energetica de Sao Paolo
Sponsored ADR Representing
Pfd Shrs*^ UT 15,000 127,901
Cia Vale Do Rio Doce Pfd A Shrs MM 60,000 10,366
Cia Vale Do Rio Doce Sponsored
ADR Representing Pfd Shrs MM 8,200 346,873
Dixie Toga SA Pfd Shrs* PP 359,898 367,958
Duratex SA Pfd Shrs BC 4,000,000 181,984
Itausa-Investimentos Itau SA Non
Voting Pfd Shrs DV 750,000 506,086
Lojas Americanas SA Non Voting
Pfd Shrs* RT 15,000,000 346,590
Marcopolo SA Series B Non Voting
Pfd Shrs* AM 210,000 35,643
Telecomunicacoes de Sao Paulo SA
Non Voting Pfd Shrs TC 1,500,000 275,893
Usinas Siderurgicas de Minas Gerais
SA (Usiminas) Non Voting Pfd Shrs ST 12,000,000 13,740
----------
4,992,617
----------
COLUMBIA 1.48%
Banco Industrial Colombiano SA
Sponsored ADR Representing
Pfd Shrs BK 12,000 214,500
Gran Cedena de Almacenes Colombianos
SA Sponsored ADR Representing
Class B Pfd Shrs^ RT 6,000 83,154
----------
297,654
----------
TOTAL PREFERRED STOCKS
(Cost $4,932,595) 5,290,271
----------
SHORT-TERM INVESTMENTS -
REPURCHASE AGREEMENTS 9.78%
Repurchase Agreement with
State Street Bank & Trust Co
dated 1/31/1996 due 2/1/1996
at 5.000%, repurchased at
$1,960,272 (Collateralized by
US Treasury Bonds due
8/15/2017 at 8.750%,
value $2,001,180)
(Cost $1,960,000) RA 1,960,000 1,960,000
----------
TOTAL INVESTMENT SECURITIES AT VALUE 100.00%
(Cost $18,874,895)
(Cost for Income Tax Purposes
$18,879,692) $20,051,312
----------
<PAGE>
WORLDWIDE CAPITAL GOODS Fund
COMMON STOCKS 89.11%
ARGENTINA 1.25%
Cia Naviera Perez Companc SA
Series B Shrs DV 15,000 94,663
----------
CANADA 3.68%
Agrium Inc CH 9,000 123,750
Diamond Fields Resources MM 4,000 85,031
Fletcher Challenge Canada Ltd
Class A PP 4,500 70,314
----------
279,095
----------
CHILE 1.25%
Madeco SA Sponsored ADR CR 3,500 94,500
----------
GERMANY 1.46%
Degussa AG MM 300 110,693
----------
HONG KONG 1.53%
CITIC Pacific Ltd DV 30,000 116,206
----------
MEXICO 1.78%
Groupo Industrial Alfa SA de CV ADR DV 10,000 134,590
----------
SINGAPORE 0.48%
Asia Pacific Resources
International Holdings Ltd
Class A* CH 8,000 36,000
----------
UNITED KINGDOM 2.37%
Antofagasta Holdings PLC DV 9,000 46,917
HSBC Holdings PLC BK 8,000 132,437
----------
179,354
----------
UNITED STATES 75.31%
Airborne Freight TR 5,000 133,125
American Standard* MA 2,500 72,812
Bearings Inc MY 3,000 74,250
Black & Decker TL 3,500 118,563
Boeing Co AE 1,000 77,625
Cairn Energy USA* OG 6,000 84,000
Coastal Corp OG 3,000 113,625
Computervision Corp* CO 7,500 92,812
Dresser Industries OG 4,000 104,000
ENSCO International* OG 4,000 95,500
First Brands CL 4,000 197,500
GTE Corp TC 3,000 138,000
General Electric DV 3,500 268,625
Global Industrial Technologies* MM 6,000 136,500
Halliburton Co OG 2,500 129,063
<PAGE>
Honeywell Inc EE 2,000 101,750
Kansas City Southern Industries DV 2,000 91,000
Kimberly-Clark Corp PP 1,500 120,937
Masco Corp CR 3,000 87,750
Northwestern Steel & Wire* ST 10,000 90,000
NYNEX Corp TC 3,000 160,875
Olin Corp DV 2,500 205,937
Pall Corp ME 6,000 162,000
Panhandle Eastern OG 2,500 72,188
Phelps Dodge MM 1,500 94,500
Potlatch Corp PP 3,000 122,625
Procter & Gamble CL 1,500 125,812
Raytheon Co AE 4,000 196,500
Roanoke Electric Steel ST 5,000 78,750
Rohr Inc* AE 5,000 91,250
Roper Industries CI 3,000 118,687
Sealed Air* CN 3,500 102,812
Sonat Inc OG 4,000 138,000
Sonoco Products CN 5,000 133,750
Stanley Works CR 2,000 103,000
Stolt-Nielsen SA
Representing Class B Shrs* TR 10,000 186,250
Stone Energy* OG 6,000 84,750
Texas Industries CR 2,000 112,250
Titan Holdings IN 5,000 67,500
USG Corp* CR 3,500 104,125
Union Pacific TR 2,500 166,563
United Technologies AE 1,500 153,937
US WEST Communications Group TC 4,000 140,500
Varian Associates EL 2,000 96,250
Whitman Corp DV 7,500 170,625
World Color Press* PR 5,000 99,375
Zurn Industries MA 4,000 89,500
----------
5,705,748
----------
TOTAL COMMON STOCKS
(Cost $6,252,356) 6,750,849
----------
SHORT-TERM INVESTMENTS --
REPURCHASE AGREEMENTS 10.89%
UNITED STATES 10.89%
Repurchase Agreement with
State Street Bank & Trust Co
dated 1/31/1996 due 2/1/1996
at 5.750%, repurchased at
$825,132 (Collateralized by
US Treasury Notes due
11/15/2022 at 7.625%,
value $847,938)
(Cost $825,000) RA 825,000 825,000
----------
<PAGE>
TOTAL INVESTMENT
SECURITIES AT VALUE 100.00%
(Cost $7,077,356)
(Cost for Income Tax Purposes
$7,082,632) 7,575,849
----------
WORLDWIDE COMMUNICATIONS Fund
COMMON STOCKS 68.72%
AUSTRALIA 0.64%
Digicall Group Ltd* TC 250,000 214,130
----------
BERMUDA 0.84%
South China Morning Post
Holdings Ltd PR 400,000 281,946
----------
CANADA 0.26%
BC TELECOM UT 4,700 89,237
----------
FINLAND 1.55%
Nokia Corp ADR
Representing Ord A Shrs EL 14,000 523,250
----------
FRANCE 1.35%
Compagnie Generale des Eaux SV 4,300 456,283
----------
HONG KONG 1.65%
Television Broadcasts Ltd BR 155,100 557,655
----------
SWEDEN 1.96%
Ericsson (L M) Telephone ADR
Representing Class B Shrs TC 32,000 660,000
----------
UNITED KINGDOM 16.23%
Bell Cablemedia PLC
Sponsored ADR* CA 28,000 413,000
Carlton Communications PLC BR 15,000 234,809
Comcast UK Cable Partners Ltd
Class A* CA 44,000 539,000
Granada Group PLC AV 133,000 1,436,885
HTV Group PLC BR 75,000 376,239
NYNEX CableComms Group PLC ADR* TC 35,000 479,063
Pearson PLC PR 2,500 25,158
Scottish Television PLC BR 88,600 662,679
Videotron Holdings PLC
Sponsored ADR* CA 34,000 454,750
Vodafone Group PLC
Sponsored ADR TC 13,000 464,750
Yorkshire-Tyne Tees Television
Holdings PLC BR 32,000 388,750
----------
5,475,083
----------
<PAGE>
UNITED STATES 44.24%
ALLTEL Corp UT 30,000 941,250
BCE Inc TC 20,000 722,500
Century Telephone Enterprises UT 23,200 785,900
Cincinnati Bell UT 10,000 325,000
DSP Technology* CI 27,000 172,125
Gaylord Entertainment Class A RS 25,000 678,125
Identix Inc* CO 10,000 136,250
Individual Investor Group* PR 63,000 401,625
NYNEX Corp UT 11,400 611,325
Osicom Technologies* TC 54,000 681,750
Pacific Telesis Group UT 42,000 1,239,000
PanAmSat Corp* TC 34,000 850,000
SBC Communications UT 16,000 906,000
Southern New England
Telecommunications UT 33,000 1,320,000
TII Industries* EE 190,000 1,330,000
United Television BR 5,000 439,375
U S Satellite Broadcasting* TC 25,000 675,000
U S WEST Communications Group UT 50,000 1,756,250
Vertex Communications* EE 32,000 548,000
VIASOFT Inc* CO 20,000 402,500
----------
14,921,975
----------
TOTAL COMMON STOCKS
(Cost $21,013,464) 23,179,559
----------
SHORT-TERM INVESTMENTS 31.28%
Commercial Paper 5.75%
UNITED STATES 5.75%
Ford Motor Credit
5.440%, 2/15/1996
(Cost $1,940,000) AM 1,940,000 1,940,000
Repurchase Agreements 25.53%
UNITED STATES 25.53%
Repurchase Agreement with
State Street Bank & Trust Co
dated 1/31/1996 due 2/1/1996
at 5.750%, repurchased at
$8,611,375 (Collateralized by
US Treasury Notes due
11/15/2022 at 7.625%,
value $8,800,380)
(Cost $8,610,000) RA 8,610,000 8,610,000
TOTAL SHORT-TERM INVESTMENTS
(Cost $10,550,000) 10,550,000
----------
TOTAL INVESTMENT
SECURITIES AT VALUE 100.00%
(Cost $31,563,464#) 33,729,559
----------
* Security is non-income producing.
# Also represents cost for income tax purposes.
^ The following are restricted securities at January 31,
1995:
<PAGE>
Value as
Acquisition Acquisition % of
Description Dates Cost Net Assets
- -----------------------------------------------------------------------------
LATIN AMERICAN GROWTH Fund
Carulla & Cia SA
Sponsored ADR
Representing Class 12/19/95 -
B Shrs 1/24/96 $223,043 1.08%
Cementos Diamante SA
Sponsored ADR
Representing 4/18/95 -
Class B Shrs 1/24/96 263,500 1.24
Central Costanera SA
Sponsored ADR
Representing 3/6/95 -
Class B Shrs 1/23/96 299,337 1.70
Cia Energetica de
Sao Paolo
Sponsored ADR
Representing 3/16/95 -
Pfd Shrs 5/11/95 171,762 0.65
Gran Cedena de
Almacenes
Colombianos SA
Sponsored ADR
Representing 4/18/95 -
Class B Pfd Shrs 7/11/95 111,750 0.42
Usinas Siderurgicas
de Minas Gerais
SA (Usiminas) 3/2/95 -
Sponsored ADR 1/22/96 538,925 3.07
--------
8.16%
========
<PAGE>
Summary of Investments by Industry
% of
Industry Investment
Industry Code Securities Value
- ------------------------------------------------------------------------------
European Small Company Fund
Advertising AD 0.79% $95,687
Automobile Related AM 2.16 260,557
Building & Construction Related BC 2.77 333,741
Commercial Services CS 1.51 181,898
Computer Related CO 13.30 1,603,854
Control Instruments CI 2.19 264,606
Electrical Equipment EE 2.20 265,138
Electronics EL 3.73 450,479
Engineering EG 2.61 314,634
Finance Related FR 2.05 246,818
Food Products & Beverages FD 1.62 194,906
Furniture Manufacturing FM 1.44 174,037
Health Care Related HC 3.37 406,715
Household Appliances HA 0.41 49,138
Insurance IN 1.71 206,678
Machinery MY 2.15 259,016
Manufacturing MA 3.63 437,386
Medical Products & Supplies MS 8.17 984,935
Medical Related - Drugs MD 0.37 44,703
Metals & Mining MM 2.98 359,154
Office Equipment OE 1.48 178,786
Oil & Gas Related OG 1.04 125,413
Photo Equipment & Supplies PH 2.58 310,687
Pollution Control Related PC 0.52 62,707
Printing & Publishing PR 0.36 43,215
Real Estate Related RE 2.27 274,043
Recreation Related RR 5.31 640,966
Repurchase Agreements RA 7.96 960,000
Retail RT 7.66 923,695
Safety Equipment & Services SA 3.09 373,315
Semiconductor Equipment SE 0.89 107,506
Telecommunications TC 1.13 136,034
Textiles & Apparel Manufactures TA 5.18 625,459
Transportation TR 0.53 63,462
Wholesale WH 0.84 101,860
--------------------
100.00% $12,061,228
====================
Latin American Growth Fund
Agricultural AG 0.17% $33,604
Automobile Related AM 0.18 35,643
Banking BK 7.15 1,433,247
Broadcasting BR 1.33 265,950
Building & Construction Related BC 11.61 2,328,192
Chemicals CH 2.11 422,960
Diversified Companies DV 8.90 1,784,981
Finance Related FR 0.65 129,500
Food Products & Beverages FD 5.37 1,077,624
<PAGE>
Household Appliances HA 0.97 193,948
Metals & Mining MM 4.03 807,986
Oil & Gas Related OG 3.76 754,696
Paper & Paper Products PP 2.73 546,833
Repurchase Agreement RA 9.77 1,960,000
Retail RT 5.16 1,034,116
Steel ST 3.85 773,004
Telecommunications TC 11.59 2,323,343
Textiles & Apparel Manufacturers TA 2.00 401,526
Tobacco TO 3.56 713,419
Utilities UT 13.64 2,735,990
Wholesale WH 1.47 294,750
--------------------
100.00% $20,051,312
====================
Worldwide Capital Goods
Aerospace & Defense AE 6.85% $519,312
Banking BK 1.75 132,437
Chemicals CH 2.11 159,750
Cleaning Products CL 4.27 323,312
Computer Related CO 1.23 92,812
Construction Related CR 6.62 501,625
Containers CN 3.12 236,562
Control Instuments CI 1.57 118,687
Diversified DV 14.90 1,128,563
Electrical Equipment EE 1.34 101,750
Electronics EL 1.27 96,250
Insurance IN 0.89 67,500
Machinery MY 0.98 74,250
Manufacturing MA 2.14 162,312
Medical Products ME 2.14 162,000
Metals & Mining MM 5.63 426,724
Oil & Gas Related OG 10.84 821,126
Paper & Paper Products PP 4.14 313,876
Printing & Publishing PR 1.31 99,375
Repurchase Agreement RA 10.89 825,000
Steel & Iron ST 2.23 168,750
Telecommunications TC 5.80 439,375
Tools TL 1.57 118,563
Transportation TR 6.41 485,938
--------------------
100.00% $7,575,849
====================
Worldwide Communications Fund
Automobile Related AM 5.75% $1,940,000
Audio/Video AV 4.26 1,436,885
Broadcasting BR 7.89 2,659,507
Cable Television CA 4.17 1,406,750
Control Instruments CI 0.51 172,125
Computer Related CO 1.60 538,750
Electrical Equipment EE 5.57 1,878,000
Electronics EL 1.55 523,250
Printing & Publishing PR 2.10 708,729
Repurchase Agreement RA 25.53 8,610,000
Recreation Services RS 2.01 678,125
Services SV 1.35 456,283
Telecommunications TC 14.07 4,747,193
Utilities UT 23.64 7,973,962
--------------------
100.00% $33,729,559
====================
<PAGE>
INVESCO Specialty Funds, Inc.
Statement of Assets and Liabilities
January 31, 1996
UNAUDITED
<TABLE>
<CAPTION>
European Latin American Worldwide Worldwide
Small Company Growth Capital Goods Communications
Fund Fund Fund Fund
------------------------------------------------------------------------------------
ASSETS
<S> <C> <C> <C> <C>
Investment Securities:
At Cost~ $10,965,484 $18,874,895 $7,077,356 $31,563,464
====================================================================================
At Value~ $12,061,228 $20,051,312 $7,575,849 $33,729,559
Cash 63,282 367,632 96,742 0
Foreign Currency
(Cost $100,033, $910,110,
$0, $1,289,245) 100,990 907,546 0 1,286,086
Receivables:
Investment Securities Sold 0 140 64,700 3,755,403
Fund Shares Sold 85,972 634,350 63,334 114,965
Dividends and Interest 6,977 11,813 6,970 45,476
Prepaid Expenses and Other Assets 33,971 19,356 28,880 27,155
------------------------------------------------------------------------------------
TOTAL ASSETS 12,352,420 21,992,149 7,836,475 38,958,644
------------------------------------------------------------------------------------
LIABILITIES
Payables:
Custodian 0 0 0 1,213
Investment Securities Purchased 376,083 2,402,242 282,500 3,006,984
Fund Shares Repurchased 12,054 7,971 3,727 27,012
Accrued Distribution Expenses 2,151 2,784 1,539 7,122
Accrued Expenses and Other Payables 21,463 8,928 21,453 25,400
------------------------------------------------------------------------------------
TOTAL LIABILITIES 411,751 2,421,925 309,219 3,067,731
------------------------------------------------------------------------------------
Net Assets at Value $11,940,669 $19,570,224 $7,527,256 $35,890,913
====================================================================================
NET ASSETS
Paid-in Capital* $10,843,490 $18,412,486 $7,260,869 $32,783,079
Accumulated Undistributed Net
Investment Income (Loss) (26,647) (8,540) (16,315) 54,929
Accumulated Undistributed Net
Realized Gain (Loss)
on Investment Securities and
Foreign Currency Transactions 27,417 (7,514) (215,774) 890,041
Net Appreciation of Investment
Securities and Foreign
Currency Transactions 1,096,409 1,173,792 498,476 2,162,864
------------------------------------------------------------------------------------
Net Assets at Value $11,940,669 $19,570,224 $7,527,256 $35,890,913
====================================================================================
Shares Outstanding 917,226 1,580,327 778,356 2,969,020
Net Asset Value,
Offering and Redemption
Price per Share $13.02 $12.39 $9.67 $12.09
====================================================================================
<PAGE>
<FN>
~ Investment securities at cost and value at January 31, 1996 include
repurchase agreements of $960,000, $1,960,000, $825,000 and $8,610,000 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
Six Months Ended January 31, 1996
UNAUDITED
<TABLE>
<CAPTION>
European Latin American Worldwide Worldwide
Small Company Growth Capital Goods Communications
Fund Fund Fund Fund
------------------------------------------------------------------------------------
INVESTMENT INCOME
<S> <C> <C> <C> <C>
INCOME
Dividends $28,961 $69,444 $49,184 $140,008
Interest 15,483 16,615 13,230 404,157
Foreign Taxes Withheld (4,183) (7,451) (586) (3,059)
------------------------------------------------------------------------------------
TOTAL INCOME 40,261 78,608 61,828 541,106
------------------------------------------------------------------------------------
EXPENSES
Investment Advisory Fees 25,459 33,127 25,652 99,558
Distribution Expenses 8,486 11,042 9,866 38,292
Transfer Agent Fees 9,618 13,934 16,650 56,159
Administrative Fees 5,509 5,663 5,592 7,297
Custodian Fees and Expenses 17,081 17,008 10,153 7,842
Directors' Fees and Expenses 9 41 2,817 4,652
Professional Fees and Expenses 4,505 4,685 12,176 13,455
Registration Fees and Expenses 18,882 20,186 11,305 18,000
Reports to Shareholders 1,444 2,395 1,745 7,707
Other Expenses 552 809 781 2,371
------------------------------------------------------------------------------------
TOTAL EXPENSES 91,545 108,890 96,737 255,333
Fees and Expenses Absorbed
by Investment Adviser (16,607) (13,055) (13,366) 0
Fees and Expenses Paid Indirectly (7,047) (7,498) (4,444) (3,174)
------------------------------------------------------------------------------------
NET EXPENSES 67,891 88,337 78,927 252,159
------------------------------------------------------------------------------------
NET INVESTMENT INCOME (LOSS) (27,630) (9,729) (17,099) 288,947
------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENT SECURITIES
Net Realized Gain on Investment
Securities and Foreign Currency
Transactions 26,518 118,048 367,139 1,928,544
Change in Net Appreciation (Depreciation)
of Investment Securities and
Foreign Currency Transactions 835,426 1,168,805 (319,937) 592,544
------------------------------------------------------------------------------------
NET GAIN ON INVESTMENT SECURITIES 861,944 1,286,853 47,202 2,521,088
------------------------------------------------------------------------------------
Net Increase in Net Assets
from Operations $834,314 $1,277,124 $30,103 $2,810,035
====================================================================================
See Notes to Financial Statements
</TABLE>
<PAGE>
INVESCO Specialty Funds, Inc.
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
European Small Company Fund Latin American Growth Fund
Six Months Period Six Months Period
Ended Ended Ended Ended
January 31 July 31 January 31 July 31
------------------------------------ ------------------------------------
1996 1995 1996 1995
UNAUDITED (Note 1) UNAUDITED (Note 1)
OPERATIONS
<S> <C> <C> <C> <C>
Net Investment Income (Loss) $(27,630) $13,139 $(9,729) $13,208
Net Realized Gain on Investment
Securities and Foreign Currency
Transactions 26,518 899 118,048 224,463
Change in Net Appreciation of
Investment Securities and
Foreign Currency Transactions 835,426 260,983 1,168,805 4,987
------------------------------------ ------------------------------------
NET INCREASE IN NET ASSETS
FROM OPERATIONS 834,314 275,021 1,277,124 242,658
------------------------------------ ------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
Net Investment Income 0 (12,156) 0 (12,019)
Net Realized Gain on Investment
Securities 0 0 (350,025) 0
------------------------------------ ------------------------------------
TOTAL DISTRIBUTIONS 0 (12,156) (350,025) (12,019)
------------------------------------ ------------------------------------
FUND SHARE TRANSACTIONS
Proceeds from Sales of Shares 15,011,965 5,385,187 13,296,087 10,038,576
Reinvestment of Distributions 0 12,101 345,921 11,970
------------------------------------ ------------------------------------
15,011,965 5,397,288 13,642,008 10,050,546
Amounts Paid for Repurchases
of Shares (7,706,595) (1,859,168) (2,421,449) (2,858,619)
------------------------------------ ------------------------------------
NET INCREASE IN NET ASSETS
FROM FUND SHARE TRANSACTIONS 7,305,370 3,538,120 11,220,559 7,191,927
------------------------------------ ------------------------------------
Total Increase in Net Assets 8,139,684 3,800,985 12,147,658 7,422,566
NET ASSETS
Beginning of Period 3,800,985 0 7,422,566 0
------------------------------------ ------------------------------------
End of Period $11,940,669 $3,800,985 $19,570,224 $7,422,566
==================================== ====================================
Accumulated Undistributed Net
Investment Income (Loss)
Included in Net Assets
at End of Period $(26,647) $983 $(8,540) $1,189
<PAGE>
FUND SHARE TRANSACTIONS
Shares Sold 1,205,886 499,857 1,130,579 887,351
Shares Issued from Reinvestment
of Distributions 0 1,047 31,678 1,024
------------------------------------ ------------------------------------
1,205,886 500,904 1,162,257 888,375
Shares Repurchased (617,438) (172,126) (216,979) (253,326)
------------------------------------ ------------------------------------
Net Increase in Fund Shares 588,448 328,778 945,278 635,049
==================================== ====================================
See Notes to Financial Statements
</TABLE>
<PAGE>
INVESCO Specialty Funds, Inc.
Statement of Changes in Net Assets (Continued)
<TABLE>
<CAPTION>
Worldwide Capital Goods Fund Worldwide Communications Fund
Six Months Year Six Months Year
Ended Ended Ended Ended
January 31 July 31 January 31 July 31
------------------------------------ ------------------------------------
1996 1995 1996 1995
UNAUDITED UNAUDITED
OPERATIONS
<S> <C> <C> <C> <C>
Net Investment Income (Loss) $(17,099) $12,494 $288,947 $221,727
Net Realized Gain (Loss) on
Investment Securities and
Foreign Currency Transactions 367,139 (390,413) 1,928,544 2,030,773
Change in Net Appreciation
(Depreciation) of Investment
Securities and Foreign Currency
Transactions (319,937) 818,413 592,544 1,570,320
------------------------------------ ------------------------------------
NET INCREASE IN NET ASSETS
FROM OPERATIONS 30,103 440,494 2,810,035 3,822,820
------------------------------------ ------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
Net Investment Income 0 (11,710) (239,218) (216,527)
Net Realized Gain on Investment
Securities (192,500) 0 (2,990,081) (79,195)
------------------------------------ ------------------------------------
TOTAL DISTRIBUTIONS (192,500) (11,710) (3,229,299) (295,722)
------------------------------------ ------------------------------------
FUND SHARE TRANSACTIONS
Proceeds from Sales of Shares 3,283,881 23,303,970 33,306,841 48,393,963
Reinvestment of Distributions 191,459 11,514 3,194,122 292,191
------------------------------------ ------------------------------------
3,475,340 23,315,484 36,500,963 48,686,154
Amounts Paid for Repurchases
of Shares (6,149,311) (13,430,644) (27,445,116) (25,008,922)
------------------------------------ ------------------------------------
NET INCREASE (DECREASE)
IN NET ASSETS FROM FUND
SHARE TRANSACTIONS (2,673,971) 9,884,840 9,055,847 23,677,232
------------------------------------ ------------------------------------
Total Increase (Decrease)
in Net Assets (2,836,368) 10,313,624 8,636,583 27,204,330
NET ASSETS
Initial Subscription (Note 1) 0 50,000 0 50,000
------------------------------------ ------------------------------------
Beginning of Period 10,363,624 0 27,254,330 0
==================================== ====================================
End of Period $7,527,256 $10,363,624 $35,890,913 $27,254,330
Accumulated Undistributed Net
Investment Income (Loss)
Included in Net Assets
at End of Period $(16,315) $784 $54,929 $5,200
<PAGE>
FUND SHARE TRANSACTIONS
Initial Subscription (Note 1) 0 5,000 0 5,000
Shares Sold 342,255 2,492,352 2,685,287 4,388,249
Shares Issued from Reinvestment
of Distributions 20,132 1,170 270,002 25,995
------------------------------------ ------------------------------------
362,387 2,498,522 2,955,289 4,419,244
Shares Repurchased (637,742) (1,444,811) (2,201,635) (2,203,878)
------------------------------------ ------------------------------------
Net Increase (Decrease)
in Fund Shares (275,355) 1,053,711 753,654 2,215,366
==================================== ====================================
See Notes to Financial Statements
</TABLE>
<PAGE>
INVESCO Specialty Funds, Inc.
Notes to Financial Statements
UNAUDITED
NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES. INVESCO Specialty
Funds, Inc. (the "Fund"), was incorporated in Maryland on April 12, 1994 and
presently consists of five separate Funds: Asian Growth Fund will commence
investment operations on March 1, 1996, 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. Asian Growth
Fund is not presented herein. The investment objectives of the respective Funds
are: to achieve capital appreciation for the European Small Company, Latin
American Growth, and Worldwide Capital Goods Funds; and to achieve a high total
return on investments through capital appreciation and current income for the
Worldwide Communications Fund. 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 revenues 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.
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
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 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.
<PAGE>
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
dividend if such information is obtained subsequent to 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.
The Fund may have elements of risk due to concentrated investments
in foreign issuers located in a specific country. Such concentrations may
subject the Fund to additional risks resulting from future political or
economic conditions and/or possible impositions of adverse foreign
governmental laws or currency exchange restrictions. Net realized and
unrealized gain or loss from investments includes fluctuations from
currency exchange rates and fluctuations in market value.
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
and deferred post-October 31 losses, 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.
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 and expired capital loss carryforwards.
<PAGE>
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.
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. 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. A
separate Sub-Advisory Agreement between IFG and INVESCO MIM International
Limited ("MIL"), an affiliate of IFG, provides that 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. Effective November 10, 1995, INVESCO
Asset Management Limited ("IAM"), an affiliate of IFG, serves as sub- advisor
for European Small Company and Latin American Growth Funds under terms similar
to the previous Sub-Advisory Agreement between IFG and MIL.
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.
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 July 31,
1996 for Worldwide Capital Goods and Worldwide Communications Funds, and for a
rolling twelve-month period thereafter. For the six months ended January 31,
1996, the Fund paid the Distributor $6,950, $9,739, $10,427 and $36,918,
respectively, for reimbursement of expenses incurred.
<PAGE>
IFG and ITC have voluntarily agreed, in some instances, to absorb certain
fees and expenses incurred by Worldwide Capital Goods Fund. IFG and IAM have
voluntarily agreed, in some instances, to absorb certain fees and expenses
incurred by European Small Company and Latin American Growth Funds.
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 six months ended January 31, 1996 were $47,376.
NOTE 3 - PURCHASES AND SALES OF INVESTMENT SECURITIES. For the six months
ended January 31, 1996, 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 $8,390,153 $2,012,621
Latin American Growth Fund 11,480,586 1,669,210
Worldwide Capital Goods Fund 9,194,192 12,555,520
Worldwide Communications Fund 25,465,717 21,109,755
There were no purchases or sales of U.S. Government securities.
NOTE 4 - APPRECIATION AND DEPRECIATION. At January 31, 1996, 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 $1,314,652 $219,037 $1,095,615
Latin American Growth Fund 1,484,067 312,447 1,171,620
Worldwide Capital Goods Fund 589,166 95,949 493,217
Worldwide Communications Fund 2,426,393 260,298 2,166,095
NOTE 5 - TRANSACTIONS WITH AFFILIATES AND AFFILIATED COMPANIES. Certain of the
Fund's officers and directors are also officers and directors of IFG, ITC, MIL
or IAM.
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 six months ended January 31, 1996, 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:
<PAGE>
Unfunded
Pension Accrued Pension
Fund Expenses Pension Costs Liability
- -------------------------------------------------------------------------------
European Small Company Fund $0 $0 $0
Latin American Growth Fund 0 0 0
Worldwide Capital Goods Fund 22 (64) (42)
Worldwide Communications Fund 81 (236) (155)
An affiliated company represents ownership by the Fund of at least 5% of the
voting securities of the issuer during the period, as defined in the Act. A
summary of the transactions during the six months ended January 31, 1996, in
which the issuer was an affiliate of the Fund, is as follows:
<TABLE>
<CAPTION>
Purchases Sales Realized
-------------------- ------------------- Dividend Gain Value at
Affiliate Shares Cost Shares Cost Income on Investments 1/31/96
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Latin American
Growth Fund
Centrais Eletricas
Brasileiras SA-
ELETROBRAS
Class B Non Voting
Pfd Shrs 2,000,000 $581,796 -- -- -- -- $603,214
</TABLE>
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. For the
six months ended January 31, 1996, there were no such borrowings.
<PAGE>
INVESCO Specialty Funds, Inc.
Financial Highlights
(For a Fund Share Outstanding Throughout Each Period)
<TABLE>
<CAPTION>
Six Months Period Six Months Period
Ended Ended Ended Ended
January 31 July 31 January 31 July 31
---------- ---------- ---------- ----------
1996 1995 1996 1995
UNAUDITED (Note 1) UNAUDITED (Note 1)
European Small Company Fund Latin American Growth Fund
PER SHARE DATA
<S> <C> <C> <C> <C>
Net Asset Value - Beginning of Period $11.56 $10.00 $11.69 $10.00
---------- ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss) (0.03) 0.04 (0.01) 0.02
Net Gains on Securities
(Both Realized and Unrealized) 1.49 1.56 1.15 1.69
---------- ---------- ---------- ----------
Total from Investment Operations 1.46 1.60 1.14 1.71
---------- ---------- ---------- ----------
LESS DISTRIBUTIONS
Dividends from Net Investment Income 0.00 0.04 0.00 0.02
Distributions from Capital Gains 0.00 0.00 0.44 0.00
---------- ---------- ---------- ----------
Total Distributions 0.00 0.04 0.44 0.02
---------- ---------- ---------- ----------
Net Asset Value - End of Period $13.02 $11.56 $12.39 $ 11.69
========== ========== ========== ==========
TOTAL RETURN 12.63%* 15.98%* 10.31%* 17.09%*
RATIOS
Net Assets - End of Period ($000 Omitted) $11,941 $3,801 $19,570 $7,423
Ratio of Expenses to Average Net Assets# 1.11%*@ 2.00%~ 1.09%*@ 2.00%~
Ratio of Net Investment Income (Loss) to
Average Net Assets# (0.41%)* 2.37%~ (0.11%)* 0.79%~
Portfolio Turnover Rate 31%* 0%* 18%* 30%*
<FN>
* 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 the European Small Company and Latin American Growth
Funds were voluntarily absorbed by IFG, MIL and IAM for the six months ended
January 31, 1996 and the period ended July 31, 1995. If such expenses had not
been voluntarily absorbed, ratio of expenses to average net assets would have
been 1.36% (not annualized) and 10.17% (annualized) for European Small Company
and 1.24% (not annualized) and 4.49% (annualized) for Latin American Growth,
respectively, and ratio of net investment income to average net assets would
have been (0.51%) (not annualized) and (5.80%)(annualized) for European Small
Company and (0.26%)(not annualized) and (1.70%)(annualized) for Latin American
Growth, respectively.
@ Ratio reflects Total Expenses, less Expenses Absorbed by Investment Adviser.
~ Annualized
</FN>
</TABLE>
<PAGE>
INVESCO Specialty Funds, Inc.
Financial Highlights
(For a Fund Share Outstanding Throughout Each Period)
<TABLE>
<CAPTION>
Six Months Year Six Months Year
Ended Ended Ended Ended
January 31 July 31 January 31 July 31
---------- ---------- ---------- ----------
1996 1995 1996 1995
UNAUDITED UNAUDITED
Worldwide Capital Goods Fund Worldwide Communications Fund
PER SHARE DATA
<S> <C> <C> <C> <C>
Net Asset Value - Beginning of Period $9.84 $10.00 $12.30 $10.00
---------- ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss) (0.02) 0.01 0.12 0.11
Net Gains or (Losses) on Securities
(Both Realized and Unrealized) 0.10 (0.16) 1.02 2.35
---------- ---------- ---------- ----------
Total from Investment Operations 0.08 (0.15) 1.14 2.46
---------- ---------- ---------- ----------
LESS DISTRIBUTIONS
Dividends from Net Investment Income 0.00 0.01 0.10 0.11
Distributions from Capital Gains 0.25 0.00 1.25 0.05
---------- ---------- ---------- ----------
Total Distributions 0.25 0.01 1.35 0.16
---------- ---------- ---------- ----------
Net Asset Value - End of Period $9.67 $9.84 $12.09 $12.30
========== ========== ========== ==========
TOTAL RETURN 0.90%* (1.49%) 9.51%* 24.83%
RATIOS
Net Assets -End of Period ($000 Omitted) $7,527 $10,364 $35,891 $27,254
Ratio of Expenses to Average Net Assets# 1.06%*@ 2.00% 0.84%*@ 1.95%
Ratio of Net Investment Income (Loss) to
Average Net Assets# (0.22%)* 0.25% 0.95%* 1.43%
Portfolio Turnover Rate 123%* 193% 123%* 215%
<FN>
* Based on operations for the period shown and, accordingly, are not
representative of a full year.
# Various expenses of the Worldwide Capital Goods Fund were voluntarily
absorbed by IFG and ITC for the six months ended January 31, 1996 and the
year ended July 31, 1995. If such expenses had not been voluntarily
absorbed, ratio of expenses to average net assets would have been 1.24%
(not annualized) and 2.96%, respectively, and ratio of net investment
income to average net assets would have been (0.39%) (not annualized) and
(0.71%), respectively.
@ Ratio reflects Total Expenses, less Expenses Absorbed by Investment Adviser.
</FN>
</TABLE>
<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.,(sm) Distributor
Post Office Box 173706
Denver, Colorado 80217-3706
If you're in Denver, pleas visit one of our
convenient Investor Centers:
Cherry Creek, 155-B Fillmore Street;
Denver Tech Center, 7800 East Union
Avenue, Lobby Level
This information must be preceded or
accompanied by an effective prospectus.
