SEMIANNUAL REPORT
January 31, 1997
INVESCO
SPECIALTY
FUNDS,
INC.
Asian Growth Fund
European Small Company Fund
Latin American Growth Fund
Realty Fund
Worldwide Capital Goods Fund
Worldwide Communications Fund
<PAGE>
Market Overview February 1997
Like the stock and bond markets, the U.S. economy has produced startling
numbers in recent years. After moderating during the third quarter 1996, the
expansion again gained steam the following three months, growing at an
annualized rate of 3.9%. Consequently, fears of reigniting inflation -- or
action from the Federal Reserve Board to stave off that threat -- have reemerged
among investors.
The moderate inflation level of about 3% represents a positive factor for
the economy. At the same time, though, the longevity of the current expansion --
over six years -- remains a cause for concern; the post-World War II average is
only four and a half years. Negative growth hasn't been experienced since the
first quarter of 1993. If the growth rate again approaches 5%, many economists
expect the Federal Reserve Board to launch a preemptive strike against
inflation, with the concomitant danger of cutting the expansion short.
Last summer, concern about the Fed and the national elections caused a
pullback in equity markets. Subsequently, with the political status quo
generally maintained vis-a-vis the president and Congress, and the economy
slowing on its own, the S&P 500 resumed its volatile hike upward. However,
large-capitalization stocks have again been leading the parade, a sign that
investors remain nervous about earnings growth sustainability.
1997 is a post-presidential election year, when the stock market often
drops, and volatility may well continue. Currently, valuations for many
individual stocks appear high. Equity markets have been jumpy this winter,
responding instantaneously to the smallest clues about the economy, interest
rates, or fiscal and monetary policies.
The U.S. stock market has a significant effect on securities markets
around the globe. From Hong Kong to London, equity indexes immediately dropped
following Fed Chairman Alan Greenspan's December remark that current U.S. stock
prices may reflect "irrational exuberance." Many areas recovered quickly; others
have not.
While remunerative, 1996 returns from overseas securities markets were
generally less impressive than domestic stock price advances. As a result, many
market-watchers believe foreign equities may be undervalued compared to the
U.S., and going forward, represent superior potential for long-term capital
growth. Investors should keep in mind, though, that international investing
entails special risks, including currency fluctuations and differences in
regulatory and accounting rules. And, of course, past performance is not a
guarantee of future results. For those who invested overseas last year, Europe
was a profitable choice. While the U.K. and Italy posted only mediocre returns,
countries including Germany, France and Finland all saw their indexes rise
solidly. Expectations are for continued moderate economic recovery throughout
the region, accompanied by generally benign inflation rates -- which may bode
well for stock prices.
<PAGE>
With the lone exception of Chile, Latin American stock markets turned in
positive performances in 1996. Interest rates in that region remain high, but to
many analysts, stocks here look relatively cheap based on forecasted economic
growth and earnings growth momentum.
Japan remains a trouble spot. Economic growth there has stalled, and many
analysts do not anticipate a sustained rally for some time. Outside of Japan,
results along the Pacific Rim were split between excellent and quite poor.
Price/earnings ratios are now relatively high in countries such as Malaysia, the
Philippines, and Taiwan. However, undervalued bargains may be more available in
Hong Kong, India, and South Korea. Particularly concerning the latter three
markets, investors should be aware of political issues -- not least Hong Kong's
reversion to Chinese rule in summer 1997, which caused that market to lag during
the early weeks of 1997.
INVESCO Specialty Funds, Inc.
Each of the funds is managed by a team of investment professionals. For
the international equity funds, senior investment policy groups determine the
country-by-country allocation of the fund's assets, overall stock selection
methodology, and risk control policies. The Realty Fund's investments are
selected by a team of portfolio managers that collectively determines investment
decisions. Composition of the funds' holdings is of course subject to change.
The line graphs below illustrate the value of a $10,000 investment in each
of the INVESCO Specialty Funds, plus reinvested dividends and capital gain
distributions, from inception through 1/31/97. The charts and other total return
figures cited reflect the funds' operating expenses, but the indexes do not have
expenses, which would, of course, have lowered their performance.(1),(2)
Realty Fund
INVESCO Realty Fund would like to welcome new shareholders to the exciting
potential of real estate equities. INVESCO Realty Advisors was established in
1983, and has been assisting clients with real estate investments for many
years. Since the fund's inception, our experienced team of realty specialists
has been diligently examining the market seeking the best possible real estate
equity investments. (Of course, it is too early in the fund's history to talk
about performance--since the fund was introduced only in January 1997.)
We believe the fund offers excellent long-term income and growth
opportunities, while seeking to reduce the risk exposure of typical equity
portfolios. By investing in REITs (Real Estate Investment Trusts) and other real
estate related-securities, the fund offers exposure to markets that are not
highly correlated to the domestic stock market. While we can't guarantee future
performance, when stocks have lost value in an inflationary environment, real
estate has historically provided a hedge for many investors.
<PAGE>
Asian Growth Fund
For the six-month period ended 1/31/97, INVESCO Asian Growth Fund had a
total return of 18.77%, compared to a total return of 7.91% for the MSCI-Far
East Ex Japan Index. (Of course, past performance is not a guarantee of future
results.)(1),(2)
Over the last six months, the fund has seen a dramatic reversal of
fortune. After its initial public offering on 3/1/96, Asian Growth Fund
struggled out of the gate for the first five months--due primarily to price
weakness in the Asian markets and market corrections in India and Korea.
However, in the last six months, the fund's returns improved dramatically. In
fact, just in the last quarter ended 1/31/97, the fund's total return was
13.45%, which outperformed the average fund return for the Lipper Pacific Ex
Japan Region of 7.65%. (Of course, past performance is not a guarantee of future
results.)(2),(3)
Graph: Asian Growth Fund Total Return from Inception(3/1/96)
through 1/31/97
This line graph compares the value of a $10,000 investment in INVESCO
Asian Growth Fund to the value of a $10,000 investment in the MSCI-Far
East Ex Japan Index, assuming in each case reinvestment of all dividends
and capital gain distributions, for the period from inception (3/93)
through 1/31/97.
Asian Growth Fund
Average Annualized Total Return
as of 1/31/97(2)
Since inception (3/96) 7.14%
-----------------------------------------
The financial sector performed admirably for us in the latter half of
1996, as did companies having strong earnings ties to China. We plan to continue
our heavy exposure to China through Hong Kong, as we feel that the long-term
growth prospects are excellent. The outlook for the rest of the Asian region
also appears positive for 1997, as markets should return close to their
historical averages--assuming benign U.S. interest rates and no substantial
appreciation of the U.S. dollar in 1997.
We continue to feel optimistic about Indian and Korean markets for this
year. Tight monetary policies from central banks in both countries have slowed
down their economic growth, which had hindered stock market performance for the
last 12 to 18 months. However, we believe that the central banks could now ease
monetary policies. This would reduce interest rates, stimulate growth, and
enhance market return potential. Industries that are interest rate-sensitive,
such as banks and other financial companies, should benefit from lower interest
rates.
<PAGE>
Looking Forward
As rewarding as the returns have been in Asian economies, they do not come
without risk. Just recently, in South Korea, the market has been drastically
affected by President Kim Yung Sam forcing labor laws through a secret
parliamentary session. (These enacted laws make it easier for companies to fire
workers.) This action has led to protests and riots, and has given the general
appearance that South Korea is on the verge of chaos. However, we don't believe
this is the case.
In our opinion, South Korea still has a fundamentally strong economy. In
the short-term, labor problems have depressed stock prices and left the market
undervalued and out of favor with investors. This type of short-term volatility
is just one example of the perils of investing in emerging economies--but also
of the potential opportunities.
Fund Management
William Barron, director and portfolio manager for INVESCO Asia Limited,
leads a group of specialists in managing INVESCO Asian Growth Fund. Bill was
previously with Aetna Investment Management, Hong Kong, and Chase Manhattan
Trust. A Chartered Financial Analyst, he earned a BA from Harvard University.
European Small Company Fund
For the one-year period ended 1/31/97, Lipper Analytical Services ranked
European Small Company Fund #5 of 51 European region funds, based on total
return unadjusted for commissions.(2),(3)
For the six-month period ended 1/31/97, INVESCO European Small Company
Fund achieved a total return of 11.71%, compared to the James Capel Smaller
European Index, which had a total return of 12.47%. (Of course, past performance
is not a guarantee of future results.)(1),(2)
Continental Europe is in a state of dynamic transition. Fueled by the
constraints of the Maastricht Treaty (which created the foundation for a
European Union), many European nations are addressing concerns over government
deficits, domestic inflation, and interest rates. In turn, these actions
generally have produced positive results for their economies and stock markets.
We feel that this positive momentum will continue into 1997, as it appears that
many European central banks have taken a benign view of inflation and may use
monetary policy to stimulate growth, since fiscal spending opportunities are
somewhat constrained by the Maastricht Treaty.
For 1997, the fund will continue to invest in European small
capitalization companies (companies typically with a market capitalization of $1
billion or less). We continue to believe that the best investment opportunities
exist with companies that exhibit market leadership in niche growth sectors such
as services, software, health care, and specific consumer products. These types
of companies typically offer the best combination of earnings potential and low
price-to-earnings ratios.
We continue to be heavily exposed to the U.K., where the prospects for
strong growth still exist. The fund is also strategically positioned in France
and the Netherlands for 1997.
<PAGE>
Looking Forward
After years of stagnant performance, it presently appears that Europe has
many positive factors working for it in the short- and long-run. However, it is
important to remember that, as exciting as these changes are, Europe still has
lingering problems that need to be addressed, such as competitive gaps with most
industrialized nations, industry restructuring, privatization, and unemployment.
Such issues typically increase short-term market volatility.
Graph: European Small Company Fund Total Return from
Inception(2/15/95) through 1/31/97
This line graph compares 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 Small European Index, assuming in each
case reinvestment of all dividends and capital gain distributions, for the
period from inception (2/15/95) through 1/31/97.
European Small Company Fund
Average Annualized Total Return
as of 1/31/97(2)
1 year 30.00%
-----------------------------------------
Since inception (2/95) 30.32%
-----------------------------------------
Fund Management
Claire Griffiths and Andy Crossley of our London sister company, INVESCO
Asset Management Limited, lead a group responsible for management of INVESCO
European Small Company Fund. Claire graduated from St. John's College,
Cambridge, and began her investment career in 1989. Andy began his investment
career in 1988 after graduating from Loughborough University.
Latin American Growth Fund
For the one-year period ended 1/31/97, Lipper Analytical Services ranked
Latin American Growth Fund #16 of 27 Latin American funds, based on total return
unadjusted for commissions.(2),(3)
For the six-month period ended 1/31/97, INVESCO Latin American Growth Fund
had a total return of 15.52%, compared to a total return of 18.61% for the
MSCI-Latin American Index. (Of course, past performance is not a guarantee of
future results.)(1),(2)
Latin American Growth Fund
Average Annualized Total Return
as of 1/31/97(2)
1 year 20.73%
-----------------------------------------
Since inception (2/95) 24.87%
-----------------------------------------
<PAGE>
Over the last six months, the Latin American markets have experienced
improving fundamentals which enhanced returns. In fact, just in the month of
January 1997, the fund had a total return of 8.82%. These returns, while
exciting, have to be taken in the proper context. Shareholders should remember
that economic, political, and social risks are inherent to developing and
emerging economies--especially in Latin America. But risk, which can create
market volatility, can also create buying opportunities. (Of course, past
performance is not a guarantee of future results.)(2)
An excellent example of this would be the situation in Lima, Peru, where
Tupak Amaru guerrillas are holding captive roughly 70 political prisoners in the
Japanese ambassador's residence. This situation increased the political risk in
Peru--which in turn devalued their stock market. However, it has not affected
the underlying fundamentals of the economy. Thus, political instability has
created a buying opportunity in Peru, where stocks seem undervalued compared to
their fundamentals. As a result, we have increased our exposure to Peru.
One Latin American market that was profitable for 1996 and which we
continue to like for 1997 is Brazil. President Cardoso's economic and political
reforms have had a positive influence on the economy. Presently, Brazil has
three major fundamental factors working in its favor: first, it is blessed with
an abundance of natural resources; second, it appears that inflation and
interest rates are under control; and third, continuing privatization of many
state-owned industries. Two Brazilian companies that have been stellar
performers for the fund and are likely to benefit from an improving economy are
Cia Energetica de Minas Gerais and Light Participacoe SH, both in the utility
industry.
As we advance into 1997, we will continue to search for companies that
could benefit from regional growth and privatization, as well as for undervalued
companies which are not widely followed by international investors.
Graph: Latin American Growth Fund Total Return from Inception
(2/15/95) through 1/31/97
This line graph compares 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 American Index, assuming in each case reinvestment of all
dividends and capital gain distributions, for the period from inception
(2/15/95) through 1/31/97.
Looking Forward
In our view, Latin American markets offer dynamic long-term growth
potential. Currently, the valuation levels within these markets seem extremely
low compared to most other markets. Many Latin American markets currently trade
from price/earnings ratios in the low teens, based on '97 earnings.
Consequently, we feel that when the developed markets (such as the U.S. market)
slow their torrid pace, Latin American equity markets could see a flow of
<PAGE>
capital seeking out their extremely attractive valuation
levels--which might help enhance their returns.
However, it is imperative to remember that short-term volatility has and
will occur in these markets--for instance the peso devaluation crisis that
occurred in Mexico in December 1994. Accordingly, investors should maintain a
long-term investment horizon while being prepared to ride out short-term
volatility.
Fund Management
Peter Jarvis and Jane Lyon of our London sister company, INVESCO Asset
Management Limited, lead a group responsible for management of INVESCO Latin
American Growth Fund. Peter graduated from St. John's College, Oxford, and
joined INVESCO in 1993 specializing in Latin American securities. Jane began her
investment career in 1986 after graduating from Oxford University.
Worldwide Capital Goods Fund
For the one-year period ended 1/31/97, Lipper Analytical Services ranked
Worldwide Capital Goods Fund #71 of 162 global funds, based on total return
unadjusted for commissions.(2),(3)
For the six-month period ended 1/31/97, INVESCO Worldwide Capital Goods
Fund had a total return of 17.13%, compared to a total return of 24.13% for the
domestic S&P 500 and 1.0% for the international MSCI-EAFE. Keep in mind that
these indexes measure broad equity performance, while the fund invests in a
targeted market sector. (Of course, past performance is not a guarantee of
future results.)(1),(2)
The capital goods market is typically a cyclical sector. This group of
industries usually performs well in the early stages of a business cycle, when
an economy is coming out of a recession and starts expanding. However, most
economies--including that of the U.S. which is in its unprecedented seventh year
of expansion--are at the tail-end of their business cycles. This phenomenon has
caused many capital goods stocks to lag behind the market for the last couple of
years, as they have been out of favor with investors.
We will continue to focus our investment strategy on companies with
leadership positions and global exposure within the capital goods sector. In
1997, we will be emphasizing industries such as foreign infrastructure,
electrical and machinery equipment, and selected natural resources.
A stock that has performed well for us and we continue to like for 1997 is
Sealed Air, a company that makes protective packaging material. This firm
continues to improve fundamentally as earnings have steadily increased year
after year.
Graph: Worldwide Capital Goods Fund Total Return from
Inception(8/1/94) through 1/31/97
This line graph compares the value of a $10,000 investment in INVESCO
Worldwide Capital Goods Fund to the value of a $10,000 investment in the
SP 500 Index and MSCI-EAFE Index, assuming in each case reinvestment of
all dividends and capital gain distributions, for the period from
inception (8/1/94) through 1/31/97.
<PAGE>
Worldwide Capital Goods Fund
Average Annualized Total Return
as of 1/31/97(2)
1 year 16.40%
-----------------------------------------
Since inception (8/94) 6.01%
-----------------------------------------
International regions we favor for 1997 are Mexico and most Latin American
countries. In our opinion, economic and political reforms in these areas have
created positive fundamentals for growth which, in turn, should stimulate
infrastructure development and increase demand for capital goods.
Looking Forward
It appears that 1997 might be a difficult year for the capital goods
sector, as many global economies appear to be growing at a more subdued level.
As we pointed out, however, certain countries may enjoy growth well above the
average, and careful stock selection offers additional potential.
Fund Management
INVESCO Worldwide Capital Goods Fund is managed by Vice President Albert M.
Grossi. Before joining INVESCO in 1995, he was associated with Westinghouse
Pension Investments Corp. Al earned an MBA and BA from Rutgers University.
Worldwide Communications Fund
For the one-year period ended 1/31/97, Lipper Analytical Services ranked
Worldwide Communications Fund #63 of 162 global funds, based on total return
unadjusted for commissions.(2),(3)
For the six-month period ended 1/31/97, INVESCO Worldwide Communications
Fund had a total return of 13.08%, compared to a total return of 24.13% for the
domestic S&P 500 and 1.0% for the international MSCI-EAFE. The sector and the
fund lagged behind the domestic S&P 500 as international exposure somewhat
hindered performance. Keep in mind that these indexes measure broad equity
performance, while the fund invests in a targeted market sector. (Of course,
past performance is not a guarantee of future results.)(1),(2)
Worldwide Communications Fund
Average Annualized Total Return
as of 1/31/97(2)
1 year 17.37%
-----------------------------------------
Since inception (8/94) 20.82%
-----------------------------------------
The worldwide communications market continues to be an alluring and dynamic
sector. Deregulation and privatization in Eastern Europe, corporate
<PAGE>
reorganization in Italy, and economic and political reforms in Brazil have
each made a positive impact on this group of industries.
Over the last six months, we have decreased our exposure to the U.K.
market and increased our exposure to southern Europe. We believe that certain
southern European companies are presently selling at low valuations compared to
their growth potential and thus offer excellent long-term investments. However,
we expect some volatility in the near-term as many southern European companies
in 1997 will be coming out with IPOs and secondary offerings. This could
saturate demand for communication stocks, as investors' interest shifts towards
newer firms.
Another region we are excited about for 1997 is Latin America. We feel the
prospects for growth and industry restructuring have created positive
fundamentals for their economies and local communication companies.
We feel that certain companies within the telecommunication equipment
industry offer phenomenal growth potential, but are currently undervalued and
over the long-run could offer attractive returns. Holdings in this area include
Motorola, Nokia, and Lucent Technologies.
Some individual stocks that are intriguing to us for 1997 are the
following: Viatel Inc., a small U.S. telecommunication company with exposure to
European markets, which should benefit from the deregulation and privatization
presently occurring in Europe; NEXTEL Communication Inc., a mobile communication
service provider which has fallen out of favor with investors and which we
believe is currently undervalued; and Telecommunicacoes Brasileiras, a Brazilian
telecommunication company that should benefit from President Cardoso's economic
reforms.
Graph: Worldwide Communications Fund Total Return from
Inception(8/1/94) through 1/31/97
This line graph compares 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 MSCI-EAFE Index, assuming in each case reinvestment of
all dividends and capital gain distributions, for the period from
inception (8/1/94) through 1/31/97.
Looking Forward
As 1997 continues, we will look for communication companies that have
global exposure, attractive valuation levels, and the potential for growth.
However, this year stock selectivity will be crucial as many global bourses
reach their all-time highs and consequently might be overvalued. The long-term
outlook for this sector still appears quite positive notwithstanding some
short-term volatility.
Fund Management
Vice President Jeffrey G. Morris was named manager of Worldwide
Communications Fund in 1996. Jeff joined INVESCO in 1991. He earned
an MS from University of Colorado at Denver and BS from Colorado
<PAGE>
State University and is a Chartered Financial Analyst.
(1)The MSCI-EAFE, MSCI-Pacific Ex Japan, MSCI-Latin American and James Capel
Smaller European Index are unmanaged indexes of common stocks considered to be
representative respectively of the equity markets of Europe/Australia/Far East;
Pacific Basin excluding Japan; Latin American; and European
small-capitalization. The S&P 500 is an unmanaged index indicative of the broad
U.S. stock market.
(2)Total return assumes reinvestment of dividends and capital gain distributions
for the periods indicated. Past performance is not a guarantee of future
results. Investment return and principal value will fluctuate so that, when
redeemed, an investor's shares may be worth more or less than when purchased.
(3)Lipper rankings are provided for one-, five-, and 10-year periods, except for
funds introduced more recently, and are based on total return unadjusted for
commissions.
<PAGE>
INVESCO Specialty Funds, Inc.
Ten Largest Common Stock Holdings
January 31, 1997
Description Value
- --------------------------------------------------------------------------------
ASIAN GROWTH Fund
HSBC Holdings PLC $ 1,806,815
Hutchison Whampoa Ltd 1,691,058
Cheung Kong InfrastructureHoldings Ltd 1,546,523
Berjaya Leisure Berhad 1,353,157
Sun Hung Kai Properties Ltd 1,106,595
Cheung Kong Holdings Ltd 1,100,207
China Resources Enterprise Ltd 1,097,781
Great Eagle Holdings Ltd 1,094,078
Hang Seng Bank Ltd 1,024,488
Advanced Systems Automation Ltd 948,995
EUROPEAN SMALL COMPANY Fund
Fila Holding SpA Sponsored ADR $ 3,459,250
Wolford AG Bearer Shrs 3,390,356
Altran Technologies SA 3,241,474
Gucci Group NV New York Registered Shrs 3,062,025
KCI Konecranes International 2,811,058
Assa Abloy AB Series B Shrs 2,501,281
Tomra Systems A/S A 2,291,176
Baan Co NV 2,208,855
Salomon SA 2,129,637
Bulgari SpA 2,114,077
LATIN AMERICAN GROWTH Fund
Cemex SA de CV Series B Shrs $ 1,457,222
Grupo Financiero Banamex-Accival SA de CV
Series B Shrs 1,432,222
Cia Siderurgica Nacional 1,293,038
Empresas La Moderna SA de CV Sponsored ADR
Participation Certificates Representing
Ord Series A 1,176,500
Cifra SA de CV Series C Shrs 1,145,650
Grupo Carso SA de CV Series A-1 Shrs 1,135,548
Alfa SA de CV Participation Certificates
Series A Shrs 1,078,576
Telecomunicacoes Brasileiras SA 1,049,350
Panamerican Beverages Class A 1,047,500
Grupo Televisa SA de CV Participation
Certificates Representing Series
A, D & L Shrs 1,043,476
REALTY Fund
Kilroy Realty $ 1,025,000
American General Hospitality 757,875
FelCor Suite Hotels 756,150
Equity Residential Properties Trust SBI 752,500
Liberty Property Trust SBI 576,800
Essex Property Trust 564,525
Capstead Mortgage 521,850
Sun Communities 514,763
First Industrial Realty Trust 513,300
Beacon Properties 493,350
<PAGE>
WORLDWIDE CAPITAL GOODS Fund
Grainger (W W) Inc $ 154,500
Coastal Corp 145,125
AlliedSignal Inc 140,500
Eaton Corp 140,000
United Technologies 139,500
Banco Latinoamericano de Exportaciones
SA Series E Shrs 129,062
Sealed Air 128,250
Yacimientos Petroliferos Fiscales SA Sponsored ADR 125,438
Burlington Resources 124,375
Applied Materials 123,437
WORLDWIDE COMMUNICATIONS Fund
WorldCom Inc $ 2,110,500
SBC Communications 1,865,750
Ameritech Corp 1,792,500
BellSouth Corp 1,672,937
Yorkshire-Tyne Tees Television Holdings PLC 1,639,998
ALLTEL Corp 1,542,000
BCE Inc 1,511,250
Scottish Television PLC 1,468,291
Lucent Technologies 1,356,250
Telecom Italia Mobile SpA 1,338,565
Composition of holdings is subject to change.
<PAGE>
INVESCO Specialty Funds, Inc.
Statement of Investment Securities
January 31, 1997
UNAUDITED
<TABLE>
<CAPTION>
Shares or
Industry Principal
Description Code Amount Value
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASIAN GROWTH Fund
COMMON STOCKS & WARRANTS 92.83%
HONG KONG 29.34%
Bank of East Asia Ltd BK 26,000 $ 117,099
Cheung Kong Holdings Ltd RE 118,000 1,100,207
Cheung Kong Infrastructure
Holdings Ltd* EC 535,000 1,546,523
China Everbright-IHD Pacific Ltd RT 1,000,000 722,674
China Light & Power Ltd EU 79,000 370,074
China Resources Enterprise Ltd RE 514,000 1,097,781
CITIC Pacific Ltd MY 115,000 566,912
Continental Mariner Investment Ltd* TR 950,000 468,932
Great Eagle Holdings Ltd RE 270,000 1,094,078
Hang Seng Bank Ltd BK 87,000 1,024,488
Hutchison Whampoa Ltd MY 224,000 1,691,058
Hysan Development Ltd RE 186,000 676,888
Lai Sun Development Ltd RE 430,000 665,893
New Asia Realty & Trust Class B RE 500,000 322,623
New World Development Ltd RE 144,000 888,270
Sun Hung Kai Properties Ltd RE 98,000 1,106,595
Swire Pacific Ltd Class A Shrs AR 80,000 735,579
-----------
14,195,674
-----------
INDIA 5.06%
BSES Ltd Regulation S GDR*^ UE 28,600 559,130
EIH Ltd GDR LH 10,500 189,000
Gujarat Ambuja Cement Ltd GDR BM 47,000 411,250
Industrial Credit & Investment
Corp of India Ltd Registered S GDR FN 66,500 560,927
Mahindra & Mahindra Ltd GDR* AM 30,000 348,750
Tata Engineering & Locomotive
Ltd Sponsored GDR AM 20,000 190,000
Tata Engineering & Locomotive
Ltd Sponsored GDR Representing
Registered S Shrs AM 20,000 190,000
-----------
2,449,057
-----------
<PAGE>
INDONESIA 5.95%
PT Bank Danamon Indonesia
Foreign Shrs BK 325,000 324,959
PT Bank Internasional Indonesia
Foreign Shrs BK 254,824 195,788
Warrants (Exp 2000)* BK 22,652 6,676
PT Indofood Sukses Makmur
Foreign Shrs FD 300,000 663,075
PT Kalbe Farma Foreign Shrs DR 509,500 643,498
PT Lippo Bank Foreign Shrs BK 600,000 612,555
PT Semen Gresik Foreign Shrs EC 13,000 39,816
PT Telekomunikasi Indonesia
Foreign Shrs TP 220,000 393,635
-----------
2,880,002
-----------
LUXEMBOURG 1.81%
Korea Asia Fund IDR* FN 103 875,757
-----------
MALAYSIA 19.92%
Arab-Malaysian Berhad MY 140,000 754,839
Bandar Raya Developments Berhad RE 160,000 370,177
Berjaya Leisure Berhad GM 590,000 1,353,157
Hong Leong Credit Berhad FN 125,000 799,702
Landmarks Berhad LH 535,000 843,842
Magnum Corp Berhad GM 328,000 659,880
Malaysian Industrial Development
Finance Berhad FN 326,000 595,518
Malaysian Resources Berhad RE 172,000 698,990
Perusahaan Otomobil Nasional
Berhad-Proton AM 28,000 179,133
Public Bank Berhad Foreign Shrs BK 136,000 300,970
RJ Reynolds Berhad TO 48,000 119,744
Rashid Hussain Berhad IV 30,000 247,455
Renong Berhad CG 430,000 788,959
Road Builder Holdings Berhad EC 48,000 287,772
Tanjong PLC GM 90,000 394,721
Time Engineering Berhad MY 34,000 75,242
Time Engineering Berhad
Warrants (Exp 2001)* MY 51,000 32,218
United Engineers Berhad Ltd EC 80,000 717,821
United Merchant Group FN 220,000 417,817
-----------
9,637,957
-----------
PAKISTAN 0.89%
Hub Power Ltd Sponsored GDR* UE 18,000 432,000
-----------
<PAGE>
PHILIPPINES 5.35%
Bank of the Philippine Islands BK 90,000 621,637
Benpres Holdings Sponsored GDR* BR 50,000 412,500
C&P Homes EC 387,500 209,561
First Philippine Holdings B Shrs CG 200,000 519,929
Fortune Cement* BM 400,000 227,706
Mondragon International Philippines* RT 1,000,000 436,437
William Gothong & Aboitiz* TR 1,000,000 163,189
-----------
2,590,959
-----------
SINGAPORE 13.88%
Advanced Systems Automation Ltd* MY 730,000 948,995
City Developments Ltd RE 66,000 661,079
DBS Land Ltd RE 208,000 857,001
Development Bank Ltd Foreign Shrs BK 37,000 512,538
Fraser & Neave Ltd FD 68,000 661,789
Keppel Corp Ltd MY 80,000 647,866
Overseas Union Bank Ltd
Foreign Shrs BK 64,000 518,293
Straits Steamship Land Ltd MY 207,000 735,242
United Industrial Ltd MY 140,000 119,344
United Overseas Bank Ltd BK 56,000 652,412
Wing Tai Holdings Ltd RE 126,000 399,205
-----------
6,713,764
-----------
SOUTH KOREA 3.68%
Cho-Hung Bank Ltd BK 31,050 201,538
Daewoo Heavy Industries MY 63,500 373,225
Korea Electric Power EU 18,500 610,028
Seoul City Gas* NG 9,400 565,542
Sungmi Telecom Electronics CM 220 30,418
-----------
1,780,751
-----------
THAILAND 3.22%
Asia Credit PLC Foreign Shrs IV 70,000 289,024
Electricity Generating PLC
Foreign Shrs EU 45,000 109,397
Industrial Finance Warrants
(Exp 1997)* FN 100,000 73,317
Siam Commercial Bank PLC
Foreign Shrs BK 100,000 655,996
Thai Airways International PLC TR 125,000 200,176
Thai Farmers Bank PLC Foreign Shrs BK 15,000 86,823
Warrants (Exp 2002)* BK 1,875 1,266
Total Access Communications PLC TL 20,000 141,000
-----------
1,556,999
-----------
<PAGE>
UNITED KINGDOM 3.73%
HSBC Holdings PLC BK 78,000 1,806,815
-----------
TOTAL COMMON STOCKS & WARRANTS
(Cost $42,175,683) 44,919,735
-----------
SHORT-TERM INVESTMENTS -
REPURCHASE AGREEMENTS 7.17%
UNITED STATES 7.17%
Repurchase Agreement with
State Street Bank & Trust Co
dated 1/31/1997 due 2/3/1997
at 5.470%, repurchased at
$3,469,581 (Collateralized
by US Treasury Notes due
3/31/2001 at 6.375% value
$3,616,927) (Cost $3,468,000) RA 3,468,000 3,468,000
-----------
TOTAL INVESTMENT SECURITIES AT
VALUE 100.00%
(Cost $45,643,683#) $48,387,735
===========
EUROPEAN SMALL COMPANY Fund
COMMON STOCKS & RIGHTS 95.96%
AUSTRALIA 0.69%
Cortecs International Ltd
London Shrs* HD 300,000 $999,960
-----------
AUSTRIA 2.36%
Wolford AG Bearer Shrs TA 26,400 3,390,356
-----------
BELGIUM 1.29%
Barco NV* EI 6,440 1,080,317
Creyf's SA SV 10,264 775,721
-----------
1,856,038
-----------
DENMARK 3.58%
Coloplast A/S Registered B Shrs MQ 14,000 1,060,300
Coloplast A/S Registered B Shrs
Rights* MQ 14,000 526,821
Falck Holding A/S TR 4,200 1,055,884
Martin Gruppen A/S MG 19,431 1,067,226
NeuroSearch A/S* HM 24,800 1,084,131
Nordtank Energy Group A/S MG 7,800 362,497
-----------
5,156,859
-----------
<PAGE>
FINLAND 3.09%
KCI Konecranes International* MY 1,500 2,811,058
Martela OY Series A Shrs OE 21,400 569,790
TT Tieto OY Series B Shrs CY 13,400 1,070,353
-----------
4,451,201
-----------
FRANCE 12.45%
ADA BM 16,890 1,344,428
Altran Technologies SA EC 9,100 3,241,474
BIC SA MY 3,400 542,504
CIPE France SA SV 8,200 1,082,909
Cegedim SA SV 4,350 381,669
Christian Dalloz* SV 1,700 691,969
Dassault Systemes SA* CS 36,350 2,005,671
Grand Optical Photoservice PI 7,500 1,127,503
Jet Multimedia SA Registered Shrs CS 5,900 682,037
Manutan DC 17,800 1,484,487
Penauille Polyservices SV 5,100 1,290,753
Picogiga SA* ES 20,627 951,550
Salomon SA LT 27,000 2,129,637
UBI Soft Entertainment* TY 14,000 962,425
-----------
17,919,016
-----------
GERMANY 2.20%
CeWe Color Holding AG PI 2,752 636,873
Data Modul AG EI 54,894 1,156,403
Puma AG Rudolf Dassler Sport* TA 44,200 1,373,743
-----------
3,167,019
-----------
IRELAND 0.98%
Adare Printing Group PLC PB 88,500 865,110
Anglo Irish Bank PLC BK 425,000 544,850
-----------
1,409,960
-----------
ITALY 9.96%
Bulgari SpA CJ 111,800 2,114,077
Bulgari SpA Sponsored ADR^ CJ 40,700 769,971
De Rigo SpA Sponsored ADR* MQ 51,600 490,200
Fila Holding SpA Sponsored ADR FW 50,500 3,459,250
Gucci Group NV New York
Registered Shrs RT 43,900 3,062,025
Luxottica Group SpA
Sponsored ADR PS 34,300 1,929,375
SAES Getters SpA Non-Conv
Savings Shrs EB 51,460 655,112
Safilo SpA* MQ 10,258 178,366
Simint SpA* TA 345,000 1,680,752
-----------
14,339,128
-----------
<PAGE>
NETHERLANDS 9.42%
Aalberts Industries NV CG 50,100 1,280,841
Ahrend Groep NV OE 21,900 1,322,290
Axxicon Group NV MG 58,100 1,460,084
Baan Co NV* CS 48,680 2,208,855
Getronics NV CS 51,860 1,483,809
Heidemij NV PC 122,200 1,262,945
IHC Caland NV TR 20,300 1,191,454
QIAGEN NV New York
Registered Shrs* BI 68,000 1,708,500
Randstad Holding NV SV 13,200 917,624
Toolex Alpha NV* RT 63,300 723,074
-----------
13,559,476
-----------
NORWAY 5.33%
Agresso A/S A* CS 300,000 1,077,788
Alvern Norway A/S A* SV 25,240 323,016
Ark A/S A CS 93,400 856,880
Nera A/S A CM 32,500 1,578,520
Tandberg A/S A* CM 40,000 1,548,068
Tomra Systems A/S A MY 117,932 2,291,176
-----------
7,675,448
-----------
SWEDEN 6.55%
Assa Abloy AB Series B Shrs MG 133,000 2,501,281
Biacore International AB* MQ 65,766 1,200,459
Caran AB Series B Shrs CY 105,750 1,001,712
Frontec AB Series B Shrs* CS 50,160 776,868
Meda AB Series A Shrs HD 36,629 724,324
OXiGENE Europe AB* DR 7,700 239,577
Pricer AB Series B Shrs* SV 23,828 830,348
Scala International AB* CS 7,000 759,871
Scandic Hotels AB* LH 77,752 1,279,471
WM-Data AB Series B Shrs CS 1,185 110,610
-----------
9,424,521
-----------
SWITZERLAND 2.46%
Disetronic Holding AG* MQ 700 1,458,333
Fotolabo SA PI 2,500 939,784
Stratec Holding AB Registered
B Shrs* MQ 900 1,138,280
-----------
3,536,397
-----------
<PAGE>
UNITED KINGDOM 34.30%
ABI Leisure Group PLC LT 733,666 1,058,130
Acorn Computer Group PLC* CS 97,500 289,051
Airsprung Furniture Group PLC HA 70,871 316,295
American Port Services PLC SC 149,500 330,612
Anglian Group PLC BM 225,000 890,589
Antonov PLC* AP 361,500 419,995
Appleyard Group PLC AM 375,000 426,666
AromaScan PLC* EI 313,693 452,424
Atlantic Telecom Group PLC* CA 550,000 1,339,690
Avocet Mining PLC* GP 375,000 1,171,828
Avonside Group PLC* EC 800,000 602,540
Blacks Leisure Group PLC RT 120,000 744,201
Brunel Holdings PLC MG 500,000 152,238
Burford Holdings PLC RE 149,000 346,220
Business Post Group PLC SV 60,000 485,557
CRT Group PLC BM 125,000 448,700
Cantab Pharmaceuticals PLC* BI 57,500 732,543
Charles Sidney PLC AM 300,000 442,290
Circle Communications PLC* BR 125,000 405,633
Countryside Properties PLC RE 700,000 1,088,098
EFT Group PLC FN 200,000 487,160
Eurocamp PLC LT 266,245 972,779
Eurodis Electron PLC EI 204,761 738,291
European Telecom PLC TL 175,000 521,614
Fenchurch PLC IN 200,000 200,313
First Choice Holidays PLC LT 600,000 865,350
FirstBus PLC TR 125,000 493,770
GEI International PLC MY 200,000 352,550
Games Workshop Group PLC LT 117,500 965,947
Gearhouse Group PLC SV 100,000 520,813
Geest PLC FD 85,000 371,860
Greenway Holdings PLC PC 163,749 175,813
Hambro Countrywide PLC RE 750,000 1,502,344
Hartstone Group PLC TA 2,000,000 384,600
Helical Bar PLC RE 115,000 770,322
Hogg Robinson PLC SV 100,000 350,948
IOC International PLC* EI 177,000 494,956
Innovative Technologies Group PLC* CH 275,000 824,086
Inspirations PLC LT 189,000 242,298
Intelligent Environments Group PLC* CS 300,000 362,966
Jarvis PLC BM 200,000 544,850
Kenwood Appliances PLC HA 105,000 311,286
Kunick PLC LT 1,000,000 420,656
La Senza PLC* RT 200,000 360,563
Limelight Group PLC* HH 125,000 350,547
Lionheart PLC* HB 531,250 87,261
London Forfaiting PLC FN 100,000 538,440
Lowndes Lambert Group Holdings PLC IN 111,000 190,329
MAID PLC* CS 208,500 557,982
McCarthy & Stone PLC HB 450,000 814,871
Memory Corp PLC* CY 340,000 324,186
<PAGE>
Mentmore Abbey PLC OE 465,000 409,839
Michael Page Group PLC BM 50,000 375,786
NSM PLC* GP 575,000 73,715
Norbain PLC EI 120,000 615,360
Northern Leisure PLC LT 300,000 1,023,998
Orbis PLC SC 750,000 504,787
P&P PLC RT 300,000 836,505
PPL Therapeutics PLC* BI 80,000 410,240
Peek PLC EI 350,000 544,049
Pendragon PLC AM 100,000 624,975
Persona Group PLC CS 150,000 832,899
Psion PLC CY 125,000 831,297
Quadramatic PLC MG 100,000 405,432
Quality Software Products
Holdings PLC CS 7,490 25,206
Queensborough Holdings PLC* RE 1,000,000 512,800
Ramco Energy PLC OW 70,000 1,351,709
Regal Hotel Group PLC LH 700,000 703,898
Richards PLC TA 337,500 221,746
Robert Walters PLC* SV 275,000 713,914
Rubicon Group PLC MG 210,000 420,656
Rutland Trust PLC FN 975,000 945,275
Savills PLC SC 193,940 335,652
Scottish Highland Hotels PLC* LH 223,919 550,804
Slimma PLC TA 170,000 174,352
Specialty Shops PLC RE 302,500 538,079
TC Group PLC NH 363,450 622,907
Tottenham Hotspur PLC ET 100,000 1,005,569
TransTec PLC MG 300,000 516,806
Vero Group PLC CM 250,000 737,150
VideoLogic Group PLC* CY 450,000 331,718
Vymura PLC BM 440,834 1,356,358
Wagon Industrial Holdings PLC MG 145,000 779,576
Wainhomes PLC EC 416,269 867,192
Westminster Health Care
Holdings PLC NH 98,530 450,788
Xenova Group PLC* BI 102,941 475,093
-----------
49,369,181
-----------
UNITED STATES 1.30%
OXiGENE Inc* DR 35,300 1,138,425
PETsMART Inc* RT 32,140 731,185
-----------
1,869,610
-----------
TOTAL COMMON STOCKS & RIGHTS
(Cost $127,915,747) 138,124,170
-----------
<PAGE>
PERFERRED STOCKS 4.04%
GERMANY 4.04%
Berentzen Gruppe AG Non-Voting Pfd FD 26,240 805,930
Biotest AG Non-Voting Pfd HD 29,700 1,113,500
Fresenius AG Non-Voting Pfd HM 8,600 1,727,666
Marschollek, Lautenschlaeger und
Partners AG Non-Voting Pfd IN 7,825 1,266,180
Sander (Jil) AG Non-Voting Pfd TA 1,460 900,408
-----------
TOTAL PREFERRED STOCKS
(Cost $5,418,194) 5,813,684
-----------
TOTAL INVESTMENT SECURITIES
AT VALUE 100.00%
(Cost $133,333,941)
(Cost for Income Tax
Purposes $133,584,747) 143,937,854
===========
LATIN AMERICAN GROWTH Fund
COMMON STOCKS 57.88%
ARGENTINA 9.56%
Aluar Aluminio Argentina SAIC
Class B Shrs* AL 130,000 342,037
Astra Cia Argentina de Petroleo SA OG 329,483 616,380
Atanor SA Series D Shrs CH 80,000 259,304
Banco Frances del Rio de la
Plata SA Sponsored ADR BK 23,000 690,000
Cresud SA Series B Shrs* FD 130,000 245,798
Disco SA Sponsored ADR* RT 20,000 540,000
Inversiones y Representaciones
SA Sponsored GDR RE 10,000 365,000
Perez Companc SA MY 65,000 485,744
Siderar SAIC Series A Shrs* IS 230,000 740,896
Telecom Argentina STET-France
Telecom SA Sponsored ADR TP 12,000 567,000
Yacimientos Petroliferos
Fiscales SA Sponsored ADR
Representing Class D Shrs OG 10,000 278,750
-----------
5,130,909
-----------
BRAZIL 8.23%
Cia Paranaense de Energia-Copel EU 52,000,000 696,251
Cia Paulista de Forca e Luz* EU 5,500,000 673,298
Cia Siderurgica Nacional IS 40,000,000 1,293,038
Light Participacoes SA* EU 2,500,000 705,337
Telecomunicacoes Brasileiras SA TL 13,000,000 1,049,350
-----------
4,417,274
-----------
<PAGE>
CHILE 7.61%
Administradora de Fondos de
Pensiones Provida SA
Sponsored ADR FN 29,400 676,200
Chilgener SA Sponsored ADR EU 34,000 871,250
Cia de Telecomunicaciones de
Chile SA Sponsored ADR
Representing Series A Shrs TL 35,625 886,172
Cristalerias de Chile Sponsored ADR CN 15,000 309,375
Madeco SA Sponsored ADR BM 17,500 503,125
Maderas y Sinteticos SA
Sponsored ADR PF 1,200 19,200
Sociedad Quimica y Minera de Chile
SA Sponsored ADR Representing
Series B Shrs CH 14,000 815,500
-----------
4,080,822
-----------
ECUADOR 0.63%
La Cemento Nacional GDR^ BM 1,500 336,000
-----------
MEXICO 25.76%
Alfa SA de CV Participation
Certificates Series A Shrs MY 205,719 1,078,576
Carso Global Telecom SA
Series A-1 Shrs* TL 145,355 424,726
Cemex SA de CV Series B Shrs BM 355,000 1,457,222
Cifra SA de CV Series C Shrs* RT 850,000 1,145,650
Consorcio ARA SA de CV
Sponsored ADR*^ RE 32,000 838,870
Controladora Comercial
Mexicana SA de CV GDR* RT 52,000 936,000
Empresas La Moderna SA de
CV Sponsored ADR Participation
Certificates Representing Ord
Series A TO 52,000 1,176,500
Gruma SA de CV Series B Shrs* FD 50,000 278,772
Grupo Carso SA de CV
Series A-1 Shrs MY 185,000 1,135,548
Grupo Financiero Banamex-
Accival SA de CV Series B Shrs* BK 700,000 1,432,222
Grupo Televisa SA de CV
Participation Certificates
Representing Series A, D & L Shrs* BR 80,000 1,043,476
Grupo Tribasa SA de CV
Sponsored ADR* EC 65,000 390,000
Panamerican Beverages Class A BV 20,000 1,047,500
Sanluis Corp SA de CV Participation
Certificates Representing S
eries B, C & D Shrs MY 180,000 1,008,182
<PAGE>
Telefonos de Mexico SA de CV
Ord Series L Shrs TP 225,000 428,132
-----------
13,821,376
-----------
PERU 5.04%
CPT Telefonica del Peru SA
Sponsored ADR Representing
Class B Shrs TP 35,000 756,875
Cementos Lima SA Sponsored ADR BM 39,797 667,599
Cia de Minas Buenaventura SA
Series A Shrs GP 70,257 473,344
Series T Shrs GP 25,000 167,487
Credicorp Ltd FN 30,275 635,775
-----------
2,701,080
-----------
VENEZUELA 1.05%
Cia Anonima Nacional Telefonos
de Venezuela ADR Representing
Class D Shrs* TL 20,000 565,000
-----------
TOTAL COMMON STOCKS
(Cost $28,170,297) 31,052,461
-----------
PREFERRED STOCKS 35.84%
BRAZIL 34.65%
Banco Bradesco SA Non-Voting Pfd BK 131,446,500 1,043,426
Banco Itau SA Non-Voting Pfd BK 2,400,000 1,097,169
Brasmotor SA Pfd HA 2,000,000 535,578
Centrais Eletricas Brasileiras SA
Class B Non-Voting Pfd EU 3,800,000 1,606,351
Centrais Eletricas de Santa
Catarina SA Series B Pfd* UE 950,000 1,053,941
Cia Brasileira de Distribuicao
Grupo Pao de Acucar Pfd RT 30,000,000 700,077
Cia Cervejaria Brahma
Non-Voting Pfd FD 855,513 520,377
Cia Cimento Portland Itau
Non-Voting Pfd BM 2,530,000 885,597
Cia de Tecidos Norte de
Minas-Coteminas Pfd TA 1,800,000 638,677
Cia Energetica de Minas Gerais Pfd EU 37,999,000 1,595,406
Cia Paranaense de Energia-Copel
Series B Pfd* UE 37,000,000 435,253
Cia Siderurgica Paulista-Cosipa
Non-Voting Series B Pfd* IS 600,000 516,450
Cia Vale Do Rio Doce Sponsored
ADR Representing Pfd GP 55,000 1,225,593
<PAGE>
Dixie Toga SA Pfd PF 449,898 357,130
Globex Utilidades SA Pfd* UT 40,000 703,902
Itausa-Investimentos Itau SA
Non-Voting Pfd MY 1,250,000 944,434
Marcopolo SA Series B
Non-Voting Pfd* AP 1,800,000 361,515
Perdigao SA Comercio e
Industria Non-Voting Pfd* FD 360,000,000 723,030
Telecomunicacoes Brasileiras
SA Sponsored ADR Representing Pfd TL 33,000 2,879,250
Usinas Siderurgicas de Minas
Gerais SA Sponsored ADR
Representing Pfd^ IS 70,000 763,182
-----------
18,586,338
-----------
COLOMBIA 1.19%
Banco Industrial Colombiano SA
Sponsored ADR Representing Pfd BK 21,000 364,875
Cementos Diamante SA Sponsored
ADR Representing Class B Pfd*^ BM 20,000 272,500
-----------
637,375
-----------
TOTAL PREFERRED STOCKS
(Cost $16,617,923) 19,223,713
-----------
SHORT-TERM INVESTMENTS -
REPURCHASE AGREEMENTS 6.28%
UNITED STATES 6.28%
Repurchase Agreement with
State Street Bank & Trust Co
dated 1/31/1997 due 2/3/1997
at 5.470%, repurchased at
$3,370,536 (Collateralized
by US Treasury Notes due
3/31/2001 at 6.375% value
$3,512,240) (Cost $3,369,000) RA 3,369,000 3,369,000
-----------
TOTAL INVESTMENT SECURITIES
AT VALUE 100.00%
(Cost $48,157,220)
(Cost for Income Tax Purposes
$48,173,548) 53,645,174
-----------
<PAGE>
REALTY Fund
COMMON STOCKS 94.42%
HONG KONG 4.50%
Cheung Kong Holdings Ltd ADR RE 32,100 294,678
New World Development Ltd
Sponsored ADR RE 23,700 288,192
Sun Hung Kai Properties Ltd
Sponsored ADR RE 26,900 303,747
-----------
886,617
-----------
SINGAPORE 1.64%
Singapore Land Ltd ADR RE 53,700 324,257
-----------
UNITED STATES 88.28%
American General Hospitality RE 28,200 757,875
Arden Realty Group RE 8,300 222,025
Bay Apartment Communities RE 6,800 244,800
Beacon Properties RE 13,800 493,350
Bedford Property Investors RE 12,100 208,725
CBL & Associates Properties RE 15,000 384,375
Cali Realty RE 14,600 481,800
Capstead Mortgage RE 21,300 521,850
CarrAmerica Realty RE 16,700 486,387
Catellus Development* RE 12,300 169,125
Centex Corp BM 7,200 280,800
Chelsea GCA Realty RE 8,200 281,875
Duke Realty Investments RE 7,300 289,262
Equity Residential Properties
Trust SBI RE 17,500 752,500
Essex Property Trust RE 19,300 564,525
FelCor Suite Hotels RE 21,300 756,150
First Industrial Realty Trust RE 17,700 513,300
Gables Residential Trust SBI RE 18,400 489,900
Glenborough Realty Trust RE 19,500 377,812
Health Care Property Investors RE 10,300 360,500
Highwoods Properties RE 11,800 413,000
Horizon Group RE 12,600 214,200
JDN Realty RE 13,700 376,750
JP Realty RE 5,300 142,437
Kilroy Realty* RE 40,000 1,025,000
Kimco Realty RE 5,200 170,300
Koger Equity* RE 16,200 289,575
Liberty Property Trust SBI RE 22,400 576,800
MGI Properties RE 18,400 400,200
Meridian Industrial Trust RE 15,100 332,200
Merry Land & Investment RE 20,700 460,575
Nationwide Health Properties RE 20,000 457,500
Patriot American Hospitality RE 9,300 437,100
<PAGE>
Public Storage RE 12,500 365,625
RFS Hotel Investors RE 19,600 367,500
Regency Realty RE 5,900 154,138
Rouse Co RE 7,600 235,600
Shurgard Storage Centers Class A RE 13,400 373,525
Simon DeBartolo Group RE 14,500 424,125
Spieker Properties RE 6,300 220,500
Starwood Lodging Trust SBI RE 3,000 122,625
Storage Trust Realty SBI RE 15,000 391,875
Sun Communities RE 15,900 514,763
Winston Hotels RE 22,000 297,000
-----------
17,399,849
-----------
TOTAL COMMON STOCKS
(Cost $18,494,239) 18,610,723
-----------
SHORT-TERM INVESTMENTS -
US GOVERNMENT AGENCY
OBLIGATIONS 5.58%
UNITED STATES 5.58%
Federal Home Loan Mortgage Discount
Notes 5.422%, 2/3/1997
(Cost $1,100,000) GA 1,100,000 1,100,000
-----------
TOTAL INVESTMENT SECURITIES AT
VALUE 100.00%
(Cost $19,594,239#) 19,710,723
-----------
WORLDWIDE CAPITAL GOODS Fund
COMMON STOCKS 86.82%
ARGENTINA 3.48%
Perez Companc SA MY 6,100 45,585
Yacimientos Petroliferos
Fiscales SA Sponsored ADR OG 4,500 125,438
-----------
171,023
-----------
CHILE 1.75%
Madeco SA Sponsored ADR BM 3,000 86,250
-----------
HONG KONG 3.70%
Cheung Kong Holdings Ltd RE 10,000 93,238
Hong Kong Electric Holdings Ltd UE 25,000 88,883
-----------
182,121
-----------
<PAGE>
MEXICO 3.40%
Cemex SA de CV BM 20,000 75,192
Grupo Carso SA de CV
Series A-1 Shrs MY 15,000 92,071
-----------
167,263
-----------
PANAMA 2.63%
Banco Latinoamericano de
Exportaciones SA Series E Shrs BK 2,500 129,062
-----------
UNITED STATES 71.86%
Advanced Micro Devices* CM 3,000 105,000
Air Products & Chemicals CH 1,500 107,062
AlliedSignal Inc MG 2,000 140,500
Applied Materials* ES 2,500 123,437
Bowater Inc PF 2,500 101,875
Burlington Resources OG 2,500 124,375
Case Corp MY 2,000 106,000
Chevron Corp OG 1,500 99,563
Coastal Corp NG 3,000 145,125
Control Devices* AP 7,500 90,938
Cooper Industries MY 2,000 86,250
Crown Cork & Seal CN 2,000 115,000
Eaton Corp AM 2,000 140,000
Emerson Electric EE 1,000 98,750
Energy Ventures* OG 1,000 60,000
Exxon Corp OG 1,000 103,625
Federal Express* TR 2,000 102,500
Fluor Corp EC 1,000 71,125
Gardner Denver Machinery* MY 6,000 96,000
General Electric EE 1,000 103,000
General Motors EI 1,000 59,000
Georgia-Pacific Corp PF 1,500 110,438
Grainger (W W) Inc EE 2,000 154,500
Ingersoll-Rand Co MY 2,000 91,250
Lucent Technologies TL 1,000 54,250
Minnesota Mining & Manufacturing MG 1,000 85,250
Pennzoil Co OG 1,500 93,563
Praxair Inc CH 2,500 115,937
Santa Fe Energy Resources* OG 7,500 111,562
Sealed Air* PF 3,000 128,250
Thiokol Corp AE 1,500 84,000
USX-Marathon Group OG 4,000 106,500
USX-US Steel Group IS 2,500 79,062
United Technologies AE 2,000 139,500
-----------
3,533,187
-----------
TOTAL COMMON STOCKS
(Cost $3,858,123) 4,268,906
-----------
<PAGE>
SHORT-TERM INVESTMENTS -
REPURCHASE AGREEMENTS 13.18%
UNITED STATES 13.18%
Repurchase Agreement with
State Street Bank & Trust Co
dated 1/31/1997 due 2/3/1997
at 5.470%, repurchased at
$648,295 (Collateralized
by US Treasury Notes due
2/15/2015 at 11.250% value
$661,417)(Cost $648,000) RA 648,000 648,000
-----------
TOTAL INVESTMENT SECURITIES AT
VALUE 100.00%
(Cost $4,506,123) (Cost for
Income Tax Purposes $4,506,809) 4,916,906
===========
WORLDWIDE COMMUNICATIONS Fund
COMMON STOCKS 94.55%
ARGENTINA 3.43%
Telecom Argentina STET-France
Telecom SA Sponsored ADR
Representing Class B Shrs TP 20,300 959,175
Telefonica de Argentina SA
Sponsored ADR Representing
Class B Shrs TP 32,000 976,000
-----------
1,935,175
-----------
CANADA 6.45%
BCE Inc TP 30,000 1,511,250
Newbridge Networks* TP 24,000 828,000
Northern Telecom Ltd TP 17,700 1,303,163
-----------
3,642,413
-----------
CHILE 0.94%
Cia de Telecomunicaciones de
Chile SA Sponsored ADR TL 21,250 528,594
-----------
FINLAND 1.68%
Nokia Corp Sponsored ADR
Representing Series A Shrs CM 14,200 949,625
-----------
FRANCE 0.97%
Cie Generale des Eaux SF 4,300 550,753
-----------
GERMANY 1.06%
Deutsche Telekom AG* TL 32,000 597,911
-----------
HONG KONG 1.16%
Asia Satellite Telecommunications
Holdings Ltd Sponsored ADR* TL 29,000 656,125
-----------
<PAGE>
ITALY 3.48%
STET Societa Finanziaria
Telefonica SpA TL 127,000 627,387
Telecom Italia Mobile SpA TP 450,000 1,338,565
-----------
1,965,952
-----------
PERU 0.77%
CPT Telefonica del Peru SA
Sponsored ADR Representing
Class B Shrs TP 20,000 432,500
-----------
PHILIPPINES 0.84%
Philippine Long Distance
Telephone Sponsored ADR TL 8,000 475,000
-----------
PORTUGAL 2.00%
Portugal Telecom SA Sponsored ADR TL 33,000 1,130,250
-----------
SPAIN 1.64%
Telefonica de Espana SA TP 27,000 633,380
Telefonica de Espana SA
Sponsored ADR TP 4,200 294,000
-----------
927,380
-----------
SWEDEN 1.55%
Ericsson (L M) Telephone ADR
Representing Class B Shrs CM 26,000 875,469
-----------
UNITED KINGDOM 12.94%
British Telecommunications
PLC Sponsored ADR
Represented by Installment
Receipts TL 15,000 1,029,375
Cable & Wireless PLC Sponsored ADR TL 40,000 900,000
COLT Telecom Group PLC
Sponsored ADR* TL 54,500 1,117,250
HTV Group PLC BR 200,000 1,153,800
Scottish Television PLC BR 146,600 1,468,291
Yorkshire-Tyne Tees Television
Holdings PLC BR 86,000 1,639,998
-----------
7,308,714
-----------
<PAGE>
UNITED STATES 55.64%
AT&T Corp TL 28,000 1,102,500
Aliant Communications TL 15,000 255,000
ALLTEL Corp TP 48,000 1,542,000
Ameritech Corp TP 30,000 1,792,500
Belden Inc EI 27,000 1,029,375
BellSouth Corp TP 37,700 1,672,937
Brooks Fiber Properties* TL 46,200 1,183,875
Cascade Communications* CM 10,000 397,500
Century Telephone Enterprises TP 38,900 1,220,488
Cisco Systems* CK 8,500 592,875
Gaylord Entertainment Class A LT 26,250 672,656
ICG Communications* TL 65,000 1,121,250
Intel Corp ES 4,000 649,000
International Telecommunication
Data Systems* SC 30,500 663,375
Loral Space & Communications* ED 54,000 931,500
Lucent Technologies TL 25,000 1,356,250
McLeod Inc* TL 52,400 1,205,200
Motorola Inc CM 9,200 627,900
NEXTEL Communications Class A* TC 70,000 1,076,250
NYNEX Corp TP 11,400 577,125
P-COM Inc* TL 17,000 660,875
PairGain Technologies* CM 18,500 757,344
REMEC Inc* CE 8,000 208,000
SBC Communications TP 34,000 1,865,750
Southern New England
Telecommunications TP 18,000 670,500
Superior Telecom* EB 25,000 600,000
TII Industries* EE 185,000 1,202,500
US WEST Communications Group TP 33,200 1,091,450
Veeco Instruments* EI 25,000 631,250
Vertex Communications* EE 54,000 1,147,500
Viatel Inc* TL 108,000 810,000
WorldCom Inc* TL 84,000 2,110,500
-----------
31,425,225
-----------
TOTAL COMMON STOCKS
(Cost $49,046,336) 53,401,086
-----------
PREFERRED STOCKS 5.45%
BRAZIL 5.45%
Telecomunicacoes Brasileiras
SA Sponsored ADR Representing Pfd TL 25,400 2,216,150
Telecomunicacoes de Sao Paulo
SA Pfd TP 2,500,000 582,202
Telecomunicacoes do Rio de
Janeiro SA Pfd* TL 2,000,000 280,222
-----------
<PAGE>
TOTAL PREFERRED STOCKS
(Cost $2,827,765) 3,078,574
-----------
TOTAL INVESTMENT SECURITIES AT
VALUE 100.00%
(Cost $51,874,101#) 56,479,660
===========
</TABLE>
* Security is non-income producing.
# Also represents cost for income tax purposes.
^ The following are restricted securities at January 31, 1997:
<TABLE>
<CAPTION>
Value as
Acquisition Acquisition % of
Description Date(s) Cost Net Assets
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Asian Growth Fund
BSES Ltd Regulation 5/13/96-
S GDR 1/27/97 $ 554,975 1.16%
========
European Small Company Fund
Bulgari SpA 2/29/96-
Sponsored ADR 10/14/96 $592,236 0.40%
========
Latin American Growth Fund
Cementos Diamante
SA Sponsored ADR
Representing 4/26/95-
Class B Shrs 7/2/96 $360,375 0.51%
Consorcio ARA SA de 9/26/96-
CV Sponsored ADR 1/7/97 682,850 1.56
La Cemento Nacional 2/26/96-
GDR 1/14/97 273,000 0.63
Usinas Siderurgicas de
Minas Gerais SA
Sponsored ADR 3/2/95-
Representing Pfd 6/28/96 727,750 1.42
-----------
4.12%
===========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Summary of Investments by Industry
% of
Industry Investment
Industry Code Securities Value
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Asian Growth Fund
Airlines AR 1.52% $ 735,579
Automobiles AM 1.88 907,883
Banks BK 15.79 7,639,853
Broadcasting BR 0.85 412,500
Building Materials BM 1.32 638,956
Communications - Equipment/
Manufacturing CM 0.06 30,418
Conglomerates CG 2.70 1,308,888
Drugs DR 1.33 643,498
Electric Utilities EU 2.25 1,089,499
Engineering & Construction EC 5.79 2,801,493
Financial FN 6.87 3,323,038
Foods FD 2.74 1,324,864
Gaming GM 4.97 2,407,758
Investment Bank - Broker Firm IV 1.11 536,479
Lodging - Hotels LH 2.13 1,032,842
Machinery MY 12.29 5,944,941
Natural Gas NG 1.17 565,542
Real Estate Investment Trust RE 20.54 9,938,787
Repurchase Agreements RA 7.17 3,468,000
Retail RT 2.40 1,159,111
Telecommunications -
Long Distance TL 0.29 141,000
Telephone TP 0.81 393,635
Tobacco TO 0.25 119,744
Transportation TR 1.72 832,297
Utilities - Electric UE 2.05 991,130
--------------------------
100.00% $48,387,735
==========================
European Small Company Fund
Auto Parts AP 0.29% $419,995
Automobiles AM 1.04 1,493,931
Banks BK 0.38 544,850
Biotechnology BI 2.31 3,326,376
Broadcasting BR 0.28 405,633
Building Materials BM 3.45 4,960,711
Cable CA 0.93 1,339,690
Chemicals CH 0.57 824,08
<PAGE>
Communications - Equipment/
Manufacturing CM 2.68 3,863,738
Computer Software and Services CS 8.36 12,030,493
Computer Systems CY 2.47 3,559,266
Conglomerates CG 0.89 1,280,841
Consumer - Jewelry, Novelty & Gifts CJ 2.00 2,884,048
Distributor - Consumer Products DC 1.03 1,484,487
Drugs DR 0.96 1,378,002
Electronics - Component Distributors EB 0.46 655,112
Electronics - Instruments EI 3.53 5,081,800
Electronics - Semiconductors ES 0.66 951,550
Engineering & Construction EC 3.27 4,711,206
Entertainment ET 0.70 1,005,569
Financial FN 1.37 1,970,875
Foods FD 0.82 1,177,790
Footwear W 2.40 3,459,250
Gold & Precious Metals Mining GP 0.87 1,245,543
Healthcare Drugs - Pharmaceuticals HD 1.97 2,837,784
Healthcare Miscellaneous HM 1.95 2,811,797
Homebuilding HB 0.63 902,132
Household Furniture & Appliances HA 0.44 627,581
Household Products HH 0.24 350,547
Insurance IN 1.15 1,656,822
Leisure Time LT 5.32 7,678,795
Lodging - Hotels LH 1.76 2,534,173
Machinery MY 4.17 5,997,288
Manufacturing - Diversified MG 5.33 7,665,796
Medical Equipment & Devices MQ 4.21 6,052,759
Nursing Homes/Sub Acute NH 0.75 1,073,695
Office Equipment & Supplies OE 1.60 2,301,919
Oil Well Equipment & Services OW 0.94 1,351,709
Personal Care PS 1.34 1,929,375
Photograph/Imaging PI 1.88 2,704,160
Pollution Control PC 1.00 1,438,758
Publishing PB 0.60 865,110
Real Estate Investment Trust RE 3.31 4,757,863
Retail RT 4.48 6,457,553
Services - Commercial & Consumer SC 0.82 1,171,051
Specialized Services SV 5.81 8,365,241
Telecommunications - Long Distance TL 0.36 521,614
Textile - Apparel Manufactures TA 5.65 8,125,957
Toys TY 0.67 962,425
Transportation TR 1.90 2,741,108
--------------------------
100.00% $143,937,854
==========================
<PAGE>
Latin American Growth Fund
Aluminum AL 0.64% $342,037
Auto Parts AP 0.67 361,515
Banks BK 8.63 4,627,692
Beverages BV 1.95 1,047,500
Broadcasting BR 1.94 1,043,476
Building Materials BM 7.68 4,122,043
Chemicals CH 2.00 1,074,804
Containers CN 0.58 309,375
Electric Utilities EU 11.46 6,147,893
Engineering & Construction EC 0.73 390,000
Financial FN 2.45 1,311,975
Foods FD 3.30 1,767,977
Gold & Precious Metals Mining GP 3.48 1,866,424
Household Furniture &
Appliances HA 1.00 535,578
Iron & Steel IS 6.18 3,313,566
Machinery MY 8.67 4,652,484
Oil & Gas Related OG 1.67 895,130
Paper & Forest Products PF 0.70 376,330
Real Estate Investment Trust RE 2.24 1,203,870
Repurchase Agreements RA 6.28 3,369,000
Retail RT 6.19 3,321,727
Telecommunications -
Long Distance TL 10.82 5,804,498
Telephone TP 3.27 1,752,007
Textiles - Apparel Manufacturers TA 1.19 638,677
Tobacco TO 2.19 1,176,500
Utilities UT 1.31 703,902
Utilities - Electric UE 2.78 1,489,194
--------------------------
100.00% $53,645,174
==========================
Realty Fund
Building Materials BM 1.42% $280,800
Real Estate Investment Trust RE 93.00 18,329,923
US Government Agency Obligations GA 5.58 1,100,000
--------------------------
100.00% $19,710,723
==========================
Worldwide Capital Goods Fund
Aerospace & Defense AE 4.55% $223,500
Auto Parts AP 1.85 90,938
Automobiles AM 2.85 140,000
Banks BK 2.62 129,062
Building Materials BM 3.28 161,442
Chemicals CH 4.54 222,999
Communications - Equipment/
Manufacturing CM 2.13 105,000
Containers CN 2.34% 115,000
<PAGE>
Electrical Equipment EE 7.24 356,250
Electronics - Instruments EI 1.20 59,000
Electronics - Semiconductors ES 2.51 123,437
Engineering & Construction EC 1.45 71,125
Iron & Steel IS 1.61 79,062
Machinery MY 10.52 517,156
Manufacturing - Diversified MG 4.59 225,750
Natural Gas NG 2.95 145,125
Oil & Gas Related OG 16.77 824,626
Paper & Forest Products PF 6.93 340,563
Real Estate Investment Trust RE 1.90 93,238
Repurchase Agreements RA 13.18 648,000
Telecommunications - Long Distance TL 1.10 54,250
Transportation TR 2.08 102,500
Utilities - Electric UE 1.81 88,883
--------------------------
100.00% 4,916,906
==========================
Worldwide Communications Fund
Broadcasting BR 7.55% $4,262,089
Communications - Equipment CE 0.37 208,000
Communications - Equipment/
Manufacturing CM 6.39 3,607,838
Computers - Networking CK 1.05 592,875
Electrical Equipment EE 4.16 2,350,000
Electronics - Component
Distributors EB 1.06 600,000
Electronics - Defense ED 1.65 931,500
Electronics - Instruments EI 2.94 1,660,625
Electronics - Semiconductors ES 1.15 649,000
Leisure Time LT 1.19 672,656
Services - Commercial & Consumer SC 1.17 663,375
Services - Facilities & Environment SF 0.98 550,753
Telecommunications -
Cellular/Wireless TC 1.91 1,076,250
Telecommunications - Long Distance TL 34.28 19,363,714
Telephone TP 34.15 19,290,985
--------------------------
100.00% $56,479,660
==========================
</TABLE>
See Notes to Financial Statements
<PAGE>
INVESCO Specialty Funds, Inc.
Statement of Assets and Liabilities
January 31, 1997
UNAUDITED
<TABLE>
<CAPTION>
European Latin
Asian Small American
Growth Company Growth
Fund Fund Fund
-------------------------------------------------
<S> <C> <C> <C>
ASSETS
Investment Securities:
At Cost~ $ 45,643,683 $ 133,333,941 $ 48,157,220
=================================================
At Value~ $ 48,387,735 $ 143,937,854 $ 53,645,174
Cash 31,809 0 676,361
Foreign Currency
(Cost $32,551, $2,977,075 and
$395,116, respectively) 30,926 2,941,111 393,897
Receivables:
Investment Securities Sold 1,606,277 6,034,567 152,730
Fund Shares Sold 470,249 373,225 426,347
Dividends and Interest 42,711 291,286 19,422
Appreciation on Forward
Foreign Currency Contracts 42,755 169,177 308
Prepaid Expenses and
Other Assets 25,759 213,209 70,835
-------------------------------------------------
TOTAL ASSETS 50,638,221 153,960,429 55,385,074
-------------------------------------------------
LIABILITIES
Payables:
Custodian 0 361,043 0
Distributions to Shareholders 232 0 768
Investment Securities
Purchased 1,745,245 6,294,355 1,137,384
Fund Shares Repurchased 27,464 860,951 520,380
Accrued Distribution Expenses 9,500 31,935 9,445
Accrued Expenses and
Other Payables 52,167 38,324 28,127
-------------------------------------------------
TOTAL LIABILITIES 1,834,608 7,586,608 1,696,104
-------------------------------------------------
Net Assets at Value 48,803,613 146,373,821 53,688,970
=================================================
<PAGE>
NET ASSETS
Paid-in Capital* 46,120,054 134,462,465 47,937,136
Accumulated Undistributed
Net Investment Loss (36,818) (182,960) (40,145)
Accumulated Undistributed Net
Realized Gain (Loss) on
Investment Securities and
Foreign Currency Transactions (67,944) 1,364,305 304,965
Net Appreciation of Investment
Securities and Foreign
Currency Transactions 2,788,321 10,730,011 5,487,014
-------------------------------------------------
Net Assets at Value 48,803,613 146,373,821 53,688,970
=================================================
Shares Outstanding 4,592,437 8,992,687 3,720,300
Net Asset Value, Offering
and Redemption Price
per Share 10.63 16.28 14.43
=================================================
</TABLE>
~ Investment securities at cost and value at January 31, 1997 include repurchase
agreements of $3,468,000 and $3,369,000 for Asian Growth and Latin American
Growth Funds, respectively.
* The Fund has 600 million authorized shares of common stock, par value of $0.01
per share. Of such shares, 100 million have been allocated to each individual
Fund.
See Notes to Financial Statements
<PAGE>
INVESCO Specialty Funds, Inc.
Statement of Assets and Liabilities (Continued)
January 31, 1997
UNAUDITED
<TABLE>
<CAPTION>
Worldwide Worldwide
Realty Capital Goods Communications
Fund Fund Fund
-------------------------------------------------
<S> <C> <C> <C>
ASSETS
Investment Securities:
At Cost~ $ 19,594,239 $ 4,506,123 $ 51,874,101
=================================================
At Value~ $ 19,710,723 $ 4,916,906 $ 56,479,660
Cash 0 0 677,379
Receivables:
Investment Securities Sold 0 152,047 572,665
Fund Shares Sold 566,057 79,370 378,107
Dividends and Interest 13,236 6,205 121,971
Appreciation on Forward Foreign
Currency Contracts 0 93 0
Prepaid Expenses and
Other Assets 0 73,816 30,778
-------------------------------------------------
TOTAL ASSETS 20,290,016 5,228,437 58,260,560
-------------------------------------------------
LIABILITIES
Payables:
Custodian 114,635 7,234 0
Foreign Sub-Custodian
(Cost $0, $0 and $373,027,
respectively) 0 0 376,826
Investment Securities Purchased 580,060 56,490 676,500
Fund Shares Repurchased 29,651 4,493 410,272
Depreciation on Forward Foreign
Currency Contracts 0 0 9,540
Accrued Distribution Expenses 0 1,082 12,893
Accrued Expenses and
Other Payables 0 81,508 15,710
-------------------------------------------------
TOTAL LIABILITIES 724,346 150,807 1,501,741
-------------------------------------------------
Net Assets at Value $ 19,565,670 $ 5,077,630 $ 56,758,819
=================================================
<PAGE>
NET ASSETS
Paid-in Capital* 19,423,219 4,448,546 50,395,875
Accumulated Undistributed
Net Investment Income 25,967 975 122,033
Accumulated Undistributed Net
Realized Gain on Investment
Securities and Foreign
Currency Transactions 0 217,295 1,642,380
Net Appreciation of Investment
Securities and Foreign
Currency Transactions 116,484 410,814 4,598,531
-------------------------------------------------
Net Assets at Value $ 19,565,670 $ 5,077,630 $ 56,758,819
=================================================
Shares Outstanding 1,925,546 514,339 4,376,852
Net Asset Value, Offering
and Redemption Price
per Share 10.16 9.87 12.97
=================================================
</TABLE>
~ Investment securities at cost and value at January 31, 1997 include a
repurchase agreement of $648,000 for the Worldwide Capital Goods Fund.
* The Fund has 600 million authorized shares of common stock, par value of $0.01
per share. Of such shares, 100 million have been allocated to each individual
Fund.
See Notes to Financial Statements
<PAGE>
INVESCO Specialty Funds, Inc.
Statement of Operations
Six Months Ended January 31, 1997
UNAUDITED
<TABLE>
<CAPTION>
European Latin
Asian Small American
Growth Company Growth
Fund Fund Fund
----------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME
INCOME
Dividends $ 105,910 $ 490,435 $ 245,012
Interest 84,391 337,728 37,264
Foreign Taxes Withheld (111) (83,799) (7,204)
----------------------------------------------
TOTAL INCOME 190,190 744,364 275,072
----------------------------------------------
EXPENSES
Investment Advisory Fees 94,768 462,700 131,340
Distribution Expenses 31,589 154,233 43,780
Transfer Agent Fees 44,459 151,442 56,153
Administrative Fees 6,949 14,308 7,681
Custodian Fees and Expenses 42,978 92,603 50,144
Directors' Fees and Expenses 3,787 5,811 4,108
Professional Fees and Expenses 14,565 14,719 12,747
Registration Fees and Expenses 12,221 38,236 18,229
Reports to Shareholders 5,457 14,766 6,376
Other Expenses 1,968 10,909 5,139
----------------------------------------------
TOTAL EXPENSES 258,741 959,727 335,697
Fees and Expenses Absorbed
by Investment Adviser (14,744) 0 0
Fees and Expenses Paid
Indirectly (14,398) (27,677) (20,100)
----------------------------------------------
NET EXPENSES 229,599 932,050 315,597
----------------------------------------------
NET INVESTMENT LOSS (39,409) (187,686) (40,525)
----------------------------------------------
<PAGE>
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENT SECURITIES
Net Realized Gain (Loss) on
Investment Securities and
Foreign Currency Transactions (28,869) 1,580,094 738,040
Change in Net Appreciation of
Investment Securities and
Foreign Currency Transactions 4,436,091 11,698,660 4,311,528
----------------------------------------------
NET GAIN ON INVESTMENT
SECURITIES 4,407,222 13,278,754 5,049,568
----------------------------------------------
Net Increase in Net Assets
from Operations $4,367,813 $ 13,091,068 $ 5,009,043
==============================================
</TABLE>
See Notes to Financial Statements
<PAGE>
INVESCO Specialty Funds, Inc.
Statement of Operations (Continued)
Period Ended January 31, 1997 (Note 1)
UNAUDITED
<TABLE>
<CAPTION>
Worldwide Worldwide
Realty Capital Goods Communications
Fund Fund Fund
---------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME
INCOME
Dividends $ 13,737 $ 44,851 $ 431,989
Interest 12,230 25,506 206,680
Foreign Taxes Withheld 0 (924) (27,610)
---------------------------------------------
TOTAL INCOME 25,967 69,433 611,059
---------------------------------------------
EXPENSES
Investment Advisory Fees 0 17,859 174,553
Distribution Expenses 0 6,869 67,136
Transfer Agent Fees 0 18,882 125,993
Administrative Fees 0 5,466 9,082
Custodian Fees and Expenses 0 6,892 11,488
Directors' Fees and Expenses 0 3,611 4,647
Professional Fees and Expenses 0 11,905 13,103
Registration Fees and Expenses 0 10,711 24,549
Reports to Shareholders 0 1,546 13,179
Other Expenses 0 881 5,425
---------------------------------------------
TOTAL EXPENSES 0 84,622 449,155
Fees and Expenses Absorbed
by Investment Adviser 0 (28,720) 0
Fees and Expenses Paid
Indirectly 0 (3,104) (6,504)
---------------------------------------------
NET EXPENSES 0 52,798 442,651
---------------------------------------------
NET INVESTMENT INCOME 25,967 16,635 168,408
---------------------------------------------
<PAGE>
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENT SECURITIES
Net Realized Gain on Investment
Securities and Foreign
Currency Transactions 0 527,309 2,054,905
Change in Net Appreciation of
Investment Securities and
Foreign Currency Transactions 116,484 391,085 4,270,263
---------------------------------------------
NET GAIN ON INVESTMENT SECURITIES 116,484 918,394 6,325,168
---------------------------------------------
Net Increase in Net Assets
from Operations $ 142,451 $ 935,029 $ 6,493,576
=============================================
</TABLE>
See Notes to Financial Statements
<PAGE>
INVESCO Specialty Funds, Inc.
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Asian Growth European Small Company Latin American Growth
Fund Fund Fund
--------------------------- ------------------------- -------------------------
Six Months Period Six Months Year Six Months Year
Ended Ended Ended Ended Ended Ended
January 31 July 31 January 31 July 31 January 31 July 31
--------------------------- ------------------------- -------------------------
1997 1996 1997 1996 1997 1996
UNAUDITED (Note 1) UNAUDITED UNAUDITED
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS
Net Investment Income (Loss) $ (39,409) $ 33,239 $ (187,686) $ 43,500 $ (40,525) $ 219,683
Net Realized Gain (Loss)
on Investment Securities and
Foreign Currency Transactions (28,869) (39,425) 1,580,094 3,681,763 738,040 481,310
Change in Net Appreciation
(Depreciation) of Investment
Securities and Foreign
Currency Transactions 4,436,091 (1,647,770) 11,698,660 (1,229,632) 4,311,528 1,170,499
--------------------------- ---------------------------- ---------------------------
NET INCREASE (DECREASE) IN
NET ASSETS FROM
OPERATIONS 4,367,813 (1,653,956) 13,091,068 2,895,631 5,009,043 1,871,492
--------------------------- ---------------------------- ---------------------------
DISTRIBUTIONS TO SHAREHOLDERS
Net Investment Income 0 (30,298) 0 (439,757) (28,000) (217,967)
Net Realized Gain on
Investment Securities 0 0 (3,898,451) 0 (763,348) (350,025)
--------------------------- ---------------------------- ---------------------------
TOTAL DISTRIBUTIONS 0 (30,298) (3,898,451) (439,757) (791,348) (567,992)
--------------------------- ---------------------------- ---------------------------
FUND SHARE TRANSACTIONS
Proceeds from Sales of Shares 38,702,842 18,102,250 250,653,040 241,646,456 34,785,575 38,393,207
Reinvestment of Distributions 0 30,018 3,678,905 436,279 782,963 562,352
--------------------------- ---------------------------- ---------------------------
38,702,842 18,132,268 254,331,945 242,082,735 35,568,538 38,955,559
Amounts Paid for Repurchases
of Shares (8,581,746) (2,133,310) (211,411,748) (154,078,587) (18,161,163) (15,617,725)
--------------------------- ---------------------------- ---------------------------
NET INCREASE IN NET ASSETS FROM
FUND SHARE TRANSACTIONS 30,121,096 15,998,958 42,920,197 88,004,148 17,407,375 23,337,834
--------------------------- ---------------------------- ---------------------------
Total Increase in Net Assets 34,488,909 14,314,704 52,112,814 90,460,022 21,625,070 24,641,334
<PAGE>
NET ASSETS
Beginning of Period 14,314,704 0 94,261,007 3,800,985 32,063,900 7,422,566
--------------------------- ---------------------------- ---------------------------
End of Period 48,803,613 14,314,704 146,373,821 94,261,007 53,688,970 32,063,900
=========================== ============================ ===========================
Accumulated Undistributed
Net Investment Income
(Loss) Included in Net
Assets at End of Period $ (36,818) $ 2,591 $ (182,960) $ 4,726 $ (40,145) $ 28,380
FUND SHARE TRANSACTIONS
Shares Sold 3,865,041 1,818,644 15,815,925 16,101,290 2,513,983 3,077,189
Shares Issued from Reinvestment
of Distributions 0 3,354 239,338 28,931 61,652 48,510
--------------------------- ---------------------------- ---------------------------
3,865,041 1,821,998 16,055,263 16,130,221 2,575,635 3,125,699
Shares Repurchased (872,299) (222,303) (13,311,513) (10,210,062) (1,348,600) (1,267,483)
--------------------------- ---------------------------- ---------------------------
Net Increase in Fund Shares 2,992,742 1,599,695 2,743,750 5,920,159 1,227,035 1,858,216
=========================== ============================ ===========================
</TABLE>
See Notes to Financial Statements
<PAGE>
INVESCO Specialty Funds, Inc.
Statement of Changes in Net Assets (Continued)
<TABLE>
<CAPTION>
Realty Fund Worldwide Capital Goods Fund Worldwide Communications Fund
Period Six Months Year Six Months Year
Ended Ended Ended Ended Ended
January 31 January 31 July 31 January 31 July 31
------------ ------------- ------------ -----------------------------
1997 1997 1996 1997 1996
UNAUDITED UNAUDITED UNAUDITED
(Note 1)
<S> <C> <C> <C> <C> <C>
OPERATIONS
Net Investment Income $ 25,967 $ 16,635 $ 4,056 $ 168,408 $ 699,676
Net Realized Gain on Investment Securities
and Foreign Currency Transactions 0 527,309 760,106 2,054,905 4,577,595
Change in Net Appreciation (Depreciation)
of Investment Securities and Foreign
Currency Transactions 116,484 391,085 (798,684) 4,270,263 (1,242,052)
------------ --------------------------- ---------------------------
NET INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS 142,451 935,029 (34,522) 6,493,576 4,035,219
------------ --------------------------- ---------------------------
DISTRIBUTIONS TO SHAREHOLDERS
Net Investment Income 0 (20,500) 0 (50,000) (701,251)
Net Realized Gain on
Investment Securities 0 (487,207) (192,500) (3,951,559) (2,990,139)
------------ --------------------------- ---------------------------
TOTAL DISTRIBUTIONS 0 (507,707) (192,500) (4,001,559) (3,691,390)
------------ --------------------------- ---------------------------
FUND SHARE TRANSACTIONS
Proceeds from Sales of Shares 21,879,390 6,414,372 8,918,314 44,591,669 86,755,968
Reinvestment of Distributions 0 501,282 191,459 3,801,617 3,647,177
------------ --------------------------- ---------------------------
21,879,390 6,915,654 9,109,773 48,393,286 90,403,145
Amounts Paid for Repurchases
of Shares (2,456,171) (9,996,311) (11,515,410) (44,642,868) (67,484,918)
------------ --------------------------- ---------------------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM FUND SHARE TRANSACTIONS 19,423,219 (3,080,657) (2,405,637) 3,750,418 22,918,227
------------ --------------------------- ---------------------------
Total Increase (Decrease) in
Net Assets 19,565,670 (2,653,335) (2,632,659) 6,242,435 23,262,056
NET ASSETS
Beginning of Period 0 7,730,965 10,363,624 50,516,386 27,254,330
------------ --------------------------- ---------------------------
End of Period $ 19,565,670 $ 5,077,630 $ 7,730,965 $ 56,758,821 $ 50,516,386
============ =========================== ===========================
Accumulated Undistributed Net Investment
Income Included in Net Assets
at End of Period 25,967 975 4,840 122,033 3,625
<PAGE>
FUND SHARE TRANSACTIONS
Shares Sold 2,168,957 629,148 904,991 3,437,947 6,894,716
Shares Issued from Reinvestment
of Distributions 0 53,575 20,133 308,727 306,451
------------ --------------------------- ---------------------------
2,168,957 682,723 925,124 3,746,674 7,201,167
Shares Repurchased (243,411) (972,902) (1,174,317) (3,433,979) (5,352,376)
------------ --------------------------- ---------------------------
Net Increase (Decrease) in
Fund Shares 1,925,546 (290,179) (249,193) 312,695 1,848,791
============ =========================== ===========================
</TABLE>
See Notes to Financial Statements
<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 and presently
consists of six separate Funds: Asian Growth Fund, European Small Company Fund,
Latin American Growth Fund, Realty Fund, Worldwide Capital Goods Fund and
Worldwide Communications Fund. The investment objectives of the Funds are: To
achieve capital appreciation for Asian Growth, European Small Company, Latin
American Growth and Worldwide Capital Goods Funds; to achieve current income for
Realty Fund; and to achieve a high total return on investments through capital
appreciation and current income for Worldwide Communications Fund. The Fund is
registered under the Investment Company Act of 1940 (the "Act") as a
diversified, open-end management investment company. Investment operations of
Asian Growth and Realty Funds commenced on March 1, 1996 and January 1, 1997,
respectively.
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of income and expenses during the reporting period. Actual
results could differ from those estimates.
A. SECURITY VALUATION - Equity securities traded on national securities
exchanges or in the over-the-counter market are valued at the last sales
price in the market where such securities are primarily traded. If last
sales prices are not available, securities are valued at the highest closing
bid price obtained from one or more dealers making a market for such
securities or by a pricing service approved by the Fund's board of
directors.
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.
Assets and liabilities initially expressed in terms of foreign
currencies are translated into U.S. dollars at the prevailing market rates
as quoted by one or more banks or dealers on the date of valuation. The
cost of securities is translated into U.S. dollars at the rates of exchange
prevailing when such securities were acquired. Income and expenses are
translated into U.S. dollars at rates of exchange prevailing when accrued.
<PAGE>
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 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
specific industries or foreign issuers located in a specific country. Such
concentrations may subject the Fund to additional risks resulting from
future political or economic conditions and/or possible impositions of
adverse foreign governmental laws or currency exchange restrictions. Net
realized and unrealized gain or loss from investments includes fluctuations
from currency exchange rates and fluctuations in market value.
The Fund's use of short-term forward foreign currency contracts may
subject it to certain risks as a result of unanticipated movements in
foreign exchange rates. The Fund does not hold short-term forward foreign
currency contracts for trading purposes. The Fund may hold foreign currency
in anticipation of settling foreign security transactions and not for
investment purposes.
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 each Fund to sell a security at a fair price and may
substantially delay the sale of the security which each 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.
Asian Growth Fund incurred and elected to defer post-October 31 net
capital losses of $39,075 to the year ended July 31, 1997. 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.
Net capital loss carryovers utilized in 1996 by the Worldwide Capital Goods
Fund amounted to $16,088.
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.
<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 and expired capital loss carryforwards.
F. FORWARD FOREIGN CURRENCY CONTRACTS - The Fund enters into short-term
forward foreign currency contracts in connection with planned purchases or
sales of securities as a hedge against fluctuations in foreign exchange
rates pending the settlement of transactions in foreign securities. A
forward foreign currency contract is an agreement between contracting
parties to exchange an amount of currency at some future time at an agreed
upon rate. These contracts are marked-to-market daily and the related
appreciation or depreciation of the contracts is presented in the Statement
of Assets and Liabilities.
G. EXPENSES - Each of the Funds bears expenses incurred specifically on its
behalf and, in addition, each Fund bears a portion of general expenses,
based on the relative net assets of each Fund.
Under an agreement between each Fund and the Fund's Custodian, agreed
upon Custodian Fees and Expenses are reduced by credits granted by the
Custodian from any temporarily uninvested cash. Similarly, Transfer Agent
Fees are reduced by credits earned by each Fund from security brokerage
transactions under certain broker/service arrangements with third parties.
Such credits are included in Fees and Expenses Paid Indirectly in the
Statement of Operations.
For the period ended January 31, 1997, Fees and Expenses Paid Indirectly
consisted of the following:
Custodian Fees Transfer
Fund and Expense Agent Fees
- --------------------------------------------------------------------------------
Asian Growth Fund $ 14,398 $ 0
European Small Company Fund 25,827 1,850
Latin American Growth Fund 20,100 0
Realty Fund 0 0
Worldwide Capital Goods Fund 3,104 0
Worldwide Communications Fund 6,410 94
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:
<PAGE>
AVERAGE NET ASSETS
-------------------------------------------
$0 to $500 Million Over
$500 to $1 $1
Fund Million Billion Billion
- --------------------------------------------------------------------------------
Asian Growth Fund 0.75% 0.65% 0.55%
European Small Company Fund 0.75% 0.65% 0.55%
Latin American Growth Fund 0.75% 0.65% 0.55%
Realty 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
Worldwide Capital Goods and Worldwide Communications Funds are made by ITC. A
separate Sub-Advisory Agreement between IFG and INVESCO Asia Limited ("INVESCO
Asia"), a wholly owned subsidiary of IFG, provides that investment decisions of
Asian Growth Fund are made by INVESCO Asia. A separate Sub-Advisory Agreement
between IFG and INVESCO Asset Management Limited ("IAM"), an affiliate of IFG,
provides that investment decisions of European Small Company and Latin American
Growth Funds are made by IAM. A separate Sub-Advisory Agreement between IFG and
INVESCO Realty Advisors ("INVESCO Realty"), an affiliate of IFG, provides that
investment decisions of Realty Fund are made by INVESCO Realty. Fees for such
sub-advisory services are paid by IFG.
In accordance with an Administrative Agreement, each Fund pays IFG an annual
fee of $10,000, plus an additional amount computed at an annual rate of 0.015%
of average net assets to provide administrative, accounting and clerical
services. The fee is accrued daily and paid monthly.
IFG receives a transfer agent fee at an annual rate of $20.00 per
shareholder account, or, where applicable, per participant in an omnibus
account, per year. IFG may pay such fee for participants in omnibus accounts to
affiliates or third parties. The fee is paid monthly at one-twelfth of the
annual fee and is based upon the actual number of accounts in existence during
each month.
A plan of distribution pursuant to Rule 12b-1 of the Act has provided 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 April 30,
1998 for Asian Growth Fund, ending March 31, 1997 for European Small Company and
Latin American Growth Funds, ending January 31, 1999 for Realty Fund, and ending
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, 1997, the Fund paid the Distributor $25,330, $148,336, $41,433,
$7,533 and $65,260, for Asian Growth, European Small Company, Latin American
Growth, Worldwide Capital Goods and Worldwide Communications Funds,
respectively, for reimbursement of expenses incurred. For the period ended
January 31, 1997, the Fund paid the distributor $0 for Realty Fund for
reimbursement of expenses incurred. Effective January 1, 1997, the Rule 12b-1
distribution plan was modified by action of the Board of Directors so that the
<PAGE>
Fund compensates IFG for permissible activities and serivices in connection with
the distribution of each Fund's shares. Accordingly, the above amounts reflect
reimbursements under the plan for the five months ended December 31, 1996 and
compensation under the plan for the month of January 1997.
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. IFG and
INVESCO Asia have voluntarily agreed, in some instances, to absorb certain fees
and expenses incurred by Asian Growth Fund.
A 1% redemption fee is retained by Asian Growth and Latin American Growth
Funds 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 three months. The redemption fee is accounted for as an
addition to Paid-in-Capital. Total redemption fees received by Asian Growth and
Latin American Growth Funds for the six months ended January 31, 1997 were
$42,261 and $38,687, respectively.
NOTE 3 - PURCHASES AND SALES OF INVESTMENT SECURITIES. For the six months
ended January 31, 1997, the aggregate cost of purchases and proceeds from sales
of investment securities (excluding all U.S. Government securities and short-
term securities) were as follows:
Fund Purchases Sales
- --------------------------------------------------------------------------------
Asian Growth Fund $38,676,055 $10,940,410
European Small Company Fund 83,053,381 38,599,997
Latin American Growth Fund 25,315,776 12,185,851
Realty Fund 18,494,239 0
Worldwide Capital Goods Fund 4,744,614 7,872,157
Worldwide Communications Fund 35,650,244 23,045,469
There were no purchases or sales of U.S. Government securities.
NOTE 4 - APPRECIATION AND DEPRECIATION. At January 31, 1997, the gross
appreciation of securities in which there was an excess of value over tax cost,
the gross depreciation of securities in which there was an excess of tax cost
over value and the resulting net appreciation by Fund were as follows:
Gross Gross Net
Fund Appreciation Depreciation Appreciation
- --------------------------------------------------------------------------------
Asian Growth Fund $ 4,370,315 $ 1,626,263 $ 2,744,052
European Small Company Fund 19,429,320 9,076,213 10,353,107
Latin American Growth Fund 6,038,349 566,723 5,471,626
Realty Fund 365,077 248,593 116,484
Worldwide Capital Goods Fund 437,573 27,476 410,097
Worldwide Communications Fund 5,911,195 1,305,636 4,605,559
NOTE 5 - TRANSACTIONS WITH AFFILIATES. Certain of the Fund's officers and
directors are also officers and directors of IFG, ITC, IAM, INVESCO Asia or
INVESCO Realty. At January 31, 1997, 12.78% of outstanding shares of Worldwide
Capital Goods Fund were held by IFG, ITC or affiliated parties.
<PAGE>
The Fund has adopted an unfunded deferred compensation plan covering all
independent directors of the Fund who will have served as an independent
director for at least five years at the time of retirement. Benefits under this
plan are based on an annual rate 40% of the retainer fee at the time of
retirement.
Pension expenses for the six months ended January 31, 1997, included in
Directors' Fees and Expenses in the Statement of Operations, and unfunded
accrued pension costs and pension liability included in Prepaid Expenses and
Accrued Expenses, respectively, in the Statement of Assets and Liabilities were
as follows:
Unfunded
Pension Accrued Pension
Fund Expenses Pension Costs Liability
- --------------------------------------------------------------------------------
Asian Growth Fund $47 $240 $287
European Small Company Fund 326 1,650 1,977
Latin American Growth Fund 102 516 619
Realty Fund 0 0 0
Worldwide Capital Goods Fund 60 (5) 122
Worldwide Communications Fund 328 516 1,088
NOTE 6 - LINE OF CREDIT. The Fund has available a Redemption Line of Credit
Facility ("LOC"), from a consortium of national banks, to be used for temporary
or emergency purposes to fund redemptions of investor shares. The LOC permits
borrowings to a maximum of 10% of the Net Assets at Value of each respective
Fund. Each Fund agrees to pay annual fees and interest on the unpaid principal
balance based on prevailing market rates as defined in the agreement. At January
31, 1997, there were no such borrowings.
Other Information
UNAUDITED
On January 31, 1997, a special meeting of the shareholders of the Fund was held
at which the eleven directors identified below were elected, the selection of
Price Waterhouse LLP as independent accountants (Proposal 1), the approval of a
new investment advisory agreement with INVESCO Funds Group, Inc. ("IFG"),
(Proposal 2), a new sub-advisory agreement between IFG and INVESCO Asia Limited
for Asian Growth Fund (Proposal 3), a new sub-advisory agreement between IFG and
INVESCO Asset Management Limited for European Small Company and Latin American
Growth Funds (Proposal 4) and a new sub-advisory agreement between IFG and
INVESCO Trust Company for Worldwide Capital Goods and Worldwide Communications
Funds (Proposal 5) were ratified. The following is a report of the votes cast:
<TABLE>
<CAPTION>
Withheld/
Nominee/Proposal For Against Abstain Total
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Asian Growth Fund
Charles W. Brady 2,419,600 0 113,832 2,533,432
Dan J. Hesser 2,422,741 0 110,691 2,533,432
Fred A. Deering 2,421,085 0 112,347 2,533,432
<PAGE>
Victor L. Andrews 2,417,271 0 116,161 2,533,432
Bob R. Baker 2,421,311 0 112,121 2,533,432
Lawrence H. Budner 2,421,085 0 112,347 2,533,432
Daniel D. Chabris 2,415,539 0 117,893 2,533,432
A.D. Frazier, Jr. 2,422,593 0 110,839 2,533,432
Hubert L. Harris, Jr. 2,422,651 0 110,781 2,533,432
Kenneth T. King 2,419,979 0 113,453 2,533,432
John W. McIntyre 2,416,584 0 116,848 2,533,432
Proposal No. 1 2,406,050 29,330 98,050 2,533,430
Proposal No. 2 2,372,134 40,200 121,098 2,533,432
Proposal No. 3 2,375,828 38,048 119,555 2,533,431
European Small Company Fund
Charles W. Brady 5,818,905 0 152,657 5,971,562
Dan J. Hesser 5,821,105 0 150,457 5,971,562
Fred A. Deering 5,810,131 0 161,431 5,971,562
Victor L. Andrews 5,807,616 0 163,946 5,971,562
Bob R. Baker 5,815,175 0 156,387 5,971,562
Lawrence H. Budner 5,811,268 0 160,294 5,971,562
Daniel D. Chabris 5,811,908 0 159,654 5,971,562
A.D. Frazier, Jr. 5,817,335 0 154,227 5,971,562
Hubert L. Harris, Jr. 5,811,588 0 159,974 5,971,562
Kenneth T. King 5,800,483 0 171,079 5,971,562
John W. McIntyre 5,818,473 0 153,089 5,971,562
Proposal No. 1 5,744,092 85,778 141,691 5,971,561
Proposal No. 2 5,632,536 118,402 220,624 5,971,562
Proposal No. 4 5,605,767 128,336 237,458 5,971,561
Latin American Growth Fund
Charles W. Brady 1,494,509 0 51,487 1,545,996
Dan J. Hesser 1,496,130 0 49,866 1,545,996
Fred A. Deering 1,491,724 0 54,272 1,545,996
Victor L. Andrews 1,495,103 0 50,893 1,545,996
Bob R. Baker 1,495,753 0 50,243 1,545,996
Lawrence H. Budner 1,495,085 0 50,911 1,545,996
Daniel D. Chabris 1,497,207 0 48,789 1,545,996
A.D. Frazier, Jr. 1,494,665 0 51,331 1,545,996
Hubert L. Harris, Jr. 1,495,828 0 50,168 1,545,996
Kenneth T. King 1,490,288 0 55,708 1,545,996
John W. McIntyre 1,499,048 0 46,948 1,545,996
Proposal No. 1 1,468,108 27,496 50,390 1,545,994
Proposal No. 2 1,450,938 33,910 61,146 1,545,994
Proposal No. 4 1,440,080 36,673 69,241 1,545,994
Worldwide Capital Goods Fund
Charles W. Brady 240,806 0 6,033 246,839
Dan J. Hesser 240,117 0 6,722 246,839
<PAGE>
Fred A. Deering 240,806 0 6,033 246,839
Victor L. Andrews 238,422 0 8,417 246,839
Bob R. Baker 240,117 0 6,722 246,839
Lawrence H. Budner 240,806 0 6,033 246,839
Daniel D. Chabris 240,528 0 6,311 246,839
A.D. Frazier, Jr. 240,591 0 6,248 246,839
Hubert L. Harris, Jr. 240,117 0 6,722 246,839
Kenneth T. King 240,054 0 6,785 246,839
John W. McIntyre 240,054 0 6,785 246,839
Proposal No. 1 239,617 2,610 4,611 246,838
Proposal No. 2 236,614 4,369 5,854 246,837
Proposal No. 5 237,160 5,178 4,500 246,838
Worldwide Communications Fund
Charles W. Brady 2,415,939 0 126,631 2,542,570
Dan J. Hesser 2,416,329 0 126,241 2,542,570
Fred A. Deering 2,411,949 0 130,621 2,542,570
Victor L. Andrews 2,407,934 0 134,636 2,542,570
Bob R. Baker 2,415,161 0 127,409 2,542,570
Lawrence H. Budner 2,413,203 0 129,367 2,542,570
Daniel D. Chabris 2,411,594 0 130,976 2,542,570
A.D. Frazier, Jr. 2,415,979 0 126,591 2,542,570
Hubert L. Harris, Jr. 2,414,609 0 127,961 2,542,570
Kenneth T. King 2,403,654 0 138,916 2,542,570
John W. McIntyre 2,418,341 0 124,229 2,542,570
Proposal No. 1 2,396,955 46,294 99,322 2,542,571
Proposal No. 2 2,328,730 90,701 123,138 2,542,569
Proposal No. 5 2,325,907 92,056 124,608 2,542,571
</TABLE>
<PAGE>
INVESCO Specialty Funds, Inc.
Financial Highlights
(For a Fund Share Outstanding Throughout Each Period)
<TABLE>
<CAPTION>
Six Months Period Six Months Year Period
Ended Ended Ended Ended Ended
January 31 July 31 January 31 July 31 July 31
------------- ------------ ------------ ------------ ------------
1997 1996^ 1997 1996 1995>
UNAUDITED UNAUDITED
Asian Growth Fund European Small Company Fund
<S> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value - Beginning of Period $ 8.95 $ 10.00 $ 15.08 $ 11.56 $ 10.00
------------- ------------ ------------ ------------ ------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss) (0.01) 0.02 (0.02) 0.07 0.04
Net Gains or (Losses) on Securities
(Both Realized and Unrealized) 1.69 (1.05) 1.75 3.52 1.56
------------- ------------ ------------ ------------ ------------
Total from Investment Operations 1.68 (1.03) 1.73 3.59 1.60
------------- ------------ ------------ ------------ ------------
LESS DISTRIBUTIONS
Dividends from Net Investment Income 0.00 0.02 0.00 0.07 0.04
Distributions from Capital Gains 0.00 0.00 0.53 0.00 0.00
------------- ------------ ------------ ------------ ------------
Total Distributions 0.00 0.02 0.53 0.07 0.04
------------- ------------ ------------ ------------ ------------
Net Asset Value - End of Period $ 10.63 $ 8.95 $ 16.28 $ 15.08 $ 11.56
============= ============ ============ ============ ============
TOTAL RETURN+ 18.77%* (10.31%)* 11.71%* 31.07% 15.98%*
RATIOS
Net Assets - End of Period
($000 Omitted) 48,804 14,315 146,374 94,261 3,801
Ratio of Expenses to Average Net Assets# 0.99%*@ 2.19%~@ 0.79%@* 1.68%@ 2.00%~
Ratio of Net Investment Income (Loss) to
Average Net Assets# (0.16%)* 0.94%~ (0.16%)* 1.23% 2.37%~
Portfolio Turnover Rate 47%* 2%* 34%* 141% 0%*
Average Commission Rate Paid^^ 0.0037* 0.0198* 0.0132* 0.0125 -
</TABLE>
^ From March 1, 1996, commencement of operations, to July 31, 1996.
> From February 15, 1995, commencement of operations to July, 31,1995.
+ Total return for Asian Growth Fund does not reflect the effect of the
applicable redemption fees.
* Based on operations for the period shown and, accordingly, are not
representative of a full year.
<PAGE>
# Various expenses of Asian Growth Fund were voluntarily absorbed by IFG and
INVESCO Asia for the six months ended January 31, 1997 and the period ended
July 31, 1996. Various expenses of the European Small Company Fund were
voluntarily absorbed by IFG, MIL and IAM 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 1.05% (not annualized) and 2.79%
(annualized) for Asian Growth Fund and 10.17% (annualized) for European Small
Company Fund, respectively, and ratio of net investment income to average net
assets would have been (0.22%) (not annualized) and 0.34% (annualized) for
Asian Growth Fund and (5.80%) (annualized) for European Small Company Fund,
respectively.
@ Ratio is based on Total Expenses of the Fund, less Expenses Absorbed by
Investment Adviser, if applicable, which is before any expense offset
arrangements.
~ Annualized
^^ The average commission rate paid is the total brokerage commissions paid on
applicable purchases and sales of securities for the period divided by the
total number of related shares purchased or sold which is required to be
disclosed for the fiscal years beginning September 1, 1995 and thereafter.
<PAGE>
INVESCO Specialty Funds, Inc.
Financial Highlights (Continued)
(For a Fund Share Outstanding Throughout Each Period)
<TABLE>
<CAPTION>
Six Months Year Period Period
Ended Ended Ended Ended
January 31 July 31 July 31 January 31
------------ ------------ ------------ ------------
1997 1996 1995^ 1997>
UNAUDITED UNAUDITED
Latin American Growth Fund Realty Fund
<S> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value - Beginning of Period $ 12.86 $ 11.69 $ 10.00 $ 10.00
------------ ------------ ------------ ------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss) (0.01) 0.08 0.02 0.01
Net Gains on Securities
(Both Realized and Unrealized) 1.95 1.62 1.69 0.15
------------ ------------ ------------ ------------
Total from Investment Operations 1.94 1.70 1.71 0.16
------------ ------------ ------------ ------------
LESS DISTRIBUTIONS
Dividends from Net Investment Income 0.01 0.09 0.02 0.00
Distributions from Capital Gains 0.36 0.44 0.00 0.00
------------ ------------ ------------ ------------
Total Distributions 0.37 0.53 0.02 0.00
------------ ------------ ------------ ------------
Net Asset Value - End of Period $ 14.43 $ 12.86 $ 11.69 $ 10.16
============ ============ ============ ============
TOTAL RETURN+ 15.52%* 15.27% 17.09%* 1.60%*
RATIOS
Net Assets - End of Period ($000 Omitted) $ 53,689 $ 32,064 $ 7,423 $ 19,566
Ratio of Expenses to Average Net Assets# 0.98%*@ 2.14%@ 2.00%~ 0.00%*@
Ratio of Net Investment Income (Loss) to
Average Net Assets# (0.12%)* 1.26% 0.79%~ 0.21%*
Portfolio Turnover Rate 36%* 29% 30%* 0%*
Average Commission Rate Paid^^ $ 0.0003* $ 0.0001 $ - $ 0.0596*
</TABLE>
^ From February 15, 1995, commencement of operations, to July 31, 1995
> From January 1, 1997, commencement of operations, to January 31, 1997.
+ Total return for Latin American Growth Fund does not reflect the effect of
the applicable redemption fees.
<PAGE>
* Based on operations for the period shown and, accordingly, are not
representative of a full year.
# Various expenses of Latin American Growth Fund were voluntarily absorbed by
IFG, MIL and IAM 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 4.49% (annualized) and ratio of net investment income to average net
assets would have been (1.70%) (annualized).
@ Ratio is based on Total Expenses of the Fund, less Expenses Absorbed by
Investment Adviser, which is before any expense offset arrangements.
~ Annualized
^^ The average commission rate paid is the total brokerage commissions paid on
applicable purchases and sales of securities for the period divided by the
total number of related shares purchased or sold which is required to be
disclosed for the fiscal years beginning September 1, 1995 and thereafter.
<PAGE>
INVESCO Specialty Funds, Inc.
Financial Highlights (Continued)
(For a Fund Share Outstanding Throughout Each Period)
<TABLE>
<CAPTION>
Six Months Six Months
Ended Ended
January 31 Year Ended July 31 January 31 Year Ended July 31
------------ ------------------------- ----------- ------------------------
1997 1996 1995 1997 1996 1995
UNAUDITED UNAUDITED
Worldwide Capital Goods Fund Worldwide Communications Fund
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value -
Beginning of Period $ 9.61 $ 9.84 $ 10.00 $ 12.43 $ 12.30 $ 10.00
------------ ------------------------- ----------- ------------------------
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income 0.04 0.01 0.01 0.04 0.22 0.11
Net Gains or (Losses)
on Securities (Both
Realized and Unrealized) 1.53 0.01 (0.16) 1.53 1.38 2.35
------------ ------------------------- ----------- -----------------------
Total from Investment
Operations 1.57 0.02 (0.15) 1.57 1.60 2.46
------------ ------------------------- ----------- -----------------------
LESS DISTRIBUTIONS
Dividends from Net
Investment Income 0.04 0.00 0.01 0.01 0.22 0.11
Distributions from
Capital Gains 1.27 0.25 0.00 1.02 1.25 0.05
------------ ------------------------ ----------- -----------------------
Total Distributions 1.31 0.25 0.01 1.03 1.47 0.16
------------ ------------------------ ----------- -----------------------
Net Asset Value -
End of Period $ 9.87 $ 9.61 $ 9.84 $ 12.97 $ 12.43 $ 12.30
============ ======================== =========== =======================
TOTAL RETURN 17.13%* 0.27% (1.49%) 13.08%* 13.67% 24.83%
RATIOS
Net Assets - End of Period
($000 Omitted) $ 5,078 $ 7,731 $ 10,364 $ 56,759 $ 50,516 $ 27,254
Ratio of Expenses to
Average Net Assets# 1.03%*@ 2.11%@ 2.00% 0.85%*@ 1.66%@ 1.95%
Ratio of Net Investment Income to
Average Net Assets# 0.31%* 0.05% 0.25% 0.32%* 1.78% 1.43%
Portfolio Turnover Rate 104%* 247% 193% 51%* 157% 215%
Average Commission Rate Paid^^ 0.0299* 0.0907 - 0.0107* 0.1285 -
</TABLE>
<PAGE>
* Based on operations for the period shown and, accordingly, are not
representative of a full year.
# Various expenses of Worldwide Capital Goods Fund were voluntarily absorbed by
IFG and ITC for the six months ended January 31, 1997 and the years ended
July 31, 1996 and 1995. If such expenses had not been voluntarily absorbed,
ratio of expenses to average net assets would have been 1.56% (not
annualized), 2.49% and 2.96%, respectively, and ratio of net investment
income to average net assets would have been (0.22%) (not annualized),
(0.33%) and (0.71%), respectively.
@ Ratio is based on Total Expenses of the Fund, less Expenses Absorbed by
Investment Adviser, if applicable, which is before any expense offset
arrangements.
^^ The average commission rate paid is the total brokerage commissions paid on
applicable purchases and sales of securities for the period divided by the
total number of related shares purchased or sold which is required to be
disclosed for fiscal years beginning September 1, 1995 and thereafter.
<PAGE>
FAMILY OF FUNDS
Newspaper
Fund Name Fund Code Ticker Symbol Abbreviation
- --------------------------------------------------------------------------------
International
International Growth 49 FSIGX IntlGr
Asian Growth 41 IVAGX AsianGr
European 56 FEURX Europ
European Small Company 37 IVECX EuroSmCo
Latin American Growth 34 IVSLX LatinAmGr
Pacific Basin 54 FPBSX PcBas
- --------------------------------------------------------------------------------
Sector
Energy 50 FSTEX Enrgy
Environmental Services 59 FSEVX Envirn
Financial Services 57 FSFSX FinSvc
Gold 51 FGLDX Gold
Health Sciences 52 FHLSX HlthSc
Leisure 53 FLISX Leisur
Realty 42 IVSRX Realty
Technology 55 FTCHX Tech
Utilities 58 FSTUX Util
Worldwide Capital Goods 38 ISWGX WldCap
Worldwide Communications 39 ISWCX WldCom
- --------------------------------------------------------------------------------
Capital Appreciation
Growth 10 FLRFX Grwth
Dynamics 20 FIDYX Dynm
Small Company 74 IDSCX DivSmCo
Emerging Growth 60 FIEGX Emgrth
- --------------------------------------------------------------------------------
Growth & Income
Industrial Income 15 FIIIX IndInc
Value Equity 46 FSEQX ValEq
Multi-Asset Allocation 70 IMAAX MulAstAl
Balanced 71 IMABX Bal
Total Return 48 FSFLX TotRtn
- --------------------------------------------------------------------------------
Bond
Short-Term Bond 33 INIBX ShTrBd
Intermediate Government Bond 47 FIGBX IntGov
U.S. Government Securities 32 FBDGX USGvt
Select Income 30 FBDSX SelInc
High Yield 31 FHYPX HiYld
- --------------------------------------------------------------------------------
<PAGE>
Tax-Exempt
Tax-Free Intermediate Bond 36 IVTIX *
Tax-Free Long-Term Bond 35 FTIFX TxFre
- --------------------------------------------------------------------------------
Money Market
U.S. Government Money Fund 44 FUGXX N/A
Cash Reserves 25 FDSXX N/A
Tax-Free Money Fund 40 FFRXX N/A
* This fund does not meet size requirements to be assigned a ticker symbol in
newspaper listings.
For more information about any of the INVESCO Funds, including management fees
and expenses, please call us at 1-800-525-8085 for a prospectus. Read it
carefully before you invest or send money.
<PAGE>
INVESCO FUNDS
We're easy to stay in touch with:
Investor Services Representatives,
1-800-525-8085
PAL (R), your Personal Account Line,
1-800-424-8085
On the World Wide Web:
http://www.invesco.com
Denver Investors Centers:
Cherry Creek, 155-B Fillmore Street;
Denver Tech Center, 7800 E. Union
Avenue, Lobby Level
INVESCO Funds Group, Inc., (SM) Distributor
Post Office Box 173706
Denver, Colorado 80217-3706
This information must be preceded or accompanied by a current prospectus.
