KNOWLEDGE DISCIPLINE SERVICE CHOICE
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Specialty Funds, Inc.
ASIAN GROWTH
EUROPEAN SMALL COMPANY
LATIN AMERICAN GROWTH
REALTY
WORLDWIDE CAPITAL GOODS
WORLDWIDE COMMUNICATIONS
S&P 500 INDEX FUND
YOU SHOULD KNOW WHAT INVESCO KNOWS.(TM)
INVESCO
SEMIANNUAL REPORT January 31, 1999
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SHAREHOLDERS IN ASIAN GROWTH FUND, EUROPEAN SMALL COMPANY FUND, LATIN AMERICAN
GROWTH FUND, REALTY FUND, WORLDWIDE CAPITAL GOODS FUND, WORLDWIDE COMMUNICATIONS
FUND AND S&P 500 INDEX FUND WILL BE RECEIVING IMPORTANT PROXY INFORMATION
SHORTLY. PLEASE BE SURE TO READ THE PROXY CAREFULLY AND VOTE PROMPTLY ON ALL
ISSUES.
"MANAGER BRIAN HAYWARD HAS FASHIONED A TELECOMMUNICATIONS FUND WITH A LITTLE
INTERNET ICING." SMARTMONEY.COM JANUARY 11, 1999 (SEE PAGE 15)
"WHEN THE DOORS OF FINANCIAL OPTIMISM SLAM SHUT AS THEY DID LAST YEAR,
DEVELOPING MARKETS SUCH AS THOSE IN LATIN AMERICA ARE OFTEN LEFT OUT IN THE
COLD." (SEE PAGE 9)
INVESCO SPECIALTY FUNDS, INC.
AVERAGE ANNUALIZED TOTAL RETURN,
PERIODS ENDED 1/31/99*
Fund (inception) 1 Year Since inception Page Number
Asian Growth Fund (3/96) -8.74% -21.16% 4
European Small Company Fund (2/95) 9.25% 15.83% 6
Latin American Growth Fund (2/95) -50.57% -7.73% 8
Realty Fund (1/97) -24.83% -5.09% 10
Worldwide Capital Goods (8/94) -1.20% 7.72% 12
Worldwide Communications Fund (8/94) 53.08% 30.09% 14
S&P 500 Index Fund-Class I (12/97) 34.02% 35.47% 16
S&P 500 Index Fund-Class II (12/97) 34.12% 36.49% 16
* 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.
<PAGE>
INVESCO Semiannual Report January 1999
Moving Forward
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MARKET HEADLINES: AUGUST 1998-JANUARY 1999
The latter half of 1998 was a period few market veterans will forget. Just when
the danger seemed to have passed, the tidal wave of the Asian economic crisis
finally pounded foreign shores in late summer, swamping financial markets. The
gloom over world financial markets deepened as the headlines warned of one
global economic calamity after another: Russian loan default, the ominous
near-collapse of a prominent hedge fund, tumbling currencies in Latin America,
and a perilous banking situation in Japan.
Following the gut-wrenching declines, however, markets in the United States and
Europe began an equally dizzying rebound in October. A series of three interest
rate cuts by the Federal Reserve Board, along with those of other central banks,
pumped liquidity and confidence into the international financial system. Despite
profit warnings from large multinational corporations, investors began to focus
on the many sectors of strength within the American and European economies:
robust consumer spending, low interest rates and unemployment, and subdued
inflation.
Other markets struggled to recover. Hoping the worst was behind them,
investors in some Asian nations, most notably South Korea, bid up their markets;
and indeed, the first small signs of recovery began to appear across the region.
Other Asian markets remained mired in the profound structural and financial
problems confronting the region, however. Although seemingly facing less
intractable problems than Asia, Latin America was unable to maintain a short
rally, and by winter, stocks had returned to the lows of the previous summer.
In Europe and the United States, the optimists seemed to be vindicated by
January as the advanced Western economies continued strong, and stocks headed
higher in January. Yet the mixed economic picture resulted in mixed market
performance for the six-month period, as large-capitalization stocks in favored
industries continued to dramatically outperform the broader markets.
YEAR 2000 COMPUTER ISSUE.
Many computer systems in use today may not be able to recognize any date after
December 31, 1999. If these systems are not fixed by that date, it is possible
that they could generate erroneous information or fail altogether. INVESCO
has committed substantial resources in an effort to make sure that its own major
computer systems will continue to function on and after January 1, 2000. Of
course, INVESCO cannot fix systems that are beyond its control If INVESCO's own
systems, or the systems of third parties upon which it relies, do not perform
properly after December 31, 1999, the Funds could be adversely affected.
In addition, the markets for, or values of, securities in which the Funds invest
may possibly be hurt by computer failures affecting portfolio investments or
trading of securities beginning January 1, 2000. For example, improperly
functioning computer systems could result in securities trade settlement
problems and liquidity issues, production issues for individual companies and
overall economic uncertainties. Individual issuers may incur increased costs in
making their own systems Year 2000 compliant. The combination of market
uncertainty and increased costs means that there is a possibility that Year 2000
computer issues may adversely affect the Funds' investments. At this time, it is
generally believed that foreign issuers, particularly those in emerging and
other markets, may be more vulnerable to Year 2000 problems than will be issuers
in the U.S.
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ASIAN GROWTH FUND
Your Fund's Performance: A Report from the Manager
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Dear Shareholder:
Commentators have recently spoken of Asian stocks "finding the bottom" before
they can rise again. Perhaps all we can say about the past six months is that
the markets seemed to have touched the bottom of the pool. While they may not
resurface soon, they at least did not dive any further.
As an investor in INVESCO Asian Growth Fund, you saw the value of your shares
rise 15.73% over the past six months ended January 31, 1999. This can be
compared to the Morgan Stanley Capital Index-Far East Ex-Japan, which rose
22.30% over the same period. (Of course, past performance is not a guarantee of
future results.)(1),(2)
Such strengthening is welcome, especially following the steep losses last year.
Indeed, many of us are inclined to think that if the markets have fallen so far,
there is no way for them to go but up. It is important to temper this optimism,
however, and not to understate the severe problems facing Asia. The anemic
Japanese economy continues to place a heavy drag on the region, thus affecting
funds even such as ours that do not invest in Japan. With its banking system in
disarray, Japan is in no position to resume its role as a source of credit for
neighboring economies. And with its consumers facing difficult times, it is also
in no position to serve as an outlet for the region's exports.
Still, the situation is not one of unbroken gloom. South Korea has led the
way in restructuring its economy to raise its credit rating and improve the
efficiency of its industries. As a result, the comeback of their stock market
has been impressive. Other nations have taken lesser but important steps to get
their economies on the right track. While traumatic to Asian consumers,
declining currencies have also helped countries turn around their current
account deficits.
We have positioned the fund defensively, and we anticipate no major changes
in this stance as we go forward. We will continue to maintain cash reserves and
to focus on companies with positive cash flows and low financial leverage. At
the same time, we are taking selected aggressive positions in less secure
companies, but only those taking the radical steps necessary to become
profitable.
/s/ Sam Lau
Sam Lau
Portfolio Manager
<PAGE>
ASIAN GROWTH FUND
AVERAGE ANNUALIZED TOTAL RETURN,
PERIOD ENDED 1/31/99(2)
1 year -8.74%
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Since inception (3/96) -21.16%
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Graph: Asian Growth Fund Total Return from Inception(3/96)
through 1/31/99
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 (3/96) through 1/31/99.
The line graph illustrates the value of a $10,000 investment, plus
reinvested dividends and capital gain distributions, since inception through
1/31/99. The chart and other total return figures cited reflect the fund's
operating expenses, but the index does not have expenses, which would, of
course, have lowered its performance. (Of course, past performance is not a
guarantee of future results.)(1),(2)
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FUND MANAGER
SAM LAU
Sam Lau serves as portfolio manager of INVESCO Asian Growth Fund. Sam received
his BS from the University of Illinois and MBA from the Chinese University of
Hong Kong. Began investment career in 1998. Joined INVESCO in 1994.
<PAGE>
EUROPEAN SMALL COMPANY FUND
Your Fund's Performance: A Report from the Managers
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Dear Shareholder:
The European markets rode much the same roller coaster as did those of the
United States late last year: a tumble in late summer was followed by a rebound
in the fall. As in the United States, however, a relatively small number of
large-company stocks dramatically outperformed the rest of the market. Thus,
while your investment appreciated somewhat, it was unable to match the returns
of many larger-capitalization European funds.
The European Small Company Fund declined 15.10% over the six months ended
January 31, 1999. This can be compared to the return of the James Capel Smaller
European Index, which fell 12.29% over the same period. (Of course, past
performance is not a guarantee of future results.)(1),(2)
European markets fell steeply following the Russian loan default and
devaluation in late summer. While this decline reflected concerns over declines
in exports to Russia or losses on loans, it mainly resulted in a loss in
confidence. Investors fled from risk-oriented assets, including those in smaller
companies. As economists lowered world growth forecasts, investors also began to
show concern for companies in industries such as manufacturing and construction.
While a concerted rate cut by nearly all the major European central banks helped
revive the markets, significant sectors remained under the haze of investor
worry. We have tried to position the fund to avoid those problem industries, yet
we were unable to do so entirely. Smaller stocks are usually less liquid, which
makes them less attractive in periods of volatility.
Yet many small European companies remain well-positioned to take advantage of
the new borderless European economy. Increased competition brought about by the
single European currency, the euro, should provide excellent opportunities for
the region's most dynamic firms. A small French, German, or Italian company, for
example, now has the possibility of becoming a large player not only in its home
market, but all across the continent. The increasing interest in equity
investing in Europe holds the promise of focusing greater attention on the
stocks of these firms.
/s/ Claire Griffiths /s/ Andy Crossley
Claire Griffiths Andy Crossley
Portfolio Manager Portfolio Manager
<PAGE>
EUROPEAN SMALL COMPANY FUND
AVERAGE ANNUALIZED TOTAL RETURN,
PERIOD ENDED 1/31/99(2)
1 year 9.25%
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Since inception (2/95) 15.83%
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Graph: European Small Company Fund Total Return from Inception(2/95)
through 1/31/99
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
James Capel Smaller European Index, assuming in each case reinvestment
of all dividends and capital gain distributions, for the period from
inception (2/95) through 1/31/99.
The line graph illustrates the value of a $10,000 investment, plus
reinvested dividends and capital gain distributions, since inception through
1/31/99. The chart and other total return figures cited reflect the fund's
operating expenses, but the index does not have expenses, which would, of
course, have lowered its performance. (Of course, past performance is not a
guarantee of future results.)(1),(2)
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FUND MANAGERS
CLAIRE GRIFFITHS
Claire Griffiths and Andy Crossley of our London sister company, INVESCO
Asset Management Limited, lead a group responsible for the management of INVESCO
European Small Company Fund. Claire graduated from St. John's College,
Cambridge, and began her investment career in 1989.
ANDY CROSSLEY
Andy began his investment career in 1988 after graduating from Loughborough
University.
<PAGE>
LATIN AMERICAN GROWTH FUND
Your Fund's Performance: A Report from the Manager
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Dear Shareholder:
Unfortunately, the performance of our fund over the past six months highlighted
the potential short-term pitfalls of international investing, especially in
emerging markets, rather than the long-term potential rewards. When the doors of
financial optimism slam shut as they did last year, developing markets such as
those in Latin America are often left out in the cold. Nonetheless, the
long-term fundamentals for many Latin American economies remain solid.
For the six-month period ended January 31, 1999, the value of your shares
declined 47.56%. In comparison, the MSCI-Latin America index fell 32.07%. (Of
course, past performance is not a guarantee of future results.)(1),(2)
Overall, we can say that the region was caught in an unfortunate scissors
effect. On one side was the dramatic aversion to risk, sometimes referred to as
the "flight to quality," which settled over the global investment landscape
following the Russian loan default last summer. Although Latin America's
economies are linked only very slightly to Russia, investors proved largely
unwilling to distinguish between different risks around the world and sought
haven in the largest markets and safest companies.
On the other side, the region was affected by another force originating
overseas. The recession throughout much of Asia has had a detrimental effect on
world commodity prices. While its economies are diversifying, Latin America
remains heavily reliant on commodity exports, such as coffee and metals.
Dependent on rapidly disappearing external financing and unable to command
strong prices for its exports, the region has suffered through a very trying
time in its development. Indeed, the roots of many of its problems lie at home.
Foremost among them are the fiscal woes of Brazil. As the largest economy in the
region, Brazil's struggles with its huge budget deficit have reverberated
extensively.
In short, these are temporarily unloved markets trading at unloved prices.
Since assuming management of the fund, I have sought to position the portfolio
for any rebound in the region. How strong that rebound will be, and how long it
will take to come about, remains uncertain.
Nonetheless, despite its severe problems, Latin America is a region endowed with
abundant natural resources and a young, resourceful population. For investors
willing to accept periods like this past one, the potential rewards remain
strong over the longer-term.
/s/ David Manuel
David Manuel
Lead Portfolio Manager
<PAGE>
LATIN AMERICAN GROWTH FUND
AVERAGE ANNUALIZED TOTAL RETURN,
PERIOD ENDED 1/31/99(2)
1 year -50.57%
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Since inception (2/95) -7.73%
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Graph: Latin American Growth Fund Total Return from Inception(2/95)
through 1/31/99
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 America Index, assuming in each case reinvestment of all
dividends and capital gain distributions, for the period from
inception (2/95) through 1/31/99.
The line graph illustrates the value of a $10,000 investment, plus
reinvested dividends and capital gain distributions, since inception through
1/31/99. The chart and other total return figures cited reflect the fund's
operating expenses, but the index does not have expenses, which would, of
course, have lowered its performance. (Of course, past performance is not a
guarantee of future results.)(1),(2)
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FUND MANAGER
DAVID MANUEL
David Manuel joined INVESCO Asset Management Ltd., the London-based
investment management affiliate of INVESCO Funds Group, in June 1998 following
the acquisition of LGT Asset Management. He currently serves as lead manager of
the INVESCO Latin American Growth Fund. David heads a team of three, which is
also part of the Global Emerging Markets Team; individual team members have
specialist responsibility for stocks, divided on a sector and country basis. He
received a BA in Natural Sciences from Downing College, Cambridge University,
and a Ph.D. in Biotechnology from Imperial College, University of London.
<PAGE>
REALTY FUND
Your Fund's Performance: A Report from the Managers
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Dear Shareholder:
This was an unusual and disappointing period for real estate investors. Overall,
the real estate market itself continued to be very healthy, with vacancy rates
low and new construction at sustainable levels. The yields offered by real
estate firms and investment trusts have been at very high levels--contrasting
favorably with declining yields on the broader market. Despite all the
encouraging signs, however, the value of many real estate investments has fallen
over the past year.
The value of shares in the Realty Fund declined 14.53% over the past six
months. This performance can be compared to that of the NAREIT Index, which
tracks the real estate industry, and which fell 9.65%. It can also be compared
to the S&P 500 Index, which rose 15.01% (Of course, past performance is not a
guarantee of future results.)(1),(2)
Undoubtedly, the downturn in the real estate sector is traceable to
concerns that the U.S. economy might be slowing. Some probably have in mind the
late 1980s and early 1990s, which saw a deep slump in the real estate market
coincide with a relatively mild economic recession. While understandable,
however, these fears ignore the significant differences between the current real
estate market and that of a decade ago. We are glad to report this market shows
all signs of being much more in balance regarding supply and demand, since new
commercial construction has been very moderate over the past several years.
Certainly, the vulnerability of the real estate market to global financial
turmoil may have caused some concerns, but the actual effect thus far appears
minimal as well. Asian investors long ago ceased to be a major source of real
estate demand, for example. Indeed, Asian investors are now net sellers.
Whatever the reasons for last year's slump, we continue to be optimistic
about the fundamentals of this sector. Earnings growth among real estate
companies promises to be strong again this year, and companies should continue
to offer attractive dividends. U.S. real estate may well be a defensive outpost
due to its relative isolation from world financial problems.
Whether this results in a strong return in real estate stocks, on the other
hand, is harder to foresee. Still, we remain convinced that fundamentals
matter--and we foresee these fundamentals remaining strong.
/s/ Jim Trowbridge /s/ Todd Johnston /s/ Joe Rodriguez
Jim Trowbridge Todd Johnston Joe Rodriguez
Portfolio Manager Portfolio Manager Portfolio Manager
<PAGE>
REALTY FUND
AVERAGE ANNUALIZED TOTAL RETURN,
PERIOD ENDED 1/31/99(2)
1 year -24.83%
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Since inception (1/97) -5.09%
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Graph: Realty Fund Total Return from Inception(1/97)
through 1/31/99
This line graph compares the value of a $10,000 investment in INVESCO
Realty Fund to the value of a $10,000 investment in the NAREIT Index
and the S&P 500 Index, assuming in each case reinvestment of all
dividends and capital gain distributions, for the period from
inception (1/97) through 1/31/99.
The line graph illustrates the value of a $10,000 investment, plus
reinvested dividends and capital gain distributions, since inception through
1/31/99. The chart and other total return figures cited reflect the fund's
operating expenses, but the indexes do not have expenses, which would, of
course, have lowered their performance. (Of course, past performance is not a
guarantee of future results.)(1),(2)
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FUND MANAGERS
TODD JOHNSTON
JOE RODRIGUEZ
JAMES TROWBRIDGE
James Trowbridge joined INVESCO Realty Advisors, the Dallas-based investment
management affiliate of INVESCO Funds Group, in 1989. Beginning his investment
career in 1975, Jim received his BS in Finance from Indiana University, with
graduate work also at Indiana.
Todd Johnston has been with INVESCO since 1986 and has been a member of
INVESCO's real estate securities management team since 1993. Beginning his
investment career in 1986, he received his BS in Industrial Economics from Union
College and his Master of Science degree in Finance from Boston College.
Joe Rodriguez joined INVESCO Realty Advisors in 1990. He began his investment
career in 1983 and received his BBA in Economics and Finance and his MBA from
Baylor University.
<PAGE>
WORLDWIDE CAPITAL GOODS FUND
Your Fund's Performance: A Report from the Manager
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Dear Shareholder:
If one thinks of the Asian economic crisis as an earthquake, the capital goods
sector was only a few steps away from the epicenter late last summer. Fearing
that lowered demand and excess capacity in Asia would hurt profits, many
investors took a dim view of capital goods producers around the globe. The
prospect of a slowdown in U.S. growth also took its toll. As most of you know,
the broader market has been driven upward largely by technology, health care,
and certain other large-capitalization stocks in the recent past.
For the six-month period ended January 31, 1999, the fund declined 4.21%.
This return severely lagged that of the domestic S&P 500 Index, which rose
15.01%. (Of course, past performance is not a guarantee of future results.)(1),
(2)
While these results are disappointing, we take some comfort in reflecting
that they could have been much worse. Since last summer, we have tried to
reposition the fund for slower global economic growth, primarily by focusing the
fund on investments that are less sensitive to cyclical downturns. We have
increased our holdings of defense stocks, for example. Indications of an
increase in U.S. defense spending following years of reductions should boost
profits in the industry despite slower growth in the broader economy.
We have also focused on capital goods producers that are poised to benefit
from the growth of the service and information economy. Some traditional
manufacturers are re-gearing themselves to provide the infrastructure necessary
to keep the Internet and other new technologies running; in the long run, they
should provide some excellent opportunities for investors. This strategy has
also helped us avoid some of the worst performers in the sector, such as makers
of agricultural machinery, which have seen their shares tumble alongside the
prices of farm commodities.
/s/ John Segner
John Segner
Vice President & Portfolio Manager
<PAGE>
WORLDWIDE CAPITAL GOODS FUND
AVERAGE ANNUALIZED TOTAL RETURN,
PERIOD ENDED 1/31/99(2)
1 year -1.20%
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Since inception (8/94) 7.72%
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Graph: Worldwide Capital Goods Fund Total Return from Inception(8/94)
through 1/31/99
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 MSCI-EAFE Index and the S&P 500 Index, assuming in each case rein-
vestment of all dividends and capital gain distributions, for the
period from inception (8/94) through 1/31/99.
The line graph illustrates the value of a $10,000 investment, plus
reinvested dividends and capital gain distributions, since inception through
1/31/99. The chart and other total return figures cited reflect the fund's
operating expenses, but the indexes do not have expenses, which would, of
course, have lowered their performance. (Of course, past performance is not a
guarantee of future results.)(1),(2)
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FUND MANAGER
JOHN SEGNER
John Segner assumed responsibilities of portfolio manager in December 1997.
He received a BS from the University of Alabama and an MBA from the University
of Texas at Austin. Before joining INVESCO in 1997, John served as Managing
Director and Principal for the Mitchell Group, and had previous experience with
Texaco, Inc., Ameranda Hess Corporation, and First Tennessee National
Corporation.
<PAGE>
WORLDWIDE COMMUNICATIONS FUND
Your Fund's Performance: A Report from the Manager
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Dear Shareholder:
This has been an exciting and rewarding time to be an investor in the
communications sector. New technologies are driving major changes in the ways we
communicate, and these have contributed to healthy profits for the leading
companies in this area.
As an investor in Worldwide Communications Fund, you enjoyed a very healthy
return of 25.81% for the six months ended January 31, 1999. This return
substantially exceeded even the very strong returns of the S&P 500 Index, which
rose 15.01% during the same period. (Of course, past performance is not a
guarantee of future results.)(1),(2)
Continuing results on such a scale would surprise us. Yet three forces driving
communications make us very optimistic about the future possibilities for
investors:
First, ongoing deregulation will likely continue to encourage innovation
and reward the best companies with healthy profits. While we hear a great deal
in the United States about the deregulation process at home, changes of equal or
even greater magnitude are taking place abroad. In many nations, consumers who
have long endured substandard service from state-run monopolies are now enjoying
the fruits of competition--and they are responding by expanding the market for
communications services.
Second, the explosion of data traffic over the Internet and other networks
is opening new horizons for communications companies. Most people are now
familiar with e-mail, but the sending of millions of messages daily over the
Internet pales in comparison to the exploding transmission of visual and audio
information. Creating the new infrastructure required to transmit sound and
pictures over communications networks will provide a building boom reminiscent
in some ways of the construction of our rail and highway networks.
Third, the migration of voice traffic from cable to wireless networks will
continue to transform the industry. For instance, the proliferation of cellular
phones has allowed consumers to communicate more often, with greater choice over
their carriers.
We have invested in companies at the centers of all three of these
revolutions. Our particular attention, however, will continue to be focused on
communications equipment makers--which benefit from all these changes. The
enormous demand for new cable, routers, and other technologies should provide
proportionate opportunities for well-positioned companies.
No stocks, not even those in as promising a sector as the communications
industry, are immune to changes in market sentiment and other broad economic
factors. Still, we view this past six months as an encouraging sign of the
long-term strength of the communications sector.
/s/ Brian Hayward
Brian Hayward
Vice President & Portfolio Manager
<PAGE>
WORLDWIDE COMMUNICATIONS FUND
AVERAGE ANNUALIZED TOTAL RETURN,
PERIOD ENDED 1/31/99(2)
1 year 53.08%
- ------------------------------------
Since inception (8/94) 30.09%
- ------------------------------------
Graph: Worldwide Communications Fund Total Return from Inception(8/94)
through 1/31/99
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 MSCI-EAFE Index and the S&P 500 Index, assuming in each case rein-
vestment of all dividends and capital gain distributions, for the
period from inception (8/94) through 1/31/99.
The line graph illustrates the value of a $10,000 investment, plus
reinvested dividends and capital gain distributions, since inception through
1/31/99. The chart and other total return figures cited reflect the fund's
operating expenses, but the indexes do not have expenses, which would, of
course, have lowered their performance. (Of course, past performance is not a
guarantee of future results.)(1),(2)
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FUND MANAGER
BRIAN HAYWARD
Brian Hayward assumed responsibilities of portfolio manager of Worldwide
Communications Fund in July 1997. Previously, he was a senior equity analyst for
Mississippi Valley Advisors in St. Louis, Missouri and began his investment
career in 1985. Brian earned a BA in Mathematics and a MA in Economics from the
University of Missouri. He is a Chartered Financial Analyst.
<PAGE>
S&P 500 INDEX FUND
Summary
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INVESCO launched its first index fund in December 1997 in order to provide
shareholders an additional option for diversifying their portfolios. INVESCO S&P
500 Index Fund seeks to provide price performance and income comparable to the
Standard & Poor's 500 Index, which is composed of 500 selected
large-capitalization stocks.
Over the past six months, the fund's Class I shares returned 15.82%, while
Class II shares returned 15.65%. Both closely tracked the 15.02% total return of
S&P 500 Index itself over the same period. The slight divergence in performance
is explained by the fund's asset size and expenses. As the fund increases in
size, it is likely to track the index more closely. (Of course, past performance
is not a guarantee of future results.)(1),(2)
S&P 500 INDEX FUND - CLASS I S&P 500 INDEX FUND - CLASS II
AVERAGE ANNUALIZED TOTAL RETURN, AVERAGE ANNUALIZED TOTAL RETURN,
PERIOD ENDED 1/31/99(2) PERIOD ENDED 1/31/99(2)
1 year 34.02% 1 year 34.12%
- ------------------------------------ ------------------------------------
Since inception (12/97) 35.47% Since inception (12/97) 36.49%
- ------------------------------------ ------------------------------------
Graph: S&P 500 INDEX Fund - CLASS I&II Total Return from Inception(12/97)
through 1/31/99
This line graph compares the value of a $10,000 investment in INVESCO
S&P 500 Index Fund - Class I&II to the value of a $10,000 investment in
the S&P 500 Index, assuming in each case reinvestment of all dividends
and capital gain distributions, for the period from inception (12/97)
through 1/31/99.
<PAGE>
A Review & Strategy Session with
INVESCO's Specialty Fund Managers
- --------------------------------------------------------------------------------
Worldwide Communications Fund had an excellent year, so let's start with
you, Brian. According to Smart Money Magazine, you have a little "Internet
icing" on the fund. Is that why you did so well?
BRIAN HAYWARD: Well, our biggest position was America Online. That was not
our intention, but rather a result of the stock's remarkable growth.
But this is not an Internet fund as that term might commonly be
understood--that is, we don't have a portfolio of stocks with negative earnings
but spectacular valuations. I think the Internet is going to grow and open new
horizons, but I prefer to own the companies that are building the equipment that
makes it operate.
John, the capital goods sector had a tougher time this year, but could you
discuss a "traditional" industrial company that is taking advantage of these
trends?
JOHN SEGNER: Tyco would be a good example. They are a diversified
conglomerate, but they seem to do well at almost anything they put their hand
to. One thing they are doing--and doing quite profitably--is laying fiber optic
cable across the ocean. Companies such as this interest us because they will be
able to adapt to however the economy evolves. General Electric is another
example of a firm that is adjusting itself, by increasing its role in financial
services.
Another so-called "traditional" investment might be real estate, which also
had a tough time in 1998.
JIM TROWBRIDGE: True, but you might say that we are also trying to pick out
the "new real estate economy." We're on the lookout for markets in which supply
is constrained while the demand for space is growing. These days, we're finding
them more on the East and West Coasts. No matter how fast the Internet grows,
people are going to need to stay in hotel rooms and work in offices, and
developers have been building these facilities at a very sustainable pace.
Don't all real estate funds target hot markets?
JIM TROWBRIDGE: Well, all of our competitors analyze balance sheets, and
those sheets always look best in hot markets. But we pride ourselves on doing
the basic research on asset prices and the like, which not everyone can do
because of the work that is involved. That's where a large real estate staff
like ours becomes very useful.
Just as people are always going to need real estate, they're always going
to need things like cars--isn't that a bright spot for the capital goods sector,
John?
JOHN SEGNER: Perhaps, but it is important to stress the very real hurdles
that remain--unlike real estate, the fundamentals in many cases are not so
encouraging. The American consumer has been on a spending spree over the past
few years, one that has to end someday. I'm not convinced they are going to keep
buying as many cars, for example. On top of that--and unlike their real estate
counterparts--American capital goods firms are subject to excess capacity
overseas.
Sam, much of that excess capacity is in Asia. Has any progress been made in
addressing it?
SAM LAU: Some, although it is an awesome task. South Korea has led the way
in reducing capacity through consolidation and liquidation sales in both the
manufacturing and financial sectors. China, though, has tremendous amounts of
excess production capacity. This is already exerting deflationary pressures on
their economy--and, of course, everyone is waiting to see if their currency, the
RMB, is devalued. But restructuring means unemployment, at least in the
short-term. And this is a high price to pay in China right now.
<PAGE>
It seemed not too long ago that leading firms in many industries--in
communications, capital goods, and other sectors--were likely to emerge in Asia.
What happened?
SAM LAU: The lack of external financing has been a major negative factor
recently. Yet many Asian firms still have dedicated, low-cost workforces and
technological savvy. We're positioning ourselves for the future in firms that
are becoming less reliant on debt and selling off businesses that don't fit into
their core. Samsung would be a good example of a company with some real core
capabilities that is taking the tough steps necessary to become profitable.
Let's turn to another problem area, Latin America. Is the situation similar
there, David?
DAVID MANUEL: In part. Certainly, the lack of access to credit is a major drain
on the region--as it almost always is in high-growth, industrializing economies.
But the depression in world commodity prices also plays a large role. There is
perhaps another similarity in that, just as Asia is held hostage to the problems
in Japan, so is Latin America hostage to those in Brazil. When a region's
leading economy has the flu, its neighbors are likely to become sick.
South Korea has attempted to lead a rebound in Asia; what country will do
so in Latin America?
DAVID MANUEL: Well, perhaps Peru is the brightest spot in the region--but
its economy is tiny compared to that of South Korea. Mexico is doing fairly
well, and we are keeping our eyes out for opportunities there. Mexico's economic
fortunes are tied somewhat to those of the U.S., of course, so it has been
caught in a pleasant updraft. You can also identify some countries that seem to
be at the bottom of a cycle, and therefore should see some growth soon. Chile is
a good example, and that economy will be helped by interest rate cuts.
Beyond a doubt, the best region for international investors has been Europe.
CLAIRE GRIFFITHS: Sure, it's made up largely of mature, safe economies. And it
is subject to many of the same forces as in the U.S., which have made for very
strong returns for certain companies. Corporate competition is intensifying
under the influence of low inflation, deregulation, and the growing use of the
Internet. But we also now have the euro, which has focused increased attention
of the ability of companies to operate across borders.
So what kind of companies are doing well across the "Eurozone"?
CLAIRE GRIFFITHS: We're very interested in the new service economy that is
developing, serving customers who are seeking low prices. This has led us toward
successful hotel, restaurant, and fast food chains. We're also targeting media
content, such as conditional access software for pay-per-view television and
computer games software. Finally, we are looking into the opportunities
presented by deregulation, which is radically changing the face of European
economies. Temporary employment and telecoms are two areas of focus for us.
<PAGE>
Speaking of telecoms, one industry really taking off in Europe is the
wireless phone industry. What's happening there, Brian?
BRIAN HAYWARD: You might say the Europeans have been tutored to use
cellular phones in a way that Americans have not. Here in the States, we're used
to paying a flat fee at home for unlimited local calls. In Europe, on the other
hand, consumers have long paid by the minute. As a result, Europeans are quite
comfortable paying for their cell phone calls by the minute. I think Americans
will get there, too. In many ways, some countries in Europe form the blueprint
for the future of the American wireless industry.
---------------------------
Because these funds are actively managed, composition of holdings will change.
- --------------------------------------------------------------------------------
(1) The MSCI-EAFE, MSCI-Pacific Ex Japan, MCSI-Latin 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 America; and European small-capitalization
stocks. The S&P 500 is an unmanaged index indicative of the broad U.S. stock
market. The NAREIT is an unmanaged index indicative of the U.S. real estate
investment trust 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.
<PAGE>
TEN LARGEST COMMON STOCK HOLDINGS
INVESCO Specialty Funds, Inc.
January 31, 1999
UNAUDITED
<TABLE>
<CAPTION>
DESCRIPTION VALUE
------------------------------------------------------------------------------------------------------------------
<S> <C>
ASIAN GROWTH FUND
Hutchison Whampoa Ltd $ 1,845,447
Cheung Kong Holdings Ltd 1,664,774
HSBC Holdings PLC 856,804
DBS Land Ltd 811,913
Oversea-Chinese Banking Ltd Foreign Shrs 685,458
CLP Holdings Ltd 590,543
Korea Electric Power 550,638
Singapore Press Holdings Ltd 544,584
LG Information & Communication Ltd 493,335
Hong Kong Telecommunications Ltd 485,882
EUROPEAN SMALL COMPANY FUND
EM.TV & Merchandising AG $ 1,847,557
GFI Informatique 1,186,182
IONA Technologies PLC Sponsored ADR Representing Ord Shrs 1,074,000
Kudelski SA Bearer Shrs 1,001,902
MobilCom AG 976,702
Grand Hotel Krasnapolsky NV 947,855
Saville Systems PLC Sponsored ADR Representing Ord Shrs 875,000
Psion PLC 835,774
Bachem AG Registered B Shrs 697,527
Topcall International AG 681,420
LATIN AMERICAN GROWTH FUND
Enersis SA Sponsored ADR Representing 50 Cmn Shrs $ 813,750
Grupo Televisa SA de CV Participation Certificates Representing Series A, D & L Shrs 499,213
Grupo Financiero Banamex-Accival SA de CV Series B Shrs 495,177
Sociedad Quimica y Minera de Chile SA Sponsored ADR Representing 10 Series B Shrs 493,125
Grupo Carso SA de CV Series A-1 Shrs 428,150
Consorcio ARA SA de CV Sponsored ADR Representing 10 Shrs 410,550
Inversiones y Representaciones SA Sponsored GDR Representing 10 Shrs 374,554
Cia Paranaense de Energia-Copel 365,243
Grupo Industrial Saltillo SA de CV Series B Shrs 361,713
Quinenco SA ADR Representing 10 Ord Shrs 344,500
<PAGE>
DESCRIPTION VALUE
------------------------------------------------------------------------------------------------------------------
REALTY FUND
Prentiss Properties Trust $ 915,300
CarrAmerica Realty 915,200
Reckson Associates Realty 880,000
SL Green Realty 860,625
Host Marriott 778,750
Liberty Property Trust SBI 763,088
Arden Realty 733,500
Archstone Communities Trust 684,687
Essex Property Trust 652,650
CBL & Associates Properties 492,500
S&P 500 INDEX FUND
Microsoft Corp $ 1,974,875
General Electric 1,557,289
Intel Corp 1,067,461
Wal-Mart Stores 875,480
Cisco Systems 802,246
Merck & Co 790,542
International Business Machines 776,614
Exxon Corp 776,151
Pfizer Inc 752,328
AT&T Corp 741,155
WORLDWIDE CAPITAL GOODS FUND
Tyco International Ltd $ 462,375
General Electric 419,500
Compaq Computer 395,287
Motorola Inc 390,150
Northern States Power 371,738
Alliant Techsystems 324,675
General Dynamics 319,688
Lockheed Martin 317,250
AlliedSignal Inc 315,900
Owens-Illinois Inc 312,975
WORLDWIDE COMMUNICATIONS FUND
America Online $ 22,558,275
COLT Telecom Group PLC Sponsored ADR Representing 4 Ord Shrs 16,275,375
Cisco Systems 15,537,867
Nokia Corp Sponsored ADR Representing Class A Shrs 14,644,800
AirTouch Communications 13,634,625
MCI WorldCom 13,335,157
Mannesmann AG 13,294,550
Global Crossing Ltd 12,118,950
Tele-Communications Inc TCI Group Series A 11,998,438
EMC Corp 11,976,250
Composition of holdings is subject to change.
</TABLE>
<PAGE>
STATEMENT OF INVESTMENT SECURITIES
<TABLE>
<CAPTION>
INVESCO Specialty Funds, Inc.
January 31, 1999
UNAUDITED
SHARES, UNITS
% DESCRIPTION INDUSTRY OR PRINCIPAL
CODE AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASIAN GROWTH FUND
80.56 COMMON STOCKS & WARRANTS
5.90 AUSTRALIA
AMP Ltd(a)(b) IN 30,000 $ 362,843
Australia & New Zealand Banking Group Ltd BK 40,000 263,057
Rio Tinto Ltd GP 20,000 247,475
TABCORP Holdings Ltd GM 20,000 142,121
Telstra Corp Ltd TN 50,000 271,426
WMC Ltd GP 50,000 153,619
==================================================================================================================
1,440,541
26.83 HONG KONG
CLP Holdings Ltd EU 130,000 590,543
Cheung Kong Holdings Ltd RL 240,000 1,664,774
COSCO Pacific Ltd SV 700,000 237,134
Hang Seng Bank Ltd BK 57,900 483,820
Hong Kong Telecommunications Ltd TL 300,000 485,882
Hongkong Electric Holdings Ltd EU 120,000 351,538
Hutchison Whampoa Ltd CG 260,000 1,845,447
New World Development Ltd RL 200,000 392,319
Shanghai Industrial Holdings Ltd MG 220,000 337,859
Tianjin Development Holdings Ltd DB 330,000 167,155
==================================================================================================================
6,556,471
2.00 INDIA
BSES Ltd Regulation S GDR Representing
3 Ord Shrs(a)(h) EU 13,000 162,500
Ranbaxy Laboratories Ltd GDR Representing
Ord Shrs HD 15,000 148,050
Videsh Sanchar Nigam Ltd Regulation S GDR
Representing 1/2 Ord Shr(h) TL 17,000 178,500
==================================================================================================================
489,050
4.76 INDONESIA
PT Aneka Tambang Tbk MM 2,220,000 365,866
PT Bank Internasional Indonesia Warrants
(Exp 2000)(a) BK 22,652 175
PT Bank Pan Indonesia Tbk Foreign Shrs BK 4,500,000 289,106
PT Matahari Putra Prima Tbk(a) RT 5,000,000 139,665
PT Telekomunikasi Indonesia TN 1,000,000 368,715
==================================================================================================================
1,163,527
<PAGE>
SHARES, UNITS
% DESCRIPTION INDUSTRY OR PRINCIPAL
CODE AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------
1.09 LUXEMBOURG
Korea Asia Fund IDR Representing 500 Shrs(a) FN 315 266,963
2.43 MALAYSIA
Berjaya Sports Toto Berhad GM 74,000 76,998
Malakoff Berhad AG 120,000 195,580
Metroplex Berhad RL 320,000 41,842
Tanjong PLC GM 90,000 112,707
Telekom Malaysia Berhad TN 100,000 165,746
==================================================================================================================
592,873
3.39 PHILIPPINES
Ayala Land RL 512,880 156,528
Benpres Holdings(a) BR 1,522,800 229,409
First Philippine Holdings B Shrs CG 147,600 85,301
Manila Electric B Shrs EU 80,000 241,039
Philippine Long Distance Telephone TL 5,000 116,883
==================================================================================================================
829,160
13.86 SINGAPORE
City Developments Ltd(c) RL 65,000 265,024
DBS Land Ltd(c) RL 600,000 811,913
Development Bank of Singapore Ltd Foreign Shrs BK 49,000 376,411
Oversea-Chinese Banking Ltd Foreign Shrs BK 100,000 685,458
Singapore Press Holdings Ltd PB 48,000 544,584
Singapore Technologies Engineering Ltd(c) EC 400,000 354,547
Singapore Telecommunications Ltd TL 250,000 350,115
==================================================================================================================
3,388,052
13.77 SOUTH KOREA
Daewoo Heavy Industries(a) MY 58,050 240,105
Halla Climate Control(a) HW 12,090 250,031
Kookmin Bank(a) BK 50,000 372,766
Korea Electric Power(a) EU 20,000 550,638
LG Information & Communication Ltd(a) CM 14,260 493,335
Pohang Iron & Steel Ltd(a) IS 2,610 131,055
Pohang Iron & Steel Ltd Sponsored ADR
Representing 1/4 Ord Shr IS 7,610 142,687
Samsung Display Devices(a) EL 8,000 367,660
Samsung Electronics(a) ES 5,000 382,553
Samsung Fire & Marine Insurance IN 1,305 426,485
Sungmi Telecom Electronics(a) CM 230 7,477
==================================================================================================================
3,364,792
3.02 THAILAND
Bangkok Expressway PCL Foreign Shrs(a) AF 127,000 116,001
Bank of Asia PLC Foreign Shrs(a) BK 500,000 392,422
Electricity Generating PLC Foreign Shrs EU 45,000 108,390
PTT Exploration & Production PLC
Foreign Shrs(a) OG 16,200 121,884
Thai Farmers Bank PLC Warrants (Exp 2002)(a) BK 1,875 244
==================================================================================================================
738,941
<PAGE>
SHARES, UNITS
% DESCRIPTION INDUSTRY OR PRINCIPAL
CODE AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------
3.51 UNITED KINGDOM
HSBC Holdings PLC BK 34,400 856,804
==================================================================================================================
TOTAL COMMON STOCKS & WARRANTS (Cost $21,788,509) 19,687,174
==================================================================================================================
4.53 OTHER SECURITIES
4.53 SOUTH KOREA
Merrill Lynch International & Co CV KOSPI
200 Index Low Exercise Price Call Warrants
(Exp 3/11/1999)(d)(Cost $510,539) SV 2,026 1,108,059
==================================================================================================================
14.91 SHORT-TERM INVESTMENTS
0.16 Commercial Paper
0.16 MALAYSIA
SCB Malaysia Berhad TD, 5.750%, 8/2/1999
(Cost $38,995) BK $ 38,995 38,995
==================================================================================================================
14.75 Repurchase Agreements
14.75 UNITED STATES
Repurchase Agreement with State Street dated
1/29/1999 due 2/1/1999 at 4.670%,
repurchased at $3,606,403 (Collateralized
by US Treasury Bonds, due 4/15/2028
at 3.625%, value $3,681,149)
(Cost $3,605,000) RA $3,605,000 3,605,000
==================================================================================================================
TOTAL SHORT-TERM INVESTMENTS (Cost $3,643,995) 3,643,995
==================================================================================================================
100.00 TOTAL INVESTMENT SECURITIES AT VALUE
(Cost $25,943,043)
(Cost for Income Tax Purposes $26,222,365) $ 24,439,228
==================================================================================================================
EUROPEAN SMALL COMPANY FUND
89.09 COMMON STOCKS & WARRANTS
1.42 AUSTRIA
Topcall International AG CO 1,600 $ 681,420
==================================================================================================================
2.75 DENMARK
Coloplast A/S Registered B Shrs HC 4,000 450,728
Falck A/S AF 5,800 469,356
NeuroSearch A/S(a) HD 3,000 201,545
William Demant Holding A/S HC 3,000 194,615
==================================================================================================================
1,316,244
1.62 FINLAND
Raisio Group PLC FD 35,800 280,541
Tieto Corp Series B Shrs CO 11,593 497,155
==================================================================================================================
777,696
14.75 FRANCE
Alliance et Gestion Commerciale SV 4,300 312,545
Altran Technologies SA EC 1,700 503,524
Cie des Signaux SA EL 3,700 271,455
Du Pareil au Meme RT 2,241 174,085
GFI Informatique(a) SV 9,900 1,186,182
Genset SA(a) BI 8,500 569,554
GrandVision SA PI 10,000 272,568
Infogrames Entertainment SA(a) ET 8,200 535,483
Infonie SA(a) CO 12,343 315,404
Ingenico SA SV 12,000 327,082
LVL Medical SA HC 22,850 365,906
LVL Medical SA Warrants (Exp 2000)(a) HC 380 2,154
Lectra Systemes(a) CO 5,516 37,149
Leon de Bruxelles SA RS 7,800 318,905
<PAGE>
SHARES, UNITS
% DESCRIPTION INDUSTRY OR PRINCIPAL
CODE AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------
Marc Orian SA RT 2,797 360,539
Omnicom SA(a) TL 1,027 150,461
Penauille Polyservices SV 1,600 467,000
Sidergie SA SV 1,570 146,210
Stedim SA HC 3,700 214,307
UBI Soft Entertainment SA(a) TY 3,900 530,622
==================================================================================================================
7,061,135
13.77 GERMANY
Bertrandt AG SV 6,400 587,293
Boewe Systec AG MY 8,900 341,641
Brokat Infosystems AG(a) CO 3,600 603,057
Data Modul AG EL 9,900 305,821
EM.TV & Merchandising AG BR 1,960 1,847,557
Intershop Communications AG(a) CO 3,100 453,110
Kinowelt Medien AG(a) BR 2,264 498,818
MobilCom AG TC 2,000 976,702
Refugium Holding AG HC 13,700 463,661
TDS Informationstechnologie AG(a) SV 5,100 515,494
==================================================================================================================
6,593,154
0.15 GREECE
Chipita International SA FD 2,258 $ 71,918
==================================================================================================================
7.62 IRELAND
Adare Printing Group PLC PB 17,143 150,669
CBT Group PLC Sponsored ADR Representing
Ord Shrs(a) CO 16,500 294,937
Esat Telecom Group PLC Sponsored ADR
Representing 2 Ord Shrs(a) TL 10,300 500,838
Heiton Holdings PLC BD 102,558 221,303
IONA Technologies PLC Sponsored ADR
Representing Ord Shrs(a) CO 24,000 1,074,000
Marlborough International PLC(a) SV 180,566 533,179
Saville Systems PLC Sponsored ADR
Representing Ord Shrs(a) CO 40,000 875,000
==================================================================================================================
3,649,926
3.95 ITALY
Banca Popolare Commercio e Industria BK 12,900 298,138
Bulgari SpA CJ 71,600 453,744
Ciga SpA(a) LH 645,700 498,659
Industria Macchine Automatiche MY 53,700 372,021
Simint SpA TA 34,800 270,728
==================================================================================================================
1,893,290
<PAGE>
SHARES, UNITS
% DESCRIPTION INDUSTRY OR PRINCIPAL
CODE AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------
1,893,290
8.89 NETHERLANDS
Aalberts Industries NV CG 14,700 367,285
Beter Bed Holding NV HF 16,000 565,124
Computer Services Solutions SV 7,272 138,748
Fugro NV EC 10,700 212,052
Grand Hotel Krasnapolsky NV LH 12,000 947,855
Kempen & Co NV IV 8,100 442,480
Nederlandsche Apparatenfabriek NV SV 9,400 168,140
Prolion Holding NV(a) MY 2,570 231,457
QIAGEN NV New York Registered Shrs(a) BI 9,700 668,088
Simac Techniek NV EL 2,697 50,233
Unique International NV SV 21,400 465,421
==================================================================================================================
4,256,883
2.11 NORWAY
Ekornes A/S A Registered Shrs HF 46,000 482,398
Tomra Systems A/S A PC 15,600 525,992
==================================================================================================================
1,008,390
1.90 PORTUGAL
Companhia de Seguros Tranquilidade
Registered Shrs IN 15,000 448,204
Ibersol SGPS SA RS 3,900 $ 461,747
==================================================================================================================
909,951
1.81 SPAIN
Banco de Valencia SA Registered Shrs BK 10,000 283,925
TelePizza SA(a) RS 60,400 582,382
==================================================================================================================
866,307
2.81 SWEDEN
Assa Abloy AB Series B Shrs MG 11,500 464,120
Scandic Hotels AB LH 11,500 353,615
Semcon AB SV 57,300 528,577
==================================================================================================================
1,346,312
4.25 SWITZERLAND
Bachem AG Registered B Shrs(a) CH 450 697,527
Disetronic Holding AG HC 130 334,320
Kudelski SA Bearer Shrs(a) EL 360 1,001,902
==================================================================================================================
2,033,749
<PAGE>
SHARES, UNITS
% DESCRIPTION INDUSTRY OR PRINCIPAL
CODE AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------
21.29 UNITED KINGDOM
Advanced Medical Solutions Group PLC(a) HD 236,434 120,408
Antonov PLC(a) AP 147,816 157,841
Atlantic Telecom Group PLC(a) CA 240,000 544,095
Biocompatibles International PLC(a) HC 260,000 341,702
British Biotech PLC(a) HD 350,000 132,245
Celltech PLC(a) BI 73,000 434,126
Cortecs PLC(a) HD 255,282 90,166
Countrywide Assured Group PLC RE 276,450 476,860
Denby Group PLC HW 150,000 202,064
Dialog Corp PLC(a) CO 150,000 187,279
Electronics Boutique PLC RT 180,000 235,085
Finelist Group PLC AP 230,000 536,538
GEI International PLC MY 200,000 180,708
Games Workshop Group PLC LT 50,692 333,107
Grantchester Holdings PLC RE 180,000 408,072
Greenway Holdings PLC PC 163,749 39,006
Helical Bar PLC RE 23,124 191,840
ICON PLC Sponsored ADR Representing
Ord Shrs(a) SV 11,500 333,500
Ilion Group PLC CO 220,000 209,621
Infobank International Holdings PLC(a) CO 115,454 118,542
Infobank International Holdings PLC
9% Convertible Unsecured Loan Cmn Stk(a) CO 41,233 98,219
McCarthy & Stone PLC HB 205,000 491,690
Memory Corp PLC(a) CO 22,000 323,400
NXT PLC(a) EL 12,522 70,970
Norbain PLC EL 60,000 231,635
Northern Leisure PLC LT 230,000 457,191
Orbis PLC SV 600,000 261,205
Psion PLC CO 55,000 835,774
Regal Hotel Group PLC LH 700,000 321,989
Rutland Trust PLC FN 300,000 204,529
SOCO International PLC(a) OG 200,000 105,139
Savills PLC SV 260,000 452,756
Tracker Network PLC EL 40,000 257,920
Trafficmaster PLC(a) SV 35,000 332,338
Vitec Group PLC PI 31,375 273,177
Vymura PLC BD 190,834 206,911
==================================================================================================================
10,197,648
TOTAL COMMON STOCKS & WARRANTS (Cost $40,883,635) 42,664,023
==================================================================================================================
1.52 PREFERRED STOCKS
1.52 GERMANY
Marschollek, Lautenschlaeger und Partners
AG Non-Voting Pfd IN 700 433,270
Sander (Jil) AG Non-Voting Pfd TA 957 293,453
==================================================================================================================
TOTAL PREFERRED STOCKS (Cost $837,122) 726,723
==================================================================================================================
9.39 SHORT-TERM INVESTMENTS -- REPURCHASE AGREEMENTS
9.39 UNITED STATES
Repurchase Agreement with State Street dated
1/29/1999 due 2/1/1999 at 4.670%,
repurchased at $4,497,750 (Collateralized
by US Treasury Bonds due 4/15/2028
at 3.625%, value $4,590,199)
(Cost$4,496,000) RA $4,496,000 4,496,000
==================================================================================================================
100.00 TOTAL INVESTMENT SECURITIES AT VALUE
(Cost $46,216,757)
(Cost for Income Tax Purposes $46,624,226) $ 47,886,746
==================================================================================================================
<PAGE>
SHARES, UNITS
% DESCRIPTION INDUSTRY OR PRINCIPAL
CODE AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------
LATIN AMERICAN GROWTH FUND
53.67 COMMON STOCKS
7.01 ARGENTINA
Banco Hipotecario SA(a) FN 21,507 $ 150,549
Banco Rio de la Plata SA ADR
Representing 2 Class B Shrs BK 23,000 196,937
Bansud SA Series B Shrs(a) BK 85,000 188,776
Inversiones y Representaciones SA Sponsored
GDR Representing 10 Shrs RE 16,285 $ 374,554
==================================================================================================================
910,816
4.64 BRAZIL
Cia Paranaense de Energia-Copel EU 132,000,000 365,243
Rossi Residencial SA GDR Regulation S
Representing 5 Ord Shrs(h) HB 58,600 43,950
Telecomunicacoes de Sao Paulo SA(a) TN 3,500,000 194,539
==================================================================================================================
603,732
14.44 CHILE
Cia Cervecerias Unidas SA Sponsored ADR
Representing 5 Cmn Shrs BV 12,500 225,000
Enersis SA Sponsored ADR
Representing 50 Cmn Shrs(e) EU 30,000 813,750
Quinenco SA ADR Representing 10 Ord Shrs FN 53,000 344,500
Sociedad Quimica y Minera de Chile SA
Sponsored ADR Representing 10 Series B Shrs CH 15,000 493,125
==================================================================================================================
1,876,375
25.90 MEXICO
Alfa SA de CV Participation Certificates
Series A Shrs CH 135,718 312,579
Apasco SA de CV BD 24,266 87,415
Consorcio ARA SA de CV
Regulation S Sponsored ADR
Representing 10 Shrs(a)(h) HB 1,400 32,657
Sponsored ADR Representing 10 Shrs(a)(b) HB 17,600 410,550
Corporacion GEO SA de CV Series B Shrs(a) HB 100,000 236,220
Grupo Carso SA de CV Series A-1 Shrs(a) CG 150,000 428,150
Grupo Financiero Banamex-Accival SA de CV
Series B Shrs(a) BK 450,000 495,177
Grupo Industrial Saltillo SA de CV Series B Shrs IS 150,000 361,713
Grupo Televisa SA de CV Participation Certificates
Representing Series A, D & L Shrs(a) BR 40,000 499,213
Pepsi-Gemex SA Sponsored GDR Representing 6
Ord Participation Certificates BV 45,000 323,437
Sanluis Corp SA de CV Participation Certificates
Representing Series B, C & D Shrs MY 100,000 111,220
Tubos de Acero de Mexico SA Sponsored ADR
Representing Cmn Shrs IS 10,000 68,750
==================================================================================================================
3,367,081
1.68 PANAMA
Banco Latinoamericano de Exportaciones
SA Series E Shrs BK 10,000 218,125
TOTAL COMMON STOCKS (Cost $12,956,347) $ 6,976,129
==================================================================================================================
<PAGE>
SHARES, UNITS
% DESCRIPTION INDUSTRY OR PRINCIPAL
CODE AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------
38.28 PREFERRED STOCKS
5.11 ARGENTINA
Nortel Inversora SA ADR Representing
1/20th Pfd B Shr TL 48,300 664,125
==================================================================================================================
31.45 BRAZIL
Centrais Eletricas de Santa Catarina SA
Series B Pfd EU 1,300,000 302,913
Cia de Tecidos Norte de Minas Coteminas Pfd TA 5,800,000 422,330
Cia Energetica de Brasilia
Series A Pfd EU 2,080,000 29,282
Series B Pfd(a) EU 1,152,561 8,392
Cia Energetica de Minas Gerais Pfd EU 26,711,876 330,657
Cia Energetica do Ceara-Coelce Series A Pfd EU 150,000,000 233,010
Eletropaulo Metropolitana SA Pfd EU 12,240,000 212,061
Embratel Participacoes SA Pfd(a) TL 40,000,000 450,485
Empresa Bandeirante de Energia SA Pfd(a) EU 12,240,000 55,258
Investimentos Itau SA Pfd MY 1,000,000 339,806
Petroleo Brasileiro SA Pfd (e) OG 8,100,000 538,689
Renner Participacoes SA Pfd(a) RT 10,000,000 3,641
Tele Centro Sul Participacoes SA ADR Representing
5,000 Pfd Shrs(a) TN 4,900 176,706
Tele Norte Leste Participacoes SA Pfd(a) TN 25,000,000 251,214
Telecomunicacoes Brasileiras SA Sponsored ADR
Representing 1,000 Pfd Shrs(e) TN 6,000 377,625
Telecomunicacoes de Sao Paulo SA Pfd TN 4,025,000 355,607
==================================================================================================================
4,087,676
1.72 LUXEMBOURG
Quilmes Industrial SA ADR Representing
Non-Voting Pfd FD 28,000 224,000
==================================================================================================================
TOTAL PREFERRED STOCKS (Cost $14,618,642) 4,975,801
==================================================================================================================
8.05 OTHER SECURITIES
8.05 MEXICO
Controladora Comercial Mexicana SA de CV GDR
Representing 20 Linked BC
Units (Each unit consists of 3 Series B Shrs
and one Series C Shr) RT 27,000 327,375
Fomento Economico Mexicano SA de CV Sponsored ADR
Representing 10 Units
(Each unit consists of 10 Series B shrs,
20 Series D-B Shrs and 20
Series D-L Shrs)(e) BV 32,500 719,062
==================================================================================================================
TOTAL OTHER SECURITIES (Cost $1,194,261) 1,046,437
==================================================================================================================
100.00 TOTAL INVESTMENT SECURITIES AT VALUE
(Cost $28,769,250)(f) $ 12,998,367
==================================================================================================================
<PAGE>
SHARES, UNITS
% DESCRIPTION INDUSTRY OR PRINCIPAL
CODE AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------
REALTY FUND
88.43 COMMON STOCKS
5.22 LODGING -- HOTELS
Host Marriott 70,000 $ 778,750
MeriStar Hospitality 1,019 19,616
MeriStar Hotels & Resorts(a) 20,000 62,500
==================================================================================================================
860,866
81.66 REAL ESTATE INVESTMENT TRUST
Archstone Communities Trust 35,000 684,687
Arden Realty 32,600 733,500
Avalonbay Communities 9,923 318,156
Brandywine Realty Trust SBI 23,000 379,500
CBL & Associates Properties 20,000 492,500
Cabot Industrial Trust 1,500 29,625
CarrAmerica Realty 41,600 915,200
Cornerstone Properties 10,000 157,500
Developers Diversified Realty 16,000 266,000
Essex Property Trust 22,800 652,650
General Growth Properties 14,000 484,750
Glenborough Realty Trust 15,000 263,437
Highwoods Properties 16,300 393,237
Innkeepers USA Trust 10,000 116,250
Koger Equity 10,000 152,500
Liberty Property Trust SBI 32,300 763,088
Macerich Co 10,000 246,250
New Plan Excel Realty Trust 10,000 210,000
PS Business Parks 5,100 115,706
Patriot American Hospitality 42,431 228,067
Philips International Realty 21,200 318,000
Post Properties 10,000 372,500
Prentiss Properties Trust 43,200 915,300
Prime Group Realty Trust 300 4,406
ProLogis Trust 15,000 317,813
Public Storage 8,400 213,675
Reckson Associates Realty 40,000 880,000
Rouse Co 17,000 401,625
SL Green Realty 42,500 860,625
Simon Property Group 3,900 102,619
Smith (Charles E) Residential Realty 10,000 301,250
Spieker Properties 1,200 40,800
Starwood Hotels & Resorts SBI 7,400 185,000
Sunstone Hotel Investors 800 6,650
Taubman Centers 30,000 390,000
Weeks Corp 12,500 343,750
Weingarten Realty Investors 5,000 196,875
==================================================================================================================
13,453,491
<PAGE>
SHARES, UNITS
% DESCRIPTION INDUSTRY OR PRINCIPAL
CODE AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------
1.55 REAL ESTATE RELATED
Reckson Service Industries(a) 4,800 19,200
Security Capital US Realty(a) 28,500 233,700
Vornado Operating(a) 355 2,574
==================================================================================================================
255,474
TOTAL COMMON STOCKS (Cost $15,574,349) 14,569,831
==================================================================================================================
11.57 SHORT-TERM INVESTMENTS -- REPURCHASE AGREEMENTS
Repurchase Agreement with State Street dated
1/29/1999 due 2/1/1999 at 4.670%,
repurchased at $1,906,742 (Collateralized
by US Treasury Bonds, due 4/15/2028
at 3.625%, value $1,947,962)
(Cost $1,906,000) $1,906,000 1,906,000
==================================================================================================================
100.00 TOTAL INVESTMENT SECURITIES AT VALUE
(Cost $17,480,349)
(Cost for Income Tax Purposes $18,915,055) 16,475,831
==================================================================================================================
S&P 500 INDEX FUND
93.12 COMMON STOCKS
0.88 AEROSPACE & DEFENSE
Boeing Co 4,556 $ 157,467
General Dynamics 334 19,414
Goodrich (B F) Co 10 340
Lockheed Martin 1,656 58,374
Northrop Grumman 18 1,026
Raytheon Co Class B 1,147 64,160
United Technologies 853 101,880
==================================================================================================================
402,661
0.10 AIR FREIGHT
FDX Corp(a) 416 33,982
Laidlaw Inc 1,146 9,741
==================================================================================================================
43,723
0.19 AIRLINES
AMR Corp(a) 420 24,675
Delta Air Lines 298 16,260
Southwest Airlines 1,296 34,830
US Airways Group(a) 213 10,597
==================================================================================================================
86,362
0.10 ALUMINUM
Alcoa Inc 413 34,537
Reynolds Metals 200 9,775
==================================================================================================================
44,312
0.26 AUTO PARTS
AutoZone Inc(a) 421 14,261
Cooper Tire & Rubber 11 236
Cummins Engine 100 3,800
Dana Corp 407 16,738
Genuine Parts 725 23,109
Goodyear Tire & Rubber 403 19,747
ITT Industries 317 12,700
Johnson Controls 212 13,661
Pep Boys-Manny Moe & Jack 100 1,575
TRW Inc 317 15,236
==================================================================================================================
121,063
<PAGE>
SHARES, UNITS
% DESCRIPTION INDUSTRY OR PRINCIPAL
CODE AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------
1.34 AUTOMOBILES
Ford Motor 5,488 337,169
General Motors 2,964 266,019
Navistar International(a) 100 3,406
PACCAR Inc 200 8,725
==================================================================================================================
615,319
6.18 BANKS
BB&T Corp 980 37,485
Bank of New York 3,394 120,487
Bank One 5,343 279,840
BankAmerica Corp 7,089 474,077
BankBoston Corp 990 36,568
Bankers Trust New York 264 22,968
Chase Manhattan 3,854 296,517
Comerica Inc 403 25,162
Fifth Third Bancorp 1,033 70,696
First Union 4,522 237,970
Firstar Corp 800 70,550
Fleet Financial Group 2,258 100,058
Huntington Bancshares 759 23,624
KeyCorp 1,788 56,993
Mellon Bank 967 64,789
Mercantile Bancorp 600 26,963
Morgan (J P) & Co 717 75,644
National City 1,140 81,011
Northern Trust 200 17,313
PNC Bank 1,200 61,425
Regions Financial 900 34,538
Republic New York 330 12,086
State Street 406 29,029
Summit Bancorp 400 16,325
SunTrust Banks 1,238 87,202
Synovus Financial 986 24,650
US Bancorp 3,283 110,596
Union Planters 300 13,650
Wachovia Corp 834 73,913
Wells Fargo 7,366 257,350
==================================================================================================================
2,839,479
2.80 BEVERAGES
Anheuser-Busch Cos 1,922 135,861
Brown-Forman Corp Class B 200 14,437
Coca-Cola Co 11,124 727,927
Coca-Cola Enterprises 1,800 63,675
Coors (Adolph) Co Class B 100 6,406
PepsiCo Inc 6,596 257,656
Seagram Co Ltd 1,750 82,906
==================================================================================================================
1,288,868
0.29 BIOTECHNOLOGY
Amgen Inc(a) 1,037 132,542
0.35 BROADCASTING
CBS Corp 2,762 93,908
Clear Channel Communications(a) 1,028 63,607
King World Productions(a) 200 5,475
==================================================================================================================
162,990
<PAGE>
SHARES, UNITS
% DESCRIPTION INDUSTRY OR PRINCIPAL
CODE AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------
0.33 BUILDING MATERIALS
Armstrong World Industries 100 5,887
Centex Corp 100 4,319
Crane Co 150 4,078
Lowe's Cos 1,230 71,724
Masco Corp 1,316 42,523
Owens-Corning 100 3,575
Sherwin-Williams Co 724 18,553
==================================================================================================================
150,659
0.83 CABLE
Comcast Corp Class A 1,249 84,912
MediaOne Group(a) 2,785 156,134
Tele-Communications Inc TCI Group Series A(a) 2,033 139,388
==================================================================================================================
380,434
1.06 CHEMICALS
Air Products & Chemicals 944 31,742
Dow Chemical 849 74,765
du Pont (E I) de Nemours 5,143 263,257
Eastman Chemical 211 8,572
Engelhard Corp 320 6,260
Grace (W R) & Co(a) 20 274
Great Lakes Chemical 100 3,788
Hercules Inc 413 11,125
Morton International 319 8,254
Nalco Chemical 200 5,500
PPG Industries 417 22,414
Praxair Inc 422 13,636
Rohm & Haas 448 13,888
Sigma-Aldrich Corp 314 8,949
Union Carbide 317 12,541
==================================================================================================================
484,965
2.41 COMMUNICATIONS -- EQUIPMENT & MANUFACTURING
Advanced Micro Devices(a) 320 7,340
Andrew Corp(a) 413 7,486
Harris Corp 11 413
Lucent Technologies 5,942 668,846
Motorola Inc 2,292 165,597
Northern Telecom Ltd 2,972 187,608
Scientific-Atlanta Inc 11 342
Tellabs Inc(a) 819 70,229
==================================================================================================================
1,107,861
13.25 COMPUTER RELATED
Adobe Systems 10 477
Apple Computer(a) 318 13,098
Ascend Communications(a) 900 78,581
Autodesk Inc 100 4,419
BMC Software(a) 900 42,019
Cabletron Systems(a) 422 4,405
Cisco Systems(a) 7,191 802,246
Compaq Computer 7,685 365,998
Computer Associates International 2,476 125,347
Compuware Corp(a) 600 39,750
Data General(a) 100 1,956
Dell Computer(a) 5,756 575,600
==================================================================================================================
<PAGE>
SHARES, UNITS
% DESCRIPTION INDUSTRY OR PRINCIPAL
CODE AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------
EMC Corp(a) 1,926 209,693
Gateway 2000(a) 400 30,900
Hewlett-Packard Co 4,683 367,030
International Business Machines 4,238 776,614
Microsoft Corp(a) 11,285 1,974,875
Momentum Business Applications(a) 18 200
Novell Inc(a) 1,349 27,486
Oracle Corp(a) 4,444 246,087
Parametric Technology(a) 1,036 13,533
PeopleSoft Inc(a) 900 17,831
Seagate Technology(a) 1,134 46,140
Silicon Graphics(a) 726 15,065
Sun Microsystems(a) 1,752 195,786
3Com Corp(a) 1,648 77,456
Unisys Corp(a) 1,025 33,953
==================================================================================================================
6,086,545
0.33 CONGLOMERATES
Fortune Brands 724 24,073
Monsanto Co 2,389 113,627
National Service Industries 100 3,425
Tenneco Inc 324 10,004
==================================================================================================================
151,129
0.28 CONSUMER FINANCE
Countrywide Credit Industries 315 14,962
Household International 1,852 81,372
SLM Holding 700 30,844
==================================================================================================================
127,178
0.01 CONSUMER -- JEWELRY, NOVELTIES & GIFTS
Jostens Inc 100 2,331
==================================================================================================================
0.11 CONTAINERS
Ball Corp 100 4,500
Bemis Co 100 3,400
Crown Cork & Seal 318 10,077
Owens-Illinois Inc(a) 420 12,285
Sealed Air(a) 219 11,621
Temple-Inland Inc 100 5,706
Tupperware Corp 100 2,056
==================================================================================================================
49,645
0.01 DISTRIBUTION
Supervalu Inc 200 5,488
==================================================================================================================
1.70 ELECTRIC UTILITIES
AES Corp(a) 400 13,475
Ameren Corp 314 12,324
American Electric Power 425 18,620
Baltimore Gas & Electric 421 11,472
Carolina Power & Light 421 17,524
Central & South West 630 16,656
CINergy Corp 422 13,214
Consolidated Edison 954 47,163
DTE Energy 320 12,960
Dominion Resources 726 32,488
Duke Energy 1,236 76,400
Edison International 1,353 37,630
<PAGE>
SHARES, UNITS
% DESCRIPTION INDUSTRY OR PRINCIPAL
CODE AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------
Entergy Corp 1,134 33,382
FPL Group 419 22,993
FirstEnergy Corp 632 19,631
GPU Inc 317 13,512
Houston Industries 1,040 31,590
New Century Energies 300 13,200
Niagara Mohawk Power(a) 520 7,963
Northern States Power 300 8,081
PG&E Corp 1,761 56,242
PP&L Resources 423 11,289
PacifiCorp 1,141 23,462
PECO Energy 931 35,553
Public Service Enterprise Group 932 36,989
Southern Co 3,196 86,092
Texas Utilities 1,162 51,055
Unicom Corp 630 22,444
==================================================================================================================
783,404
3.86 ELECTRICAL EQUIPMENT
AMP Inc 475 24,997
Emerson Electric 1,991 115,851
General Electric 14,849 1,557,289
Grainger (W W) Inc 426 17,360
Honeywell Inc 284 18,513
Solectron Corp(a) 400 35,625
Thomas & Betts 100 4,419
==================================================================================================================
1,774,054
0.03 ELECTRONICS
EG&G Inc 100 2,837
Perkin-Elmer Corp 100 9,506
Tektronix Inc 100 2,531
==================================================================================================================
14,874
2.84 ELECTRONICS -- SEMICONDUCTOR
Intel Corp 7,574 1,067,461
LSI Logic(a) 320 8,920
Micron Technology(a) 530 41,406
National Semiconductor(a) 423 5,473
Rockwell International 437 18,982
Texas Instruments 1,656 163,737
==================================================================================================================
1,305,979
0.01 ENGINEERING & CONSTRUCTION
Fluor Corp 12 457
Foster Wheeler 100 1,281
McDermott International 100 2,069
==================================================================================================================
3,807
1.63 ENTERTAINMENT
Disney (Walt) Co 9,229 304,557
Time Warner 5,536 346,000
Viacom Inc Class B(a) 1,149 97,665
==================================================================================================================
748,222
0.22 EQUIPMENT -- SEMICONDUCTOR
Applied Materials(a) 1,251 79,048
KLA-Tencor Corp(a) 412 23,793
==================================================================================================================
102,841
<PAGE>
SHARES, UNITS
% DESCRIPTION INDUSTRY OR PRINCIPAL
CODE AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------
3.40 FINANCIAL
American Express 1,905 195,977
Associates First Capital Class A 2,832 114,873
Capital One Financial 100 13,237
Citigroup Inc 9,353 524,353
Fannie Mae 4,697 342,294
Franklin Resources 1,000 33,500
Freddie Mac 3,056 189,472
MBIA Inc 212 13,899
MBNA Corp 3,643 101,776
Providian Financial 319 32,159
==================================================================================================================
1,561,540
1.88 FOODS
Archer-Daniels-Midland Co 2,241 33,895
Bestfoods Inc 1,088 54,740
Campbell Soup 1,800 84,487
ConAgra Inc 1,866 60,645
General Mills 404 33,911
Heinz (H J) Co 1,241 69,884
Hershey Foods 294 16,538
Kellogg Co 1,870 76,436
Pioneer Hi-Bred International 954 27,010
Quaker Oats 319 17,744
Ralston-Purina Group 1,110 30,386
Sara Lee 4,130 105,315
Sysco Corp 1,324 36,079
Unilever NV New York Registered Shrs 2,520 192,780
Wrigley Jr 276 25,841
==================================================================================================================
865,691
0.11 FOOTWEAR
NIKE Inc Class B 1,091 49,913
Reebok International(a) 100 1,488
==================================================================================================================
51,401
0.04 GAMING
Harrah's Entertainment(a) 314 4,671
Mirage Resorts(a) 725 10,377
Park Place Entertainment(a) 635 4,326
==================================================================================================================
19,374
0.13 GOLD & PRECIOUS METALS MINING
ASARCO Inc 100 1,394
Barrick Gold 1,252 23,866
Battle Mountain Gold 632 2,330
Freeport McMoRan Copper & Gold Class B 327 3,229
Homestake Mining 920 8,683
Newmont Mining 422 7,464
Placer Dome 1,033 11,557
==================================================================================================================
58,523
0.03 HARDWARE & TOOLS
Snap-On Inc 100 3,400
Stanley Works 412 10,377
==================================================================================================================
13,777
<PAGE>
SHARES, UNITS
% DESCRIPTION INDUSTRY OR PRINCIPAL
CODE AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------
9.92 HEALTH CARE DRUGS -- PHARMACEUTICALS
Abbott Laboratories 6,904 320,605
Allergan Inc 100 7,687
ALZA Corp(a) 212 10,719
American Home Products 5,954 349,425
Bristol-Myers Squibb 4,153 532,363
Cardinal Health 808 59,741
Johnson & Johnson 6,083 517,055
Lilly (Eli) & Co 5,028 471,061
Longs Drug Stores 100 3,831
Merck & Co 5,387 790,542
Pfizer Inc 5,849 752,328
Pharmacia & Upjohn 1,933 111,148
Schering-Plough Corp 6,662 363,079
Warner-Lambert Co 3,737 269,765
==================================================================================================================
4,559,349
1.26 HEALTH CARE RELATED
Bard (C R) Inc 100 5,062
Bausch & Lomb 100 6,137
Baxter International 1,084 76,896
Becton Dickinson 1,134 40,540
Biomet Inc 316 11,573
Boston Scientific(a) 1,356 33,137
Columbia/HCA Healthcare 2,490 45,131
Guidant Corp 794 46,796
HCR Manor Care(a) 100 2,675
HEALTHSOUTH Corp(a) 1,655 22,446
Humana Inc(a) 423 7,561
Mallinckrodt Inc 10 349
McKesson HBOC 1,087 81,640
Medtronic Inc 1,908 152,044
St Jude Medical(a) 13 339
Shared Medical Systems 100 4,700
Tenet Healthcare(a) 1,200 24,900
United Healthcare 424 18,974
==================================================================================================================
580,900
0.01 HOMEBUILDING
Kaufman & Broad Home 100 2,819
Pulte Corp 100 3,019
==================================================================================================================
5,838
0.10 HOUSEHOLD FURNITURE & APPLIANCES
Maytag Corp 413 26,096
Rubbermaid Inc 421 13,577
Whirlpool Corp 200 8,988
==================================================================================================================
48,661
1.53 HOUSEHOLD PRODUCTS
Black & Decker 213 11,289
Clorox Co 268 33,533
Colgate-Palmolive Co 1,194 96,042
Newell Co 422 17,539
Procter & Gamble 5,982 543,614
==================================================================================================================
702,017
<PAGE>
SHARES, UNITS
% DESCRIPTION INDUSTRY OR PRINCIPAL
CODE AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------
2.67 INSURANCE
Aetna Inc 298 26,857
Allstate Corp 3,764 141,385
American General 960 68,460
American International Group 5,556 571,921
Aon Corp 410 20,807
Chubb Corp 412 24,205
CIGNA Corp 847 69,772
Cincinnati Financial 445 14,657
Conseco Inc 1,241 38,393
Hartford Financial Services Group 956 49,652
Jefferson-Pilot Corp 215 16,286
Lincoln National 267 22,244
Loews Corp 276 23,236
MGIC Investment 475 17,397
Progressive Corp 219 27,361
Provident Cos 300 12,863
SAFECO Corp 320 12,440
St Paul Cos 932 27,378
Torchmark Corp 320 10,500
Transamerica Corp 234 13,104
UNUM Corp 319 19,280
==================================================================================================================
1,228,198
0.13 INSURANCE BROKERS
Marsh & McLennan 968 60,863
==================================================================================================================
0.95 INVESTMENT BANK/BROKER FIRM
Bear Stearns 200 9,425
Lehman Brothers Holdings 500 27,344
Merrill Lynch 1,219 92,644
Morgan Stanley Dean Witter & Co 2,289 198,714
Schwab (Charles) Corp 1,561 109,758
==================================================================================================================
437,885
0.12 IRON & STEEL
Allegheny Teledyne 724 14,661
Bethlehem Steel(a) 316 2,725
Nucor Corp 412 20,188
USX-US Steel Group 412 10,738
Worthington Industries 414 5,744
==================================================================================================================
54,056
0.31 LEISURE TIME
Brunswick Corp 314 7,752
Carnival Corp 2,700 132,469
==================================================================================================================
140,221
0.07 LODGING -- HOTELS
Hilton Hotels 1,035 14,943
Marriott International Class A 468 16,439
==================================================================================================================
31,382
<PAGE>
SHARES, UNITS
% DESCRIPTION INDUSTRY OR PRINCIPAL
CODE AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------
0.42 MACHINERY
Aeroquip-Vickers Inc 100 3,525
Briggs & Stratton 100 5,437
Case Corp 20 379
Caterpillar Inc 1,244 53,881
Cooper Industries 317 13,136
Danaher Corp 400 21,400
Deere & Co 966 31,455
Dover Corp 1,046 32,491
Harnischfeger Industries 100 844
Ingersoll-Rand Co 423 20,093
Milacron Inc 100 $ 1,956
NACCO Industries Class A 100 8,469
Timken Co 100 2,169
==================================================================================================================
195,235
0.01 MANUFACTURED HOUSING
Fleetwood Enterprises 100 3,700
==================================================================================================================
1.30 MANUFACTURING
AlliedSignal Inc 2,179 84,981
Corning Inc 952 46,410
Eaton Corp 211 14,691
FMC Corp(a) 100 5,406
Illinois Tool Works 964 58,141
Millipore Corp 100 3,056
Minnesota Mining & Manufacturing 1,768 137,241
Pall Corp 318 7,374
Parker-Hannifin Corp 316 9,717
Raychem Corp 12 302
Textron Inc 408 30,371
Thermo Electron(a) 421 6,999
Tyco International Ltd 2,526 194,660
==================================================================================================================
599,349
0.06 METALS MINING
Alcan Aluminium Ltd 632 16,156
Cyprus Amax Minerals 413 3,949
Inco Ltd 423 4,468
Phelps Dodge 100 4,344
==================================================================================================================
28,917
0.46 NATURAL GAS
Coastal Corp 530 15,801
Columbia Energy Group 150 7,762
Consolidated Natural Gas 213 10,930
Eastern Enterprises 100 4,025
Enron Corp 1,309 86,394
NICOR Inc 100 3,856
ONEOK Inc 100 2,925
Peoples Energy 100 3,450
Sempra Energy 918 21,114
Williams Cos 1,710 56,430
==================================================================================================================
212,687
<PAGE>
SHARES, UNITS
% DESCRIPTION INDUSTRY OR PRINCIPAL
CODE AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------
0.69 OFFICE EQUIPMENT & SUPPLIES
Avery Dennison 314 15,523
Ikon Office Solutions 319 5,104
Moore Corp Ltd 412 4,764
Pitney-Bowes Inc 1,090 75,006
Staples Inc(a) 1,800 $ 51,525
Xerox Corp 1,314 162,936
==================================================================================================================
314,858
4.81 OIL & GAS RELATED
Amerada Hess 213 10,118
Anadarko Petroleum 200 5,412
Apache Corp 313 6,025
Ashland Inc 200 9,500
Atlantic Richfield 1,311 75,219
Baker Hughes 1,294 21,836
Burlington Resources 725 21,931
Chevron Corp 2,531 189,192
Exxon Corp 11,019 776,151
Halliburton Co 1,696 50,350
Helmerich & Payne 100 1,756
Kerr-McGee Corp 100 3,394
Mobil Corp 3,515 308,222
Occidental Petroleum 1,347 20,289
Oryx Energy(a) 315 3,839
Phillips Petroleum 973 37,582
Rowan Cos(a) 412 3,631
Royal Dutch Petroleum New York Registry 1.25 Gldr Shrs 9,708 388,927
Schlumberger Ltd 2,125 101,203
Sonat Inc 312 8,034
Sunoco Inc 200 7,025
Texaco Inc 2,077 98,398
USX-Marathon Group 1,189 27,050
Union Pacific Resources Group 1,035 8,345
Unocal Corp 962 27,417
==================================================================================================================
2,210,846
0.68 PAPER & FOREST PRODUCTS
Boise Cascade 100 3,006
Champion International 213 7,468
Fort James 1,037 37,202
Georgia-Pacific Corp 413 26,638
International Paper 1,098 43,440
Kimberly-Clark Corp 2,176 108,392
Louisiana-Pacific Corp 315 6,320
Mead Corp 115 3,292
Potlatch Corp 100 3,456
Union Camp 200 12,338
Westvaco Corp 314 6,928
Weyerhaeuser Co 831 44,978
Willamette Industries 216 7,560
==================================================================================================================
311,018
<PAGE>
SHARES, UNITS
% DESCRIPTION INDUSTRY OR PRINCIPAL
CODE AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------
0.76 PERSONAL CARE
Alberto-Culver Class B 100 $ 2,575
Avon Products 1,074 39,671
Gillette Co 5,036 295,865
International Flavors & Fragrances 215 9,379
==================================================================================================================
347,490
0.19 PHOTOGRAPHY & IMAGING
Eastman Kodak 1,313 85,837
Polaroid Corp 100 1,706
==================================================================================================================
87,543
0.28 POLLUTION CONTROL
Browning-Ferris Industries 728 20,020
Waste Management 2,153 107,515
==================================================================================================================
127,535
0.39 PUBLISHING
American Greetings Class A 10 395
Donnelley (R R) & Sons 320 12,060
Dow Jones 213 9,532
Gannett Co 1,086 71,472
Harcourt General 210 10,080
Knight-Ridder Inc 12 573
McGraw-Hill Cos 214 23,139
Meredith Corp 100 3,725
New York Times Class A 526 18,048
Times Mirror Series A 213 11,728
Tribune Co 317 20,268
==================================================================================================================
181,020
0.42 RAILROADS
Burlington Northern Santa Fe 2,109 73,024
CSX Corp 543 21,856
Norfolk Southern 1,753 48,317
Union Pacific 962 49,483
==================================================================================================================
192,680
0.60 RESTAURANTS
Darden Restaurants 321 6,019
McDonald's Corp 3,052 240,536
Tricon Global Restaurants(a) 421 20,024
Wendy's International 318 7,572
==================================================================================================================
274,151
5.52 RETAIL
Albertson's Inc 961 58,621
American Stores 1,038 37,627
CVS Corp 1,726 94,498
Circuit City Stores-CarMax Group 214 11,823
Consolidated Stores(a) 229 $ 3,821
Costco Cos(a) 540 44,752
Dayton Hudson 1,686 107,482
Dillard's Inc Class A 215 5,335
Dollar General 775 19,327
Federated Department Stores(a) 538 22,495
Gap Inc 2,296 147,375
Great Atlantic & Pacific Tea 100 3,338
Home Depot 6,660 402,098
K mart Corp(a) 1,868 32,807
Kohl's Corp(a) 300 20,325
Kroger Co(a) 967 61,405
Limited Inc 879 29,996
May Department Stores 952 57,477
<PAGE>
SHARES, UNITS
% DESCRIPTION INDUSTRY OR PRINCIPAL
CODE AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------
Meyer (Fred) Inc(a) 300 18,750
Nordstrom Inc 400 16,650
Penney (J C) Co 864 33,858
Rite Aid 1,034 50,795
Safeway Inc(a) 1,900 106,638
Sears Roebuck 1,757 70,500
TJX Cos 1,246 36,835
Tandy Corp 214 11,556
Toys "R" Us(a) 1,040 15,600
Walgreen Co 1,923 120,188
Wal-Mart Stores 10,180 875,480
Winn-Dixie Stores 421 19,234
==================================================================================================================
2,536,686
0.21 SAVINGS & LOAN
Golden West Financial 15 1,408
Washington Mutual 2,261 94,962
==================================================================================================================
96,370
2.09 SERVICES
America Online(a) 2,100 368,944
Automatic Data Processing 2,384 101,469
Block (H & R) Inc 215 9,433
Cendant Corp(a) 3,819 83,063
Ceridian Corp(a) 211 16,748
Computer Sciences(a) 402 27,562
Dun & Bradstreet 324 9,882
Ecolab Inc 300 11,625
Electronic Data Systems 1,900 99,631
Equifax Inc 421 16,656
First Data 1,760 67,430
IMS Health 1,412 $ 51,715
Interpublic Group 318 25,162
Omnicom Group 443 28,352
Paychex Inc 400 19,475
Ryder System 200 4,875
Service Corp International 1,065 16,907
==================================================================================================================
958,929
0.02 SPECIALTY PRINTING
Deluxe Corp 211 7,517
==================================================================================================================
0.54 TELECOMMUNICATIONS -- CELLULAR & WIRELESS
AirTouch Communications(a) 2,231 215,431
NEXTEL Communications Class A(a) 1,000 32,000
==================================================================================================================
247,431
3.56 TELECOMMUNICATIONS -- LONG DISTANCE
AT&T Corp 8,167 741,155
General Instrument(a) 421 14,945
MCI WorldCom(a) 8,285 660,729
Sprint Corp (FON Group) 1,982 166,240
Sprint Corp (PCS Group)(a) 1,591 50,713
==================================================================================================================
1,633,782
4.67 TELEPHONE
ALLTEL Corp 1,070 69,082
Ameritech Corp 5,019 326,862
Bell Atlantic 7,020 421,200
BellSouth Corp 8,902 397,252
Frontier Corp 423 15,281
GTE Corp 4,329 292,207
SBC Communications 8,904 480,816
US WEST 2,343 144,534
==================================================================================================================
2,147,234
<PAGE>
SHARES, UNITS
% DESCRIPTION INDUSTRY OR PRINCIPAL
CODE AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------
0.05 TEXTILE -- APPAREL MANUFACTURING
Fruit of the Loom Class A(a) 10 145
Liz Claiborne 200 7,650
Russell Corp 100 1,969
VF Corp 317 13,512
==================================================================================================================
23,276
0.01 TEXTILE -- HOME FURNISHINGS
Springs Industries Class A 100 4,175
1.24 TOBACCO
Philip Morris 10,992 516,624
RJR Nabisco Holdings 1,100 29,700
UST Inc 726 $ 22,869
==================================================================================================================
569,193
0.08 TOYS
Hasbro Inc 318 11,826
Mattel Inc 1,091 24,752
==================================================================================================================
36,578
TOTAL COMMON STOCKS (Cost $37,345,258) 42,784,611
==================================================================================================================
6.88 SHORT-TERM INVESTMENTS
0.65 US Government Obligations
US Treasury Bills, 3/4/1999(g)
(Cost $298,925) $ 300,000 $ 298,925
6.23 Repurchase Agreements
Repurchase Agreement with State Street dated
1/29/1999 due 2/1/1999 at 4.670%,
repurchased at $2,864,114
(Collateralized by US Treasury
Notes, due 10/31/2000 at 5.750%, value $2,927,342)
(Cost $2,863,000) $ 2,863,000 $ 2,863,000
==================================================================================================================
TOTAL SHORT-TERM INVESTMENTS (Cost $3,161,925) 3,161,925
==================================================================================================================
100.00 TOTAL INVESTMENT SECURITIES AT VALUE
(Cost $40,507,183)(f) $ 45,946,536
==================================================================================================================
Worldwide Capital Goods Fund
90.55 COMMON STOCKS
3.48 ITALY
Telecom Italia SpA(a) TN 32,000 $ 299,461
1.13 MEXICO
Cemex SA de CV
Participation Certificates(a) BD 30,000 72,638
Series A Shrs(a) BD 10,000 24,213
==================================================================================================================
96,851
3.60 SPAIN
Endesa SA Sponsored ADR Representing Ord Shrs EU 11,000 309,375
3.48 SWEDEN
Volvo AB Sponsored ADR Representing Class B
Shrs(a) AM 11,100 299,700
<PAGE>
78.86 UNITED STATES
Alliant Techsystems(a) AE 3,700 324,675
AlliedSignal Inc MG 8,100 315,900
Boeing Co AE 7,400 255,762
Compaq Computer CO 8,300 395,287
Dana Corp AP 7,300 300,212
Dril-Quip Inc(a) OG 10,000 160,000
du Pont (E I) de Nemours CH 4,400 225,225
Emerson Electric EE 4,200 244,388
General Dynamics AE 5,500 319,688
General Electric EE 4,000 419,500
Ingersoll-Rand Co MY 6,400 304,000
Lockheed Martin AE 9,000 317,250
Mobil Corp OG 3,400 298,138
Motorola Inc CM 5,400 390,150
Northern States Power EU 13,800 371,738
Northrop Grumman AE 4,000 228,000
Owens-Illinois Inc(a) CT 10,700 312,975
Sempra Energy NG 12,000 276,000
Southdown Inc BD 4,900 272,256
Sundstrand Corp AE 4,700 209,150
Textron Inc MG 3,600 267,975
Tyco International Ltd MG 6,000 462,375
USX-Marathon Group OG 5,000 113,750
==================================================================================================================
6,784,394
==================================================================================================================
TOTAL COMMON STOCKS (Cost $7,259,282) 7,789,781
==================================================================================================================
9.45 SHORT-TERM INVESTMENTS -- REPURCHASE AGREEMENTS
9.45 UNITED STATES
Repurchase Agreement with State Street dated
1/29/1999 due 2/1/1999 at
4.670%, repurchased at $ 813,105
(Collateralized by US Treasury Notes,
due 10/31/2000 at 5.750%, value $831,221)
(Cost $813,000) RA $ 813,000 813,000
==================================================================================================================
100.00 TOTAL INVESTMENT SECURITIES AT VALUE
(Cost $8,072,282)
(Cost for Income Tax Purposes $8,239,284) $ 8,602,781
==================================================================================================================
<PAGE>
SHARES, UNITS
% DESCRIPTION INDUSTRY OR PRINCIPAL
CODE AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------
Worldwide Communications Fund
91.65 COMMON STOCKS
2.82 BERMUDA
Global Crossing Ltd(a) TL 229,200 $ 12,118,950
5.03 CANADA
MetroNet Communications Class B
Non-Voting Shrs(a) TN 208,600 7,718,200
Northern Telecom Ltd CM 54,200 3,421,375
Teleglobe Inc TL 268,000 10,452,000
==================================================================================================================
21,591,575
3.41 FINLAND
Nokia Corp Sponsored ADR Representing
Class A Shrs CM 101,700 $ 14,644,800
3.09 GERMANY
Mannesmann AG MY 94,100 13,294,550
3.03 ITALY
Telecom Italia Mobile SpA TC 782,700 5,324,585
Telecom Italia SpA TN 822,000 7,692,414
==================================================================================================================
13,016,999
6.22 UNITED KINGDOM
COLT Telecom Group PLC Sponsored ADR
Representing 4 Ord Shrs(a) TN 195,500 16,275,375
Vodafone Group PLC Sponsored ADR
Representing 10 Ord Shrs TC 53,600 10,465,400
==================================================================================================================
26,740,775
68.05 UNITED STATES
AirTouch Communications(a) TC 141,200 13,634,625
America Online(a) SV 128,400 22,558,275
Ameritech Corp TN 79,400 5,170,925
Ascend Communications(a) CO 123,900 10,818,019
Bell Atlantic TN 91,310 5,478,600
BellSouth Corp TN 105,200 4,694,550
CMGI Inc(a) SV 35,000 4,270,000
Century Telephone Enterprises TN 85,250 5,797,000
Cisco Systems(a) CO 139,275 15,537,867
Concentric Network(a) CO 135,000 5,872,500
Covad Communications Group(a) TL 39,000 2,057,250
EMC Corp(a) CO 110,000 11,976,250
EchoStar Communications Class A(a) BR 187,700 10,276,575
GTE Corp TN 78,000 5,265,000
Global TeleSystems Group(a) TL 169,000 10,583,625
ICG Communications(a) TL 209,700 3,944,981
IXC Communications(a) TL 125,200 4,444,600
Intermedia Communications(a) TN 180,000 2,497,500
Level 3 Communications(a) TL 91,000 4,766,125
Lucent Technologies CM 105,600 11,886,600
MCI WorldCom(a) TL 167,212 13,335,157
Metromedia Fiber Network Class A(a) CM 220,000 10,078,750
Microsoft Corp(a) CO 44,000 7,700,000
NTL Inc(a) CA 60,000 4,987,500
NEXTLINK Communications Class A(a) TN 219,100 9,681,481
Pacific Gateway Exchange(a) TL 133,000 $ 4,405,625
Qwest Communications International(a) TL 168,500 10,099,469
SBC Communications TN 102,600 5,540,400
Sprint Corp TL 66,900 5,611,238
Tele-Communications Inc --
TCI Group Series A(a) CA 175,000 11,998,438
<PAGE>
SHARES, UNITS
% DESCRIPTION INDUSTRY OR PRINCIPAL
CODE AMOUNT VALUE
------------------------------------------------------------------------------------------------------------------
Teligent Inc Class A(a) TC 126,150 4,415,250
Tellabs Inc(a) CM 90,500 7,760,375
Uniphase Corp(a) EL 96,000 8,748,000
US WEST TN 74,300 4,583,381
Viatel Inc(a) TL 400,000 7,300,000
Western Wireless Class A(a) TC 175,000 4,593,750
WinStar Communications(a) TC 232,200 9,970,087
==================================================================================================================
292,339,768
==================================================================================================================
TOTAL COMMON STOCKS (Cost $248,512,952) 393,747,417
==================================================================================================================
8.35 SHORT-TERM INVESTMENTS-- REPURCHASE AGREEMENTS
8.35 UNITED STATES
Repurchase Agreement with State Street
dated 1/29/1999 due 2/1/1999 at
4.670%, repurchased at $35,879,958
(Collateralized by US Treasury
Bonds, due 4/15/2028 at 3.625%,
value $36,591,725)
(Cost $35,866,000) RA $ 35,866,000 35,866,000
==================================================================================================================
100.00 TOTAL INVESTMENT SECURITIES AT VALUE
(Cost $284,378,952)
(Cost for Income Tax Purposes $285,085,549) $ 429,613,417
==================================================================================================================
(a)Security is non-income producing.
(b)Securities acquired pursuant to Rule 144A. The Fund deems such such
securities to be "liquid" because an institutional market exists.
(c)Security has been designated as collateral for forward foreign currency
contracts.
(d)Security is linked to a barometer index of the Korean stock market. The
KOSPI 200 is an unmanaged index indicative of the overall Korean stock
market.
(e)Security is an affiliated company (See Notes).
(f)Also represents cost for income tax purposes.
(g)Security has been designated as collateral for future contracts.
</TABLE>
<PAGE>
<TABLE>
<CAPTION> VALUE AS
ACQUISITION ACQUISITION % OF
DESCRIPTION DATE(S) COST NET ASSETS
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Asian Growth Fund
BSES Ltd Regulation S GDR Representing
3 Ord Shrs 2/27/98 $ 273,000 0.67%
Videsh Sanchar Nigam Ltd Regulation S
GDR Representing 1/2 Ord Shr 2/3/98 223,929 0.74
===========================================================================================================
1.41%
===========================================================================================================
Latin American Growth Fund
Consorcio ARA SA de CV Regulation S
Sponsored ADR Representing 10 Shrs 1/7/97-10/17/97 $ 63,175 0.23
Rossi Residencial SA GDR Regulation
S Representing 5 Ord Shrs 7/15/97 820,400 0.32
===========================================================================================================
0.55%
===========================================================================================================
--------------------------------------------------------
FOWARD FOREIGN CURRENCY CONTRACTS
-----------------------------------------------------------------------------------------------------------
Open at January 31, 1999:
-----------------------------------------------------------------------------------------------------------
CURRENCY CURRENCY UNREALIZED
CURRENCY/VALUE DATE UNITS SOLD VALUE (US$) LOSS
-----------------------------------------------------------------------------------------------------------
Asian Growth Fund
Singapore Dollar 3/9/1999 $ 515,000 $ 283,551 $ (10,903)
===========================================================================================================
FUTURES CONTRACTS ---------------------------------------------------------
Open at January 31, 1999
-----------------------------------------------------------------------------------------------------------
NUMBER OF FACE MARKET
POSITION CONTRACTS AMOUNT VALUE
-----------------------------------------------------------------------------------------------------------
S & P 500 Index Fund
S&P 500 Index
(Expires March 1999) Long 10 $ 2,500 $ 3,203,750
<PAGE>
SUMMARY OF INVESTMENTS BY INDUSTRY
-----------------------------------------------------------------------------------------------------------
% OF
INDUSTRY INVESTMENT
INDUSTRY CODE SECURITIES VALUE
-----------------------------------------------------------------------------------------------------------
Asian Growth Fund
Agricultural Products AG 0.80% $ 195,580
Air Freight AF 0.47 116,001
Banks BK 15.38 3,759,258
Broadcasting BR 0.94 229,409
Communications-- Equipment & Manufacturing CM 2.05 500,812
Conglomerates CG 7.90 1,930,748
Distribution DB 0.68 167,155
Electric Utilities EU 8.20 2,004,648
Electronics EL 1.51 367,660
Electronics-- Semiconductor ES 1.57 382,553
Engineering & Construction EC 1.45 354,547
Financial FN 1.09 266,963
Gaming GM 1.36 331,826
Gold & Precious Metals Mining GP 1.64 401,094
Health Care Drugs-- Pharmaceuticals HD 0.61 148,050
Housewares HW 1.02 250,031
Insurance IN 3.23 789,328
Iron & Steel IS 1.12 273,742
Machinery MY 0.98 240,105
Manufacturing MG 1.38 337,859
Metals Mining MM 1.50 365,866
Oil & Gas Related OG 0.50 121,884
Publishing PB 2.23 544,584
Real Estate Related RL 13.64 3,332,400
Repurchase Agreements RA 14.75 3,605,000
Retail RT 0.57 139,665
Services SV 5.50 1,345,193
Telecommunications-- Long Distance TL 4.63 1,131,380
Telephone TN 3.30 805,887
===========================================================================================================
100.00% $ 24,439,228
===========================================================================================================
European Small Company Fund
Air Freight AF 0.98% $ 469,356
Auto Parts AP 1.45 694,379
Banks BK 1.21 582,063
Biotechnology BI 3.49 1,671,768
Broadcasting BR 4.90 2,346,375
Building Materials BD 0.89 428,214
Cable CA 1.14 544,095
Chemicals CH 1.46 697,527
Computer Related CO 13.79 6,604,067
Conglomerates CG 0.77 367,285
<PAGE>
-----------------------------------------------------------------------------------------------------------
% OF
INDUSTRY INVESTMENT
INDUSTRY CODE SECURITIES VALUE
-----------------------------------------------------------------------------------------------------------
European Small Company Fund (Continued)
Consumer-- Jewelry, Novelties & Gifts CJ 0.95% $ 453,744
Electronics EL 4.57 2,189,936
Engineering & Construction EC 1.49 715,576
Entertainment ET 1.12 535,483
Financial FN 0.43 204,529
Foods FD 0.73 352,459
Health Care Drugs-- Pharmaceuticals HD 1.14 544,364
Health Care Related HC 4.94 2,367,393
Homebuilding HB 1.03 491,690
Household Furniture & Appliances HF 2.19 1,047,522
Housewares HW 0.42 202,064
Insurance IN 1.84 881,474
Investment Bank/Broker Firm IV 0.92 442,480
Leisure Time LT 1.65 790,298
Lodging-- Hotels LH 4.43 2,122,118
Machinery MY 2.35 1,125,827
Manufacturing MG 0.97 464,120
Oil & Gas Related OG 0.22 105,139
Photography & Imaging PI 1.14 545,745
Pollution Control PC 1.18 564,998
Publishing PB 0.31 150,669
Real Estate Investment Trust RE 2.25 1,076,772
Repurchase Agreements RA 9.39 4,496,000
Restaurants RS 2.85 1,363,034
Retail RT 1.61 769,709
Services SV 14.11 6,755,670
Telecommunications-- Cellular & Wireless TC 2.04 976,702
Telecommunications-- Long Distance TL 1.36 651,299
Textile-- Apparel Manufacturing TA 1.18 564,181
Toys TY 1.11 530,622
===========================================================================================================
100.00% $47,886,746
===========================================================================================================
Latin American Growth Fund
Banks BK 8.46% $ 1,099,015
Beverages BV 9.75 1,267,499
Broadcasting BR 3.84 499,213
Building Materials BD 0.67 87,415
Chemicals CH 6.20 805,704
Conglomerates CG 3.29 428,150
Electric Utilities EU 18.08 2,350,566
Financial FN 3.81 495,049
Foods FD 1.72 224,000
Homebuilding HB 5.57 723,377
Iron & Steel IS 3.31 430,463
Machinery MY 3.47 451,026
Oil & Gas Related OG 4.14 538,689
Real Estate Investment Trust RE 2.88 374,554
<PAGE>
-----------------------------------------------------------------------------------------------------------
% OF
INDUSTRY INVESTMENT
INDUSTRY CODE SECURITIES VALUE
-----------------------------------------------------------------------------------------------------------
Latin American Growth Fund (Continued)
Retail RT 2.55% $ 331,016
Telecommunications-- Long Distance TL 8.58 1,114,610
Telephone TN 10.43 1,355,691
Textile-- Apparel Manufacturing TA 3.25 422,330
===========================================================================================================
100.00% $ 12,998,367
Worldwide Capital Goods Fund
Aerospace & Defense AE 19.23% $ 1,654,525
Auto Parts AP 3.49 300,212
Automobiles AM 3.48 299,700
Building Materials BD 4.29 369,107
Chemicals CH 2.62 225,225
Communications-- Equipment & Manufacturing CM 4.54 390,150
Computer Related CO 4.59 395,287
Containers CT 3.64 312,975
Electric Utilities EU 7.92 681,113
Electrical Equipment EE 7.72 663,888
Machinery MY 3.53 304,000
Manufacturing MG 12.16 1,046,250
Natural Gas NG 3.21 276,000
Oil & Gas Related OG 6.65 571,888
Repurchase Agreements RA 9.45 813,000
Telephone TN 3.48 299,461
===========================================================================================================
100.00% $ 8,602,781
Worldwide Communications Fund
Broadcasting BR 2.39% $10,276,575
Cable CA 3.95 16,985,938
Communications-- Equipment & Manufacturing CM 11.12 47,791,900
Computer Related CO 12.08 51,904,636
Electronics EL 2.04 8,748,000
Machinery MY 3.10 13,294,550
Repurchase Agreements RA 8.35 35,866,000
Services SV 6.25 26,828,275
Telecommunications-- Cellular & Wireless TC 11.27 48,403,697
Telecommunications-- Long Distance TL 20.74 89,119,020
Telephone TN 18.71 80,394,826
===========================================================================================================
100.00% $429,613,417
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
-----------------------------------------------------------------------------------------------------------
INVESCO Specialty Funds, Inc.
January 31, 1999
UNAUDITED
ASIAN EUROPEAN
GROWTH SMALL COMPANY
FUND FUND
-----------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Investment Securities:
At Cost(a) $ 25,943,043 $ 46,216,757
===========================================================================================================
At Value(a) $ 24,439,228 $ 47,886,746
Cash 0 9,094
Foreign Currency (Cost $0 and $531,748, respectively) 0 531,747
Receivables:
Investment Securities Sold 920,960 2,303,841
Fund Shares Sold 48,150 2,601,323
Dividends and Interest 12,943 104,326
Appreciation on Forward Foreign Currency Contracts 0 4,390
Prepaid Expenses and Other Assets 80,977 88,882
===========================================================================================================
TOTAL ASSETS 25,502,258 53,530,349
===========================================================================================================
LIABILITIES
Payables:
Custodian 232,598 0
Investment Securities Purchased 917,884 528,498
Fund Shares Repurchased 94,702 1,266,583
Depreciation on Forward Foreign Currency Contracts 7,010 0
Accrued Distribution Expenses 4,885 9,895
Accrued Expenses and Other Payables 25,793 38,736
===========================================================================================================
TOTAL LIABILITIES 1,282,872 1,843,712
===========================================================================================================
Net Assets at Value $ 24,219,386 $ 51,686,637
===========================================================================================================
NET ASSETS
Paid-in Capital(b) $ 37,681,725 $ 53,868,375
Accumulated Undistributed Net Investment Income (Loss) 105,681 (327,665)
Accumulated Undistributed Net Realized Loss on
Investment Securities and Foreign Currency Transactions (12,056,945) (3,523,146)
Net Appreciation (Depreciation) of Investment Securities
and Foreign Currency Transactions (1,511,075) 1,669,073
===========================================================================================================
Net Assets at Value $ 24,219,386 $ 51,686,637
===========================================================================================================
Shares Outstanding 6,210,546 4,708,238
Net Asset Value, Offering and Redemption
Price per Share $ 3.90 $ 10.98
===========================================================================================================
(a)Investment securities at cost and value at January 31, 1999 include
repurchase agreements of $3,605,000 and $4,496,000 for Asian Growth and
European Small Company Funds, respectively.
(b)The Fund has 800 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 and/or class.
See Notes to Financial Statements
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES (CONTINUED)
-----------------------------------------------------------------------------------------------------------
INVESCO Specialty Funds, Inc
January 31, 1999
UNAUDITED
LATIN AMERICAN
GROWTH REALTY
FUND FUND
-----------------------------------------------------------------------------------------------------------
ASSETS
Investment Securities:
At Cost(a) $ 28,769,250 $ 17,480,349
===========================================================================================================
At Value(a) $ 12,998,367 $ 16,475,831
Cash 133,214 0
Receivables:
Investment Securities Sold 906,832 812,776
Fund Shares Sold 54,252 18,503
Dividends and Interest 76,291 105,800
Prepaid Expenses and Other Assets 179,396 187,646
===========================================================================================================
TOTAL ASSETS 14,348,352 17,600,556
===========================================================================================================
LIABILITIES
Payables:
Custodian 0 777
Distributions to Shareholders 0 9,781
Investment Securities Purchased 351,865 0
Fund Shares Repurchased 43,500 274,717
Depreciation on Forward Foreign Currency Contracts 711 0
Accrued Distribution Expenses 3,044 3,694
Accrued Expenses and Other Payables 29,559 14,175
==========================================================================================================
TOTAL LIABILITIES 428,679 303,144
==========================================================================================================
Net Assets at Value $ 13,919,673 $ 17,297,412
==========================================================================================================
NET ASSETS
Paid-in Capital(b) $ 41,931,387 $ 25,290,339
Accumulated Undistributed (Distributions in Excess of)
Net Investment Income (28,152) (10,398)
Accumulated Undistributed Net Realized Loss on
Investment Securities and Foreign Currency Transactions (12,181,340) (6,978,011)
Net Depreciation of Investment Securities
and Foreign Currency Transactions (15,802,222) (1,004,518)
==========================================================================================================
Net Assets at Value $ 13,919,673 $ 17,297,412
==========================================================================================================
Shares Outstanding 2,406,959 2,504,490
Net Asset Value, Offering and Redemption
Price per Share $ 5.78 $ 6.91
===========================================================================================================
(a)Investment securities at cost and value at January 31, 1999 include a
repurchase agreement of $1,906,000 for Realty Fund.
(b)The Fund has 800 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 and/or class.
See Notes to Financial Statements
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES (CONTINUED)
-----------------------------------------------------------------------------------------------------------
INVESCO Specialty Funds, Inc.
January 31, 1999
UNAUDITED
WORLDWIDE WORLDWIDE
CAPITAL GOODS COMMUNICATIONS
FUND FUND
-----------------------------------------------------------------------------------------------------------
ASSETS
Investment Securities:
At Cost(a) $ 8,072,282 $ 284,378,952
===========================================================================================================
At Value(a) $ 8,602,781 $ 429,613,417
Cash 2,536 0
Receivables:
Investment Securities Sold 0 1,264,958
Fund Shares Sold 8,824 8,213,450
Dividends and Interest 2,220 193,064
Prepaid Expenses and Other Assets 66,339 63,201
===========================================================================================================
TOTAL ASSETS 8,682,700 439,348,090
===========================================================================================================
LIABILITIES
Payables:
Custodian 0 20,633
Investment Securities Purchased 240,965 6,561,126
Fund Shares Repurchased 37,148 2,312,219
Accrued Distribution Expenses 1,655 70,544
Accrued Expenses and Other Payables 22,131 31,506
===========================================================================================================
TOTAL LIABILITIES 301,899 8,996,028
===========================================================================================================
Net Assets at Value $ 8,380,801 $ 430,352,062
===========================================================================================================
NET ASSETS
Paid-in Capital(b) $ 8,614,251 $ 311,285,662
Accumulated Undistributed Net Investment Loss (26,152) (998,844)
Accumulated Undistributed Net Realized Loss on
Investment Securities and Foreign Currency Transactions (737,797) (25,169,169)
Net Appreciation of Investment Securities
and Foreign Currency Transactions 530,499 145,234,413
===========================================================================================================
Net Assets at Value $ 8,380,801 $ 430,352,062
===========================================================================================================
Shares Outstanding 808,096 17,802,621
Net Asset Value, Offering and Redemption
Price per Share $ 10.37 $ 24.17
===========================================================================================================
(a)Investment securities at cost and value at January 31, 1999 include
repurchase agreements of $813,000 and $35,866,000 for Worldwide Capital
Goods and Worldwide Communciations Funds, respectively.
(b)The Fund has 800 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 and/or class.
See Notes to Financial Statements
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES (CONTINUED)
-----------------------------------------------------------------------------------------------------------
INVESCO Specialty Funds, Inc.
January 31, 1999
UNAUDITED
S & P
500 INDEX
FUND
-----------------------------------------------------------------------------------------------------------
ASSETS
Investment Securities:
At Cost(a) $ 40,507,183
At Value(a) $ 45,946,536
Cash 49,532
Receivables:
Fund Shares Sold 1,139,454
Dividends and Interest 34,334
Variation Margin on Futures Contracts 38,447
Prepaid Expenses and Other Assets 106,838
===========================================================================================================
TOTAL ASSETS 47,315,141
===========================================================================================================
LIABILITIES
Payables:
Distributions to Shareholders 1,341
Fund Shares Repurchased 151,395
Accrued Distribution Expenses - Class II 7,333
Accrued Expenses and Other Payables 14,583
===========================================================================================================
TOTAL LIABILITIES 174,652
===========================================================================================================
Net Assets at Value $ 47,140,489
===========================================================================================================
NET ASSETS
Paid-in Capital(b) $ 41,401,489
Accumulated Undistributed Net Investment Income 943
Accumulated Undistributed Net Realized Gain on Investment
Securities, Foreign Currency Transactions and Futures Contracts
261,294
Net Appreciation of Investment Securities, Foreign Currency
Transactions and Futures Contracts 5,476,763
===========================================================================================================
Net Assets at Value, Applicable to Shares Outstanding $ 47,140,489
===========================================================================================================
Net Assets At Value:
Class I $ 3,651,301
===========================================================================================================
Class II $ 43,489,188
Shares Outstanding
Class I 265,157
Class II 3,124,290
Net Asset Value, Offering and Redemption Price per Share
Class I $ 13.77
Class II $ 13.92
===========================================================================================================
(a)Investment securities at cost and value at January 31, 1999 include a
repurchase agreement of $2,863,000.
(b)The Fund has 800 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 and/or class.
See Notes to Financial Statements
<PAGE>
STATEMENT OF OPERATIONS
-----------------------------------------------------------------------------------------------------------
INVESCO Specialty Funds, Inc.
Six Months Ended January 31, 1999
UNAUDITED
ASIAN EUROPEAN
GROWTH SMALL COMPANY
FUND FUND
-----------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
INCOME
Dividends $ 132,182 $ 215,501
Interest 99,605 54,271
Foreign Taxes Withheld (10,659) (30,758)
===========================================================================================================
TOTAL INCOME 221,128 239,014
===========================================================================================================
EXPENSES
Investment Advisory Fees 69,997 208,535
Distribution Expenses 23,332 69,511
Transfer Agent Fees 82,893 184,948
Administrative Fees 6,400 9,171
Custodian Fees and Expenses 24,376 49,541
Directors' Fees and Expenses 4,596 5,957
Professional Fees and Expenses 13,382 13,721
Registration Fees and Expenses 14,678 18,199
Reports to Shareholders 20,326 40,314
Other Expenses 1,771 32,572
===========================================================================================================
TOTAL EXPENSES 261,751 632,469
Fees and Expenses Absorbed by Investment Adviser (66,569) (63,537)
Fees and Expenses Paid Indirectly (8,947) (16,118)
===========================================================================================================
NET EXPENSES 186,235 552,814
===========================================================================================================
NET INVESTMENT INCOME (LOSS) 34,893 (313,800)
===========================================================================================================
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENT SECURITIES Net Realized Gain (Loss) on:
Investment Securities (2,906,054) (4,229,586)
Foreign Currency Transactions (356,811) 828,136
===========================================================================================================
Total Net Realized Loss (3,262,865) (3,401,450)
===========================================================================================================
Change in Net Appreciation (Depreciation) of:
Investment Securities 5,373,771 (5,482,780)
Foreign Currency Transactions 339,399 541,141
===========================================================================================================
Total Net Appreciation (Depreciation) 5,713,170 (4,941,639)
===========================================================================================================
NET GAIN (LOSS) ON INVESTMENT SECURITIES AND
FOREIGN CURRENCY TRANSACTIONS 2,450,305 (8,343,089)
===========================================================================================================
Net Increase (Decrease) in Net Assets
from Operations $ 2,485,198 $ (8,656,889)
See Notes to Financial Statements
<PAGE>
STATEMENT OF OPERATIONS (CONTINUED)
-----------------------------------------------------------------------------------------------------------
INVESCO Specialty Funds, Inc.
Six Months Ended January 31, 1999
UNAUDITED
LATIN AMERICAN
GROWTH REALTY
FUND FUND
-----------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
INCOME
Dividends $ 251,693 $ 641,991
Interest 19,202 57,788
Foreign Taxes Withheld (34,691) 0
===========================================================================================================
TOTAL INCOME 236,204 699,779
===========================================================================================================
EXPENSES
Investment Advisory Fees 82,953 79,228
Distribution Expenses 27,651 26,409
Transfer Agent Fees 167,119 114,661
Administrative Fees 6,659 6,585
Custodian Fees and Expenses 30,790 8,758
Directors' Fees and Expenses 5,669 5,088
Professional Fees and Expenses 12,825 9,733
Registration Fees and Expenses 19,806 17,021
Reports to Shareholders 34,351 24,208
Other Expenses 8,777 869
===========================================================================================================
TOTAL EXPENSES 396,600 292,560
Fees and Expenses Absorbed by Investment Adviser (161,081) (146,890)
Fees and Expenses Paid Indirectly (13,799) (3,485)
===========================================================================================================
NET EXPENSES 221,720 142,185
===========================================================================================================
NET INVESTMENT INCOME 14,484 557,594
===========================================================================================================
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENT SECURITIES Net Realized Gain (Loss) on:
Investment Securities (6,593,508) (6,622,105)
Foreign Currency Transactions (1,212,867) 7,103
===========================================================================================================
Total Net Realized Loss (7,806,375) (6,615,002)
===========================================================================================================
Change in Net Appreciation (Depreciation) of:
Investment Securities (1,894,877) 3,035,350
Foreign Currency Transactions (5,718,103) 27,708
===========================================================================================================
Total Net Appreciation (Depreciation) (7,612,980) 3,063,058
===========================================================================================================
NET LOSS ON INVESTMENT SECURITIES AND
FOREIGN CURRENCY TRANSACTIONS (15,419,355) (3,551,944)
===========================================================================================================
Net Decrease in Net Assets from Operations $ (15,404,871) $ (2,994,350)
===========================================================================================================
See Notes to Financial Statements
<PAGE>
STATEMENT OF OPERATIONS (CONTINUED)
-----------------------------------------------------------------------------------------------------------
INVESCO Specialty Funds, Inc.
Six Months Ended January 31, 1999
UNAUDITED
WORLDWIDE WORLDWIDE
CAPITAL GOODS COMMUNICATIONS
FUND FUND
-----------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
INCOME
Dividends $ 58,066 $ 465,030
Interest 15,825 355,192
Foreign Taxes Withheld (370) (4,330)
===========================================================================================================
TOTAL INCOME 73,521 815,892
===========================================================================================================
EXPENSES
Investment Advisory Fees 32,920 852,635
Distribution Expenses 12,662 327,937
Transfer Agent Fees 51,036 447,221
Administrative Fees 5,760 24,676
Custodian Fees and Expenses 3,858 21,776
Directors' Fees and Expenses 4,628 9,382
Professional Fees and Expenses 12,521 17,969
Registration Fees and Expenses 18,023 42,076
Reports to Shareholders 10,484 71,264
Other Expenses 634 9,356
===========================================================================================================
TOTAL EXPENSES 152,526 1,824,292
Fees and Expenses Absorbed by Investment Adviser (49,258) 0
Fees and Expenses Paid Indirectly (1,742) (12,761)
===========================================================================================================
NET EXPENSES 101,526 1,811,531
===========================================================================================================
NET INVESTMENT LOSS (28,005) (995,639)
===========================================================================================================
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENT SECURITIES
Net Realized Gain (Loss) on:
Investment Securities (648,217) (24,940,546)
Foreign Currency Transactions 4,034 (60,859)
===========================================================================================================
Total Net Realized Loss (644,183) (25,001,405)
===========================================================================================================
Change in Net Appreciation (Depreciation) of:
Investment Securities 19,870 102,731,427
Foreign Currency Transactions (11,855) 87,784
===========================================================================================================
Total Net Appreciation 8,015 102,819,211
===========================================================================================================
NET GAIN (LOSS) ON INVESTMENT SECURITIES AND
FOREIGN CURRENCY TRANSACTIONS (636,168) 77,817,806
===========================================================================================================
Net Increase (Decrease) in Net Assets
from Operations $ (664,173) $ 76,822,167
===========================================================================================================
See Notes to Financial Statements
<PAGE>
STATEMENT OF OPERATIONS (CONTINUED)
-----------------------------------------------------------------------------------------------------------
INVESCO Specialty Funds, Inc.
Six Months Ended January 31, 1999
UNAUDITED
S & P
500 INDEX
FUND
-----------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
INCOME
Dividends $ 167,786
Interest 75,357
Foreign Taxes Withheld (791)
===========================================================================================================
TOTAL INCOME 242,352
===========================================================================================================
EXPENSES
Investment Advisory Fees 34,173
Distribution Expenses - Class II 30,300
Transfer Agent Fees 25,161
Administrative Fees 7,050
Custodian Fees and Expenses 8,939
Directors' Fees and Expenses 4,582
Professional Fees and Expenses 7,928
Registration Fees and Expenses
Class I 15,058
Class II 18,820
Reports to Shareholders 4,704
Other Expenses 856
===========================================================================================================
TOTAL EXPENSES 157,571
Fees and Expenses Absorbed by Investment Adviser (81,769)
Fees and Expenses Paid Indirectly (4,124)
===========================================================================================================
NET EXPENSES 71,678
===========================================================================================================
NET INVESTMENT INCOME 170,674
===========================================================================================================
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENT SECURITIES
Net Realized Gain on:
Investment Securities and Foreign Currency Transactions 27,957
Futures Contracts 216,104
===========================================================================================================
Total Net Realized Gain 244,061
===========================================================================================================
Change in Net Appreciation of:
Investment Securities and Foreign Currency Transactions 4,713,754
Futures Contracts 55,214
===========================================================================================================
Total Net Appreciation 4,768,968
===========================================================================================================
NET GAIN ON INVESTMENT SECURITIES, FOREIGN CURRENCY
TRANSACTIONS AND FUTURES CONTRACTS 5,013,029
===========================================================================================================
Net Increase in Net Assets from Operations $ 5,183,703
===========================================================================================================
See Notes to Financial Statements
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
-----------------------------------------------------------------------------------------------------------
Asian Growth Fund
SIX MONTHS YEAR
ENDED ENDED
JANUARY 31 JULY 31
-----------------------------------------------------------------------------------------------------------
1999 1998
UNAUDITED
-----------------------------------------------------------------------------------------------------------
OPERATIONS
Net Investment Income $ 34,893 $ 78,102
Net Realized Loss on Investment Securities
and Foreign Currency Transactions (3,262,865) (8,606,011)
Change in Net Appreciation (Depreciation) of Investment
Securities and Foreign Currency Transactions 5,713,170 (8,109,793)
===========================================================================================================
NET INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS 2,485,198 (16,637,702)
===========================================================================================================
DISTRIBUTIONS TO SHAREHOLDERS
Net Investment Income 0 (76,039)
In Excess of Net Realized Gain on Investment Securities
and Foreign Currency Transactions 0 (2,740,227)
===========================================================================================================
TOTAL DISTRIBUTIONS 0 (2,816,266)
===========================================================================================================
FUND SHARE TRANSACTIONS
Proceeds from Sales of Shares 23,377,798 39,750,220
Reinvestment of Distributions 0 2,758,516
===========================================================================================================
23,377,798 42,508,736
===========================================================================================================
Amounts Paid for Repurchases of Shares (13,846,173) (43,821,535)
===========================================================================================================
NET INCREASE (DECREASE) IN NET ASSETS FROM
FUND SHARE TRANSACTIONS 9,531,625 (1,312,799)
===========================================================================================================
Total Increase (Decrease) in Net Assets 12,016,823 (20,766,767)
NET ASSETS
Beginning of Period 12,202,563 32,969,330
===========================================================================================================
End of Period (Including Accumulated Undistributed Net
Investment Income of $105,681 and $70,788, respectively) $ 24,219,386 $ 12,202,563
===========================================================================================================
FUND SHARE TRANSACTIONS
Shares Sold 6,266,368 7,741,648
Shares Issued from Reinvestment of Distributions 0 567,644
===========================================================================================================
6,266,368 8,309,292
Shares Repurchased (3,677,968) (7,590,758)
===========================================================================================================
Net Increase in Fund Shares 2,588,400 718,534
===========================================================================================================
See Notes to Financial Statements
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
-----------------------------------------------------------------------------------------------------------
European Small Company Fund
SIX MONTHS YEAR
ENDED ENDED
JANUARY 31 JULY 31
-----------------------------------------------------------------------------------------------------------
1999 1998
UNAUDITED
OPERATIONS
Net Investment Loss $ (313,800) $ (318,691)
Net Realized Gain (Loss) on Investment Securities
and Foreign Currency Transactions (3,401,450) 11,536,000
Change in Net Appreciation (Depreciation) of Investment
Securities and Foreign Currency Transactions (4,941,639) 1,682,817
===========================================================================================================
NET INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS (8,656,889) 12,900,126
===========================================================================================================
DISTRIBUTIONS TO SHAREHOLDERS
Net Realized Gain on Investment Securities and
Foreign Currency Transactions (8,496,798) (11,445,624)
===========================================================================================================
FUND SHARE TRANSACTIONS
Proceeds from Sales of Shares 163,410,035 300,560,139
Reinvestment of Distributions 8,070,960 10,350,638
===========================================================================================================
171,480,995 310,910,777
Amounts Paid for Repurchases of Shares (174,172,985) (315,889,901)
===========================================================================================================
NET DECREASE IN NET ASSETS FROM
FUND SHARE TRANSACTIONS (2,691,990) (4,979,124)
===========================================================================================================
Total Decrease in Net Assets (19,845,677) (3,524,622)
NET ASSETS
Beginning of Period 71,532,314 75,056,936
===========================================================================================================
End of Period (Including Accumulated Undistributed Net
Investment Loss of ($327,664) and ($13,865, respectively) $ 51,686,637 $ 71,532,314
===========================================================================================================
-----------------------------------------------------------
FUND SHARE TRANSACTIONS
Shares Sold 13,491,121 19,832,249
Shares Issued from Reinvestment of Distributions 770,865 872,000
===========================================================================================================
14,261,986 20,704,249
Shares Repurchased (14,121,190) (20,745,409)
===========================================================================================================
Net Increase (Decrease) in Fund Shares 140,796 (41,160)
===========================================================================================================
See Notes to Financial Statements
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
-----------------------------------------------------------------------------------------------------------
Latin American Growth Fund
SIX MONTHS YEAR
ENDED ENDED
JANUARY 31 JULY 31
-----------------------------------------------------------------------------------------------------------
1999 1998
UNAUDITED
OPERATIONS
Net Investment Income (Loss) $ 14,484 $ (2,871)
Net Realized Loss on Investment Securities
and Foreign Currency Transactions (7,806,375) (1,133,650)
Change in Net Depreciation of Investment Securities
and Foreign Currency Transactions (7,612,980) (28,995,772)
===========================================================================================================
NET DECREASE IN NET ASSETS FROM OPERATIONS (15,404,871) (30,132,293)
===========================================================================================================
DISTRIBUTIONS TO SHAREHOLDERS
In Excess of Net Investment Income 0 (1,644)
Net Realized Gain on Investment Securities and
Foreign Currency Transactions (324,756) (5,377,132)
In Excess of Net Realized Gain on Investment Securities
and Foreign Currency Transactions 0 (3,968,378)
===========================================================================================================
TOTAL DISTRIBUTIONS (324,756) (9,347,154)
===========================================================================================================
FUND SHARE TRANSACTIONS
Proceeds from Sales of Shares 14,738,734 41,383,944
Reinvestment of Distributions 318,416 9,253,953
===========================================================================================================
15,057,150 50,637,897
Amounts Paid for Repurchases of Shares (20,133,145) (106,705,315)
===========================================================================================================
NET DECREASE IN NET ASSETS FROM
FUND SHARE TRANSACTIONS (5,075,995) (56,067,418)
===========================================================================================================
Total Decrease in Net Assets (20,805,622) (95,546,865)
===========================================================================================================
NET ASSETS
Beginning of Period 34,725,295 130,272,160
===========================================================================================================
End of Period (Including Distributions in Excess of Net
Investment Income of ($28,152) and ($42,636),
respectively) $ 13,919,673 $ 34,725,295
===========================================================================================================
----------------------------------------------------------
FUND SHARE TRANSACTIONS
Shares Sold 2,071,931 2,743,691
Shares Issued from Reinvestment of Distributions 42,439 725,787
===========================================================================================================
2,114,370 3,469,478
Shares Repurchased (2,812,606) (7,456,925)
===========================================================================================================
Net Decrease in Fund Shares (698,236) (3,987,447)
===========================================================================================================
See Notes to Financial Statements
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
----------------------------------------------------------------------------------------------------------
Realty Fund
SIX MONTHS YEAR
ENDED ENDED
JANUARY 31 JULY 31
-----------------------------------------------------------------------------------------------------------
1999 1998
UNAUDITED
OPERATIONS
Net Investment Income $ 557,594 $ 1,293,905
Net Realized Gain (Loss) on Investment Securities
and Foreign Currency Transactions (6,615,002) 4,205,231
Change in Net Appreciation (Depreciation) of Investment
Securities and Foreign Currency Transactions 3,063,058 (6,267,343)
===========================================================================================================
NET DECREASE IN NET ASSETS FROM OPERATIONS (2,994,350) (768,207)
===========================================================================================================
DISTRIBUTIONS TO SHAREHOLDERS
Net Investment Income (578,176) (1,231,251)
Net Realized Gain on Investment Securities
and Foreign Currency Transactions (1,731,961) (2,808,471)
===========================================================================================================
TOTAL DISTRIBUTIONS (2,310,137) (4,039,722)
===========================================================================================================
----------------------------------------------------
FUND SHARE TRANSACTIONS
Proceeds from Sales of Shares 53,881,614 125,593,955
Reinvestment of Distributions 2,182,689 3,806,928
===========================================================================================================
56,064,30 3 129,400,883
Amounts Paid for Repurchases of Shares (57,010,530) (137,702,363)
===========================================================================================================
NET DECREASE IN NET ASSETS FROM
FUND SHARE TRANSACTIONS (946,227) (8,301,480)
===========================================================================================================
Total Decrease in Net Assets (6,250,714) (13,109,409)
NET ASSETS
Beginning of Period 23,548,126 36,657,535
===========================================================================================================
End of Period (Including Accumulated Undistributed
(Distributions in Excess of) Net Investment Income of
($10,398) and $10,184, respectively) $ 17,297,412 $ 23,548,126
===========================================================================================================
-------------------------------------------------------
FUND SHARE TRANSACTIONS
Shares Sold 6,900,204 11,521,060
Shares Issued from Reinvestment of Distributions 307,967 366,311
===========================================================================================================
7,208,171 11,887,371
Shares Repurchased (7,276,705) (12,649,335)
===========================================================================================================
Net Decrease in Fund Shares (68,534) (761,964)
===========================================================================================================
See Notes to Financial Statements
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
-----------------------------------------------------------------------------------------------------------
Worldwide Capital Goods Fund
SIX MONTHS YEAR
ENDED ENDED
JANUARY 31 JULY 31
-----------------------------------------------------------------------------------------------------------
1999 1998
UNAUDITED
OPERATIONS
Net Investment Loss $ (28,005) $ (41,973)
Net Realized Gain (Loss) on Investment Securities
and Foreign Currency Transactions (644,183) 1,152,932
Change in Net Appreciation (Depreciation) of Investment
Securities and Foreign Currency Transactions 8,015 (1,878,937)
===========================================================================================================
NET INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS (664,173) (767,978)
===========================================================================================================
DISTRIBUTIONS TO SHAREHOLDERS
Net Realized Gain on Investment Securities and
Foreign Currency Transactions (289,458) (1,745,282)
===========================================================================================================
FUND SHARE TRANSACTIONS
Proceeds from Sales of Shares 7,964,696 44,082,756
Reinvestment of Distributions 284,363 1,655,829
===========================================================================================================
8,249,059 45,738,585
Amounts Paid for Repurchases of Shares (12,010,052) (52,383,436)
===========================================================================================================
NET DECREASE IN NET ASSETS FROM
FUND SHARE TRANSACTIONS (3,760,993) (6,644,851)
===========================================================================================================
Total Decrease in Net Assets (4,714,624) (9,158,111)
===========================================================================================================
NET ASSETS
Beginning of Period 13,095,425 22,253,536
===========================================================================================================
End of Period (Including Accumulated Undistributed Net
Investment Income (Loss) of ($26,152)
and $1,853, respectively) $ 8,380,801 $ 13,095,425
===========================================================================================================
--------------------------------------------------
FUND SHARE TRANSACTIONS
Shares Sold 761,331 3,535,109
Shares Issued from Reinvestment of Distributions 28,211 155,040
===========================================================================================================
789,542 3,690,149
Shares Repurchased (1,153,647) (4,269,548)
===========================================================================================================
Net Decrease in Fund Shares (364,105) (579,399)
===========================================================================================================
See Notes to Financial Statements
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
-----------------------------------------------------------------------------------------------------------
Worldwide Communications Fund
SIX MONTHS YEAR
ENDED ENDED
JANUARY 31 JULY 31
-----------------------------------------------------------------------------------------------------------
1999 1998
UNAUDITED
OPERATIONS
Net Investment Loss $ (995,639) $ (230,214)
Net Realized Gain (Loss) on Investment Securities
and Foreign Currency Transactions (25,001,405) 6,087,498
Change in Net Appreciation of Investment Securities
and Foreign Currency Transactions 102,819,211 30,321,776
===========================================================================================================
NET INCREASE IN NET ASSETS FROM OPERATIONS 76,822,167 36,179,060
===========================================================================================================
DISTRIBUTIONS TO SHAREHOLDERS
Net Realized Gain on Investment Securities and
Foreign Currency Transactions (5,206,915) (5,103,352)
===========================================================================================================
FUND SHARE TRANSACTIONS
===========================================================================================================
Proceeds from Sales of Shares 356,326,241 521,582,449
Reinvestment of Distributions 5,082,071 4,810,525
===========================================================================================================
361,408,312 526,392,974
Amounts Paid for Repurchases of Shares (279,248,008) (353,350,473)
===========================================================================================================
NET INCREASE IN NET ASSETS FROM
FUND SHARE TRANSACTIONS 82,160,304 173,042,501
===========================================================================================================
Total Increase in Net Assets 153,775,556 204,118,209
NET ASSETS
Beginning of Period 276,576,506 72,458,297
===========================================================================================================
End of Period (Including Accumulated Undistributed
Net Investment Loss of ($998,844) and ($3,205),
respectively) $430,352,062 $ 276,576,506
===========================================================================================================
------------------------------------------------------
FUND SHARE TRANSACTIONS
Shares Sold 18,207,437 28,810,576
Shares Issued from Reinvestment of Distributions 268,609 319,200
===========================================================================================================
18,476,046 29,129,776
Shares Repurchased (14,787,573) (19,749,078)
===========================================================================================================
Net Increase in Fund Shares 3,688,473 9,380,698
===========================================================================================================
See Notes to Financial Statements
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
-----------------------------------------------------------------------------------------------------------
S & P 500 Index Fund
SIX MONTHS PERIOD
ENDED ENDED
JANUARY 31 JULY 31
-----------------------------------------------------------------------------------------------------------
1999 1998
UNAUDITED (Note 1)
OPERATIONS
Net Investment Income $ 170,674 $ 91,804
Net Realized Gain on Investment Securities,
Foreign Currency Transactions and Futures Contracts 244,061 132,729
Change in Net Appreciation of Investment Securities, Foreign
Currency Transactions and Futures Contracts 4,768,968 707,795
===========================================================================================================
NET INCREASE IN NET ASSETS FROM OPERATIONS 5,183,703 932,328
===========================================================================================================
DISTRIBUTIONS TO SHAREHOLDERS
Net Investment Income
Class I (20,642) (21,188)
Class II (151,583) (68,129)
Net Realized Gain on Investment Securities, Foreign Currency
Transactions and Futures Contracts
Class I (11,014) 0
Class II (104,475) 0
===========================================================================================================
TOTAL DISTRIBUTIONS (287,714) (89,317)
===========================================================================================================
FUND SHARE TRANSACTIONS
Proceeds from Sales of Shares
Class I 519,743 14,330,953
Class II 31,159,145 17,781,602
Reinvestment of Distributions
Class I 31,656 21,188
Class II 252,164 66,331
===========================================================================================================
31,962,708 32,200,074
Amounts Paid for Repurchases of Shares
Class I (514,916) (12,386,716)
Class II (7,526,687) (3,332,974)
===========================================================================================================
(8,041,603) (15,719,690)
===========================================================================================================
NET INCREASE IN NET ASSETS FROM
FUND SHARE TRANSACTIONS 23,921,105 16,480,384
===========================================================================================================
Total Increase in Net Assets 28,817,094 17,323,395
NET ASSETS
Initial Subscription (Note 1) 0 1,000,000
Beginning of Period 18,323,395 0
===========================================================================================================
End of Period (Including Accumulated Undistributed
Net Investment Income of $943 and $2,494, respectively) $ 47,140,489 $ 18,323,395
===========================================================================================================
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
-----------------------------------------------------------------------------------------------------------
S & P 500 Index Fund (Continued)
SIX MONTHS PERIOD
ENDED ENDED
JANUARY 31 JULY 31
----------------------------------------------------------------------------------------------------------
1999 1998
UNAUDITED (Note 1)
FUND SHARE TRANSACTIONS
Initial Subscription (Note 1)
Class I 0 90,000
Class II 0 10,000
Shares Sold
Class I 39,644 1,263,674
Class II 2,501,361 1,509,441
Shares Issued from Reinvestment of Distributions
Class I 2,494 1,782
Class II 19,570 5,493
===========================================================================================================
2,563,069 2,880,390
===========================================================================================================
Shares Repurchased
Class I (48,310) (1,084,127)
Class II (637,804) (283,771)
===========================================================================================================
(686,114) (1,367,898)
===========================================================================================================
Net Increase in Fund Shares 1,876,955 1,512,492
===========================================================================================================
</TABLE>
See Notes to Financial Statements
<PAGE>
INVESCO Notes to Financial Statements - INVESCO Specialty Funds,
Inc.
UNAUDITED
- --------------------------------------------------------------------------------
NOTE 1 -- ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES. INVESCO
Specialty Funds, Inc. (the "Fund") is incorporated in Maryland and presently
consists of seven separate Funds: Asian Growth Fund, European Small Company
Fund, Latin American Growth Fund, Realty Fund, Worldwide Capital Goods Fund,
Worldwide Communications Fund and S & P 500 Index 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; to achieve a high total return on
investments through capital appreciation and current income for Worldwide
Communications Fund and to provide both price performance and income comparable
to the Standard and Poor's 500 composite stock index for the S & P 500 Index
Fund. S & P 500 Index Fund commenced investment operations on December 23, 1997.
The Fund is registered under the Investment Company Act of 1940 (the "Act") as a
diversified, open-end management investment company.
The S & P 500 Index Fund offers two classes of shares, referred to as Class
I shares and Class II shares. Class I shares are not subject to any distribution
fees, while Class II shares are subject to an annual distribution fee of 0.25%
of the Fund's annual average net assets attributable to Class II shares. Income,
expenses (other than those attributable to a specific class) and gains and
losses are allocated daily to each class of shares based on the relative
proportion of net assets represented by such class. Operating expenses directly
attributable to a specific class are charged against operations of that class.
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 under
procedures established 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.
<PAGE>
B. FUTURES CONTRACTS -- S & P 500 Index Fund may enter into futures
contracts for non-speculative purposes. Upon entering into a contract, S & P 500
Index Fund deposits and maintains as collateral such initial margin as may be
required by the exchanges on which the transaction is affected. Pursuant to the
contracts, S & P 500 Index Fund agrees to receive from or pay to the broker an
amount of cash equal to the daily fluctuation in the value of the contract. Such
receipts or payments are known as "variation margin" and are recorded by S & P
500 Index Fund as variation margin receivable or payable on futures contracts.
During the period the futures contracts are open, changes in the value of the
contracts are recognized on a daily basis to reflect the market value of the
contracts at the end of each day's trading and are recorded as unrealized gain
or loss. When the contract is closed, S & P 500 Index Fund records a realized
gain or loss equal to the difference between the value of the contract at the
time it was opened and the value at the time it was closed. S & P 500 Index
Fund's use of futures contracts may subject it to certain risks as a result of
unanticipated movements in the market. In addition, there can be no assurance
that a liquid secondary market will exist for any contract purchased or sold.
C. REPURCHASE AGREEMENTS -- Repurchase agreements held by the Fund are fully
collateralized by U.S. Government securities and such collateral is in the
possession of the Fund's custodian. The collateral is evaluated daily to ensure
its market value exceeds the current market value of the repurchase agreements
including accrued interest. In the event of default on the obligation to
repurchase, the Fund has the right to liquidate the collateral and apply the
proceeds in satisfaction of the obligation. In the event of default or
bankruptcy by the other party to the agreement, realization and/or retention of
the collateral or proceeds may be subject to legal proceedings.
D. STRUCTURED CALL WARRANTS -- The Fund invests in foreign stock
market-linked structured call warrants (the "Warrants") which link the market
value to a foreign stock market index. The Warrants are valued at their bid
price as determined by a pricing service approved by the Fund's board of
directors and reflects a 1.5% early exercise transaction fee. The Warrants are
guaranteed by the issuer who has agreed to accept an early exercise notice on
any business day prior to final expiration in a quanity sufficient to liquidate
the position. The Warrants are marked-to-market daily and the related
appreciation or depreciation is presented in the Statement of Assets and
Liabilities. Any realized gain or loss incurred by the Fund upon expiration or
exercising of the Warrant will be presented in the Statement of Operations.
E. SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME -- Security
transactions are accounted for on the trade date and dividend income is recorded
on the ex dividend date. Certain dividends from foreign securities will be
recorded as soon as the Fund is informed of the dividend if such information is
obtained subsequent to the ex dividend date. Interest income, which may be
comprised of stated coupon rate, market discount, original issue discount and
amortized premium, is recorded on the accrual basis. Income and expenses on
foreign securities are translated into U.S. dollars at rates of exchange
prevailing when accrued. Cost is determined on the specific identification
basis. The cost of foreign securities is translated into U.S. dollars at the
rates of exchange prevailing when such securities are acquired.
The Fund may have elements of risk due to 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 investment securities includes fluctuations from currency
exchange rates and fluctuations in market value.
<PAGE>
The Fund's use of 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 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.
On September 1, 1998, the Malaysian government introduced capital controls
and imposed a fixed exchange rate for the Malaysian ringgit. The controls
require that all Malaysian securities and currency be repatriated to Malyasia
and impose significant restrictions on the movement of Malaysian securities and
currency out of the country. These actions may pose significant liquidity issues
and risks and may significantly affect the valuation of Malaysian securituies
and currency held by Asian Growth Fund. The price of Malaysian securities have
been discounted.
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.
F. FEDERAL AND STATE TAXES -- The Fund has complied, and continues to
comply, with the provisions of the Internal Revenue Code applicable to regulated
investment companies and, accordingly, has made or intends to make sufficient
distributions of net investment income and net realized capital gains, if any,
to relieve it from all federal and state income taxes and federal excise taxes.
At July 31, 1998, Asian Growth Fund had $2,533,039 in net capital loss
carryovers which expire in the year 2006.
Asian Growth, Latin American Growth and Realty Funds incurred and elected
to defer post-October 31 net capital losses of $6,070,023, $4,376,077 and
$9,564, respectively, to the year ended July 31, 1999. Asian Growth, European
Small Company, Latin American Growth, Worldwide Capital Goods and Worldwide
Communications Funds incurred and elected to defer post-October 31 net currency
losses of $15,043, $9,802, $40,867, $636 and $2,991, respectively, to the year
ended July 31, 1999. To the extent future capital gains and income are offset by
capital loss carryovers and deferred post-October 31 losses, such gains and
income will not be distributed to shareholders.
Dividends paid by the Fund from net investment income and distributions of
net realized short-term capital gains are, for federal income tax purposes,
taxable as ordinary income to shareholders.
Investment income received from foreign sources may be subject to foreign
withholding taxes. Dividend and interest income is shown gross of foreign
withholding taxes in the accompanying financial statements.
G. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Dividends and
distributions to shareholders are recorded by the Fund on the ex
dividend/distribution date. The Fund distributes net realized capital gains, if
any, to its shareholders at least annually, if not offset by capital loss
carryovers. Income distributions and capital gain distributions are determined
in accordance with income tax regulations which may differ from generally
accepted accounting principles. These differences are primarily due to differing
treatments for foreign currency transactions, nontaxable dividends, net
operating losses and expired capital loss carryforwards.
<PAGE>
H.FORWARD FOREIGN CURRENCY CONTRACTS -- The Fund enters into 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. Any realized
gain or loss incurred by the Fund upon the sale of secuirites is included in the
Statement of Operations.
At January 31, 1999, the Fund had outstanding forward foreign currency
contracts. Unrealized gain or loss on forward foreign currency contracts is
calculated daily as the difference between the contract exchange rate and the
closing forward rate applied to the face amount of the contract.
Forward foreign currency contracts held by the Fund are fully
collateralized by other securities which are notated in the Statement of
Investment Securities and such collateral is in the posseession of the Fund's
custodian. The collateral is evaluated daily to ensure its market value exceeds
the current market value of the forward foreign currency contract.
I. EXPENSES -- Each of the Funds bears expenses incurred specifically on its
behalf and, in addition, each Fund bears a portion of general expenses, based on
the relative net assets of each Fund.
Under an agreement between each Fund and the Fund's Custodian, agreed upon
Custodian Fees and Expenses are reduced by credits granted by the Custodian from
any temporarily uninvested cash. Such credits are included in Fees and Expenses
Paid Indirectly in the Statement of Operations.
NOTE 2 -- INVESTMENT ADVISORY AND OTHER AGREEMENTS. INVESCO Funds Group,
Inc. ("IFG") serves as the Funds' investment adviser. As compensation for its
services to each Fund, IFG receives an investment advisory fee which is accrued
daily at the applicable rate and paid monthly. The fee is based on the annual
rate of each Fund's average net assets as follows:
AVERAGE NET ASSETS
- --------------------------------------------------------------------------------
$500
$0 to 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%
Worldwide Capital Goods Fund 0.65% 0.55% 0.45%
Worldwide Communications Fund 0.65% 0.55% 0.45%
Realty and S & P 500 Index Funds' investment advisory fee is based on the
annual rate of 0.75% and 0.25%, respectively, of average net assets.
In accordance with a Sub-Advisory Agreement between IFG and INVESCO Asia
Limited ("INVESCO Asia"), an affiliate 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, Ltd ("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 ("IRAI"), an affiliate of IFG, provides that
investment decisions of Realty Fund are made by IRAI. A separate Sub-Advisory
agreement between IFG and World Asset Management ("World"), unaffiliated with
any IFG entity, provides that investment decisions of S & P 500 Index Fund are
made by World. Fees for such sub-advisory services are paid by IFG.
<PAGE>
A plan of distribution pursuant to Rule 12b-1 of the Act provides for
compensation of marketing and advertising expenditures to INVESCO Distributors,
Inc. ("IDI" or the "Distributor"), a wholly owned subsidiary of IFG, to a
maximum of 0.25% of annual average net assets. For the six months ended, January
31, 1999, Asian Growth, European Small Company, Latin American Growth, Realty,
Worldwide Capital Goods, Worldwide Communications and S & P 500 Index - Class II
Funds paid the Distributor $21,216, $75,739, $32,311, $29,064, $14,030, $315,287
and $26,037, respectively, under the plan of distribution.
IFG receives a transfer agent fee from each Fund at an annual rate of
$20.00 per shareholder account, or, where applicable, per participant in an
omnibus account, per year. IFG may pay such fee for participants in omnibus
accounts to affiliates or third parties. The fee is paid monthly at one-twelfth
of the annual fee and is based upon the actual number of accounts in existence
during each month.
In accordance with an Administrative Agreement, each Fund pays IFG an
annual fee of $10,000, plus an additional amount computed at an annual rate of
0.015% of average net assets to provide administrative, accounting and clerical
services. The fee is accrued daily and paid monthly.
IFG has voluntarily agreed, in some instances, to absorb certain fees and
expenses incurred by Realty, Worldwide Capital Goods and S & P 500 Index Funds.
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, Latin American Growth and
S & P 500 Index 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 by each respective Fund. Total redemption
fees received by Asian Growth, Latin American Growth and S & P 500 Index Funds
for the six months ended January 31, 1999 were $85,624, $78,269 and $27,385,
respectively.
NOTE 3 -- PURCHASES AND SALES OF INVESTMENT SECURITIES. For the six months
ended January 31, 1999, the aggregate cost of purchases and proceeds from sales
of investment securities (excluding all U.S. Government securities and
short-term securities) were as follows:
FUND PURCHASES SALES
- --------------------------------------------------------------------------------
Asian Growth Fund $ 12,388,375 $ 4,338,281
European Small Company Fund 21,873,490 36,292,600
Latin American Growth Fund 5,728,325 11,407,203
Realty Fund 65,567,138 69,301,683
Worldwide Capital Goods Fund 5,316,544 9,944,189
Worldwide Communications Fund 181,520,078 124,309,476
S & P 500 Index Fund 22,271,449 389,025
There were no purchases or sales of U.S. Government securities.
<PAGE>
NOTE 4 -- APPRECIATION AND DEPRECIATION. At January 31, 1999, the gross
appreciation of securities in which there was an excess of value over tax cost,
the gross depreciation of securities in which there was an excess of tax cost
over value and the resulting net appreciation (depreciation) by Fund were as
follows:
NET
GROSS GROSS APPRECIATION
FUND APPRECIATION DEPRECIATION (DEPRECIATION)
- --------------------------------------------------------------------------------
Asian Growth Fund $ 1,800,138 $ 3,583,275 $ (1,783,137)
European Small Company Fund 9,612,886 8,350,366 1,262,520
Latin American Growth Fund 413,118 16,184,001 (15,770,883)
Realty Fund 22,970 2,462,194 (2,439,224)
Worldwide Capital Goods Fund 1,067,263 703,766 363,497
Worldwide Communications Fund 149,413,997 4,886,129 144,527,868
S & P 500 Index Fund 6,636,767 1,197,414 5,439,353
NOTE 5 -- Transactions With Affiliates And Affiliated Companies. Certain of
the Funds' officers and directors are also officers and directors of IFG, IDI,
IAM, INVESCO Asia or IRAI. At January 31, 1999, 12.53% of outstanding shares of
S & P 500 Index - Class I Fund were held by IFG or Affiliated Parties.
Each Fund has adopted an unfunded defined benefit deferred compensation
plan covering all independent directors of the Fund who will have served as an
independent director for at least five years at the time of retirement. Benefits
under this plan are based on an annual rate equal to 50% of the sum of the
retainer fee at the time of retirement plus the annual meeting fee.
Pension expenses for the six months ended January 31, 1999, included in
Directors' Fees and Expenses in the Statement of Operations, and unfunded
accrued pension costs and pension liability included in Prepaid Expenses and
Accrued Expenses, respectively, in the Statement of Assets and Liabilities were
as follows:
UNFUNDED
PENSION ACCRUED PENSION
FUND EXPENSES PENSION COSTS LIABILITY
- --------------------------------------------------------------------------------
Asian Growth Fund $ 209 $ 347 $ 1,005
European Small Company Fund 808 2,189 5,493
Latin American Growth Fund 1,087 (43) 2,812
Realty Fund 534 64 1,122
Worldwide Capital Goods Fund 279 (30) 714
Worldwide Communications Fund 1,526 4,355 7,875
S & P 500 Index Fund 91 463 551
The independent directors have contributed to a deferred compensation plan,
pursuant to which they have deferred receipt of a portion of the compensation
which they would otherwise have been paid as directors of selected INVESCO
Funds. The deferred amounts may be invested in the shares of any of the INVESCO
or Treasurer's Series Trust Funds.
An affiliated company represents ownership by the Fund of at least 5% of
the voting securities of the issuer during the period, as defined in the Act. A
summary of the transactions during the six months ended January 31, 1999, in
which the issuer was an affiliate of the Fund, is as follows:
<PAGE>
<TABLE>
<CAPTION>
REALIZED
GAIN (LOSS)
PURCHASES SALES ON INVESTMENT VALUE AT
------------------------------------------------
AFFILIATE SHARES COST SHARES COST SECURITIES 1/31/99
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Latin American Growth
Fund Enersis SA Sponsored
ADR Representing
50 Cmn Shrs 30,000 $ 624,836 $ 813,750
Fomento Economico
Mexicano SA de CV
Sponsored ADR
Representing 10
Units (Each unit
consists of 10 Series
B shrs, 20 Series
D-B shrs and 20
Series D-L shrs) 7,500 $ 183,010 $ 14,899 719,062
<PAGE>
REALIZED
GAIN (LOSS)
PURCHASES SALES ON INVESTMENT VALUE AT
-----------------------------------------------
AFFILIATE SHARES COST SHARES COST SECURITIES 1/31/99
- ------------------------------------------------------------------------------------------------------------------------------
Latin American Growth Fund (Continued)
Petroleo Brasileiro
SA Pfd 900,000 $ 276,022 $ (173,853) $ 538,689
Telecomunicacoes
Brasileiras SA
Sponsored ADR
Representing 1,000
Pfd Shrs 16,000 1,873,263 (783,729) 377,625
NOTE 6 -- LINE OF CREDIT. The Fund has available a Redemption Line of
Credit Facility ("LOC"), from a consortium of national banks, to be used for
temporary or emergency purposes to fund redemptions of investor shares. The LOC
permits borrowings to a maximum of 10% of the Net Assets at Value of each
respective Fund. Each Fund agrees to pay annual fees and interest on the unpaid
principal balance based on prevailing market rates as defined in the agreement.
At January 31, 1999, there were no such borrowings.
<PAGE>
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
- ------------------------------------------------------------------------------------------------------------------------
Asian Growth Fund
(For a Fund Share Outstanding Throughout Each Period)
SIX MONTHS PERIOD
ENDED ENDED
JANUARY 31 YEAR ENDED JULY 31 JULY 31
- ------------------------------------------------------------------------------------------------------------------------
1999 1998 1997 1996(a)
UNAUDITED
<S> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value-- Beginning of Period $ 3.37 $ 11.35 $ 8.95 $ 10.00
=====================================================================================================================
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss) 0.00 0.04 (0.02) 0.02
Net Gains or (Losses) on Securities
(Both Realized and Unrealized) 0.53 (6.68) 2.42 (1.05)
=====================================================================================================================
Total from Investment Operations 0.53 (6.64) 2.40 (1.03)
=====================================================================================================================
LESS DISTRIBUTIONS
Dividends from Net Investment Income 0.00 0.02 0.00 0.02
In Excess of Capital Gains 0.00 1.32 0.00 0.00
=====================================================================================================================
Total Distributions 0.00 1.34 0.00 0.02
======================================================================================================================
Net Asset Value-- End of Period $ 3.90 $ 3.37 $ 11.35 $ 8.95
=====================================================================================================================
TOTAL RETURN(b) 15.73%(c) (62.16%) 27.04% (10.31%)(c)
RATIOS
Net Assets-- End of Period ($000 Omitted) $ 24,219 $ 12,203 $32,969 $ 14,315
Ratio of Expenses to Average Net Assets(d)(e) 1.05%(c) 2.10% 2.05% 2.19%(f)
Ratio of Net Investment Income (Loss) to
Average Net Assets(d) 0.19%(c) 0.45% (0.20%) 0.94%(f)
Portfolio Turnover Rate 31%(c) 141% 161% 2%(c)
</TABLE>
(a)From March 1, 1996, commencement of investment operations, to July
31, 1996.
(b)The applicable redemption fees are not included in the Total Return
calculation.
(c)Based on operations for the period shown and, accordingly, are not
representative of a full year.
(d)Various expenses of the Fund were voluntarily absorbed by IFG and
INVESCO Asia for the six months ended January 31, 1999, the years ended
July 31, 1998 and 1997 and the period ended July 31, 1996. If such
expenses had not been voluntarily absorbed, ratio of expenses to average
net assets would have been 1.41% (not annualized), 2.85%, 2.10%
and 2.79% (annualized), respectively, and ratio of net investment
income (loss) to average net assets would have been (0.17%) (not
annualized), (0.30%), (0.25%) and 0.34% (annualized), respectively.
(e)Ratio is based on Total Expenses of the Fund, less Expenses Absorbed by
Investment Adviser, which is before any expense offset arrangements.
(f)Annualized
<TABLE>
<CAPTION>
<PAGE>
FINANCIAL HIGHLIGHTS
---------------------------------------------------------------------------------------------------------------------
European Small Company Fund
(For a Fund Share Outstanding Throughout Each Period)
<S> <C> <C> <C> <C> <C>
SIX MONTHS PERIOD
ENDED ENDED
JANUARY 31 YEAR ENDED JULY 31 JULY 31
---------------------------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995(a)
UNAUDITED
PER SHARE DATA
Net Asset Value --
Beginning of Period $ 15.66 $ 16.29 $ 15.08 $ 11.56 $ 10.00
=====================================================================================================================
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss)(b) (0.07) 0.00 (0.05) 0.07 0.04
Net Gains or (Losses) on Securities
(Both Realized and Unrealized) (2.40) 2.82 1.79 3.52 1.56
=====================================================================================================================
Total from Investment Operations (2.47) 2.82 1.74 3.59 1.60
=====================================================================================================================
LESS DISTRIBUTIONS
Dividends from Net Investment Income 0.00 0.00 0.00 0.07 0.04
Distributions from Capital Gains 2.21 3.45 0.53 0.00 0.00
=====================================================================================================================
Total Distributions 2.21 3.45 0.53 0.07 0.04
=====================================================================================================================
Net Asset Value-- End of Period $ 10.98 $ 15.66 $ 16.29 $ 15.08 $ 11.56
=====================================================================================================================
TOTAL RETURN 9.25%(c) 24.15% 11.71% 31.07% 15.98%(c)
RATIOS
Net Assets -- End of Period
($000 Omitted) $ 51,687 $ 71,532 $75,057 $94,261 $ 3,801
Ratio of Expenses to Average Net Assets(d) 1.03%(c)(e) 2.04%(e) 1.62%(e) 1.68%(e) 2.00%(f)
Ratio of Net Investment Income (Loss)
to Average Net Assets(d) (0.57%)(c) (0.48%) (0.18%) 1.23% 2.37%(f)
Portfolio Turnover Rate 41%(c) 98% 87% 141% 0%(c)
(a)From February 15, 1995, commencement of investment operations, to
July 31, 1995.
(b)Net Investment Income (Loss) aggregated less than $0.01 on a per
share basis for the year ended July 31, 1998.
(c)Based on operations for the period shown and, accordingly, are not
representative of a full year.
(d)Various expenses of the Fund were voluntarily absorbed by IFG and
IAM for the six months ended January 31, 1999, the year ended July 31, 1998
and the period ended July 31, 1995. If such expenses had not been
voluntarily absorbed, ratio of expenses to average net assets would have
been 1.14% (not annualized), 2.06% and 10.17% (annualized), respectively,
and ratio of net investment loss to average net assets would have been
(0.68%) (not annualized), (0.50%) and (5.80%)(annualized), respectively.
(e)Ratio is based on Total Expenses of the Fund, less Expenses
Absorbed by Investment Adviser, if applicable, which is before any expense
offset arrangements
(f)Annualized
<PAGE>
FINANCIAL HIGHLIGHTS
---------------------------------------------------------------------------------------------------------------------
Latin American Growth Fund
(For a Fund Share Outstanding Throughout Each Period)
SIX MONTHS PERIOD
ENDED ENDED
JANUARY 31 YEAR ENDED JULY 31 JULY 31
----------------------------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995(a)
UNAUDITED
PER SHARE DATA
Net Asset Value --
Beginning of Period $ 11.18 $ 18.37 $ 12.86 $ 11.69 $ 10.00
=====================================================================================================================
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income(b) 0.00 0.00 0.13 0.08 0.02
Net Gains or (Losses) on Securities
(Both Realized and Unrealized) (5.29) (5.41) 5.88 1.62 1.69
=====================================================================================================================
Total from Investment Operations (5.29) (5.41) 6.01 1.70 1.71
=====================================================================================================================
LESS DISTRIBUTIONS
Dividends from Net Investment Income(c) 0.00 0.00 0.14 0.09 0.02
Distributions from Capital Gains 0.11 1.02 0.36 0.44 0.00
In Excess of Capital Gains 0.00 0.76 0.00 0.00 0.00
=====================================================================================================================
Total Distributions 0.11 1.78 0.50 0.53 0.02
=====================================================================================================================
Net Asset Value-- End of Period $ 5.78 $ 11.18 $ 18.37 $ 12.86 $ 11.69
=====================================================================================================================
TOTAL RETURN(d) (47.56%)(e) (30.64%) 48.06% 15.27% 17.09%(e)
RATIOS
Net Assets-- End of Period ($000 Omitted) $ 13,920 $ 34,725 $130,272 $ 32,064 $ 7,423
Ratio of Expenses to Average Net Assets(f) 1.08%(e)(g) 1.99%(g) 1.76%(g) 2.14%(g) 2.00%(h)
Ratio of Net Investment Income to
Average Net Assets(f) 0.07%(e) 0.00% 1.35% 1.26% 0.79%(h)
Portfolio Turnover Rate 27%(e) 33% 72% 29% 30%(e)
(a)From February 15, 1995, commencement of investment operations, to
July 31, 1995.
(b)Net Investment Income (Loss) aggregated less than $0.01 on a per
share basis for the six months ended January 31, 1999 and the year ended
July 31, 1998.
(c)Distributions in excess of net investment income for the year ended
July 31, 1998, aggregated less than $0.01 on a per share basis.
(d)The applicable redemption fees are not included in the Total Return
calculation.
(e)Based on operations for the period shown and, accordingly, are not
representative of a full year.
(f)Various expenses of the Fund were voluntarily absorbed by IFG and
IAM for the six months ended January 31, 1999 and by IFG 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 1.82%
(not annualized) and 4.49% (annualized), respectively, and ratio of net
investment loss to average net assets would have been (0.67%) (not
annualized) and (1.70%)(annualized), respectively.
(g)Ratio is based on Total Expenses of the Fund, less Expenses
Absorbed by Investment Adviser, if applicable, which is before any expense
offset arrangements.
(h)Annualized
<PAGE>
FINANCIAL HIGHLIGHTS
---------------------------------------------------------------------------------------------------------------------
Realty Fund
(For a Fund Share Outstanding Throughout Each Period)
SIX MONTHS YEAR PERIOD
ENDED ENDED ENDED
JANUARY 31 JULY 31 JULY 31
- ------------------------------------------------------------------------------------------------------------------------
1999 1998 1997(a)
UNAUDITED
PER SHARE DATA
Net Asset Value-- Beginning of Period $ 9.15 $ 10.99 $ 10.00
=====================================================================================================================
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.22 0.38 0.22
Net Gains or (Losses) on Securities
(Both Realized and Unrealized) (1.55) (0.96) 0.99
=====================================================================================================================
Total from Investment Operations (1.33) (0.58) 1.21
=====================================================================================================================
LESS DISTRIBUTIONS
Dividends from Net Investment Income 0.23 0.39 0.22
Distributions from Capital Gains 0.68 0.87 0.00
=====================================================================================================================
Total Distributions 0.91 1.26 0.22
=====================================================================================================================
Net Asset Value-- End of Period $ 6.91 $ 9.15 $ 10.99
=====================================================================================================================
TOTAL RETURN (14.53%)(b) (6.49%) 12.24%(b)
RATIOS
Net Assets-- End of Period ($000 Omitted) $ 17,297 $ 23,548 $36,658
Ratio of Expenses to Average Net Assets(c)(d) 0.70%(b) 1.22% 1.20%(e)
Ratio of Net Investment Income to
Average Net Assets(c) 2.66%(b) 3.53% 4.08%(e)
Portfolio Turnover Rate 367%(b) 258% 70%(b)
(a)From January 1, 1997, commencement of investment operations, to
July 31, 1997.
(b)Based on operations for the period shown and, accordingly, are not
representative of a full year.
(c)Various expenses of the Fund were voluntarily absorbed by IFG and
IRAI for the six months ended January 31, 1999, the year ended July 31,
1998 and the period ended July 31, 1997. If such expenses had not been
voluntarily absorbed, ratio of expenses to average net assets would have
been 1.40% (not annualized), 1.97% and 1.83% (annualized), respectively,
and ratio of net investment income to average net assets would have been
1.96% (not annualized), 2.78% and 3.45% (annualized), respectively.
(d)Ratio is based on Total Expenses of the Fund, less Expenses
Absorbed by Investment Adviser, which is before any expense offset
arrangements.
(e)Annualized
<PAGE>
FINANCIAL HIGHLIGHTS
---------------------------------------------------------------------------------------------------------------------
Worldwide Capital Goods Fund
(For a Fund Share Outstanding Throughout Each Period)
SIX MONTHS
ENDED
JANUARY 31 YEAR ENDED JULY 31
-----------------------------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995(a)
UNAUDITED
PER SHARE DATA
Net Asset Value-- Beginning of Period $ 11.17 $ 12.70 $ 9.61 $ 9.84 $ 10.00
=======================================================================================================================
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss)(b) (0.03) 0.00 0.05 0.01 0.01
Net Gains or (Losses) on Securities
(Both Realized and Unrealized) (0.45) (0.32) 4.37 0.01 (0.16)
=======================================================================================================================
Total from Investment Operations (0.48) (0.32) 4.42 0.02 (0.15)
=======================================================================================================================
LESS DISTRIBUTIONS
Dividends from Net Investment Income 0.00 0.00 0.06 0.00 0.01
Distributions from Capital Gains 0.32 1.21 1.27 0.25 0.00
======================================================================================================================
Total Distributions 0.32 1.21 1.33 0.25 0.01
======================================================================================================================
Net Asset Value-- End of Period $ 10.37 $ 11.17 $ 12.70 $ 9.61 $ 9.84
======================================================================================================================
TOTAL RETURN (4.21%)(c) (2.06%) 50.86% 0.27% (1.49%)
RATIOS
Net Assets-- End of Period ($000 Omitted) $ 8,381 $ 13,095 $ 22,254 $ 7,731 $ 10,364
Ratio of Expenses to Average Net Assets(d) 1.03%(c)(e) 1.97%(e) 1.98%(e) 2.11%(e) 2.00%
Ratio of Net Investment Income (Loss)
to Average Net Assets(d) (0.28%)(c) (0.23%) 0.51% 0.05% 0.25%
Portfolio Turnover Rate 56% 219% 192% 247% 193%
(a) Commencement of investment operations was August 1, 1994.
(b) Net Investment Income (Loss) aggregated less than $0.01 on a per
share basis for the year ended July 31, 1998.
(c) Based on operations for the period shown and, accordingly, are not
representative of a full year.
(d) Various expenses of the Fund were voluntarily absorbed by IFG for
the six months ended January 31, 1999 and the years ended July 31, 1997,
1996 and 1995. If such expenses had not been voluntarily absorbed, ratio of
expenses to average net assets would have been 1.52% (not annualized),
2.58%, 2.49% and 2.96%, respectively, and ratio of net investment loss to
average net assets would have been (0.77%) (not annualized), (0.09%),
(0.33%) and (0.71%), respectively. (e)Ratio is based on Total Expenses of
the Fund, less Expenses Absorbed by Investment Adviser, if applicable,
which is before any expense offset arrangements.
(e)Ratio is based on Total Expenses of the Fund, less Expenses Absorbed by
Investment Adviser, if applicable, which is before any expense offset
arrangements.
<PAGE>
FINANCIAL HIGHLIGHTS
---------------------------------------------------------------------------------------------------------------------
Worldwide Communications Fund
(For a Fund Share Outstanding Throughout Each Period)
SIX MONTHS
ENDED
JANUARY 31 YEAR ENDED JULY 31
---------------------------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995(a)
UNAUDITED
PER SHARE DATA
Net Asset Value -- Beginning
of Period $ 19.60 $ 15.31 $ 12.43 $ 12.30 $ 10.00
=====================================================================================================================
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income (Loss) (0.06) 0.01 0.06 0.22 0.11
Net Gains on Securities
(Both Realized and Unrealized) 5.00 5.32 3.90 1.38 2.35
=====================================================================================================================
Total from Investment Operations 4.94 5.33 3.96 1.60 2.46
=====================================================================================================================
LESS DISTRIBUTIONS Dividends from Net Investment Income 0.00 0.00 0.06 0.22 0.11
Distributions from Capital Gains 0.37 1.04 1.02 1.25 0.05
=====================================================================================================================
Total Distributions 0.37 1.04 1.08 1.47 0.16
=====================================================================================================================
Net Asset Value-- End of Period $ 24.17 $ 19.60 $ 15.31 $ 12.43 $ 12.30
=====================================================================================================================
TOTAL RETURN 25.81%(b) 36.79% 33.93% 13.67% 24.83%
RATIOS
Net Assets -- End of Period
($000 Omitted) $ 430,352 $ 276,577 $ 72,458 $ 50,516 $ 27,254
Ratio of Expenses to Average
Net Assets 0.70%(b)(c) 1.32%(c) 1.69%(c) 1.66%(c) 1.95%
Ratio of Net Investment Income (Loss)
to Average Net Assets (0.38%)(b) (0.16%) 0.56% 1.78% 1.43%
Portfolio Turnover Rate 48%(b) 55% 96% 157% 215%
(a)Commencement of investment operations was August 1, 1994.
(b)Based on operations for the period shown and, accordingly, are not
representative of a full year.
(c)Ratio is based on Total Expenses of the Fund, which is before any
expense offset arrangements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
---------------------------------------------------------------------------------------------------------------------
S & P 500 Index Fund
(For a Fund Share Outstanding Throughout Each Period)
CLASS I CLASS II
SIX MONTHS PERIOD SIX MONTHS PERIOD
ENDED ENDED ENDED ENDED
JANUARY 31 JULY 31 JANUARY 31 JULY 31
---------------------------------------------------------------------------------------------------------------------
1999 1998(a) 1999 1998(a)
UNAUDITED UNAUDITED
<S> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value --
Beginning of Period $ 12.01 $ 10.00 $ 12.14 $ 10.00
=====================================================================================================================
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income 0.09 0.11 0.07 0.07
Net Gains on Securities
(Both Realized and Unrealized) 1.80 1.98 1.82 2.14
=====================================================================================================================
Total from Investment Operations 1.89 2.09 1.89 2.21
=====================================================================================================================
LESS DISTRIBUTIONS
Dividends from Net Investment Income 0.08 0.08 0.06 0.07
Distributions from Capital Gains 0.05 0.00 0.05 0.00
=====================================================================================================================
Total Distributions 0.13 0.08 0.11 0.07
=====================================================================================================================
Net Asset Value-- End of Period $ 13.77 $ 12.01 $ 13.92 $ 12.14
=====================================================================================================================
TOTAL RETURN(b) 15.82%(c) 20.93%(c) 15.65%(c) 22.11%(c)
RATIOS
Net Assets-- End of Period
($000 Omitted) $ 3,651 $ 3,259 $ 43,489 $ 15,065
Ratio of Expenses to Average
Net Assets(d)(e) 0.16%(c) 0.46%(f) 0.30%(c) 0.62%(f)
Ratio of Net Investment Income to
Average Net Assets(e) 0.77%(c) 1.96%(f) 0.61%(c) 1.52%(f)
Portfolio Turnover Rate 2%(c) 0%(g) 2%(c) 0%(g)
(a)From December 23, 1997, commencement of investment operations, to
July 31, 1998.
(b)The applicable redemption fees are not included in the Total Return
calculation.
(c)Based on operations for the period shown and, accordingly, are not
representative of a full year.
(d)Ratio is based on Total Expenses of the Fund, less Expenses
Absorbed by Investment Adviser, if applicable, which is before any expense
offset arrangements.
(e)Various expenses of the Fund were voluntarily absorbed by IFG for
the six months ended January 31, 1999 and the period ended July 31, 1998.
If such expenses had not been voluntarily absorbed, ratio of expenses to
average net assets would have been 0.75% (not annualized), and 2.51%
(annualized) for Class I, respectively, and 0.56% and 1.71% (annualized)
for Class II, respectively, and ratio of net investment income (loss) to
average net assets would have been 0.18% (not annualized) and (0.09%)
(annualized) for Class I, respectively, and 0.35% and 0.42% (annualized)
for Class II, respectively. (f)Annualized
(f)Annualized
(g)Portfolio Turnover Rate calculated to less than 0.10% for the
period ended July 31, 1998.
<PAGE>
INVESCO Family of Funds
Newspaper
Fund Name Fund Code Ticker Symbol Abbreviation
- --------------------------------------------------------------------------------
INTERNATIONAL
International Blue Chip 09 IIBCX ItlBlChp
International Growth 49 FSIGX IntlGr
Emerging Markets 43 * *
Asian Growth 41 IVAGX AsianGr
Pacific Basin 54 FPBSX PcBas
European 56 FEURX Europ
European Small Company 37 IVECX EuroSmCo
Latin American Growth 34 IVSLX LtnAmerGr
- --------------------------------------------------------------------------------
SECTOR
Energy 50 FSTEX Enrgy
Environmental Services 59 FSEVX Envirn
Financial Services 57 FSFSX FinSvc
Gold 51 FGLDX Gold
Health Sciences 52 FHLSX HlthSc
Leisure 53 FLISX Leisur
Realty 42 IVSRX Realty
Technology-Class II 55 FTCHX Tech
Utilities 58 FSTUX Util
Worldwide Capital Goods 38 ISWGX WldCap
Worldwide Communications 39 ISWCX WldCom
- --------------------------------------------------------------------------------
STOCK
Growth & Income 21 IVGIX Gro&Inc
Endeavor 61 IVENX Endeavor
Blue Chip Growth 10 FLRFX BlChpGro
Dynamics 20 FIDYX Dynm
Small Company Growth 60 FIEGX SmCoGth
Value Equity 46 FSEQX ValEq
Small Company Value 74 IDSCX SmCoVal
S&P 500 Index Fund
- - Class II 23 ISPIX SP500II
- --------------------------------------------------------------------------------
COMBINATION STOCK & BOND
Industrial Income 15 FIIIX IndInc
Multi-Asset Allocation 70 IMAAX MulAstAl
Total Return 48 FSFLX TotRtn
Balanced 71 IMABX Bal
- --------------------------------------------------------------------------------
BOND
Short-Term Bond 33 INIBX ShTrBd
Intermediate Government
Bond 47 FIGBX IntGov
U.S. Government Securities 32 FBDGX USGvt
Select Income 30 FBDSX SelInc
High Yield 31 FHYPX HiYld
- --------------------------------------------------------------------------------
TAX-EXEMPT
Tax-Free Intermediate Bond 36 IVTIX *
Tax-Free Long-Term Bond 35 FTIFX TxFre
- --------------------------------------------------------------------------------
MONEY MARKET
U.S. Government Money Fund 44 FUGXX InvGvtMF
Cash Reserves 25 FDSXX InvCshR
Tax-Free Money Fund 40 FFRXX InvTaxFree
*Not yet available
For more complete information, including management fees, expenses, and risks,
call or write for a free prospectus. Read it carefully before you invest or send
money.
<PAGE>
INVESCO
YOU SHOULD
KNOW WHAT
INVESCO KNOWS (TM)
We're easy to stay in touch with:
Investor Srvices: 1-800-525-8085
PAL(R), your Personal Account Line:
1-800-424-8085
On the World Wide Web: www.invesco.com
In Denver, visit one of our
convenient Investor Centers:
Cherry Creek,
155-B Fillmore Street
Denver Tech Center,
7800 East Union Avenue,
Lobby Level
INVESCO Distributors, Inc.,(SM)
Distributor
Post Office Box 173706
Denver, CO 80217-3706
This information must be
preceded or accompanied
by a current prospectus.
</TABLE>
