INVESCO SPECIALTY FUNDS, INC.
INVESCO Asian Growth Fund
Supplement to Prospectus dated December 1, 1998
Effective May 13, 1999, the section of the Fund's Prospectus entitled "Annual
Fund Expenses" is amended to (1) delete footnote (2) to the Annual Fund
Operating Expenses table and (2) substitute the following in its place:
(2) Certain Fund expenses are absorbed voluntarily by INVESCO and INVESCO
Asia. In the absence of such absorbed expenses, the Fund's "Other
Expenses" and "Total Fund Operating Expenses" in the above table would
have been 1.88% and 2.88% of the Fund's average net assets based on
the actual expenses of the Fund for the fiscal year ended July 31,
1998. See "The Fund And Its Management."
The table and the remainder of the footnotes are not affected by this change.
Effective May 13, 1999, the section of the Fund's Prospectus entitled "The Fund
And Its Management" is amended to add the following at the end of the tenth
paragraph:
In addition, beginning May 13, 1999, the following additional contractual
breakpoints are in effect: 0.45% on the Fund's average net assets from $2
billion; 0.40% on the Fund's average net assets from $4 billion; 0.375% on
the Fund's average net assets from $6 billion; and 0.35% on the Fund's
average net assets from $8 billion.
Effective May 13, 1999, the section of the Fund's Prospectus entitled "The Fund
And Its Management" is amended to add the following after the second sentence of
the eleventh paragraph:
In addition, beginning May 13, 1999, the following additional contractual
breakpoints are in effect: 0.18% on the Fund's average net assets from $2
billion; 0.16% on the Fund's average net assets from $4 billion; 0.15% on
the Fund's average net assets from $6 billion; and 0.14% on the Fund's
average net assets from $8 billion.
Effective May 13, 1999, the section of the Prospectus entitled "The Fund And Its
Management" is amended to (1) delete the third sentence of the twelfth paragraph
and (2) substitute the following in its place:
For such services, the Fund pays INVESCO a fee consisting of a base fee of
$10,000 per year, plus an additional incremental fee computed at the
annual rate of 0.015% per year of the average net assets of the Fund prior
to May 13, 1999 and 0.045% per year of the average net assets of the Fund
effective May 13, 1999.
Effective June 18, 1999, the Asian Growth Fund, pursuant to approval of the
shareholders of the Fund of a Plan of Reorganization and Termination at a
special meeting held May 28, 1999, will be merged into INVESCO Pacific Basin
Fund, a series of INVESCO International Funds, Inc.
The date of this supplement is June 1, 1999.
<PAGE>
INVESCO SPECIALTY FUNDS, INC.
INVESCO European Small Company Fund
Supplement to Prospectus dated December 1, 1998
Effective May 13, 1999, the section of the Fund's Prospectus entitled "Annual
Fund Expenses" is amended to (1) delete footnote (2) to the Annual Fund
Operating Expenses table and (2) substitute the following in its place:
(2) Certain Fund expenses are absorbed voluntarily by INVESCO and IAML. In
the absence of such absorbed expenses, the Fund's "Other Expenses" and
"Total Fund Operating Expenses" in the above table would have been
1.09% and 2.09% of the Fund's average net assets based on the actual
expenses of the Fund for the fiscal year ended July 31, 1998. See "The
Fund And Its Management."
The table and the remainder of the footnotes are not affected by this change.
Effective May 13, 1999, the section of the Fund's Prospectus entitled "The Fund
And Its Management" is amended to add the following at the end of the eleventh
paragraph:
In addition, beginning May 13, 1999, the following additional contractual
breakpoints are in effect: 0.45% of the Fund's average net assets from $2
billion; 0.40% of the Fund's average net assets from $4 billion; 0.375% of
the Fund's average net assets from $6 billion; and 0.35% of the Fund's
average net assets over $8 billion.
Effective May 13, 1999, the section of the Fund's Prospectus entitled "The Fund
And Its Management" is amended to add the following after the second sentence of
the twelfth paragraph:
In addition, beginning May 13, 1999, the following additional contractual
breakpoints are in effect: 0.18% on the Fund's average net assets from $2
billion; 0.16% on the Fund's average net assets from $4 billion; 0.15% on
the Fund's average net assets from $6 billion; and 0.14% on the Fund's
average net assets over $8 billion.
Effective May 13, 1999, the section of the Fund's Prospectus entitled "The Fund
And Its Management" is amended to (1) delete the third sentence of the
thirteenth paragraph and (2) substitute the following in its place:
For such services, the Fund pays INVESCO a fee consisting of a base fee of
$10,000 per year, plus an additional incremental fee computed at the
annual rate of 0.015% per year of the average net assets of the Fund prior
to May 13, 1999 and 0.045% per year of the average net assets of the Fund
effective May 13, 1999.
Effective June 18, 1999, the European Small Company Fund, pursuant to approval
of the shareholders of the Fund of a Plan of Reorganization and Termination at a
special meeting held May 28, 1999, will be merged into INVESCO European Fund, a
series of INVESCO International Funds, Inc.
The date of this supplement is June 1, 1999.
<PAGE>
INVESCO SPECIALTY FUNDS, INC.
INVESCO Latin American Growth Fund
Supplement to Prospectus dated December 1, 1998
Effective June 18, 1999, the cover page of the Prospectus is amended to (1)
delete the sixth paragraph and (2) substitute the following in its place:
The Fund is a series of INVESCO Specialty Funds, Inc. (the "Company"), a
diversified, open-end managed no-load mutual fund consisting of four
separate portfolios of investments. This Prospectus relates to shares of
INVESCO Latin American Growth Fund. Separate prospectuses are available
upon request from INVESCO Distributors, Inc. for the Company's other
funds: INVESCO Realty Fund, INVESCO S&P 500 Index Fund and INVESCO
Worldwide Communications Fund. Investors may purchase shares of any or all
of the Funds. Additional funds may be offered by the Company in the
future.
Effective May 13, 1999, the section of the Fund's Prospectus entitled "Annual
Fund Expenses" is amended to (1) delete the Annual Fund Operating Expenses table
and (2) substitute the following in its place:
ANNUAL FUND OPERATING EXPENSES (as a percentage of average net assets)
Management Fee 0.75%
12b-1 Fees 0.25%
Other Expenses(1)(2) 1.02%
Transfer Agency Fee(3) 0.47%
General Services, Administrative Services,
Registration, Postage(4) 0.55%
Total Fund Operating Expenses(1)(2) 2.02%
The remainder of the table and the footnotes are not affected by this change.
Effective May 13, 1999, the section of the Fund's Prospectus entitled "Annual
Fund Expenses - Example" is amended to (1) delete the first paragraph and (2)
substitute the following in its place:
A shareholder would pay the following expenses on a $1,000 investment for
the periods shown, assuming (1) a hypothetical 5% annual return and (2)
redemption at the end of each time period.
1 Year 3 Years 5 Years 10 Years
$21 $64 $110 $237
Effective June 1, 1999, the section of the Fund's Prospectus entitled
"Investment Objective And Policies" is amended to delete the eighth paragraph in
its entirety.
Effective June 1, 1999, the section of the Fund's Prospectus entitled
"Investment Objective And Policies - When-Issued Securities" is amended to (1)
delete the first sentence of the section and (2) substitute the following
sentence in its place:
The Fund may purchase or sell securities on a when-issued or
delayed-delivery basis that is, with settlement taking place in the
future.
Effective June 1, 1999, the section of the Fund's Prospectus entitled
"Investment Objective And Policies - Repurchase Agreements" is amended to (1)
delete the sixth sentence of the section and (2) substitute the following
sentence in its place:
The Fund will not enter into a repurchase agreement maturing in more than
seven days if as a result more than 15% of its net assets would be
invested in such repurchase agreements and other illiquid securities.
<PAGE>
Effective June 1, 1999, the section of the Fund's Prospectus entitled
"Investment Objective And Policies - Securities Lending" is amended to (1)
delete the first sentence of the section and (2) substitute the following in its
place:
The Fund also may lend its securities.
Effective June 1, 1999, the section of the Fund's Prospectus entitled
"Investment Objective And Policies - Investment Restrictions" is amended to (1)
delete the section in its entirety and (2) substitute the following in its
place:
INVESTMENT RESTRICTIONS.
The Fund is subject to a variety of restrictions regarding its investments
that are identified in the Statement of Additional Information. Certain of
the Fund's investment restrictions are fundamental and may not be altered
without the approval of the Fund's shareholders. For example, with respect
to 75% of its total assets, the Fund may not purchase the securities of
any one issuer (other than securities issued or guaranteed by the U.S.
government or any of its agencies or instrumentalities, or securities of
other investment companies) if the purchase would cause the Fund to have
more than 5% of its total assets invested in the issuer or to hold more
than 10% of the outstanding voting securities of that issuer. In addition,
the Fund may not purchase the securities of any issuer (other than
securities issued or guaranteed by the U.S. government or any of its
agencies or instrumentalities or municipal securities) if, as a result,
more than 25% of the Fund's total assets would be invested in the
securities of companies whose principal business activities are in the
same industry. Other fundamental restrictions prohibit the Fund from
lending more that 33 1/3% of its total assets to other parties and from
borrowing money in an aggregate amount exceeding 33 1/3% of its total
assets.
For a further discussion of risks associated with an investment in the
Fund, see "Investment Policies And Restrictions" in the Statement of
Additional Information.
Effective June 1, 1999, the section of the Fund's Prospectus entitled "Risk
Factors Futures, Options and Other Derivative Instruments" is amended to (1)
delete the section in its entirety and (2) substitute the following in its
place:
FUTURES, OPTIONS AND OTHER FINANCIAL INSTRUMENTS.
The Fund may use various types of financial instruments, some of which are
derivatives, to attempt to manage the risk of its investments or, in
certain circumstances, for investment (e.g., as a substitute for investing
in securities). These financial instruments include options, futures
contracts, forward contracts, swaps, caps, floors, and collars
(collectively " Financial Instruments"). For descriptions and other
information on these Financial Instruments and strategies and their risk
considerations, see the Statement of Additional Information ("SAI").
Financial Instruments may be used in an attempt to manage the Fund's
foreign currency exposure as well as other risks of the Fund's investments
that can cause fluctuations in its net asset value. The Fund may use
Financial Instruments to increase or decrease its exposure to changing
securities prices, interest rates, currency exchange rates or other
factors. The policies in this section do not apply to other types of
instruments sometimes referred to as derivatives, such as indexed
securities, mortgage-backed and other asset-backed securities, and
stripped interest and principal of debt.
<PAGE>
The Fund's ability to use Financial Instruments may be limited by market
conditions, regulatory limits and tax considerations. The Fund might not
use any of these Financial Instruments, and there can be no assurance that
any strategy using a Financial Instrument will fully achieve its
objective.
Subject to the further limitations stated in the SAI, generally, the Fund
is authorized to use any type of Financial Instrument. However, as a
non-fundamental policy, the Fund will only use a particular Financial
Instrument (other than those related to foreign currency) if the Fund is
authorized to take a position in the type of asset to which the return on,
or value of, the Financial Instrument is primarily related. Therefore, for
example, if the Fund is authorized to invest in a particular type of
security (such as an equity security), it could take a position in an
option on an index relating to equity securities.
Effective May 13, 1999, the section of the Funds' Prospectus entitled "The Fund
And Its Management" is amended to add the following to the end of the tenth
paragraph:
In addition, beginning May 13, 1999, the following additional contractual
breakpoints are in effect: 0.45% of the Fund's average net assets from $2
billion; 0.40% of the Fund's average net assets from $4 billion; 0.375% of
the Fund's average net assets from $6 billion; and 0.35% of the Fund's
average net assets over $8 billion.
Effective May 13, 1999, the section of the Prospectus entitled "The Fund And Its
Management" is amended to add the following after the second sentence of the
eleventh paragraph:
In addition, beginning May 13, 1999, the following additional contractual
breakpoints are in effect: 0.18% on the Fund's average net assets from $2
billion; 0.16% on the Fund's average net assets from $4 billion; 0.15% on
the Fund's average net assets from $6 billion; and 0.14% on the Fund's
average net assets over $8 billion.
Effective May 13, 1999, the section of the Funds' Prospectus entitled "The Fund
And Its Management" is amended to (1) delete the third sentence of the twelfth
paragraph and (2) substitute the following in its place:
For such services, the Fund pays INVESCO a fee consisting of a base fee of
$10,000 per year, plus an additional incremental fee computed at the
annual rate of 0.015% per year of the average net assets of the Fund prior
to May 13, 1999 and 0.045% per year of the average net assets of the Fund
effective May 13, 1999.
The section of the Fund's Prospectus entitled "Services Provided By The Fund -
Shareholder Accounts" is amended to (1) delete the second and third sentence of
the section and (2) substitute the following in their place:
INVESCO no longer issues certificates. If a shareholder is selling shares
previously issued in certificate form, the certificate must be surrendered
along with your redemption/exchange request.
The date of this supplement is June 1, 1999.
<PAGE>
INVESCO SPECIALTY FUNDS, INC.
INVESCO Realty Fund
Supplement to Prospectus Dated December 1, 1998
Effective June 18, 1999, the cover page of the Prospectus is amended to (1)
delete the first sentence of the first paragraph and the second paragraph in its
entirety and (2) substitute the following, respectively, in their place:
INVESCO Realty Fund (the "Fund") seeks to provide long-term capital
growth. Above-average current income is an additional consideration in
selecting securities for the Fund's investment portfolio.
The Fund is a series of INVESCO Specialty Funds, Inc. (the "Company"), a
diversified, open-end managed no-load mutual fund consisting of four
separate portfolios of investments. This Prospectus relates to shares of
INVESCO Realty Fund. Separate prospectuses are available upon request from
INVESCO Distributors, Inc. for the Company's other funds: INVESCO Latin
American Growth Fund, INVESCO S&P 500 Index Fund and INVESCO Worldwide
Communications Fund. Investors may purchase shares of any or all of the
Funds. Additional funds may be offered by the Company in the future.
Effective May 13, 1999, the section of the Fund's Prospectus entitled "Annual
Fund Expenses" is amended to (1) delete the third paragraph, the Annual Fund
Operating Expenses table and footnote (2) and (2) substitute the following in
their place:
We calculate annual operating expenses as a percentage of each Fund's
average annual net assets. To keep expenses competitive, INVESCO
reimburses the Fund for certain expenses in excess of 1.30% of the Fund's
average net assets (excluding expense offset arrangements) effective May
13, 1999 and 1.20% of the Fund's average net assets (excluding expense
offset arrangements) prior to May 13, 1999.
ANNUAL FUND OPERATING EXPENSES (as a percentage of average net assets)
Management Fee 0.75%
12b-1 Fees 0.25%
Other Expenses (after expense limitation)(1)(2) 0.32%
Total Fund Operating Expenses (after expense limitation)(1)(2) 1.32%
(2) Certain expenses of the Fund are absorbed by INVESCO. In the absence
of such absorbed expenses, the Fund's "Other Expenses" and "Total Fund
Operating Expenses" would have been 1.00% (annualized) and 2.00%
(annualized), respectively, of the Fund's actual expenses for the
fiscal year ended July 31, 1998.
The remainder of the table and the remainder of the footnotes are not affected
by this change.
Effective May 13, 1999, the section of the Fund's Prospectus entitled "Annual
Fund Expenses - Example" is amended to (1) delete the first paragraph and (2)
substitute the following in its place:
A shareholder would pay the following expenses on a $1,000 investment for
the periods shown, assuming a hypothetical 5% annual return and redemption
at the end of each time period. (Of course, actual operating expenses are
paid from the Fund's assets, and are deducted from the amount of income
available for distribution to shareholders; they are not charged directly
to shareholder accounts.)
1 Year 3 Years 5 Years 10 Years
$14 $42 $73 $160
<PAGE>
Effective June 1, 1999, the section of the Fund's Prospectus entitled
"Investment Policies And Risks - Delayed Delivery Or When-Issued Purchases" is
amended to (1) delete the first sentence of the section and (2) substitute the
following sentence in its place:
The Fund may purchase or sell securities on a when-issued or
delayed-delivery basis that is, with settlement taking place in the
future.
Effective June 1, 1999, the section of the Fund's Prospectus entitled
"Investment Policies And Risks - Securities Lending" is amended to (1) delete
the first sentence of the section and (2) substitute the following in its place:
The Fund may seek to earn additional income by lending securities on a
fully collateralized basis.
Effective June 1, 1999, the section of the Fund's Prospectus entitled
"Investment Policies And Risks - Futures Contracts and Options" is amended to
(1) delete the section in its entirety and (2) substitute the following in its
place:
FUTURES, OPTIONS AND OTHER FINANCIAL INSTRUMENTS.
The Fund may use various types of financial instruments, some of which are
derivatives, to attempt to manage the risk of its investments or, in
certain circumstances, for investment (e.g., as a substitute for investing
in securities). These financial instruments include options, futures
contracts, forward contracts, swaps, caps, floors, and collars
(collectively " Financial Instruments"). For descriptions and other
information on these Financial Instruments and strategies and their risk
considerations, see the Statement of Additional Information ("SAI").
Financial Instruments may be used in an attempt to manage the Fund's
foreign currency exposure as well as other risks of the Fund's investments
that can cause fluctuations in its net asset value. The Fund may use
Financial Instruments to increase or decrease its exposure to changing
securities prices, interest rates, currency exchange rates or other
factors. The policies in this section do not apply to other types of
instruments sometimes referred to as derivatives, such as indexed
securities, mortgage-backed and other asset-backed securities, and
stripped interest and principal of debt.
The Fund's ability to use Financial Instruments any be limited by market
conditions, regulatory limits and tax considerations. The Fund might not
use any of these Financial Instruments, and there can be no assurance that
any strategy using a Financial Instrument will fully achieve its
objective.
Subject to the further limitations stated in the SAI, generally, the Fund
is authorized to use any type of Financial Instrument. However, as a
non-fundamental policy, the Fund will only use a particular Financial
Instrument (other than those related to foreign currency) if the Fund is
authorized to take a position in the type of asset to which the return on,
or value of, the Financial Instrument is primarily related. Therefore, for
example, if the Fund is authorized to invest in a particular type of
security (such as an equity security), it could take a position in an
option on an index relating to equity securities.
Effective June 1, 1999, the section of the Fund's Prospectus entitled
"Investment Policies And Risks - Investment Restrictions" is amended to (1)
delete the section in its entirety and (2) substitute the following paragraphs
in its place:
<PAGE>
INVESTMENT RESTRICTIONS.
The Fund is subject to a variety of restrictions regarding their
investments that are identified in the Statement of Additional
Information. Certain of the Fund's investment restrictions are fundamental
and may not be altered without the approval of the Fund's shareholders.
For example, with respect to 75% of its total assets, the Fund may not
purchase the securities of any one issuer (other than securities issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities, or securities of other investment companies) if the
purchase would cause the Fund to have more than 5% of its total assets
invested in the issuer or to hold more than 10% of the outstanding voting
securities of that issuer. Other fundamental restrictions prohibit the
Fund from lending more that 33 1/3% of its total assets to other parties
and from borrowing money in an aggregate amount exceeding 33 1/3% of its
total assets.
Effective May 13, 1999, the section of the Fund's Prospectus entitled "The Fund
And Its Management" is amended to (1) delete the sixth paragraph and (2)
substitute the following in its place:
The Fund pays INVESCO a monthly management fee which is based upon a
percentage of the Fund's average net assets determined daily. Effective
May 13, 1999, the management fee is computed at the annual rate of 0.75%
of the first $500 million of the Fund's average net assets; 0.65% of the
next $500 million of the Fund's average net assets; 0.55% of the Fund's
average net assets from $1 billion; 0.45% of the Fund's average net assets
from $2 billion; 0.40% of the Fund's average net assets from $4 billion;
0.375% of the Fund's average net assets from $6 billion; and 0.35% of the
Fund's average net assets over $8 billion and prior to May 13, 1999, 0.75%
of the Fund's average net assets.
Effective May 13, 1999, the section of the Fund's Prospectus entitled "The Fund
And Its Management" is amended to add the following at the end of the second
sentence of the seventh paragraph:
In addition, beginning May 13, 1999, the following contractual breakpoints
are in effect: 0.30% on the first $500 million of the Fund's average net
assets; 0.26% on the next $500 million of the Fund's average net assets,
0.22% on the Fund's average net assets from $1 billion; 0.18% on the
Fund's average net assets from $2 billion; 0.16% on the Fund's average net
assets from $4 billion; 0.15% on the Fund's average net assets from $6
billion; and 0.14% on the Fund's average net assets over $8 billion.
Effective May 13, 1999, the section of the Fund's Prospectus entitled "The Fund
And Its Management" is amended to (1) delete the third sentence of the twelfth
paragraph and (2) substitute the following in its place:
Certain Fund expenses were absorbed by INVESCO in order to ensure that the
Fund's total operating expenses did not exceed 1.20% of the Fund's average
net assets prior to May 13, 1999 and 1.30% of the Fund's average net
assets effective May 13, 1999. This commitment is in effect until the May
2000 meeting of the Company's board of directors and may be changed
following consultation with the Company's board of directors.
The section of the Fund's Prospectus entitled "Fund Services - Shareholder
Accounts" is amended to (1) delete the second and third sentence of the section
and (2) substitute the following in its place:
INVESCO no longer issues certificates. If you are selling shares
previously issued in certificate form, you need to include the
certificates along with your redemption/exchange request.
<PAGE>
The chart in the Fund's Prospectus entitled "How To Sell Shares" is amended to
(1) delete the "Please Remember" paragraph of the "In Writing" section and (2)
substitute the following in its place:
INVESCO no longer issues paper certificates for shares. If the shares you
are selling are represented by stock certificates, the certificates must
be sent to INVESCO before we can process your redemption.
The date of this Supplement is June 1, 1999.
<PAGE>
INVESCO SPECIALTY FUNDS, INC.
INVESCO S&P 500 Index Fund
Class I and Class II Shares
Supplement to Prospectus dated December 1, 1998
Effective June 18, 1999, the cover page of the Prospectus is amended to (1)
delete the third paragraph and (2) substitute the following in its place:
The Fund is a series of INVESCO Specialty Funds, Inc. (the "Company"), a
diversified, open-end managed no-load mutual fund consisting of four
separate portfolios of investments. This Prospectus relates to shares of
INVESCO S&P 500 Index Fund. Separate prospectuses are available upon
request from INVESCO Distributors, Inc. for the Company's other funds:
INVESCO Latin American Growth Fund, INVESCO Realty Fund and INVESCO
Worldwide Communications Fund. Investors may purchase shares of any or all
of the Funds. Additional funds may be offered by the Company in the
future.
Effective May 13, 1999, the section of the Fund's Prospectus entitled "Annual
Fund Expenses" is amended to (1) delete the third paragraph, the Annual Fund
Operating Expenses Table and footnote (2) to the table and (2) substitute the
following in their place:
We calculate annual operating expenses as a percentage of the Fund's
average annual net assets. To keep expenses competitive, INVESCO
reimburses the Fund for certain expenses in excess of 0.35% of average net
assets relating to Class I shares and 0.60% of average net assets relating
to Class II shares effective May 13, 1999 and 0.30% of average net assets
relating to Class I shares and 0.55% of average net assets relating to
Class II shares prior to May 13, 1999.
Class I Class II
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Management Fee 0.25%~ 0.25%~
12b-1 Fees None 0.25%~
Other Expenses(1)(2) 0.25%~ 0.18%~
Total Fund Operating Expenses(2) 0.50%~ 0.68%~
2. Certain Fund expenses will be absorbed by INVESCO in order to ensure
that expenses for the Fund will not exceed 0.35% of average daily net
assets relating to Class I shares and 0.60% of average daily net assets
relating to Class II shares effective May 13, 1999 and 0.30% of average
daily net assets relating to Class I shares and 0.55% of average daily net
assets relating to Class II shares prior to May 13, 1999. If such expense
limits were not in effect, the Fund's "Other Expenses" and "Total Fund
Operating Expenses" for the period December 23, 1997 (commencement of
operations) through July 31, 1998, would have been 2.26% and 2.51%,
respectively, of Class I shares average net assets and 1.21% and 1.71%,
respectively, of Class II shares average net assets.
The remainder of the table and the remainder of the footnotes are not affected
by this change.
Effective May 13, 1999, the section of the Fund's Prospectus entitled "Annual
Fund Expenses - Example" is amended to (1) delete the first paragraph and (2)
substitute the following in its place:
A shareholder would pay the following expenses on a $1,000 investment for
the periods shown, assuming a hypothetical 5% annual return and redemption
at the end of each time period. (Of course, actual operating expenses are
paid from the Fund's assets, and are deducted from the amount of income
available for distribution to shareholders; they are not charged directly
to shareholder accounts.)
<PAGE>
1 Year 3 Years 5 Years 10 Years
Class I $5 $16 $28 $63
Class II $7 $22 $38 $85
Effective June 1, 1999, the section of the Fund's Prospectus entitled
"Investment Policies And Risks - Investment Company Securities" is amended to
(1) delete the sixth sentence of the section and (2) substitute the following in
its place:
These limitations include, among others, that, subject to certain
exceptions, no more than 10% of the Fund's total assets may be invested in
securities of other investment companies and no more than 5% of its total
assets may be invested in the securities of any one investment company.
Effective June 1, 1999, the section of the Fund's Prospectus entitled
"Investment Policies And Risks - Securities Lending" is amended to (1) delete
the first sentence of the section and (2) substitute the following in its place:
The Fund may seek to earn additional income by lending securities on a
fully collateralized basis.
Effective June 1, 1999, the section of the Fund's Prospectus entitled
"Investment Policies And Risks - Futures Contracts and Options" is amended to
(1) delete the section in its entirety and (2) substitute the following in its
place:
FUTURES, OPTIONS AND OTHER FINANCIAL INSTRUMENTS.
The Fund may use various types of financial instruments, some of which
are derivatives, to attempt to manage the risk of its investments or, in
certain circumstances, for investment (e.g., as a substitute for
investing in securities). These financial instruments include options,
futures contracts, forward contracts, swaps, caps, floors, and collars
(collectively " Financial Instruments"). For descriptions and other
information on these Financial Instruments and strategies and their risk
considerations, see the Statement of Additional Information ("SAI").
Financial Instruments may be used in an attempt to manage the risk of
the Fund's investments that can cause fluctuations in its net asset
value. The Fund may use Financial Instruments to increase or decrease
its exposure to changing securities prices, interest rates or other
factors.
The Fund's ability to use Financial Instruments any be limited by market
conditions, regulatory limits and tax considerations. The Fund might not
use any of these Financial Instruments, and there can be no assurance
that any strategy using a Financial Instrument will fully achieve its
objective.
Subject to the further limitations stated in the SAI, generally, the
Fund is authorized to use any type of Financial Instrument. However, as
a non-fundamental policy, the Fund will only use a particular Financial
Instrument if the Fund is authorized to take a position in the type of
asset to which the return on, or value of, the Financial Instrument is
primarily related. Therefore, for example, if the Fund is authorized to
invest in a particular type of security (such as an equity security), it
could take a position in an option on an index relating to equity
securities.
Effective June 1, 1999, the section of the Fund's Prospectus entitled
"Investment Policies And Risks - Investment Restrictions" is amended to (1)
delete the section in its entirety and (2) substitute the following section in
its place:
<PAGE>
INVESTMENT RESTRICTIONS.
The Fund is subject to a variety of restrictions regarding their
investments that are identified in the Statement of Additional
Information. Certain of the Fund's investment restrictions are
fundamental and may not be altered without the approval of the Fund's
shareholders. For example, with respect to 75% of its total assets, the
Fund may not purchase the securities of any one issuer (other than
securities issued or guaranteed by the U.S. government or any of its
agencies or instrumentalities, or securities of other investment
companies) if the purchase would cause the Fund to have more than 5% of
its total assets invested in the issuer or to hold more than 10% of the
outstanding voting securities of that issuer. In addition, the Fund may
not purchase the securities of any issuer (other than securities issued
or guaranteed by the U.S. government or any of its agencies or
instrumentalities or municipal securities) if, as a result, more than
25% of the Fund's total assets would be invested in the securities of
companies whose principal business activities are in the same industry.
Other fundamental restrictions prohibit the Fund from lending more that
33 1/3% of its total assets to other parties and from borrowing money in
an aggregate amount exceeding 33 1/3% of its total assets.
Effective May 13, 1999, the section of the Fund's Prospectus entitled "The Fund
And Its Management" is amended to (1) delete the third sentence of the
thirteenth paragraph and (2) substitute the following in its place:
Certain Fund expenses are absorbed by INVESCO in order to ensure that the
Fund's total operating expenses did not exceed 0.30% for Class I shares
and 0.55% for Class II shares prior to May 13, 1999 and 0.35% for Class I
shares and 0.60% for Class II shares effective May 13, 1999. This
commitment is in effect until the May 2000 meeting of the Company's board
of directors and may be changed following consultation with the Company's
board of directors.
The section of the Fund's Prospectus entitled "Fund Services - Shareholder
Accounts" is amended to (1) delete the second and third sentence of the section
and (2) substitute the following in its place:
INVESCO no longer issues certificates. If you are selling shares
previously issued in certificate form, you need to include the
certificates along with your redemption/exchange request.
The chart in the Fund's Prospectus entitled "How To Sell Shares" is amended to
(1) delete the "Please Remember" paragraph of the "In Writing" section and (2)
substitute the following in its place:
INVESCO no longer issues paper certificates for shares. If the shares you
are selling are represented by stock certificates, the certificates must
be sent to INVESCO before we can process your redemption.
The date of this supplement is June 1, 1999.
<PAGE>
INVESCO SPECIALTY FUNDS, INC.
INVESCO Worldwide Capital Goods Fund
INVESCO Worldwide Communications Fund
Supplement to Prospectus dated December 1, 1998
Effective May 21, 1999, INVESCO Worldwide Capital Goods Fund was liquidated. All
references to that Fund in the Funds' Prospectus are hereby deleted. Also, all
references to "each Fund" and "the Funds" are hereby changed to "the Fund" where
applicable.
Effective June 18, 1999, the cover page of the Prospectus is amended to (1)
delete the fourth paragraph and (2) substitute the following in its place:
The Fund is a series of INVESCO Specialty Funds, Inc. (the "Company"), a
diversified, open-end managed no-load mutual fund consisting of four
separate portfolios of investments. This Prospectus relates to shares of
INVESCO Worldwide Communications Fund. Separate prospectuses are available
upon request from INVESCO Distributors, Inc. for the Company's other
funds: INVESCO Latin American Growth Fund, INVESCO Realty Fund and INVESCO
S&P 500 Index Fund. Investors may purchase shares of any or all of the
Funds. Additional funds may be offered by the Company in the future.
With respect to the INVESCO Worldwide Communications Fund:
Effective May 13, 1999, the section of the Prospectus entitled "Annual Fund
Expenses" is amended to (1) delete the Annual Fund Operating Expenses section of
theTable and (2) substitute the following in its place:
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Management Fee 0.65%
12b-1 Fees 0.25%
Other Expenses(1)
Transfer Agency Fee(2) 0.28%
General Services, Administrative
Services, Registration,
Postage(3) 0.17%
Total Fund Operating Expenses(1)(2) 1.35%
The remainder of the table and the footnotes are not affected by this change.
Effective May 13, 1999, the section of the Prospectus entitled "Annual Fund
Expenses Example" is amended to (1) delete the first paragraph and (2)
substitute the following in its place:
A shareholder would pay the following expenses on a $1,000 investment for
the periods shown, assuming (1) a 5% annual return and (2) redemption at
the end of each time period:
1 Year 3 Years 5 Years 10 Years
$14 $43 $74 $163
Effective June 1, 1999, the section of the Prospectus entitled "Investment
Objectives And Policies - Investment Policies Applicable To Both Funds" is
amended to delete the seventh paragraph in its entirety.
Effective June 1, 1999, the section of the Prospectus entitled "Investment
Objectives And Policies - Investment Policies Applicable To Both Funds -
When-Issued Securities" is amended to (1) delete the first sentence of the
section and (2) substitute the following sentence in its place:
The Fund may purchase or sell securities on a when-issued or
delayed-delivery basis that is, with settlement taking place in the
future.
<PAGE>
Effective June 1, 1999, the section of the Prospectus entitled "Investment
Objectives And Policies - Investment Policies Applicable To Both Funds -
Securities Lending" is amended to (1) delete the first sentence of the section
and (2) substitute the following in its place:
The Fund may lend its securities.
Effective June 1, 1999, the section of the Prospectus entitled "Investment
Objectives And Policies - Investment Policies Applicable to Both Funds -
Investment Restrictions" is amended to (1) delete the section in its entirety
and (2) substitute the following section in its place:
INVESTMENT RESTRICTIONS.
The Funds are subject to a variety of restrictions regarding their
investments that are identified in the Statement of Additional Information.
Certain of the Funds' investment restrictions are fundamental and may not be
altered without the approval of a Fund's shareholders. For example, with
respect to 75% of its total assets, the Fund may not purchase the securities
of any one issuer (other than securities issued or guaranteed by the U.S.
government or any of its agencies or instrumentalities, or securities of
other investment companies) if the purchase would cause the Fund to have
more than 5% of its total assets invested in the issuer or to hold more than
10% of the outstanding voting securities of that issuer. Other fundamental
restrictions prohibit the Fund from lending more that 33 1/3% of its total
assets to other parties and from borrowing money in an aggregate amount
exceeding 33 1/3% of its total assets.
Effective June 1, 1999, the section of the Prospectus entitled "Investment
Objectives And Policies - Investment Policies Applicable To Both Funds" is
amended to add the following paragraph at the end of the section after
"Investment Restrictions."
For a further discussion of risks associated with an investment in the
Fund, see "Investment Policies And Restrictions" in the Statement of
Additional Information.
June 1, 1999, the section of the Prospectus entitled "Risk Factors - Futures,
Options and Other Derivative Instruments" is amended to (1) delete the section
in its entirety and (2) substitute the following section in its place:
FUTURES, OPTIONS AND OTHER FINANCIAL INSTRUMENTS.
The Fund may use various types of financial instruments, some of which are
derivatives, to attempt to manage the risk of its investments or, in certain
circumstances, for investment (e.g., as a substitute for investing in
securities). These financial instruments include options, futures contracts,
forward contracts, swaps, caps, floors, and collars (collectively "
Financial Instruments"). For descriptions and other information on these
Financial Instruments and strategies and their risk considerations, see the
Statement of Additional Information ("SAI"). Financial Instruments may be
used in an attempt to manage the Fund's foreign currency exposure as well as
other risks of the Fund's investments that can cause fluctuations in its net
asset value. The Fund may use Financial Instruments to increase or decrease
its exposure to changing securities prices, interest rates, currency
exchange rates or other factors. The policies in this section do not apply
to other types of instruments sometimes referred to as derivatives, such as
indexed securities, mortgage-backed and other asset-backed securities, and
stripped interest and principal of debt.
The Fund's ability to use Financial Instruments may be limited by market
conditions, regulatory limits and tax considerations. The Fund might not use
any of these Financial Instruments, and there can be no assurance that any
strategy using a Financial Instrument will fully achieve its objective.
<PAGE>
Subject to the further limitations stated in the SAI, generally, the Fund is
authorized to use any type of Financial Instrument. However, as a
non-fundamental policy, the Fund will only use a particular Financial
Instrument (other than those related to foreign currency) if the Fund is
authorized to take a position in the type of asset to which the return on,
or value of, the Financial Instrument is primarily related. Therefore, for
example, if the Fund is authorized to invest in a particular type of
security (such as an equity security), it could take a position in an option
on an index relating to equity securities.
Effective May 13, 1999, the section of the Prospectus entitled "The Funds And
Their Management" is amended to add the following to the end of the tenth
paragraph:
In addition, beginning May 13, 1999, the following additional contractual
breakpoints are in effect: 0.40% of the Fund's average net assets from $4
billion; 0.375% of the Fund's average net assets from $6 billion; and
0.35% of the Fund's average net assets over $8 billion.
Effective May 13, 1999, the section of the Prospectus entitled "The Funds And
Their Management" is amended to (1) delete third sentence of the eleventh
paragraph in its entirety and (2) substitute the following in its place:
For such services, the Worldwide Communications Fund pays INVESCO a fee
consisting of a base fee of $10,000 per year, plus an additional
incremental fee computed at the annual rate of 0.015% per year of the
average net assets of the Fund prior to May 13, 1999 and 0.045% per year
of the average net assets of the Fund effective May 13, 1999.
Effective July 30, 1999, the name of INVESCO Worldwide Communications Fund will
be changed to INVESCO Telecommunications Fund.
This Supplement supersedes the Supplement dated May 25, 1999.
The date of this supplement is June 1, 1999.
<PAGE>
INVESCO SPECIALTY FUNDS, INC.
INVESCO Asian Growth Fund
INVESCO European Small Company Fund
INVESCO Latin American Growth Fund
INVESCO Realty Fund
INVESCO S&P 500 Index Fund - Classes I and II
INVESCO Worldwide Capital Goods Fund
INVESCO Worldwide Communications Fund
Supplement to Statement of Additional Information
Dated December 1, 1998
Effective May 21, 1999, INVESCO Worldwide Capital Goods Fund was liquidated. All
references to that Fund in the Funds' Statement of Additional Information
("SAI") are hereby deleted.
Effective June 18, 1999, the INVESCO Asian Growth Fund and INVESCO European
Small Company Fund, pursuant to approval of the shareholders of each of the
Funds of a Plan of Reorganization and Termination at a special meeting held May
28, 1999, will be merged into INVESCO Pacific Basin Fund and INVESCO European
Fund, respectively, each a series of INVESCO International Funds, Inc. Effective
June 18, 1999, all references to the Asian Growth Fund and the European Small
Company Fund, are hereby deleted.
Effective June 18, 1999, the cover page of the Company's SAI is amended to (1)
delete the first paragraph and (2) substitute the following in its place:
INVESCO SPECIALTY FUNDS, INC. (the "Company") is a no-load, open-end,
diversified management investment company currently consisting of four
separate portfolios of investments: INVESCO Latin American Growth Fund,
INVESCO Realty Fund, INVESCO S&P 500 Index Fund - Classes I and II, and
INVESCO Worldwide Communications Fund (collectively, the "Funds" and
individually, a "Fund").
Effective June 1, 1999, the second page of the Company's SAI is amended to (1)
delete the third paragraph and (2) substitute the following in its place:
The Realty Fund seeks to provide long-term capital growth by investing,
under normal circumstances, at least 65% of its total assets in
publicly-traded stocks of companies primarily engaged in the real estate
industry.
Effective June 1, 1999, the section of the Company's SAI entitled "Investment
Policies And Restrictions - Restricted/144ASecurities" is amended to (1) delete
the section in its entirety, and (2) substitute the following section in its
place:
Illiquid and 144A Securities. As discussed in the section of the Funds'
Prospectuses entitled "Investment Policies And Risks," the Funds may
invest in illiquid securities, including restricted securities and other
investments that are not readily marketable. Restricted securities are
securities which are subject to restrictions on their resale because they
have not been registered under the Securities Act of 1933 (the "1933
Act"). However, a Fund will not purchase any such security if the purchase
would cause the Fund to invest more than 15% of its net assets, measured
at the time of purchase, in illiquid securities. Repurchase agreements
maturing in more than seven days will be considered as illiquid for
purposes of this restriction. Investments in illiquid securities involve
certain risks to the extent that a Fund may be unable to dispose of such a
security at the time desired or at a reasonable price. In addition, in
order to resell a restricted security, a Fund might have to bear the
expense and incur the delays associated with effecting registration.
The Funds may invest in restricted securities, including restricted
securities that can be resold to institutional investors pursuant to Rule
144A under the 1933 Act ("Rule 144A Securities") if a liquid institutional
trading market exists.
<PAGE>
In recent years, a large institutional market has developed for Rule 144A
Securities. Institutional investors generally will not seek to sell these
instruments to the general public but instead will often depend on an
efficient institutional market in which Rule 144A Securities can readily
be resold or on an issuer's ability to honor a demand for repayment.
Therefore, the fact that there are contractual or legal restrictions on
resale to the general public or certain institutions is not dispositive of
the liquidity of such investments.
Rule 144A under the 1933 Act establishes a "safe harbor" from the
registration requirements of the 1933 Act for resales of certain
securities to qualified institutional buyers. Institutional markets for
Rule 144A Securities may provide both readily ascertainable values for
Rule 144A Securities and the ability to liquidate an investment in order
to satisfy share redemption orders. An insufficient number of qualified
institutional buyers interested in purchasing a Rule 144A Security held by
a Fund, however, could adversely affect the marketability of such
security, and the Fund might be unable to dispose of such security
promptly or at reasonable prices.
Effective June 1, 1999, the section of the Company's SAI entitled "Investment
Policies And Restrictions - Securities Lending" is amended to (1) delete the
first sentence of the section and (2) substitute the following in its place:
The Funds also may lend their securities.
Effective June 1, 1999, the section of the Company's SAI entitled "Investment
Policies and Restrictions" is amended to (1) delete the subsections entitled
"Futures and Options on Futures, Securities and Indices," "Options on Futures
Contracts," "Forward Foreign Currency Contracts," and "Swap and Swap-Related
Products" and (2) substitute the following in their place:
FUTURES, OPTIONS AND OTHER FINANCIAL INSTRUMENTS
General. As discussed in the Prospectuses, the adviser may use various
types of financial instruments, some of which are derivatives, to attempt
to manage the risk of the Funds' investments or, in certain circumstances,
for investment (e.g., as a substitute for investing in securities). These
financial instruments include options, futures contracts (sometimes
referred to as "futures"), forward contracts, swaps, caps, floors and
collars (collectively, "Financial Instruments"). The policies in this
section do not apply to other types of instruments sometimes referred to
as derivatives, such as indexed securities, mortgage-backed and other
asset-backed securities, and stripped interest and principal of debt.
Generally, the Funds are authorized to use any type of Financial
Instrument. However, as a non-fundamental policy, the Funds will only use
a particular Financial Instrument (other than those related to foreign
currency) if the Funds are authorized to take a position in the type of
asset to which the return on, or value of, the Financial Instrument is
primarily related. Therefore, for example, if a Fund is authorized to
invest in a particular type of security (such as an equity security), it
could take a position in an option on an index relating to equity
securities.
Hedging strategies can be broadly categorized as "short" hedges and "long"
or "anticipatory" hedges. A short hedge involves the use of a Financial
Instrument in order to partially or fully offset potential variations in
the value of one or more investments held in a Fund's portfolio. A long or
anticipatory hedge involves the use of a Financial Instrument in order to
partially or fully offset potential increases in the acquisition cost of
one or more investments that the Fund intends to acquire. In an
<PAGE>
anticipatory hedge transaction, the Fund does not already own a
corresponding security. Rather, it relates to a security or type of
security that the Fund intends to acquire. If the Fund does not eliminate
the hedge by purchasing the security as anticipated, the effect on the
Fund's portfolio is the same as if a long position were entered into.
Financial Instruments may also be used, in certain circumstances, for
investment (e.g., as a substitute for investing in securities).
Financial Instruments on individual securities generally are used to
attempt to hedge against price movements in one or more particular
securities positions that a Fund already owns or intends to acquire.
Financial Instruments on indexes, in contrast, generally are used to
attempt to hedge all or a portion of a portfolio against price movements
of the securities within a market sector in which the Fund has invested or
expects to invest.
The use of Financial Instruments is subject to applicable regulations of
the Securities and Exchange Commission ("SEC"), the several exchanges upon
which they are traded, and the Commodity Futures Trading Commission
("CFTC"). In addition, the Funds' ability to use Financial Instruments
will be limited by tax considerations. See "Tax Consequences of Owning
Shares of the Funds."
In addition to the instruments and strategies described below, the adviser
may use other similar or related techniques to the extent that they are
consistent with a Fund's investment objective and permitted by its
investment limitations and applicable regulatory authorities. The Funds'
Prospectus or Statement of Additional Information ("SAI") will be
supplemented to the extent that new products or techniques become employed
involving materially different risks than those described below or in the
Prospectus.
Special Risks. Financial Instruments and their use involve special
considerations and risks, certain of which are described below.
(1) Financial Instruments may increase the volatility of the Funds. If the
adviser employs a Financial Instrument that correlates imperfectly with a
Fund's investments, a loss could result, regardless of whether or not the
intent was to manage risk. In addition, these techniques could result in a
loss if there is not a liquid market to close out a position that a Fund
has entered.
(2) There might be imperfect correlation between price movements of a
Financial Instrument and price movement of the investment(s) being hedged.
For example, if the value of a Financial Instrument used in a short hedge
increased by less than the decline in value of the hedged investment(s),
the hedge would not be fully successful. This might be caused by certain
kinds of trading activity that distorts the normal price relationship
between the security being hedged and the Financial Instrument. Similarly,
the effectiveness of hedges using Financial Instruments on indexes will
depend on the degree of correlation between price movements in the index
and price movements in the securities being hedged.
The Funds are authorized to use options and futures contracts related to
securities with issuers, maturities or other characteristics
different from the securities in which it typically invests. This
involves a risk that the options or futures position will not track the
performance of a Fund's portfolio investments.
<PAGE>
The direction of options and futures price movements can also diverge from
the direction of the movements of the prices of their underlying
instruments, even if the underlying instruments match a Fund's investments
well. Options and futures prices are affected by such factors as current
and anticipated short-term interest rates, changes in volatility of the
underlying instrument, and the time remaining until expiration of the
contract, which may not affect security prices the same way. Imperfect
correlation may also result from differing levels of demand in the options
and futures markets and the securities markets, from structural
differences in how options and futures and securities are traded, or from
imposition of daily price fluctuation limits or trading halts. The Funds
may take positions in options and futures contracts with a greater or
lesser face value than the securities it wishes to hedge or intends to
purchase in order to attempt to compensate for differences in volatility
between the contract and the securities, although this may not be
successful in all cases.
(3) If successful, the above-discussed hedging strategies can reduce risk
of loss by wholly or partially offsetting the negative effect of
unfavorable price movements of portfolio securities. However, such
strategies can also reduce opportunity for gain by offsetting the positive
effect of favorable price movements. For example, if a Fund entered into a
short hedge because the adviser projected a decline in the price of a
security in the Fund's portfolio, and the price of that security increased
instead, the gain from that increase would likely be wholly or partially
offset by a decline in the value of the short position in the Financial
Instrument. Moreover, if the price of the Financial Instrument declined by
more than the increase in the price of the security, the Fund could suffer
a loss.
(4) The Funds' ability to close out a position in an exchange-traded
Financial Instrument prior to expiration or maturity depends on the degree
of liquidity of the market.
(5) As described below, the Funds are required to maintain assets as
"cover," maintain segregated accounts or make margin payments when it
takes positions in Financial Instruments involving obligations to third
parties (i.e., Financial Instruments other than purchased options). If a
Fund is unable to close out its positions in such Financial Instruments,
it might be required to continue to maintain such assets or segregated
accounts or make such payments until the position expired. These
requirements might impair the Fund's ability to sell a portfolio security
or make an investment at a time when it would otherwise be favorable to do
so, or require that the Fund sell a portfolio security at a
disadvantageous time.
Cover. Positions in Financial Instruments, other than purchased options,
expose the Funds to an obligation to another party. A Fund will not enter
into any such transaction unless it owns (1) an offsetting ("covered")
position in securities, currencies or other options, futures contracts or
forward contracts, or (2) cash and liquid assets with a value,
marked-to-market daily, sufficient to cover its obligations to the extent
not covered as provided in (1) above. The Funds will comply with SEC
guidelines regarding cover for these instruments and will, if the
guidelines so require, designate cash or liquid assets as segregated in
the prescribed amount as determined daily.
Assets used as cover or held as segregated cannot be sold while the
position in the corresponding Financial Instrument is open unless they are
replaced with other appropriate assets. As a result, the commitment of a
large portion of a Fund's assets to cover or as segregated could impede
portfolio management or the Fund's ability to meet redemption requests or
other current obligations.
<PAGE>
Options. The Funds may engage in certain strategies involving options to
attempt to manage the risk of its investments or, in certain
circumstances, for investment (e.g., as a substitute for investing in
securities). A call option gives the purchaser the right to buy, and
obligates the writer to sell the underlying investment at the agreed-upon
exercise price during the option period. A put option gives the purchaser
the right to sell, and obligates the writer to buy the underlying
investment at the agreed-upon exercise price during the option period.
Purchasers of options pay an amount, known as a premium, to the option
writer in exchange for the right under the option contract. See "Options
on Indexes" below with regard to cash settlement of option contracts on
index values.
The purchase of call options can serve as a hedge against a price rise of
the underlier and the purchase of put options can serve as a hedge against
a price decline of the underlier. Writing call options can serve as a
limited short hedge because declines in the value of the hedged investment
would be offset to the extent of the premium received for writing the
option. However, if the security or currency appreciates to a price higher
than the exercise price of the call option, it can be expected that the
option will be exercised and a Fund will be obligated to sell the security
or currency at less than its market value.
Writing put options can serve as a limited long or anticipatory hedge
because increases in the value of the hedged investment would be offset to
the extent of the premium received for writing the option. However, if the
security or currency depreciates to a price lower than the exercise price
of the put option, it can be expected that the put option will be
exercised and a Fund will be obligated to purchase the security or
currency at more than its market value.
The value of an option position will reflect, among other things, the
current market value of the underlying investment, the time remaining
until expiration, the relationship of the exercise price to the market
price of the underlying investment, the price volatility of the underlying
investment and general market and interest rate conditions. Options that
expire unexercised have no value.
A Fund may effectively terminate its right or obligation under an option
by entering into a closing transaction. For example, the Fund may
terminate its obligation under a call or put option that it had written by
purchasing an identical call or put option; which is known as a closing
purchase transaction. Conversely, the Fund may terminate a position in a
put or call option it had purchased by writing an identical put or call
option; which is known as a closing sale transaction. Closing transactions
permit the Funds to realize profits or limit losses on an option position
prior to its exercise or expiration.
Risks of Options on Securities. Options embody the possibility of large
amounts of exposure, which will result in a Fund's net asset value being
more sensitive to changes in the value of the related investment.
The Funds' ability to establish and close out positions in exchange-listed
options depends on the existence of a liquid market. If a Fund is not able
to enter into an offsetting closing transaction on an option it has
written, it will be required to maintain the securities subject to the
call or the liquid assets underlying the put until a closing purchase
transaction can be entered into or the option expires. However, there can
be no assurance that such a market will exist at any particular time.
If a Fund was unable to effect a closing transaction for an option it had
purchased, it would have to exercise the option to realize any profit. The
inability to enter into a closing purchase transaction for a covered call
option written by the Fund could cause material losses because the Fund
would be unable to sell the investment used as cover for the written
option until the option expires or is exercised.
<PAGE>
Options on Indexes. Puts and calls on indexes are similar to puts and
calls on securities or futures contracts except that all settlements are
in cash and changes in value depend on changes in the index in question.
When a Fund writes a call on an index, it receives a premium and agrees
that, prior to the expiration date, upon exercise of the call, the
purchaser will receive from the Fund an amount of cash equal to the
positive difference between the closing price of the index and the
exercise price of the call times a specified multiple ("multiplier"),
which determines the total dollar value for each point of such difference.
When the Fund buys a call on an index, it pays a premium and has the same
rights as to such call as are indicated above. When the Fund buys a put on
an index, it pays a premium and has the right, prior to the expiration
date, to require the seller of the put to deliver to the Fund an amount of
cash equal to the positive difference between the exercise price of the
put and the closing price of the index times the multiplier. When the Fund
writes a put on an index, it receives a premium and the purchaser of the
put has the right, prior to the expiration date, to require the Fund to
deliver to it an amount of cash equal to the positive difference between
the exercise price of the put and the closing level of the index times the
multiplier.
The risks of purchasing and selling options on indexes may be greater than
options on securities. Because index options are settled in cash, when a
Fund writes a call on an index it cannot fulfill its potential settlement
obligations by delivering the underlying securities. The Fund can offset
some of the risk of writing a call index option by holding a diversified
portfolio of securities similar to those on which the underlying index is
based. However, the Fund cannot, as a practical matter, acquire and hold a
portfolio containing exactly the same securities as underlie the index
and, as a result, bears a risk that the value of the securities held will
vary from the value of the index.
Even if the Fund could assemble a portfolio that exactly reproduced the
composition of the underlying index, it still would not be fully covered
from a risk standpoint because of the "timing risk" inherent in writing
index options. When an index option is exercised, the amount of cash that
the holder is entitled to receive is determined by the difference between
the exercise price and the closing index level. As with other kinds of
options, the Fund as the call writer will not learn what it has been
assigned until the next business day. The time lag between exercise and
notice of assignment poses no risk for the writer of a covered call on a
specific underlying security, such as common stock, because in that case
the writer's obligation is to deliver the underlying security, not to pay
its value as of a moment in the past. In contrast, the writer of an index
call will be required to pay cash in an amount based on the difference
between the closing index value on the exercise date and the exercise
price. By the time the Fund learns what it has been assigned, the index
may have declined. This "timing risk" is an inherent limitation on the
ability of index call writers to cover their risk exposure.
If the Fund has purchased an index option and exercises it before the
closing index value for that day is available, it runs the risk that the
level of the underlying index may subsequently change. If such a change
causes the exercised option to fall out-of-the-money, the Fund
nevertheless will be required to pay the difference between the closing
index value and the exercise price of the option (times the applicable
multiplier) to the assigned writer.
Futures Contracts and Options on Futures Contracts. When a Fund purchases
or sells a futures contract, it incurs an obligation respectively to take
or make delivery of a specified amount of the obligation underlying the
contract at a specified time and price. When the Fund writes an option on
a futures contract, it becomes obligated to assume a position in the
futures contract at a specified exercise price at any time during the term
of the option. If the Fund writes a call, on exercise it assumes a short
futures position. If it writes a put, on exercise it assumes a long
futures position.
<PAGE>
The purchase of futures or call options on futures can serve as a long or
an anticipatory hedge, and the sale of futures or the purchase of put
options on futures can serve as a short hedge. Writing call options on
futures contracts can serve as a limited short hedge, using a strategy
similar to that used for writing call options on securities or indexes.
Similarly, writing put options on futures contracts can serve as a limited
long or anticipatory hedge.
In addition, futures strategies can be used to manage the "duration" (a
measure of anticipated sensitivity to changes in interest rates, which is
sometimes related to the weighted average maturity of a portfolio) and
associated interest rate risk of a Fund's fixed-income portfolio. If the
adviser wishes to shorten the duration of the Fund's fixed-income
portfolio (i.e., reduce anticipated sensitivity), the Fund may sell an
appropriate debt futures contract or a call option thereon, or purchase a
put option on that futures contract. If the adviser wishes to lengthen the
duration of the Fund's fixed-income portfolio (i.e., increase anticipated
sensitivity), the Fund may buy an appropriate debt futures contract or a
call option thereon, or sell a put option thereon.
At the inception of a futures contract, a Fund is required to deposit
"initial margin" in an amount generally equal to 10% or less of the
contract value. Initial margin must also be deposited when writing a call
or put option on a futures contract, in accordance with applicable
exchange rules. Subsequent "variation margin" payments are made to and
from the futures broker daily as the value of the futures or written
option position varies, a process known as "marking-to-market." Unlike
margin in securities transactions, initial margin on futures contracts and
written options on futures contracts does not represent a borrowing on
margin, but rather is in the nature of a performance bond or good-faith
deposit that is returned to the Fund at the termination of the transaction
if all contractual obligations have been satisfied. Under certain
circumstances, such as periods of high volatility, the Fund may be
required to increase the level of initial margin payments. If the Fund has
insufficient cash to meet daily variation margin requirements, it might
need to sell securities in order to do so at a time when such sales are
disadvantageous.
Purchasers and sellers of futures contracts and options on futures can
enter into offsetting closing transactions, similar to closing
transactions on options, by selling or purchasing, respectively, an
instrument identical to the instrument purchased or sold. Positions in
futures and options on futures used by the Funds may be closed only on an
exchange or board of trade that provides a market. However, there can be
no assurance that a liquid market will exist for a particular contract at
a particular time. In such event, it may not be possible to close a
futures contract or options position.
Under certain circumstances, futures exchanges may establish daily limits
on the amount that the price of a futures contract or an option on a
futures contract can vary from the previous day's settlement price; once
that limit is reached, no trades may be made that day at a price beyond
the limit. Daily price limits do not limit potential losses because prices
could move to the daily limit for several consecutive days with little or
no trading, thereby preventing liquidation of unfavorable positions.
If a Fund were unable to liquidate a futures contract or an option on a
futures contract position due to the absence of a liquid market or the
imposition of price limits, it could incur substantial losses. The Fund
would continue to be subject to market risk with respect to the position.
In addition, except in the case of purchased options, the Fund would
continue to be required to make daily variation margin payments and might
be required to continue to maintain the position being hedged by the
futures contract or option or to continue to maintain cash or securities
in a segregated account.
<PAGE>
To the extent that a Fund enters into futures contracts, options on
futures contracts and options on foreign currencies traded on a
CFTC-regulated exchange, in each case that is not for bona fide hedging
purposes (as defined by the CFTC), the aggregate initial margin and
premiums required to establish these positions (excluding the amount by
which options are "in-the-money" at the time of purchase) may not exceed
5% of the liquidation value of the Fund's portfolio, after taking into
account unrealized profits and unrealized losses on any contracts the Fund
has entered into. This policy does not limit to 5% the percentage of the
Fund's assets that are at risk in futures contracts, options on futures
contracts and currency options.
Risks of Futures Contracts and Options Thereon. The ordinary spreads at a
given time between prices in the cash and futures markets (including the
options on futures markets), due to differences in the natures of those
markets, are subject to the following factors. First, all participants in
the futures market are subject to margin deposit and maintenance
requirements. Rather than meeting additional margin deposit requirements,
investors may close futures contracts through offsetting transactions,
which could distort the normal relationship between the cash and futures
markets. Second, the liquidity of the futures market depends on
participants entering into offsetting transactions rather than making or
taking delivery. To the extent participants decide to make or take
delivery, liquidity in the futures market could be reduced, thus producing
distortion. Due to the possibility of distortion, a hedge may not be
successful. Additionally, the adviser may be incorrect in its expectations
as to the extent of various interest rates, currency exchange rates or
stock market movements or the time span within which the movements take
place.
Index Futures. The risk of imperfect correlation between movements in the
price of index futures and movements in the price of the securities that
are the subject of a hedge increases as the composition of a Fund's
portfolio diverges from the index. The price of the index futures may move
proportionately more than or less than the price of the securities being
hedged. If the price of the index futures moves proportionately less than
the price of the securities that are the subject of the hedge, the hedge
will not be fully effective. Assuming the price of the securities being
hedged has moved in an unfavorable direction, as anticipated when the
hedge was put into place, the Fund would be in a better position than if
it had not hedged at all, but not as good as if the price of the index
futures moved in full proportion to that of the hedged securities.
However, if the price of the securities being hedged has moved in a
favorable direction, this advantage will be partially offset by movement
of the price of the futures contract. If the price of the futures contract
moves more than the price of the securities, the Fund will experience
either a loss or a gain on the futures contract that will not be
completely offset by movements in the price of the securities that are the
subject of the hedge.
Where index futures are purchased in an anticipatory hedge, it is possible
that the market may decline instead. If a Fund then decides not to invest
in the securities at that time because of concern as to possible further
market decline or for other reasons, it will realize a loss on the futures
contract that is not offset by a reduction in the price of the securities
it had anticipated purchasing.
Foreign Currency Hedging Strategies--Special Considerations. A Fund may
use options and futures contracts on foreign currencies, as mentioned
previously, and forward currency contracts, as described below, to attempt
to hedge against movements in the values of the foreign currencies in
which the Fund's securities are denominated or, in certain circumstances,
for investment (e.g., as a substitute for investing in securities
denominated in foreign currency). Currency hedges can protect against
price movements in a security that the Fund owns or intends to acquire
that are attributable to changes in the value of the currency in which it
is denominated.
<PAGE>
A Fund might seek to hedge against changes in the value of a particular
currency when no Financial Instruments on that currency are available or
such Financial Instruments are more expensive than certain other Financial
Instruments. In such cases, the Fund may seek to hedge against price
movements in that currency by entering into transactions using Financial
Instruments on another currency or a basket of currencies, the value of
which the adviser believes will have a high degree of positive correlation
to the value of the currency being hedged. The risk that movements in the
price of the Financial Instrument will not correlate perfectly with
movements in the price of the currency subject to the hedging transaction
may be increased when this strategy is used.
The value of Financial Instruments on foreign currencies depends on the
value of the underlying currency relative to the U.S. dollar. Because
foreign currency transactions occurring in the interbank market might
involve substantially larger amounts than those involved in the use of
such Financial Instruments, the Funds could be disadvantaged by having to
deal in the odd-lot market (generally consisting of transactions of less
than $1 million) for the underlying foreign currencies at prices that are
less favorable than for round lots.
There is no systematic reporting of last sale information for foreign
currencies or any regulatory requirement that quotations available through
dealers or other market sources be firm or revised on a timely basis.
Quotation information generally is representative of very large
transactions in the interbank market and thus might not reflect odd-lot
transactions where rates might be less favorable. The interbank market in
foreign currencies is a global, round-the-clock market. To the extent the
U.S. options or futures markets are closed while the markets for the
underlying currencies remain open, significant price and rate movements
might take place in the underlying markets that cannot be reflected in the
markets for the Financial Instruments until they reopen.
Settlement of hedging transactions involving foreign currencies might be
required to take place within the country issuing the underlying currency.
Thus, the Funds might be required to accept or make delivery of the
underlying foreign currency in accordance with any U.S. or foreign
regulations regarding the maintenance of foreign banking arrangements by
U.S. residents and might be required to pay any fees, taxes and charges
associated with such delivery assessed in the issuing country.
Forward Currency Contracts and Foreign Currency Deposits. The Funds may
enter into forward currency contracts to purchase or sell foreign
currencies for a fixed amount of U.S. dollars or another foreign currency.
A forward currency contract involves an obligation to purchase or sell a
specific currency at a future date, which may be any fixed number of days
(term) from the date of the forward currency contract agreed upon by the
parties, at a price set at the time the forward currency contract is
entered. Forward currency contracts are negotiated directly between
currency traders (usually large commercial banks) and their customers.
Such transactions may serve as long or anticipatory hedges. For example, a
Fund may purchase a forward currency contract to lock in the U.S. dollar
price of a security denominated in a foreign currency that the Fund
intends to acquire. Forward currency contracts may also serve as short
hedges. For example, a Fund may sell a forward currency contract to lock
in the U.S. dollar equivalent of the proceeds from the anticipated sale of
a security or a dividend or interest payment denominated in a foreign
currency.
<PAGE>
The Funds may also use forward currency contracts to hedge against a
decline in the value of existing investments denominated in foreign
currency. Such a hedge would tend to offset both positive and negative
currency fluctuations, but would not offset changes in security values
caused by other factors. A Fund could also hedge the position by entering
into a forward currency contract to sell another currency expected to
perform similarly to the currency in which the Fund's existing investments
are denominated. This type of hedge could offer advantages in terms of
cost, yield or efficiency, but may not hedge currency exposure as
effectively as a simple hedge against U.S. dollars. This type of hedge may
result in losses if the currency used to hedge does not perform similarly
to the currency in which the hedged securities are denominated.
The Funds may also use forward currency contracts in one currency or a
basket of currencies to attempt to hedge against fluctuations in the value
of securities denominated in a different currency if the adviser
anticipates that there will be a positive correlation between the two
currencies.
The cost to the Funds of engaging in forward currency contracts varies
with factors such as the currency involved, the length of the contract
period and the market conditions then prevailing. Because forward currency
contracts are usually entered into on a principal basis, no fees or
commissions are involved. When the Funds enters into a forward currency
contract, it relies on the counterparty to make or take delivery of the
underlying currency at the maturity of the contract. Failure by the
counterparty to do so would result in the loss of some or all of any
expected benefit of the transaction.
As is the case with futures contracts, purchasers and sellers of forward
currency contracts can enter into offsetting closing transactions, similar
to closing transactions on futures contracts, by selling or purchasing,
respectively, an instrument identical to the instrument purchased or sold.
Secondary markets generally do not exist for forward currency contracts,
with the result that closing transactions generally can be made for
forward currency contracts only by negotiating directly with the
counterparty. Thus, there can be no assurance that a Fund will in fact be
able to close out a forward currency contract at a favorable price prior
to maturity. In addition, in the event of insolvency of the counterparty,
the Fund might be unable to close out a forward currency contract. In
either event, the Fund would continue to be subject to market risk with
respect to the position, and would continue to be required to maintain a
position in securities denominated in the foreign currency or to maintain
cash or liquid assets in a segregated account.
The precise matching of forward currency contract amounts and the value of
the securities, dividends or interest payments involved generally will not
be possible because the value of such securities, dividends or interest
payments, measured in the foreign currency, will change after the forward
currency contract has been established. Thus, a Fund might need to
purchase or sell foreign currencies in the spot (cash) market to the
extent such foreign currencies are not covered by forward currency
contracts. The projection of short-term currency market movements is
extremely difficult, and the successful execution of a short-term hedging
strategy is highly uncertain.
Forward currency contracts may substantially change a Fund's investment
exposure to changes in currency exchange rates and could result in losses
to the Fund if currencies do not perform as the adviser anticipates. There
is no assurance that the adviser's use of forward currency contracts will
be advantageous to the Fund or that it will hedge at an appropriate time.
<PAGE>
The Funds may also purchase and sell foreign currency and invest in
foreign currency deposits. Currency conversion involves dealer spreads and
other costs, although commissions usually are not charged.
Combined Positions. A Fund may purchase and write options or futures in
combination with each other, or in combination with futures or forward
currency contracts, to manage the risk and return characteristics of its
overall position. For example, the Fund may purchase a put option and
write a call option on the same underlying instrument, in order to
construct a combined position whose risk and return characteristics are
similar to selling a futures contract. Another possible combined position
would involve writing a call option at one strike price and buying a call
option at a lower price, in order to reduce the risk of the written call
option in the event of a substantial price increase. Because combined
options positions involve multiple trades; they result in higher
transaction costs.
Turnover. The Funds' options and futures activities may affect their
turnover rates and brokerage commission payments. The exercise of calls or
puts written by a Fund, and the sale or purchase of futures contracts, may
cause it to sell or purchase related investments, thus increasing its
turnover rate. Once the Fund has received an exercise notice on an option
it has written, it cannot effect a closing transaction in order to
terminate its obligation under the option and must deliver or receive the
underlying securities at the exercise price. The exercise of puts
purchased by the Fund may also cause the sale of related investments,
increasing turnover. Although such exercise is within the Fund's control,
holding a protective put might cause it to sell the related investments
for reasons that would not exist in the absence of the put. The Fund will
pay a brokerage commission each time it buys or sells a put or call or
purchases or sells a futures contract. Such commissions may be higher than
those that would apply to direct purchases or sales.
Swaps, Caps, Floors and Collars. The Funds are authorized to enter into
swaps, caps, floors and collars. However, these instruments are not
exchange-traded and the Funds presently have a non-fundamental policy to
utilize only exchange-traded Financial Instruments.
Swaps involve the exchange by one party with another party of their
respective commitments to pay or receive cash flows, e.g., an exchange of
floating rate payments for fixed rate payments. The purchase of a cap or a
floor entitles the purchaser, to the extent that a specified index exceeds
in the case of a cap, or falls below in the case of a floor, a
predetermined value, to receive payments on a notional principal amount
from the party selling such instrument. A collar combines elements of
buying a cap and selling a floor.
Effective June 1, 1999, the section of the Company's SAI entitled "Investment
Policies And Restrictions" is amended to add the following to that section:
SPDRs. The Funds may invest in SPDRs and shares of other investment
companies. SPDRs are traded on the American Stock Exchange. SPDR holders
such as a Fund are paid a "Dividend Equivalent Amount" that corresponds to
the amount of cash dividends accruing to the securities held by the SPDR
Trust, net of certain fees and expenses. Therefore, the dividend yield of
SPDRs may be less than that of the S&P 500 Index. The Investment Company
Act of 1940 limits investments in securities of other investment
companies, such as the SPDR Trust. These limitations include, among
others, that, subject to certain exceptions, no more than 10% of a Fund's
total assets may be invested in securities of other investment companies,
and no more than 5% of its total assets may be invested in the securities
of any one investment company. As a shareholder of another investment
company, a Fund would bear its pro rata portion of the other investment
company's expenses, including advisory fees, in addition to the expenses
the Fund bears directly in connection with its own operations.
<PAGE>
Effective June 1, 1999, the section of the Company's SAI entitled "Investment
Policies And Restrictions - Investment Restrictions" is amended to (1) delete
the section in its entirety, and (2) substitute the following section in its
place:
Investment Restrictions. The Funds operate under certain investment
restrictions. For purposes of the following restrictions, all percentage
limitations apply immediately after a purchase or initial investment. Any
subsequent change in a particular percentage resulting from fluctuations
in value does not require elimination of any security from a Fund.
The following restrictions are fundamental and may not be changed with
respect to a Fund without prior approval of a majority of the outstanding
voting securities of that Fund, as defined in the Investment Company Act
of 1940, as amended (the "1940 Act"). Each Fund, unless otherwise
indicated, may not:
1. with respect to the Latin American Growth Fund only, purchase the
securities of any issuer (other than securities issued or guraranteed
by the U.S. government or any of its agencies or instrumentalities or
municipal securities) if, as a result, more than 25% of the Fund's
total assets would be invested in the securities of companies whose
principal business activities are in the same industry;
2. with respect to 75% of the Fund's total assets, purchase the
securities of any issuer (other than securities issued or guaranteed
by the U.S. government or any of its agencies or instrumentalities, or
securities of other investment companies) if, as a result, (i) more
than 5% of the Fund's total assets would be invested in the securities
of that issuer, or (ii) the Fund would hold more than 10% of the
outstanding voting securities of that issuer;
3. underwrite securities of other issuers, except insofar as it may be
deemed to be an underwriter under the Securities Act of 1933, as
amended, in connection with the disposition of the Fund's portfolio
securities;
4. borrow money, except that the Fund may borrow money in an amount not
exceeding 33 1/3% of its total assets (including the amount borrowed)
less liabilities (other than borrowings);
5. issue senior securities, except as permitted under the Investment
Company Act of 1940;
6. lend any security or make any loan if, as a result, more than 33 1/3%
of its total assets would be lent to other parties, but this
limitation does not apply to the purchase of debt securities or to
repurchase agreements;
7. purchase or sell physical commodities; however, this policy shall not
prevent the Fund from purchasing and selling foreign currency, futures
contracts, options, forward contracts, swaps, caps, floors, collars
and other financial instruments; or
8. purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments (but this shall not prevent the
Fund from investing in securities or other instruments backed by real
estate or securities of companies engaged in the real estate
business).
9. The Fund may, notwithstanding any other fundamental investment policy
or limitation, invest all of its assets in the securities of a single
open-end management investment company managed by INVESCO Funds Group,
Inc. or an affiliate or a successor thereof, with substantially the
same fundamental investment objective, policies and limitations as the
Fund.
<PAGE>
In addition, each Fund has the following non-fundamental policies, which
may be changed without shareholder approval:
A. The Fund may not sell securities short (unless it owns or has the
right to obtain securities equivalent in kind and amount to the
securities sold short) or purchase securities on margin, except that
(i) this policy does not prevent the Fund from entering into short
positions in foreign currency, futures contracts, options, forward
contracts, swaps, caps, floors, collars and other financial
instruments, (ii) the Fund may obtain such short-term credits as are
necessary for the clearance of transactions, and (iii) the Fund may
make margin payments in connection with futures contracts, options,
forward contracts, swaps, caps, floors, collars and other financial
instruments.
B. The Fund may borrow money only from a bank or from an open-end
management investment company managed by INVESCO Funds Group, Inc. or
an affiliate or a successor thereof for temporary or emergency
purposes (not for leveraging or investing) or by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
will be treated as borrowings for purposes of fundamental limitation
(4)).
C. The Fund does not currently intend to purchase any security if, as a
result, more than 15% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.
D. The Fund may invest in securities issued by other investment companies
to the extent that such investments are consistent with the Fund's
investment objective and policies and permissible under the 1940 Act.
E. With respect to fundamental limitation (1), domestic and foreign
banking will be considered to be different industries.
In addition, with respect to the Funds that may invest in municipal
obligations, the following non-fundamental policy applies, which may be
changed without shareholder approval:
Each state (including the District of Columbia and Puerto Rico), territory
and possession of the United States, each political subdivision, agency,
instrumentality and authority thereof, and each multi-state agency of
which a state is a member is a separate "issuer." When the assets and
revenues of an agency, authority, instrumentality or other political
subdivision are separate from the government creating the subdivision and
the security is backed only by assets and revenues of the subdivision,
such subdivision would be deemed to be the sole issuer. Similarly, in the
case of an Industrial Development Bond or Private Activity Bond, if that
bond is backed only by the assets and revenues of the non-governmental
user, then that non-governmental user would be deemed to be the sole
issuer. However, if the creating government or another entity guarantees a
security, then to the extent that the value of all securities issued or
guaranteed by that government or entity and owned by the Fund exceeds 10%
of the Fund's total assets, the guarantee would be considered a separate
security and would be treated as issued by that government or entity.
Effective May 13, 1999, the section of the Company's SAI entitled "The Funds And
Their Management - Investment Advisory Agreement" is amended to add the
following after the third sentence of the third paragraph:
<PAGE>
In addition, with respect to Communications Fund, beginning May 13, 1999,
the following additional contractual breakpoints are in effect: 0.40% on
the Fund's average net assets from $4 billion; 0.375% of the Fund's
average net assets from $6 billion; and 0.35% of the Fund's average net
assets over $8 billion. With respect to Capital Goods Fund, the above
stated additional contractual breakpoints are in effect from May 13, 1999
through May 21, 1999.
Effective May 13, 1999, the section of the Company's SAI entitled "The Funds And
Their Management - Investment Advisory Agreement" is amended to add the
following after the fourth sentence of the third paragraph:
In addition, with respect to Latin American Growth Fund, beginning May 13,
1999, the following additional contractual breakpoints are in effect:
0.45% on each Fund's average net assets from $2 billion; 0.40% of each
Fund's average net assets from $4 billion; 0.375% of each Fund's average
net assets from $6 billion; and 0.35% of each Fund's average net assets
over $8 billion. With respect to Asian Growth and European Small Company
Funds, the above stated additional contractual breakpoints are in effect
from May 13, 1999 through June 18, 1999.
Effective May 13, 1999, the section of the Company's SAI entitled "The Funds And
Their Management - Investment Advisory Agreement" is amended to add the
following after the fifth sentence of the third paragraph:
In addition, beginning May 13, 1999, the following contractual breakpoints
are in effect: 0.75% on the first $500 million of the Fund's average net
assets; 0.65% on the next $500 million of the Fund's average net assets;
0.55% on the Fund's average net assets from $1 billion; 0.45% on the
Fund's average net assets from $2 billion; 0.40% of the Fund's average net
assets from $4 billion; 0.375% of the Fund's average net assets from $6
billion; and 0.35% of the Fund's average net assets over $8 billion.
Effective May 13, 1999, the section of the Company's SAI entitled "The Funds And
Their Management - Sub-Advisory Agreement" is amended to add the following at
the end of the fifth sentence of the sixth paragraph:
In addition, with respect to all Funds except the Realty and S&P 500 Index
Funds, beginning May 13, 1999, the following additional contractual
breakpoints are in effect: 0.18% on each Fund's average net assets from $2
billion; 0.16% on each Fund's average net assets from $4 billion; 0.15% on
each Fund's average net assets from $6 billion; and 0.14% on each Fund's
average net assets from $8 billion. Effective May 13, 1999, with respect
to the Realty Fund, the fee is contractual and is calculated at the
following annual rates: 0.30% on the first $500 million of the Fund's
average net assets; 0.26% on the next $500 million of the Fund's average
net assets; 0.22% on the Fund's average net assets from $1 billion; 0.18%
on the Fund's average net assets from $2 billion; 0.16% of the Fund's
average net assets from $4 billion; 0.15% of the Fund's average net assets
from $6 billion; and 0.14% of the Fund's average net assets over $8
billion. Prior to May 13, 1999, the advisory fee was calculated at the
annual rate of 0.30% of the Fund's average net assets.
Effective May 13, 1999, the section of the Company's SAI entitled "The Funds And
Their Management - Administrative Services Agreement" is amended to (1) delete
the third paragraph and (2) substitute the following in its place:
As full compensation for services provided under the Administrative
Agreement, each Fund pays a monthly fee to INVESCO consisting of a base
fee of $10,000 per year, plus an additional incremental fee computed daily
and paid monthly at an annual rate of 0.015% per year of the average net
assets of each Fund prior to May 13, 1999 and 0.045% per year of the
average net assets of each Fund effective May 13, 1999.
The date of this Supplement is June 1, 1999.
