-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, WPaHHMhDRjxMpTZZDydqiI8yG9WsuhSm0Y5Ld58xSeVM0CBKgYJXP5EV4j8b9j+n PikXOGNC9dX1yk/UTXN6wA== 0000110042-95-000002.txt : 19950424 0000110042-95-000002.hdr.sgml : 19950424 ACCESSION NUMBER: 0000110042-95-000002 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19950228 FILED AS OF DATE: 19950418 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: FINANCIAL INDUSTRIAL FUND INC CENTRAL INDEX KEY: 0000110042 STANDARD INDUSTRIAL CLASSIFICATION: 0000 IRS NUMBER: 840202353 STATE OF INCORPORATION: MD FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-00352 FILM NUMBER: 95529295 BUSINESS ADDRESS: STREET 1: 7800 E UNION AVE STREET 2: STE 800 CITY: DENVER STATE: CO ZIP: 80237 BUSINESS PHONE: 303-930-63 MAIL ADDRESS: STREET 1: P.O. BOX 173706 CITY: DENVER STATE: CO ZIP: 80217-3706 N-30D 1 SEMIANNUAL REPORT February 28, 1995 INVESCO GROWTH FUND, INC. A Smart Choice For Seeking Steady Growth INVESCO FUNDS Market Overview March 1995 Perversely, to the securities markets, strong economic growth can be viewed as a negative, a harbinger of inflation. Some analysts are worried about the figures for late 1994: Gross domestic product (GDP) rose 4.6% for the fourth quarter. That was the sixth straight quarter in which the GDP growth rate was 2.7% or better, and current indications are that growth will be as much as 3% in the current quarter. Corporate earnings growth continued strong throughout the fourth quarter for industries as diverse as airlines, entertainment, and packaging. And 1994 showed the biggest leap in corporate profits for at least two decades. We are finally seeing signs that economic growth is slowing, though. For instance, hourly wages and hours worked remained flat or dropped through February. These factors work together in relieving pressure for increases in wages and benefits -- key contributors to rising inflation. In fact, employer-paid health care costs actually decreased about 1% last year. Another encouraging sign, relative to inflation, is industrial production. The output at U.S. factories and mines grew at just 0.4% in January, half the rate of each of the two preceding months. New factory orders slowed even more. Finally, consumer confidence -- and spending plans -- are also lessening. There are still legitimate concerns regarding inflation. The most widely used index, the CPI, rose 0.3% in January. Moreover, unemployment surprisingly dropped to 5.4% in February. As a consequence of these and other signs, the next few months may bring additional modest increases in the Fed Funds rate. By increasing short-term rates, the Federal Reserve is attempting a "soft landing" -- that is, to moderate the current economic expansion before inflation heats up. Over the past twelve months, the Fed has raised short-term rates by a total of 3.00%. Particularly during the first half of 1994, the markets reacted poorly to these increases -- the Lehman Government/Corporate Bond Index had a total return of negative 4.36% over the six months ended 6/30/94. Bond prices made up some of the lost ground during the latter half of 1994; still, for all of 1994, the Lehman Index dropped 3.53%. Stocks took the initial increases to interest rates poorly, and the S&P 500 lost 3.35% over the first six months of 1994. But they rebounded, gaining 4.87% over the following six months. While inflation is not likely to approach the eight percent-plus levels seen in the early 1980s, it will probably be higher than the 2.5% to 3% range seen during recent years. The INVESCO economic forecast calls for steadily increasing inflation. We anticipate that consumer prices will rise as much as 4.0% year-over-year by the fourth quarter of 1995; that compares to an increase of just 2.7% in 1993 and 2.8% in 1994. In 1994, the markets' performance reflected concern that the Fed would overshoot its goal, bringing growth lower than the 2.5% target -- or worse, induce a recession. Now, however, investors appear to be gaining confidence that interest rates are stabilizing. Investors should keep in mind that any inflation surprises, or a spate of disappointing corporate earnings reports, could trigger corrections. One final factor to bear in mind is the decline of the U.S. dollar against major world currencies. It works in favor of U.S. companies exporting goods and services -- but it also encourages the Federal Reserve Board to increase short-term interest rates. Growth Fund The line graph on the next page illustrates the value of a $10,000 investment in INVESCO Growth Fund, plus reinvested dividends and capital gain distributions, for the ten-year period ended 2/28/95. (Of course, past performance is not a guarantee of future returns.)* The chart and other total return figures cited reflect the fund's operating expenses, but the indices do not have expenses, which would, of course, have lowered their performance. For the six months ended 2/28/95, INVESCO Growth Fund had a total return of negative 3.44%. During the same period, the Russell 2000 had a total return of positive 0.55%, while the S&P 500 achieved a total return of positive 3.96%. (Of course, past performance is not a guarantee of future results.)* Growth Fund Average Annualized Total Return* 12/31/94 2/28/95 1 Year -8.80% -8.12% 5 Years 9.22% 10.61% 10 Years 11.61% 10.78% Stock market moves in the past few months have been rotational -- one sector swiftly succeeding another as market leader and laggard. During the winter, the former included consumer staples, utilities, energy, and technology. Due to concern over rising inflation, the superior earnings growth enjoyed by industrial and consumer cyclical stocks tended to be overlooked, and the market instead rewarded the more stable earnings records of consumer staples firms. During this period, Growth Fund was overweighted in capital goods and consumer cyclicals, and had taken cash and equivalents up to 19% of net assets. Hence, the fund did not participate in the early winter rally enjoyed by the S&P 500 -- although in February, when consumer cyclicals took the lead (and utilities with consumer staples brought up the rear), we paced the broad market. Telefonos de MexicoSA de CV Sponsored ADR was one of our larger holdings at 8/31/94, due to its strong earnings growth. The Mexican currency crisis punished the bolsa across the board, regardless of strong fundamentals, and we closed this position at a loss. Recent takeover activity has made consumer staples more attractive as a group. Over the longer-term, however, these industries have lost much of their pricing power, and earnings growth may well decelerate. Therefore this category has not been over-weighted relative to the market. Over the past few weeks, Growth Fund has selectively increased its focus on food and drug companies. Identifying firms which we expect to have earnings estimates revised upward, we took new positions in Philip Morris, Merck & Co, and Mylan Laboratories. Likewise, we have modestly increased our attention to basic materials -- purchasing Union Camp (paper & paper products) and Barrick Gold (Canadian exploration & mining), both companies with good prospects for seeing growth accelerate. But again, longer-term prospects for this industry appear weaker, due to the lateness of the current economic cycle. Instead, we have sought to position the portfolio to benefit from strong earnings growth in U.S. manufacturing sectors. We have paid particular attention to companies which may enjoy surging export sales due to economic recoveries underway in Europe and the Far East. As a group, the underlying 1995 earnings estimates for fund holdings are well above the market average (18.9% versus 12.5% for the S&P 500). And our stocks are selling at a discount of 16.2% to the S&P 500 multiple. Going forward, we believe that this discount plus above average earnings growth could result in superior performance (although, of course, future performance cannot be guaranteed). Technology stocks continue as the largest portfolio focus. During the last few months, we purchased Xerox Corp, cisco Systems, LEGENT Corp, and Silicon Graphics. Due to seasonal factors, we expect to take profits in some stocks while prices remain strong. But this sector retains its long-term potential and interest. Graph: This line graph represents a comparison of the value of a $10,000 investment in the INVESCO Growth Fund to the value of a $10,000 investment in the S&P 500 and Russell 2000 Indexes, assuming in each case reinvestment of all dividends and capital gain distributions, for the ten year period ended 2/28/95. We trimmed consumer cyclicals during the period -- again, we are at a late stage in the current economic cycle, and we anticipate that earnings growth here is at or near the peak. Additional diversification beyond retail firms was provided by new investments in Marriott International, and Time Warner. Meanwhile, we sold Cifra SA de CV, Price/Costco Inc, Singer Co NV, and Ford Motor. Temporarily, we have cut back on manufacturing and automobile-related industries. Over the last six months, for instance, we sold Louisiana-Pacific Corp, AlliedSignal Inc, Eaton Corp, Federal-Mogul Corp, and Cummins Engine. The capital goods and construction industries remain important to our strategy, though, as we anticipate that selected companies will enjoy continued strong earnings growth. The fund's holdings in Del Webb Corp were increased, and positions opened in Tyco International Ltd and Deere & Co. Graph:Growth Fund Diversification by Value of Net Assets This graph reflects the allocation of the Growth Fund's portfolio by value of net assets in basic materials, capital goods and construction, consumer cyclical, consumer staples, diversified, energy, finance, technology, transportation and services, utilities and cash and equivalent securities as of 2/28/94, 8/31/94, 11/30/95 and 2/28/95 Two sectors in particular suffered from the period's higher interest rate trend -- finance and utilities. Accordingly, holdings in these industries received a serious overhaul. We sold Chase Manhattan and Federal National Mortgage Association. Most utilities positions were closed during the past six months. INVESCO Growth Fund has been managed by R. Dalton Sim since 1988. Mr. Sim has been chief investment officer for the INVESCO funds for seven years; he is chairman and president of INVESCO Trust Company. He has 28 years of experience with prominent financial and investment companies: Putnam Companies, Lazard Freres, Aetna Life & Casualty, Anchor Corporation, and Price Waterhouse. Mr. Sim earned his MBA from Stanford University, and a B. Comm. from the University of Toronto. Additionally, he is a CA, Canadian Institute of Chartered Accountant. *Total return assumes reinvestment of dividends and capital gain distributions. Past performance is not a guarantee of future results. Investment return and principal value will vary so that, when redeemed, an investor's shares may be worth more or less than when purchased. The S&P 500 is an unmanaged index of common stocks considered representative of the broad market. The Russell 2000 is an unmanaged index of small-to-medium-capitalization common stocks. The Lehman Government/Corporate Bond Index is an unmanaged index considered representative of the broad bond market. INVESCO Growth Fund, Inc. Ten Largest Common Stock Holdings* February 28, 1995 Description Value Viacom Inc Class B $13,425,000 Xerox Corp 11,087,500 Hewlett-Packard Co 10,925,000 Crescent Real Estate Equities 10,700,000 Philip Morris 10,631,250 Sears Roebuck 10,588,750 Texas Instruments 10,237,500 Travelers Inc 10,107,500 Columbia/HCA Healthcare 9,723,125 Colgate-Palmolive Co 9,675,000 *The composition of holdings is subject to change. INVESCO Growth Fund, Inc. Statement of Investment Securities February 28, 1995 UNAUDITED Shares or Principal Description Amount Value COMMON STOCKS 81.54% AUTOMOBILE RELATED 1.04% Chrysler Corp 110,000 $4,785,000 ----------- BANKING 2.51% Citicorp 140,000 6,300,000 First Interstate Bancorp 65,000 5,289,375 ----------- 11,589,375 ----------- BROADCASTING 4.57% Gaylord Entertainment Class A 290,700 7,630,875 Viacom Inc Class B* 300,000 13,425,000 ----------- 21,055,875 ----------- CABLE TELEVISION 1.11% Tele-Communications Inc Class A* 225,000 5,118,750 ----------- CLEANING PRODUCTS 2.10% Colgate-Palmolive Co 150,000 9,675,000 ----------- COMPUTER RELATED 10.65% Cisco Systems* 200,000 6,750,000 Compaq Computer* 113,700 3,922,650 Computer Associates International 150,000 8,550,000 Hewlett-Packard Co 95,000 10,925,000 International Business Machines 125,000 9,406,250 LEGENT Corp* 150,000 4,350,000 Silicon Graphics* 150,000 5,193,750 ----------- 49,097,650 ----------- COSMETICS & TOILETRIES 1.08% Dial Corp 200,000 5,000,000 ----------- DIVERSIFIED COMPANIES 4.01% Philip Morris 175,000 $10,631,250 Tyco International Ltd 150,000 7,818,750 ----------- 18,450,000 ----------- ELECTRONICS 4.62% Intel Corp 70,000 5,582,500 Sensormatic Electronics 193,700 5,496,237 Texas Instruments 130,000 10,237,500 ----------- 21,316,237 ----------- EXPLORATION & MINING 0.94% Barrick Gold 200,000 4,350,000 ----------- FINANCE RELATED 2.19% Travelers Inc 260,000 10,107,500 ----------- FOOD PRODUCTS & BEVERAGES 1.07% Seagram Co 160,000 4,920,000 ----------- HEALTH CARE RELATED 5.10% Columbia/HCA Healthcare 235,000 9,723,125 Humana Inc* 400,000 9,500,000 U S HealthCare 100,000 4,300,000 ----------- 23,523,125 ----------- HOTELS 0.44% Marriott International 65,100 2,018,100 ----------- INSURANCE 1.10% Mid Ocean Ltd* 200,000 5,075,000 ----------- MACHINERY 5.40% Cincinnati Milacron 200,000 4,200,000 Deere & Co 65,000 4,980,625 Ingersoll-Rand Co 200,000 6,375,000 Varity Corp* 255,600 9,329,400 ----------- 24,885,025 ----------- MEDICAL RELATED 4.20% Allergan Inc 175,000 5,053,125 Amgen Inc* 140,000 9,660,000 Baxter International 150,000 4,668,750 ----------- 19,381,875 ----------- MEDICAL RELATED - DRUGS 2.84% Merck & Co 125,000 5,296,875 Mylan Laboratories 250,000 7,812,500 ----------- 13,109,375 ----------- OFFICE EQUIPMENT 2.41% Xerox Corp 100,000 11,087,500 ----------- OIL & GAS RELATED 8.67% Apache Corp 300,000 7,500,000 Coastal Corp 160,000 4,580,000 Phillips Petroleum 200,000 6,675,000 TOTAL SA Sponsored ADR Representing Ord B Shrs 204,666 5,679,482 Unocal Corp 200,000 5,675,000 Vastar Resources 160,000 4,140,000 Yacimientos Petroliferos Fiscades SA Sponsored ADR Representing Class D Shrs 300,000 $5,700,000 ----------- 39,949,482 ----------- PAPER & PAPER PRODUCTS 0.75% Union Camp 66,700 3,435,050 ----------- PUBLISHING 1.26% Time Warner 150,000 5,793,750 ----------- REAL ESTATE RELATED 4.14% Crescent Real Estate Equities 400,000 10,700,000 Webb (Del) Corp 425,000 8,393,750 ----------- 19,093,750 ----------- RECREATION SERVICES 1.13% Carnival Corp Class A 220,000 5,225,000 ----------- RETAIL 5.07% AnnTaylor Stores* 100,000 3,300,000 Sears Roebuck 215,000 10,588,750 Wal-Mart Stores 400,000 9,500,000 ----------- 23,388,750 ----------- TELECOMMUNICATIONS 1.63% LDDS Communications* 320,701 7,516,430 ----------- TOYS & HOBBIES 0.58% Mattel Inc 118,750 2,657,031 ----------- TRANSPORTATION 0.93% Southern Pacific Rail* 240,000 4,290,000 ----------- TOTAL COMMON STOCKS (Cost $339,467,724) 375,894,630 ----------- SHORT-TERM INVESTMENTS 18.46% Commercial Paper 18.30% FINANCE RELATED 18.30% American Express Credit 5.800%, 3/6/1995 $18,805,000 18,805,000 Chevron Oil Finance 5.830%, 3/1/1995 $12,533,000 12,533,000 General Electric Capital Services 5.850%, 3/3/1995 $11,877,000 11,877,000 Household Finance 5.850%, 3/1/1995 $6,127,000 6,127,000 5.800%, 3/1/1995 $13,880,000 13,880,000 Sears Roebuck Acceptance 5.900%, 3/8/1995 $21,150,000 21,150,000 ----------- TOTAL COMMERCIAL PAPER (Cost $84,372,000) 84,372,000 ----------- Repurchase Agreements 0.16% Repurchase Agreement with State Street Bank & Trust Co dated 2/28/1995 due 3/1/1995 at 5.500%, repurchased at $750,115 (Collateralized by US Treasury Notes due 10/31/1996 at 6.500%, value $783,294) (Cost $750,000) $750,000 $750,000 ----------- TOTAL SHORT-TERM INVESTMENTS (Cost $85,122,000) 85,122,000 ----------- TOTAL INVESTMENT SECURITIES AT VALUE 100.00% (Cost $424,589,724#) $461,016,630 ============ *Security is non-income producing. #Also represents cost for income tax purposes. See Notes to Financial Statements INVESCO Growth Fund, Inc. Statement of Assets and Liabilities February 28, 1995 UNAUDITED ASSETS Investment Securities at Value (Cost $424,589,724) $461,016,630 Cash 21,319 Receivables: Investment Securities Sold 7,842,050 Fund Shares Sold 2,112,584 Dividends and Interest 675,535 Prepaid Expenses and Other Assets 58,914 ------------ TOTAL ASSETS 471,727,032 ------------ LIABILITIES Payables: Distributions to Shareholders 124,510 Investment Securities Purchased 15,923,798 Fund Shares Repurchased 91,308 Accrued Distribution Expenses 825,910 Accrued Expenses and Other Payables 29,389 ------------ TOTAL LIABILITIES 16,994,915 ------------ Net Assets at Value $454,732,117 ============ NET ASSETS Paid-in Capital* $414,289,163 Accumulated Undistributed Net Investment Income 58,054 Accumulated Undistributed Net Realized Gain on Investment Securities 3,957,994 Net Appreciation of Investment Securities 36,426,906 ------------ Net Assets at Value $454,732,117 ============ Net Asset Value, Offering and Redemption Price per Share $4.62 ===== *The Fund has 200 million authorized shares of common stock, par value of $0.01 per share, of which 98,488,472 shares were outstanding at February 28, 1995. See Notes to Financial Statements INVESCO Growth Fund, Inc. Statement of Operations Six-Months Ended February 28, 1995 UNAUDITED INVESTMENT INCOME INCOME Dividends $3,208,181 Interest 1,522,681 ----------- TOTAL INCOME 4,730,862 ----------- EXPENSES Investment Advisory Fees 1,342,524 Distribution Expenses 570,859 Transfer Agent Fees 352,899 Administrative Fees 39,252 Custodian Fees and Expenses 17,588 Directors' Fees and Expenses 20,677 Professional Fees and Expenses 24,822 Registration Fees and Expenses 29,682 Reports to Shareholders 38,425 Other Expenses 6,974 ----------- TOTAL EXPENSES 2,443,702 ----------- NET INVESTMENT INCOME 2,287,160 ----------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENT SECURITIES Net Realized Gain on Investment Securities 10,090,689 Change in Net Depreciation of Investment Securities (29,286,089) ----------- NET LOSS ON INVESTMENT SECURITIES (19,195,400) ----------- Net Decrease in Net Assets from Operations $(16,908,240) =========== See Notes to Financial Statements INVESCO Growth Fund, Inc. Statement of Changes in Net Assets Six-Months Ended Year Ended February 28 August 31 1995 1994 UNAUDITED OPERATIONS Net Investment Income $2,287,160 $2,326,577 Net Realized Gain on Investment Securities 10,090,689 43,030,605 Change in Net Depreciation of Investment Securities (29,286,089) (33,651,104) ------------- ------------- NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS (16,908,240) 11,706,078 ------------- ------------- DISTRIBUTIONS TO SHAREHOLDERS Net Investment Income (2,250,533) (2,299,634) Net Realized Gain on Investment Securities (44,862,077) (4,543,653) ------------- ------------- TOTAL DISTRIBUTIONS (47,112,610) (6,843,287) ------------- ------------- FUND SHARE TRANSACTIONS Proceeds from Sales of Shares 42,005,898 177,341,865 Reinvestment of Distributions 41,965,780 6,075,869 ------------- ------------- 83,971,678 183,417,734 Amounts Paid for Repurchases of Shares (53,629,567) (183,826,443) ------------- ------------- NET INCREASE (DECREASE) IN NET ASSETS FROM FUND SHARE TRANSACTIONS 30,342,111 (408,709) ------------- ------------- Total Increase (Decrease) in Net Assets (33,678,739) 4,454,082 NET ASSETS Beginning of Period 488,410,856 483,956,774 ------------- ------------- End of Period (Including Accumulated Undistributed Net Investment Income of $58,054 and $21,427, respectively) $454,732,117 $488,410,856 ============= ============= FUND SHARE TRANSACTIONS Shares Sold 8,540,516 33,033,950 Shares Issued from Reinvestment of Distributions 9,255,946 1,107,074 ------------- ------------- 17,796,462 34,141,024 Shares Repurchased (10,820,844) (34,227,070) ------------- ------------- Net Increase (Decrease) in Fund Shares 6,975,618 (86,046) ============= ============= See Notes to Financial Statements INVESCO Growth Fund, Inc. Notes to Financial Statements UNAUDITED NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES. The Fund, a Maryland corporation, is registered under the Investment Company Act of 1940 (the "Act") as a diversified, open-end management investment company. The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. A. SECURITY VALUATION - Equity securities traded on national securities exchanges or in the over-the-counter market are valued at the last sale price in the market where such securities are primarily traded. If last sale prices are not available, securities are valued at the highest closing bid price obtained from one or more dealers making a market for such securities or by a pricing service approved by the Fund's board of directors. If market quotations or pricing service valuations are not readily available, securities are valued at fair value as determined in good faith by the Fund's board of directors. Short-term securities are stated at amortized cost (which approximates market value) if maturity is 60 days or less, or at market value if maturity is greater than 60 days. B. REPURCHASE AGREEMENTS - Repurchase agreements held by the Fund are fully collateralized by U.S. Government securities and such collateral is in the possession of the Fund's custodian. The collateral is evaluated daily to ensure its market value exceeds the current market value of the repurchase agreements including accrued interest. C. SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME - Security transactions are accounted for on the trade date and dividend income is recorded on the ex dividend date. Interest income, which may be comprised of stated coupon rate, market discount and original issue discount is recorded on the accrual basis. Cost is determined on the specific identification basis. D. FEDERAL AND STATE TAXES - The Fund has complied with the provisions of the Internal Revenue Code applicable to regulated investment companies and, accordingly, has made or intends to make sufficent distributions of net investment income and net realized capital gains, if any, to relieve it from all federal and state income taxes and federal excise taxes. Dividends paid by the Fund from net investment income and distributions of net realized short-term capital gains are, for federal income tax purposes, taxable as ordinary income to shareholders. E. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS - Dividends and distributions to shareholders are recorded by the Fund on the ex dividend/distribution date. The Fund distributes net realized capital gains, if any, to its shareholders at least annually, if not offset by capital loss carryovers. Income distributions and capital gain distributions are determined in accordance with income tax regulations which may differ from generally accepted accounting principles. These differences are primarily due to differing treatments for nontaxable dividends, net operating losses, expiring capital loss carry forwards and deferral of wash sales. NOTE 2 - INVESTMENT ADVISORY AND OTHER AGREEMENTS. INVESCO Funds Group, Inc. ("IFG") serves as the Fund's investment adviser. As compensation for its services to the Fund, IFG receives an investment advisory fee which is accrued daily at the applicable rate and paid monthly. The fee is based on the annual rate of 0.60% on the first $350 million of average net assets; reduced to 0.55% of the next $350 million of average net assets; and 0.50% of average net assets in excess of $700 million. In accordance with a Sub-Advisory Agreement between IFG and INVESCO Trust Company ("ITC"), a wholly owned subsidiary of IFG, investment decisions of the Fund are made by ITC. Fees for such sub-advisory services are paid by IFG. In accordance with an Administrative Agreement, the Fund pays IFG an annual fee of $10,000, plus an additional amount computed at an annual rate of 0.015% of average net assets to provide administrative, accounting and clerical services. The fee is accrued daily and paid monthly. IFG receives a transfer agent fee at an annual rate of $14.00 per shareholder account, or per participant in an omnibus account. IFG may pay such fee for participants in omnibus accounts to affiliates or third parties. The fee is paid monthly at one-twelfth of the annual fee and is based upon the actual number of accounts in existence during each month. A plan of distribution pursuant to Rule 12b-1 of the Act provides for reimbursement of marketing and advertising expenditures to IFG (the "Distributor") to a maximum of 0.25% of average annual net assets. Amounts accrued by the Fund are available to reimburse the Distributor for actual expenditures incurred within a rolling twelve-month period. For the six-months ended February 28, 1995, the Fund paid the Distributor $301,361 for reimbursement of expenses incurred. NOTE 3 - PURCHASES AND SALES OF INVESTMENT SECURITIES. For the six-months ended February 28, 1995, the aggregate cost of purchases and proceeds from sales of investment securities (excluding all U.S. Government securities and short-term securities) were $178,572,632 and $215,720,818, respectively. There were no purchases or sales of U.S. Government securities. NOTE 4 - APPRECIATION AND DEPRECIATION. At February 28, 1995, the gross appreciation of securities in which there was an excess of value over tax cost amounted to $44,094,127, and the gross depreciation of securities in which there was an excess of tax cost over value amounted to $7,667,221 resulting in net appreciation of $36,426,906. NOTE 5 - TRANSACTIONS WITH AFFILIATES. Certain of the Fund's officers and directors are also officers and directors of IFG or ITC. The Fund has adopted an unfunded noncontributory defined benefit pension plan covering all independent directors of the Fund who will have served as an independent director for at least five years at the time of retirement. Benefits under this plan are based on an annual rate equal to 25% of the retainer fee at the time of retirement. Pension expenses for the six-months ended February 28, 1995, included in Directors' Fees and Expenses in the Statement of Operations were $476. Prepaid pension costs of $23,846 and accrued pension liability of $24,320 are included in prepaid expenses and accrued expenses, respectively, in the Statement of Assets and Liabilities. INVESCO Growth Fund, Inc. Financial Highlights (For a Fund Share Outstanding throughout Each Period)
Six-Months Ended February 28 Year Ended August 31 1995 1994 1993 1992 1991 1990 UNAUDITED PER SHARE DATA Net Asset Value-- Beginning of Period $5.34 $5.28 $4.72 $5.26 $4.37 $4.54 ------ ---------------------------------------------- INCOME FROM INVESTMENT OPERATIONS Net Investment Income 0.02 0.03 0.04 0.05 0.07 0.10 Net Gains or (Losses) on Securities (Both Realized and Unrealized) (0.22) 0.11 1.00 0.05 1.28 (0.14) ------ ---------------------------------------------- Total from Investment Operations (0.20) 0.14 1.04 0.10 1.35 (0.04) ------ ---------------------------------------------- LESS DISTRIBUTIONS Dividends from Net Investment Income 0.02 0.03 0.04 0.05 0.08 0.11 Distributions from Capital Gains 0.50 0.05 0.44 0.59 0.38 0.02 ------ ---------------------------------------------- Total Distributions 0.52 0.08 0.48 0.64 0.46 0.13 ------ ---------------------------------------------- Net Asset Value-- End of Period $4.62 $5.34 $5.28 $4.72 $5.26 $4.37 ====== ============================================== TOTAL RETURN (3.44%)* 2.52% 22.17% 2.04% 31.16% (1.01%) RATIOS Net Assets-- End of Period ($000 Omitted) $454,732 $488,411 $483,957 $408,218 $428,564 $339,927 Ratio of Expenses to Average Net Assets 0.53%* 1.03% 1.04% 1.04% 1.00% 0.78% Ratio of Net Investment Income to Average Net Assets 0.50%* 0.47% 0.72% 0.93% 1.52% 2.17% Portfolio Turnover Rate 44%* 63% 77% 77% 69% 86%
*These amounts are based on operations for the period shown and, accordingly, are not representative of a full year. INVESCO FUNDS To receive general information and prospectuses on any of INVESCO's funds or retirement plans, or to obtain current account or price information. Call toll-free: 1-800-525-8085 To reach PAL, your 24-hour Personal Account Line, call: 1-800-525-8085 Or write to: INVESCO Funds Group, Inc., Distributor Post Office Box 173706 Denver, Colorado 80217-3706 This information must be preceded or accompanied by a current prospectus. -----END PRIVACY-ENHANCED MESSAGE-----