-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, F/4tdv4GRO7d55Wxf9JGS6zwWh0dqYRPb/WSSeW9gNjq8o+BetaQ6HoJT4oVHvtp hHcxPqpk5uXSpUZBkz/gXg== 0000110042-97-000010.txt : 19971027 0000110042-97-000010.hdr.sgml : 19971027 ACCESSION NUMBER: 0000110042-97-000010 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970831 FILED AS OF DATE: 19971024 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: INVESCO GROWTH FUND INC /CO/ CENTRAL INDEX KEY: 0000110042 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 840202353 STATE OF INCORPORATION: MD FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-00352 FILM NUMBER: 97700185 BUSINESS ADDRESS: STREET 1: 7800 E UNION AVE STREET 2: STE 800 CITY: DENVER STATE: CO ZIP: 80237 BUSINESS PHONE: 303-930-6300 MAIL ADDRESS: STREET 1: P.O. BOX 173706 CITY: DENVER STATE: CO ZIP: 80217-3706 N-30D 1 Annual Report August 31, 1997 INVESCO GROWTH FUND A smart choice for seeking steady capital growth. INVESCO FUNDS MARKET OVERVIEW September 1997 U.S. financial markets are highly dependent on investors' perception of the domestic economy. This has been especially true this year. In the early spring, fears of inflation and the potential for an overheating economy caused the Federal Reserve Board to increase short-term interest rates by 25 basis points. This produced a sharp pullback in the stock market. Subsequently, the prevailing view had been of strong and stable economic growth with benign inflation. With this change of attitude, equity markets rallied, and many large-capitalization indexes produced 20% gains within a two-month time period. In fact, the Dow Jones Industrial Average jumped 20% in two months for only the third time in 59 years. Recently, however, renewed concerns over inflation, corporate profits, and a stronger-than-expected economy have again increased day-to-day volatility within the equity markets.(1) Why has the economy been so difficult to gauge? Conventional wisdom has always held that strong economic growth and benign inflation couldn't coexist. However, for the last seven months, they have. Some analysts are calling the current economic environment a "new paradigm" or a "utopian environment." The Gross Domestic Product (GDP) -- the primary indicator of economic status -- continues to increase at a rapid pace. In the fourth quarter of 1996, the GDP rose at a revised rate of 3.9%; for the first quarter of 1997, 4.9%; and for the second quarter of 1997, 3.3%. Meanwhile, the specter of inflation has been nonexistent. Wholesale prices across the economy decreased for the first seven months of 1997, yet the unemployment rate measured 4.9% in August and 4.8% in July -- the lowest levels since 1973. Whatever your outlook on the economy, the current environment bodes well for domestic equity markets. Low inflation with strong economic growth may continue to lead to high multiples for corporate stock prices, albeit with likely price volatility. Of course, a significant increase in interest rates could alter the current market conditions and change the investment climate. INVESCO GROWTH FUND Growth Fund Average Annual Total Return as of 8/31/97 (2) 1 Year 28.14% --------------------------- 5 Years 16.68% --------------------------- 10 Years 11.36% --------------------------- The fund's one-year total return as of 8/31/97 was 28.14%, compared to the one-year figure of 40.57% for the S&P 500 broad market index.(1),(2) The fund's underperformance was primarily due to our aggressive posture at the beginning of 1997, which left the portfolio vulnerable when the market corrected in the spring of this year. We remain confident, however, that our investment style should produce superior returns over the full market cycle. The following line graph illustrates the growth of the S&P 500 compared to the value of a $10,000 investment in INVESCO Growth Fund, plus reinvested dividends and capital gain distributions, for the 10 years ended 8/31/97. The chart and other total return figures cited reflect the fund's operating expenses. However, the index does not have expenses, which would, of course, have lowered its performance(2) Graph: This line graph represents a comparison of the value of a $10,000 investment in INVESCO Growth Fund to the value of a $10,000 investment in the S&P 500 Index, assuming in each case reinvestment of all dividends and capital gain distributions, for the ten year period ended 8/31/97. STRATEGIC OVERVIEW Large-capitalization growth stocks continued to lead the domestic equity markets over the last year. Within this environment, fund management has stayed true to our investment philosophy of focusing the fund's core holdings on classic growth companies like Coca-Cola Co., General Electric, Microsoft Corp., and Pfizer Inc. While we remain exposed to some faster-growing companies, we favor the predictability of earnings associated with large-cap growth companies for the foundation of the portfolio. The health care and technology sectors produced strong returns for the fund during the past 12 months, and we will continue to seek opportunities in these faster-growing sectors. In the health care sector, gains were produced by market-leading pharmaceuticals like Johnson & Johnson, Merck & Co., and Pfizer Inc. These pharmaceutical companies continue to benefit from an improved regulatory environment and the introduction of new products to the market. On the technology side, our exposure to large, dependable growth companies like International Business Machines (IBM) and Microsoft Corp. boosted performance. These firms continue to benefit from dominant positions in their respective markets. LOOKING FORWARD The current economic environment bodes well for domestic equity markets. Low inflation and strong economic growth may continue to lead to improved corporate earnings, fueling price appreciation. We have recently, however, reduced the number of stocks in the portfolio. In this way, we should be better able to monitor individual holdings, as we feel that stock selectivity is growing in importance. One minor area of concern is the recent currency turmoil in Southeast Asia. Many large-cap growth companies derive a significant portion of their revenues from the Asia/Pacific Rim economies. Weak Asian currencies and slowing economic growth rates could make U.S. goods less attractive overseas, and potentially hurt the earnings of large-cap companies. Consequently, we will continue to monitor this area closely. FUND MANAGEMENT INVESCO Growth Fund is managed by Senior Vice President Timothy J. Miller. He received his MBA from the University of Missouri, and a BSBA from St. Louis University. An 18-year veteran of the investment business, he is a Chartered Financial Analyst. Before joining INVESCO in 1992, Tim was an analyst and portfolio manager with Mississippi Valley Advisors. Trent E. May was named co-manager in 1996. He received a BS from the Florida Institute of Technology and an MBA from Rollins College. Before joining INVESCO in 1996, Trent was a senior equity manager/equity analyst with Munder Capital Management. He is a Chartered Financial Analyst. (1) The S&P 500 is an unmanaged index of common stocks considered representative of the broad U.S. equity market, while the Dow Jones Industrial Average reflects performance of large-capitalization stocks. (2) Total return assumes reinvestment of dividends and capital gain distributions for the periods indicated. Past performance is not a guarantee of future results. Investment return and principal value will fluctuate so that, when redeemed, an investor's shares may be worth more or less than when purchased. INVESCO Growth Fund, Inc. TEN LARGEST COMMON STOCK HOLDINGS August 31, 1997 Description Value - --------------------------------------------------------------------- PepsiCo Inc $ 30,960,000 Pfizer Inc 30,267,975 General Electric 29,375,000 Philip Morris 29,228,750 Johnson & Johnson 29,194,063 American International Group 29,020,312 Coca-Cola Co 28,942,812 Merck & Co 28,920,938 Bristol-Myers Squibb 28,880,000 SBC Communications 28,818,750 Composition of holdings is subject to change. INVESCO Growth Fund, Inc. STATEMENT OF INVESTMENT SECURITIES August 31, 1997
Shares or Principal Description Amount Value - --------------------------------------------------------------------------------------------- COMMON STOCKS 100.00% BANKS 5.90% BankAmerica Corp 110,000 $ 7,239,375 Chase Manhattan 65,000 7,227,187 Citicorp 215,000 27,439,375 --------------- 41,905,937 --------------- BEVERAGES 8.44% Coca-Cola Co 505,000 28,942,812 PepsiCo Inc 860,000 30,960,000 --------------- 59,902,812 --------------- CHEMICALS 3.95% du Pont (E I) de Nemours 450,000 28,040,625 --------------- COMMUNICATIONS - EQUIPMENT & MANUFACTURING 0.57% Motorola Inc 55,000 4,035,625 --------------- COMPUTER RELATED 15.18% Bay Networks* 600,000 21,225,000 Compaq Computer* 25,000 1,637,500 Hewlett-Packard Co 460,000 28,203,750 International Business Machines 280,000 28,245,000 Microsoft Corp* 215,000 28,420,313 --------------- 107,731,563 --------------- CONSUMER FINANCE 0.55% American Express 50,000 3,887,500 --------------- ELECTRICAL EQUIPMENT 4.14% General Electric 470,000 29,375,000 --------------- ELECTRONICS - SEMICONDUCTOR 4.76% Maxim Integrated Products* 275,000 19,009,375 National Semiconductor* 230,000 7,877,500 Xilinx Inc* 145,000 6,887,500 --------------- 33,774,375 --------------- ENTERTAINMENT 3.15% Disney (Walt) Co 140,000 10,753,750 Time Warner 225,000 11,587,500 --------------- 22,341,250 --------------- FINANCIAL 1.64% Federal National Mortgage Association 265,000 11,660,000 --------------- HEALTH CARE DRUGS - PHARMACEUTICALS 18.04% Bristol-Myers Squibb 380,000 28,880,000 Johnson & Johnson 515,000 29,194,063 Merck & Co 315,000 28,920,938 Pfizer Inc 546,600 30,267,975 SmithKline Beecham PLC ADR Representing 5 Ord A Shrs 250,000 10,828,125 --------------- 128,091,101 --------------- HEALTH CARE RELATED 0.57% Tenet Healthcare* 150,000 4,087,500 --------------- HOUSEHOLD PRODUCTS 3.14% Colgate-Palmolive Co 271,000 17,005,250 Procter & Gamble 40,000 5,322,500 --------------- 22,327,750 --------------- INSURANCE 4.09% American International Group 307,500 29,020,312 --------------- OIL & GAS RELATED 9.93% Exxon Corp 460,000 28,146,250 Mobil Corp 95,000 6,911,250 Royal Dutch Petroleum New York Registry 1.25 Gldr Shr 555,000 28,166,250 Schlumberger Ltd 95,000 7,237,813 --------------- 70,461,563 --------------- PERSONAL CARE 2.28% Avon Products 175,000 11,210,937 Gillette Co 60,000 4,968,750 --------------- 16,179,687 --------------- RESTAURANTS 0.53% McDonald's Corp 80,000 3,785,000 --------------- RETAIL 4.00% Wal-Mart Stores 800,000 28,400,000 --------------- TELECOMMUNICATIONS - LONG DISTANCE 0.96% AT&T Corp 175,000 6,825,000 --------------- TELEPHONE 4.06% SBC Communications 530,000 28,818,750 --------------- TOBACCO 4.12% Philip Morris 670,000 29,228,750 --------------- TOTAL INVESTMENT SECURITIES AT VALUE 100.00% (Cost $672,489,569) (Cost for Income Tax Purposes $672,571,263) $ 709,880,100 =============== * Security is non-income producing. See Notes to Financial Statements
INVESCO Growth Fund, Inc. STATEMENT OF ASSETS AND LIABILITIES August 31, 1997 ASSETS Investment Securities at Value (Cost $672,489,569) $709,880,100 Cash 140,385 Receivables: Investment Securities Sold 22,016,720 Fund Shares Sold 460,757 Dividends 788,998 Prepaid Expenses and Other Assets 94,246 -------------- TOTAL ASSETS 733,381,206 -------------- LIABILITIES Payables: Distributions to Shareholders 102,293 Investment Securities Purchased 23,036,148 Fund Shares Repurchased 823,681 Accrued Distribution Expenses 159,759 Accrued Expenses and Other Payables 38,870 -------------- TOTAL LIABILITIES 24,160,751 -------------- Net Assets at Value 709,220,455 ============== NET ASSETS Paid-in Capital* 506,691,202 Accumulated Distributions in Excess of Net Investment Income (24,778) Accumulated Undistributed Net Realized Gain on Investment Securities and Foreign Currency Transactions 165,163,500 Net Appreciation of Investment Securities and Foreign Currency Transactions 37,390,531 -------------- Net Assets at Value $ 709,220,455 ============== Net Asset Value, Offering and Redemption Price per Share 6.06 ======= * The Fund has 200 million authorized shares of common stock, par value of $0.01 per share, of which 117,112,178 were outstanding at August 31, 1997. See Notes to Financial Statements INVESCO Growth Fund, Inc. STATEMENT OF OPERATIONS Year Ended August 31, 1997 INVESTMENT INCOME INCOME Dividends $8,006,006 Interest 857,195 Foreign Taxes Withheld (34,666) -------------- TOTAL INCOME 8,828,535 -------------- EXPENSES Investment Advisory Fees 3,922,981 Distribution Fees and Expenses 1,706,756 Transfer Agent Fees 1,066,438 Administrative Fees 112,386 Custodian Fees and Expenses 131,329 Directors' Fees and Expenses 38,040 Professional Fees and Expenses 52,240 Registration Fees and Expenses 105,016 Reports to Shareholders 120,595 Other Expenses 37,492 -------------- TOTAL EXPENSES 7,293,273 Fees and Expenses Paid Indirectly (48,910) -------------- NET EXPENSES 7,244,363 -------------- NET INVESTMENT INCOME 1,584,172 -------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENT SECURITIES Net Realized Gain on Investment Securities and Foreign Currency Transactions 185,903,395 Change in Net Appreciation of Investment Securities and Foreign Currency Transactions (23,243,958) -------------- NET GAIN ON INVESTMENT SECURITIES 162,659,437 -------------- Net Increase in Net Assets from Operations $ 164,243,609 ============== See Notes to Financial Statements INVESCO Growth Fund, Inc. STATEMENT OF CHANGES IN NET ASSETS
Year Ended August 31 ------------------------------------ 1997 1996 OPERATIONS Net Investment Income $ 1,584,172 $ 3,536,606 Net Realized Gain on Investment Securities and Foreign Currency Transactions 185,903,395 111,005,199 Change in Net Appreciation of Investment Securities and Foreign Currency Transactions (23,243,958) (15,848,975) ------------------------------------ NET INCREASE IN NET ASSETS FROM OPERATIONS 164,243,609 98,692,830 ------------------------------------ DISTRIBUTIONS TO SHAREHOLDERS Net Investment Income (1,500,483) (3,514,988) Net Realized Gain on Investment Securities (84,751,427) (79,381,324) ------------------------------------ TOTAL DISTRIBUTIONS (86,251,910) (82,896,312) ------------------------------------ FUND SHARE TRANSACTIONS Proceeds from Sales of Shares 647,469,283 295,345,551 Reinvestment of Distributions 77,405,695 73,787,554 ------------------------------------ 724,874,978 369,133,105 Amounts Paid for Repurchase of Shares (690,372,256) (289,488,892) ------------------------------------ NET INCREASE IN NET ASSETS FROM FUND SHARE TRANSACTIONS 34,502,722 79,644,213 ------------------------------------ Total Increase in Net Assets 112,494,421 95,440,731 NET ASSETS Beginning of Period 596,726,034 501,285,303 End of Period (Including Accumulated Undistributed (Distributions in Excess of) Net Investment Income of ($24,778) and $17,416 respectively) $ 709,220,455 $ 596,726,034 ==================================== --------------------------------------------------------- FUND SHARE TRANSACTIONS Shares Sold 113,639,331 55,102,359 Shares Issued from Reinvestment of Distributions 14,903,327 14,849,577 ------------------------------------ 128,542,658 69,951,936 Shares Repurchased (121,110,949) (54,263,125) ------------------------------------ Net Increase in Fund Shares 7,431,709 15,688,811 ====================================
See Notes to Financial Statements INVESCO Growth Fund, Inc. Notes to Financial Statements NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES. INVESCO Growth Fund, Inc. (the "Fund"), is incorporated in Maryland. The investment objective of the Fund is to seek long-term capital growth. The Fund is registered under the Investment Company Act of 1940 (the "Act") as a diversified, open-end management investment company. The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. A. SECURITY VALUATION - Equity securities traded on national securities exchanges or in the over-the-counter market are valued at the last sales price in the market where such securities are primarily traded. If last sales prices are not available, securities are valued at the highest closing bid price obtained from one or more dealers making a market for such securities or by a pricing service approved by the Fund's board of directors. Foreign securities are valued at the closing price on the principal stock exchange on which they are traded. In the event that closing prices are not available for foreign securities, prices will be obtained from the principal stock exchange at or prior to the close of the New York Stock Exchange. Foreign currency exchange rates are determined daily prior to the close of the New York Stock Exchange. If market quotations or pricing service valuations are not readily available, securities are valued at fair value as determined in good faith by the Fund's board of directors. Short-term securities are stated at amortized cost (which approximates market value) if maturity is 60 days or less at the time of purchase, or market value if maturity is greater than 60 days. Assets and liabilities initially expressed in terms of foreign currencies are translated into U.S. dollars at the prevailing market rates as quoted by one or more banks or dealers on the date of valuation. The cost of securities is translated into U.S. dollars at the rates of exchange prevailing when such securities are acquired. Income and expenses are translated into U.S. dollars at the rates of exchange prevailing when accrued. B. SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME - Security transactions are accounted for on the trade date and dividend income is recorded on the ex dividend date. Certain dividends from foreign securities will be recorded as soon as the Fund is informed of the dividend if such information is obtained subsequent to the ex dividend date. Interest income, which may be comprised of stated coupon rate, market discount, amortized premium, and original issue discount, is recorded on the accrual basis. Cost is determined on the specific identification basis. The Fund's use of short-term forward foreign currency contracts may subject it to certain risks as a result of unanticipated movements in foreign exchange rates. The Fund does not hold short-term forward foreign currency contracts for trading purposes. C. FEDERAL AND STATE TAXES - The Fund has complied, and continues to comply, with the provisions of the Internal Revenue Code applicable to regulated investment companies and, accordingly, has made or intends to make sufficient distributions of net investment income and net realized capital gains, if any, to relieve it from all federal and state income taxes and federal excise taxes. To the extent future capital gains are offset by capital loss carryovers, such gains will not be distributed to shareholders. Dividends paid by the Fund from net investment income and distributions of net realized short-term capital gains are, for federal income tax purposes, taxable as ordinary income to shareholders. Of the ordinary income distributions declared for the year ended August 31, 1997, 2.97% qualified for the dividends received deduction available to the Fund's corporate shareholders. Investment income received from foreign sources may be subject to foreign withholding taxes. Dividend and interest income is shown gross of foreign withholding taxes in the accompanying financial statements. D. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS - Dividends and distributions to shareholders are recorded by the Fund on the ex dividend/distribution date. The Fund distributes net realized capital gains, if any, to its shareholders at least annually, if not offset by capital loss carryovers. Income distributions and capital gain distributions are determined in accordance with income tax regulations which may differ from generally accepted accounting principles. These differences are primarily due to differing treatments for foreign currency transactions, nontaxable dividends, net operating losses and expired capital loss carryforwards. For the year ended August 31, 1997, the Fund reclassified $138,025 from accumulated undistributed net investment income to paid-in capital and reclassified $12,142 from accumulated undistributed net realized gain on investment securities to accumulated undistributed net investment income. Net investment income, net realized gains and net assets were not affected. E. EXPENSES - Under an agreement between the Fund and the Fund's Custodian, agreed upon Custodian Fees and Expenses are reduced by credits granted by the Custodian from any temporarily uninvested cash. Similarly, Distribution Expenses and Transfer Agent Fees, are reduced by credits earned by the Fund from security brokerage transactions under certain broker/service arrangements with third parties. Such credits are included in Fees and Expenses Paid Indirectly in the Statement of Operations. For the year ended August 31, 1997, Fees and Expenses Paid Indirectly consisted of $47,462 included in Custodian Fees and Expenses and $323 included in Distribution Expenses, and $1,125 included in Transfer Agent Fees. 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% on the next $350 million of average net assets; and 0.50% on 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 $20.00 per shareholder account, or, where applicable, per participant in an omnibus account, per year. IFG may pay such fee for participants in omnibus accounts to affiliates or third parties. The fee is paid monthly at one-twelfth of the annual fee and is based upon the actual number of accounts in existence during each month. A plan of distribution pursuant to Rule 12b-1 of the Act provided for reimbursement of marketing and advertising expenditures to IFG (the "Distributor") to a maximum of 0.25% of average annual net assets. Effective January 1, 1997, the Rule 12b-1 distribution plan was modified by action of the Board of Directors so that the Fund compensates IFG for permissable activities and services in connection with the distribution of the Fund's shares. For the year ended August 31, 1997, the Fund paid the Distributor $2,526,261 under the plan of distribution. Accordingly, the above amounts reflect reimbursements under the plan for the four months ended December 31, 1996 and compensation under the plan for the eight months ended August 31, 1997. Effective September 29,1997, INVESCO Distributors, Inc., a wholly owned subsidiary of IFG, will replace IFG, as Distributor. NOTE 3 - PURCHASES AND SALES OF INVESTMENT SECURITIES. For the year ended August 31, 1997, the aggregate cost of purchases and proceeds from sales of investment securities (excluding all U.S. Government securities and short-term securities) were $1,893,969,801and $1,891,550,581, respectively. There were no purchases or sales of U.S. Government securities. NOTE 4 - APPRECIATION AND DEPRECIATION. At August 31, 1997, the gross appreciation of securities in which there was an excess of value over tax cost amounted to $48,852,349 and the gross depreciation of securities in which there was an excess of tax cost over value amounted to $11,543,512, resulting in net appreciation of $37,308,837. 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 deferred compensation plan covering all independent directors of the Fund who will have served as an independent director for at least five years at the time of retirement. Benefits under this plan were based on an annual rate equal to 40% of the retainer fee at the time of retirement. Pension expenses for the year ended August 31, 1997, included in Directors' Fees and Expenses in the Statement of Operations were $8,754. Unfunded accrued pension costs of $22,258 and pension liability of $47,036 are included in Prepaid Expenses and Accrued Expenses, respectively, in the Statement of Assets and Liabilities. NOTE 6 - LINE OF CREDIT. The Fund has available a Redemption Line of Credit Facility ("LOC"), from a consortium of national banks, to be used for temporary or emergency purposes to fund redemptions of investor shares. The LOC permits borrowings to a maximum of 5% of the Net Assets at Value of the Fund. The Fund agrees to pay annual fees and interest on the unpaid principal balance based on prevailing market rates as defined in the agreement. At August 31, 1997, there were no such borrowings. INVESCO Growth Fund, Inc. FINANCIAL HIGHLIGHTS (For a Fund Share Outstanding Throughout Each Period)
Year Ended August 31 ---------------------------------------------------------------------- 1997 1996 1995 1994 1993 PER SHARE DATA Net Asset Value - Beginning of Period $ 5.44 $ 5.33 $ 5.34 $ 5.28 $ 4.72 ---------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS Net Investment Income 0.01 0.03 0.05 0.03 0.04 Net Gains on Securities (Both Realized and Unrealized) 1.39 0.95 0.49 0.11 1.00 ---------------------------------------------------------------------- Total from Investment Operations 1.40 0.98 0.54 0.14 1.04 ---------------------------------------------------------------------- LESS DISTRIBUTIONS Dividends from Net Investment Income+ 0.01 0.03 0.05 0.03 0.04 Distributions from Capital Gains 0.77 0.84 0.50 0.05 0.44 ---------------------------------------------------------------------- Total Distributions 0.78 0.87 0.55 0.08 0.48 ====================================================================== Net Asset Value - End of Period $ 6.06 $ 5.44 $ 5.33 $ 5.34 $ 5.28 ====================================================================== TOTAL RETURN 28.14% 20.23% 12.05% 2.52% 22.17% RATIOS Net Assets - End of Period ($000 Omitted) $709,220 $596,726 $501,285 $488,411 $483,957 Ratio of Expenses to Average Net Assets 1.07%@ 1.05%@ 1.06% 1.03% 1.04% Ratio of Net Investment Income to Average Net Assets 0.22% 0.64% 1.07% 0.47% 0.72% Portfolio Turnover Rate 286% 207% 111% 63% 77% Average Commission Rate Paid^^ $ 0.0697 $ 0.0286 - - -
+ Distributions in excess of net investment income for the year ended August 31, 1995, aggregated less than $0.01 on a per share basis. @ Ratio is based on Total Expenses of the Fund, which is before any expense offset arrangements. ^^ The average commission rate paid is the total brokerage commissions paid on applicable purchases and sales of securities for the period divided by the total number of related shares purchased or sold which is required to be disclosed effective for fiscal years beginning September 1, 1995 and thereafter. REPORT OF INDEPENDENT ACCOUNTANTS To the Shareholders and Board of Directors of INVESCO Growth Fund, Inc. In our opinion, the accompanying statement of assets and liabilities, including the statement of investment securities, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of INVESCO Growth Fund, Inc. (the "Fund") at August 31,1997, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with generally accepted accounting principles. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fund's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with generally accepted auditing standards which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at August 31, 1997 by correspondence with the custodian and the application of alternative auditing procedures where securities purchased had not been received, provide a reasonable basis for the opinion expressed above. Price Waterhouse LLP Denver, Colorado October 8, 1997 FAMILY OF FUNDS Newspaper Fund Name Fund Code Ticker Symbol Abbreviation - -------------------------------------------------------------------------------- International International Growth 49 FSIGX IntlGr Asian Growth 41 IVAGX AsianGr European 56 FEURX Europ European Small Company 37 IVECX EuroSmCo Latin American Growth 34 IVSLX LatinAmGr Pacific Basin 54 FPBSX PcBas - -------------------------------------------------------------------------------- Sector Energy 50 FSTEX Enrgy Environmental Services 59 FSEVX Envirn Financial Services 57 FSFSX FinSvc Gold 51 FGLDX Gold Health Sciences 52 FHLSX HlthSc Leisure 53 FLISX Leisur Realty 42 IVSRX Realty Technology 55 FTCHX Tech Utilities 58 FSTUX Util Worldwide Capital Goods 38 ISWGX WldCap Worldwide Communications 39 ISWCX WldCom - -------------------------------------------------------------------------------- Capital Appreciation Growth 10 FLRFX Grwth Dynamics 20 FIDYX Dynm Small Company 74 IDSCX DivSmCo Emerging Growth 60 FIEGX Emgrth - -------------------------------------------------------------------------------- Growth & Income Industrial Income 15 FIIIX IndInc Value Equity 46 FSEQX ValEq Multi-Asset Allocation 70 IMAAX MulAstAl Balanced 71 IMABX Bal Total Return 48 FSFLX TotRtn - -------------------------------------------------------------------------------- Bond Short-Term Bond 33 INIBX ShTrBd Intermediate Government Bond 47 FIGBX IntGov U.S. Government Securities 32 FBDGX USGvt Select Income 30 FBDSX SelInc High Yield 31 FHYPX HiYld - -------------------------------------------------------------------------------- Tax-Exempt Tax-Free Intermediate Bond 36 IVTIX * Tax-Free Long-Term Bond 35 FTIFX TxFre - -------------------------------------------------------------------------------- Money Market U.S. Government Money Fund 44 FUGXX InvGvtMF Cash Reserves 25 FDSXX InvCshR Tax-Free Money Fund 40 FFRXX InvTaxFree * This fund does not meet size requirements to be assigned a ticker symbol in newspaper listings. For more information about any of the INVESCO Funds, including management fees and expenses, please call us at 1-800-525-8085 for a prospectus. Read it carefully before you invest or send money. INVESCO FUNDS INVESCO Distributors, Inc., (SM) Distributor (formerly INVESCO Funds Group, Inc., Distributor) Post Office Box 173706 Denver, CO 80217-3706 1-800-525-8085 PAL(R): 1-800-424-8085 http://www.invesco.com If you're in Denver, visit one of our convenient Investor Centers: Cherry Creek, 155-B Fillmore Street Denver Tech Center, 7800 East Union Avenue, Lobby Level -----END PRIVACY-ENHANCED MESSAGE-----