-----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, RVLREGEdJXoT/6XacgKl7dUBlS4e5+xd8tKoLcaxXgy9FKzGV6Q8pl00jmnHy2xZ 17lEMAIGz2UupodDO+GiVw== 0000110042-98-000003.txt : 19980427 0000110042-98-000003.hdr.sgml : 19980427 ACCESSION NUMBER: 0000110042-98-000003 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980228 FILED AS OF DATE: 19980424 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: 98600854 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 Semiannual Report February 28, 1998 INVESCO GROWTH FUND You should know what INVESCO knows. INVESCO FUNDS Market Overview March 1998 Like a great prize fighter, it appears that the U.S. economy has taken Asia's best punch and continues to fight. At the beginning of the Asian financial crisis, in the summer of 1997, investment professionals postulated that Asian currency problems were "isolated," and would have little effect on the U.S. economy. Then, as the contagion spread, market pundits theorized that the crisis would derail economic growth in the U.S. and possibly devastate most of the world's financial markets -- wrong again. As with most financial crises, speculation on the length and severity of the situation varies from extreme pessimism to extreme optimism, with the truth usually between the two. Over the last six months, this uncertainty increased volatility in the equity markets -- producing both the first market correction in more than seven years and record highs for most indexes. However, as fears of deflation swept through the economy, fixed-income markets experienced a significant rally, with high-quality obligations realizing the strongest returns. With so much uncertainty regarding the direction of the U.S. economy, it's important to examine the known facts: - The U.S. economy is still the dominant economy in the world. GDP (Gross Domestic Product) grew 3.8% last year -- the fastest rate since 1988. - U.S. exports to the Asian/Pacific Rim region are relatively minimal, currently representing less than 15% of our total exports. - Inflation remains subdued, as both consumer and producer prices remain stable. - Consumer confidence is at its highest level in more than 27 years. - Unemployment is at historically low levels, and real wages are starting to increase. - The chronic U.S. budget deficit might become a surplus in the next few years. It appears that the domestic economy is still poised for growth with benign inflation. Although the Asian financial crisis will influence the profitability of certain industries, it will probably have only a minor effect on the U.S. expansion, as consumer demand remains strong here and in Europe. In fact, the crisis may have been a positive for the U.S, as it applied the brakes to an exuberant economy before it had the chance to overheat. Plus, the crisis may create necessary reforms in Asian economies which could allow for greater global competition. Nonetheless, 1998 may be a more selective stock market with greater volatility compared to the last three years. For fixed-income investors, deflationary pressures produced by the Asian crisis should keep both consumer and producer prices in check as cheaper foreign goods flood the U.S. markets. This may keep the Federal Reserve Board from changing the interest rate environment until the crisis has washed through the U.S. economy. The one possible inflationary pressure remains increasing real wages, given low unemployment rates. Nevertheless, the overall outlook for the fixed-income markets continues to be positive. INVESCO Growth Fund INVESCO Growth Fund Average Annual Total Return as of 2/28/98 (2) --------------------------------------------- 1 Year 31.18% --------------------------------------------- 5 Years 18.02% --------------------------------------------- 10 Years 15.93% --------------------------------------------- For the six-month period ended 2/28/98, INVESCO Growth Fund achieved a total return of 18.25%, compared to the six-month figure of 17.62% for the S&P 500.(1) (2) The line graph on the previous page illustrates the growth of the S&P 500 Index 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 2/28/98. 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. (1),(2) Graph: This line graph compares 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 February 28, 1998. Strategic Overview The fund continues to invest a core portion of the portfolio in high quality, large-capitalization growth companies. These firms are market leaders and have historically delivered predictable and consistent earnings over the business cycle. For the remaining holdings, we seek to identify companies with leading positions which serve attractive growth markets and which have the potential for superior financial returns. This strategy produces a portfolio that combines premier stable growth companies with faster-growing firms in the communications, technology, and health care sectors. In the summer of 1997, we reduced the overall number of securities in the portfolio, making the fund somewhat more concentrated in large-cap growth stocks. This action was based on the belief that, in an uncertain market environment, predictability of earnings would be crucial. While past performance is no guarantee of future results, our intensified focus paid off for the fund as large-cap growth companies produced strong returns during the last six volatile months. Colgate-Palmolive Co., Merck & Co., and Fannie Mae are examples of large-cap stocks which provided healthy results for the fund and remain core holdings. (Holdings and composition of holdings are subject to change.) In regard to faster-growing firms serving attractive growth markets, we have avoided companies that derive a significant portion of their revenues from Asian markets. We focused instead on institutions that could benefit from the strong domestic economy. For instance, we believe that deregulation of the telecommunications industry has created enormous growth opportunities for selected telecommunications companies, and WorldCom Inc. remains one of our favorite stocks. The fund will continue to look for the best investments in communications industries, as well as the health care and technology sectors. Looking Forward We believe that 1998 will be a year of slower earnings growth and more volatile equity markets. Within this environment, predictability of earnings will remain critical as any earnings disappointments will be negatively dealt with by the market. Thus, we will continue to allocate a substantial portion of the fund's assets to large-cap growth companies. Fund Management INVESCO Growth Fund is managed by Vice President Trent E. May. He received a BS from the Florida Institute of Technology and a 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. Senior Vice President Timothy J. Miller is co-manager of the fund. 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. (1)The S&P 500 is an unmanaged index of common stocks considered representative of the broad U.S. equity market. (2)Total return assumes reinvestment of dividends and capital gain distributions for the periods indicated. Past performance is not a guarantee of future results. Investment return and principal value will fluctuate so that, when redeemed, an investor's shares may be worth more or less than when purchased.
INVESCO Growth Fund, Inc. Ten Largest Common Stock Holdings February 28, 1998 Description Value - -------------------------------------------------------------------------------------------- Wal-Mart Stores $ 33,622,875 Ford Motor 33,258,750 Johnson & Johnson 32,646,200 Disney (Walt) Co 32,103,675 Fannie Mae 31,906,250 American International Group 31,248,750 Merck & Co 30,729,806 Hewlett-Packard Co 30,424,700 Procter & Gamble 30,322,688 Bristol-Myers Squibb 30,216,550 Composition of holdings is subject to change.
INVESCO Growth Fund, Inc. Statement of Investment Securities February 28, 1998 UNAUDITED - -------------------------------------------------------------------------------------------- Shares or Principal Description Amount Value - -------------------------------------------------------------------------------------------- COMMON STOCKS 99.79% AUTOMOBILES 3.99% Ford Motor 588,000 $ 33,258,750 ------------ BANKS 1.02% BankAmerica Corp 109,900 8,517,250 ------------ BEVERAGES 3.49% Coca-Cola Co 424,000 29,123,500 ------------ CHEMICALS 3.54% du Pont (E I) de Nemours+ 482,000 29,552,625 ------------ COMPUTER RELATED 11.58% HNC Software* 218,130 7,770,881 Hewlett-Packard Co 454,100 30,424,700 International Business Machines 272,500 28,459,219 Microsoft Corp* 352,900 29,908,275 ------------ 96,563,075 ------------ ELECTRICAL EQUIPMENT 3.58% General Electric 384,000 29,856,000 ------------ ELECTRONICS -- SEMICONDUCTOR 6.01% Altera Corp* 188,460 8,127,337 Intel Corp 326,800 29,309,875 Maxim Integrated Products* 315,100 12,722,163 ------------ 50,159,375 ------------ ENTERTAINMENT 3.85% Disney (Walt) Co 286,800 $ 32,103,675 ------------ FINANCIAL 3.83% Fannie Mae 500,000 31,906,250 ------------ HEALTH CARE DRUGS -- PHARMACEUTICALS 18.09% Bristol-Myers Squibb 301,600 30,216,550 Johnson & Johnson 432,400 32,646,200 Lilly (Eli) & Co 412,600 27,154,238 Merck & Co 240,900 30,729,806 Pfizer Inc 341,000 30,178,500 ------------ 150,925,294 ------------ HOUSEHOLD PRODUCTS 4.62% Colgate-Palmolive Co 101,600 8,248,650 Procter & Gamble 357,000 30,322,688 ------------ 38,571,338 ------------ INSURANCE 7.29% American International Group 260,000 31,248,750 Travelers Group 530,000 29,547,500 ------------ 60,796,250 ------------ LEISURE TIME 0.80% International Game Technology 274,600 6,659,050 ------------ OIL & GAS RELATED 8.54% Exxon Corp 467,900 29,887,112 Royal Dutch Petroleum New York Registry 1.25 Gldr Shrs 527,400 28,644,413 Schlumberger Ltd 168,700 12,715,763 ------------ 71,247,288 ------------ RETAIL 4.03% Wal-Mart Stores 726,000 33,622,875 ------------ SERVICES 0.99% Cendant Corp* 219,200 8,220,000 ------------ TELECOMMUNICATIONS -- LONG DISTANCE 4.38% AT&T Corp 467,500 28,459,062 WorldCom Inc* 211,500 8,076,656 ------------ 36,535,718 ------------ TELEPHONE 6.89% Bell Atlantic 312,000 28,002,000 SBC Communications 390,000 29,493,750 ------------ 57,495,750 ------------ TOBACCO 3.27% Philip Morris 628,000 27,278,750 ------------ TOTAL COMMON STOCKS (Cost $707,376,584) 832,392,813 ------------ SHORT-TERM INVESTMENTS -- COMMERCIAL PAPER 0.21% FINANCIAL 0.21% Associates Corp of North America 5.673%, 3/2/1998 (Cost $1,760,000) $ 1,760,000 1,760,000 ------------ TOTAL INVESTMENT SECURITIES AT VALUE 100.00% (Cost $709,136,584) (Cost for Income Tax Purposes $711,158,475) $834,152,813 ============
CALL OPTIONS - -------------------------------------------------------------------------------------------- Number of Expiration Exercise Premium Market Contracts Date Price Received Value - -------------------------------------------------------------------------------------------- Call Option on du Pont (EI) de Nemours 1,000 4/18/1998 $55 $409,486 $675,000 + Security has been designated as collateral for call options. * Security is non-income producing. See Notes to Financial Statements
INVESCO Growth Fund, Inc. Statement of Assets and Liabilities February 28, 1998 UNAUDITED ASSETS Investment Securities at Value (Cost $709,136,584) $ 834,152,813 Cash 3,229,576 Receivables: Investment Securities Sold 19,084,330 Fund Shares Sold 764,662 Dividends and Interest 1,078,510 Prepaid Expenses 94,348 --------------- TOTAL ASSETS 858,404,239 --------------- LIABILITIES Options Written, at Value (Premiums Received $409,486) 675,000 Payables: Distributions to Shareholders 7,449 Investment Securities Purchased 24,249,901 Fund Shares Repurchased 4,445,547 Accrued Distribution Expenses 149,251 Accrued Expenses 48,684 --------------- TOTAL LIABILITIES 29,575,832 --------------- Net Assets at Value $ 828,828,407 =============== NET ASSETS Paid-in Capital* $ 685,060,949 Accumulated Undistributed Net Investment Income 1,732,570 Accumulated Undistributed Net Realized Gain on Investment Securities and Foreign Currency Transactions 17,284,173 Net Appreciation of Investment Securities and Foreign Currency Transactions 124,750,715 --------------- Net Assets at Value $ 828,828,407 =============== Net Asset Value, Offering and Redemption Price per Share $5.39 ===== * The Fund has 200 million authorized shares of common stock, par value of $0.01 per share, of which 153,690,703 were outstanding at February 28, 1998. See Notes to Financial Statements INVESCO Growth Fund, Inc. Statement of Operations Six Months Ended February 28, 1998 UNAUDITED INVESTMENT INCOME INCOME Dividends $ 5,748,622 Interest 68,111 Foreign Taxes Withheld (65,795) --------------- TOTAL INCOME 5,750,938 --------------- EXPENSES Investment Advisory Fees 2,141,831 Distribution Expenses 940,756 Transfer Agent Fees 557,732 Administrative Fees 61,445 Custodian Fees and Expenses 43,188 Directors' Fees and Expenses 29,861 Professional Fees and Expenses 32,704 Registration Fees and Expenses 55,982 Reports to Shareholders 137,072 Other Expenses 11,679 --------------- TOTAL EXPENSES 4,012,250 Fees and Expenses Paid Indirectly (18,660) --------------- NET EXPENSES 3,993,590 --------------- NET INVESTMENT INCOME 1,757,348 --------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENT SECURITIES Net Realized Gain on Investment Securities and Foreign Currency Transactions 39,191,928 Change in Net Appreciation of: Investment Securities and Foreign Currency Transactions 87,094,670 Call Options (See Note 1) 265,514 --------------- Total Net Appreciation 87,360,184 --------------- NET GAIN ON INVESTMENT SECURITIES 126,552,112 --------------- Net Increase in Net Assets from Operations $ 128,309,460 =============== See Notes to Financial Statements
INVESCO Growth Fund, Inc. Statement of Changes in Net Assets Six Months Year Ended Ended February 28 August 31 ------------- ------------ 1998 1997 UNAUDITED OPERATIONS Net Investment Income $ 1,757,348 $ 1,584,172 Net Realized Gain on Investment Securities and Foreign Currency Transactions 39,191,928 185,903,395 Change in Net Appreciation of Investment Securities, Foreign Currency Transactions and Call Options 87,360,184 (23,243,958) --------------- ------------ NET INCREASE IN NET ASSETS FROM OPERATIONS 128,309,460 164,243,609 --------------- ------------ DISTRIBUTIONS TO SHAREHOLDERS Net Investment Income 0 (1,500,483) Net Realized Gain on Investment Securities and Foreign Currency Transactions (187,071,255) (84,751,427) --------------- ------------ TOTAL DISTRIBUTIONS (187,071,255) (86,251,910) --------------- ------------ FUND SHARE TRANSACTIONS Proceeds from Sales of Shares 282,403,499 647,469,283 Reinvestment of Distributions 165,451,154 77,405,695 -------------- ------------ 447,854,653 724,874,978 Amounts Paid for Repurchases of Shares (269,484,906) (690,372,256) --------------- ------------ NET INCREASE IN NET ASSETS FROM FUND SHARE TRANSACTIONS 178,369,747 34,502,722 -------------- ------------ Total Increase in Net Assets 119,607,952 112,494,421 NET ASSETS Beginning of Period 709,220,455 596,726,034 -------------- ------------ End of Period (Including Accumulated Undistributed (Distributions in Excess of) Net Investment Income of $1,732,570 and ($24,778), respectively) $828,828,407 $709,220,455 =============== ============ - -------------------------------------------------------------------------------------------- FUND SHARE TRANSACTIONS Shares Sold 48,900,138 113,639,331 Shares Issued from Reinvestment of Distributions 34,043,449 14,903,327 -------------- ------------ 82,943,587 128,542,658 Shares Repurchased (46,365,062) (121,110,949) -------------- ------------ Net Increase in Fund Shares 36,578,525 7,431,709 ============== ============ See Notes to Financial Statements
INVESCO Growth Fund, Inc. Notes to Financial Statements UNAUDITED 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. Options are valued at the last sales price on the principal exchange on which the options are traded. If there is no last sales price reported, then the bid price will be used. If market quotations or pricing service valuations are not readily available, securities are valued at fair value as determined in good faith by the 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 such securities are acquired. B. OPTIONS - The Fund may write covered call options. When an option the Fund receives a premium and becomes obligated to sell the underlying security at a fixed price, upon exercise of the option. In writing an option, the Fund bears the market risk of an unfavorable change in the price of the security underlying the written option. Exercise of an option written by the Fund could result in the Fund selling a security at a price different from the current market value. All securities covering call options written are held in escrow by the Fund's custodian. Written option activity for the six months ended February 28, 1998 was as follows: Call Options ----------------------------- Number Amount of Options of Premiums --------------------------------------------------------------------------- Options outstanding at August 31, 1997..... 0 $ 0 Options written ............................ 1,000 409,486 Options closed or expired................... 0 0 Options exercised........................... 0 0 --------------------------- Options outstanding at February 28, 1998.... 1,000 $ 409,486 =========================== C. SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME - Security transactions are accounted for on the trade date and dividend income is recorded on the ex dividend date. Certain dividends from foreign securities will be recorded as soon as the Fund is informed of the dividend if such information is obtained subsequent to the ex dividend date. Interest income, which may be comprised of stated coupon rate, market discount, original issue discount and amortized premium, is recorded on the accrual basis. Cost is determined on the specific identification basis. The Fund may have elements of risk due to concentrated investments in foreign issuers located in a specific country. Such concentrations may subject the Fund to additional risks resulting from future political or economic conditions and/or possible impositions of adverse foreign governmental laws or currency exchange restrictions. Net realized and unrealized gain or loss from investments includes fluctuations from currency exchange rates and fluctuations in market value. The Fund's use of short-term forward foreign currency contracts may subject it to certain risks as a result of unanticipated movements in foreign exchange rates. The Fund does not hold short-term forward foreign currency contracts for trading purposes. The Fund may hold foreign currency in anticipation of settling foreign security transactions and not for investment purposes. D. FEDERAL AND STATE TAXES - The Fund has complied, and continues to comply, with the provisions of the Internal Revenue Code applicable to regulated investment companies and, accordingly, has made or intends to make sufficient distributions of net investment income and net realized capital gains, if any, to relieve it from all federal and state income taxes and federal excise taxes. 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. 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. E. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS - Dividends and distributions to shareholders are recorded by the Fund on the ex dividend/distribution date. The Fund distributes net realized capital gains, if any, to its shareholders at least annually, if not offset by capital loss carryovers. Income distributions and capital gain distributions are determined in accordance with income tax regulations which may differ from generally accepted accounting principles. These differences are primarily due to differing treatments for foreign currency transactions, nontaxable dividends, net operating losses and expired capital loss carryforwards. F. FORWARD FOREIGN CURRENCY CONTRACTS - The Fund enters into short-term forward foreign currency contracts in connection with planned purchases or sales of securities as a hedge against fluctuations in foreign exchange rates pending the settlement of transactions in foreign securities. A forward foreign currency contract is an agreement between contracting parties to exchange an amount of currency at some future time at an agreed upon rate. These contracts are marked-to-market daily and the related appreciation or depreciation of the contracts is presented in the Statement of Assets and Liabilities. G. EXPENSES - 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, Custodian Fees and 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 six months ended February 28, 1998, Fees and Expenses Paid Indirectly consisted of $18,467 included in Custodian Fees and Expenses and $193 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 were made by ITC. Effective February 4, 1998, such responsibilities were transferred to IFG. 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 provides for compensation of marketing and advertising expenditures to IFG (the "Distributor") to a maximum of 0.25% of annual average net assets. For the six months ended February 28, 1998, the Fund paid the Distributor $950,133 under the plan of distribution. Effective September 29, 1997, INVESCO Distributors, Inc., a wholly owned subsidiary of IFG, replaced IFG as Distributor. NOTE 3 - PURCHASES AND SALES OF INVESTMENT SECURITIES. For the six months ended February 28, 1998, the aggregate cost of purchases and proceeds from sales of investment securities (excluding all U.S. Government securities and short-term securities) were $714,456,133 and $718,757,438, respectively. There were no purchases or sales of U.S. Government securities. NOTE 4 - APPRECIATION AND DEPRECIATION. At February 28, 1998, the gross appreciation of securities in which there was an excess of value over tax cost amounted to $123,980,247 and the gross depreciation of securities in which there was an excess of tax cost over value amounted to $985,909, resulting in net appreciation of $122,994,338. 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 are based on an annual rate equal to 40% of the retainer fee at the time of retirement. Pension expenses for the six months ended February 28, 1998, included in Directors' Fees and Expenses in the Statement of Operations were $7,891. Unfunded accrued pension costs of $28,806 and pension liability of $61,496 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 February 28, 1998, there were no such borrowings. Other Information UNAUDITED On October 28, 1997, a special meeting of the shareholders of the Fund was held at which the approval to change the investment policy of the Fund to allow the Fund to utilize futures contracts, options on futures, puts and calls to the extent permitted by applicable law was ratified. The votes cast for, against and abstain were 43,124,780, 14,151,226 and 4,004,904, respectively.
INVESCO Growth Fund, Inc. Financial Highlights (For a Fund Share Outstanding Throughout Each Period) Six Months Ended February 28 Year Ended August 31 ----------- ---------------------------------------------------- 1998 1997 1996 1995 1994 1993 UNAUDITED PER SHARE DATA Net Asset Value--- Beginning of Period $ 6.06 $5.44 $ 5.33 $5.34 $5.28 $4.72 ------ ---------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS Net Investment Income 0.01 0.01 0.03 0.05 0.03 0.04 Net Gains on Securities (Both Realized and Unrealized) 0.92 1.39 0.95 0.49 0.11 1.00 ----- ---------------------------------------------------- Total from Investment Operations 0.93 1.40 0.98 0.54 0.14 1.04 ----- ---------------------------------------------------- LESS DISTRIBUTIONS Dividends from Net Investment Income+ 0.00 0.01 0.03 0.05 0.03 0.04 Distributions from Capital Gains 1.60 0.77 0.84 0.50 0.05 0.44 ----- ---------------------------------------------------- Total Distributions 1.60 0.78 0.87 0.55 0.08 0.48 ------ ---------------------------------------------------- Net Asset Value--- End of Period $ 5.39 $ 6.06 $ 5.44 $ 5.33 $5.34 $5.28 ====== ==================================================== TOTAL RETURN 18.25%* 28.14% 20.23% 12.05% 2.52% 22.17% RATIOS Net Assets --- End of Period ($000 Omitted) $828,828 $709,220 $596,726 $501,285 $488,411 $483,957 Ratio of Expenses to Average Net Assets 0.53%*@ 1.07%@ 1.05%@ 1.06% 1.03% 1.04% Ratio of Net Investment Income to Average Net Assets 0.23%* 0.22% 0.64% 1.07% 0.47% 0.72% Portfolio Turnover Rate 95%* 286% 207% 111% 63% 77% Average Commission Rate Paid^^ $0.0605* $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. * Based on operations for the period shown and, accordingly, are not representative of a full year. @ 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 for fiscal years beginning September 1, 1995 and thereafter.
FAMILY OF FUNDS Newspaper Fund Name Fund Code Ticker Symbol Abbreviation - -------------------------------------------------------------------------------- International International Growth 49 FSIGX IntlGr Emerging Markets 43 * * Asian Growth 41 IVAGX AsianGr Pacific Basin 54 FPBSX PcBas European 56 FEURX Europ European Small Company 37 IVECX EuroSmCo Latin American Growth 34 IVSLX LatinAmGr - -------------------------------------------------------------------------------- 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 - -------------------------------------------------------------------------------- Equity Growth 10 FLRFX Grwth Dynamics 20 FIDYX Dynm Small Company Growth 60 FIEGX SmCoGth Value Equity 46 FSEQX ValEq Small Company Value 74 IDSCX SmCoVal S&P 500 Index Fund Class II 23 * * - -------------------------------------------------------------------------------- All-Weather Industrial Income 15 FIIIX IndInc Multi-Asset Allocation 70 IMAAX MulAstAl Total Return 48 FSFLX TotRtn Balanced 71 IMABX Bal - -------------------------------------------------------------------------------- Bond Short-Term Bond 33 INIBX ShTrBd Intermediate Government Bond 47 FIGBX IntGov U.S. Government Securities 32 FBDGX USGvt Select Income 30 FBDSX SelInc High Yield 31 FHYPX HiYld - -------------------------------------------------------------------------------- Tax-Exempt Tax-Free Intermediate Bond 36 IVTIX * Tax-Free Long-Term Bond 35 FTIFX TxFre - -------------------------------------------------------------------------------- Money Market U.S. Government Money Fund 44 FUGXX InvGvtMF Cash Reserves 25 FDSXX InvCshR Tax-Free Money Fund 40 FFRXX InvTaxFree * 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 Post Office Box 173706 Denver, CO 80217-3706 1-800-525-8085 PAL(R): 1-800-424-8085 http://www.invesco.com In Denver, visit one of our convenient Investor Centers: Cherry Creek, 155-B Fillmore Street Denver Tech Center, 7800 East Union Avenue, Lobby Level This information must be preceded or accompanied by a current prospectus. -----END PRIVACY-ENHANCED MESSAGE-----