OMB APPROVAL | ||||
OMB Number: | 3235-0570 | |||
Expires: | January 31, 2017 | |||
Estimated average burden | ||||
hours per response: | 20.6 |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-03826
AIM Sector Funds (Invesco Sector Funds)
(Exact name of registrant as specified in charter)
11 Greenway Plaza, Suite 1000 Houston, Texas 77046
(Address of principal executive offices) (Zip code)
Philip A. Taylor 11 Greenway Plaza, Suite 1000 Houston, Texas 77046
(Name and address of agent for service)
Registrants telephone number, including area code: (713) 626-1919
Date of fiscal year end: 4/30
Date of reporting period: 10/31/14
Item 1. Report to Stockholders.
| ||||
|
Semiannual Report to Shareholders
|
October 31, 2014 | ||
Invesco American Value Fund | ||||
Nasdaq: |
||||
A: MSAVX ¡ B: MGAVX ¡ C: MSVCX ¡ R: MSARX ¡ Y: MSAIX ¡ R5: MSAJX ¡ R6: MSAFX |
| ||
2 |
Fund Performance | |
4 |
Letters to Shareholders | |
5 |
Schedule of Investments | |
7 |
Financial Statements | |
9 |
Notes to Financial Statements | |
17 |
Financial Highlights | |
19 |
Fund Expenses | |
20 |
Approval of Investment Advisory and Sub-Advisory Contracts |
For the most current month-end Fund performance and commentary, please visit invesco.com/performance.
Unless otherwise noted, all data provided by Invesco.
This report must be accompanied or preceded by a currently effective Fund prospectus, which contains more complete information, including sales charges and expenses. Investors should read it carefully before investing. | ||
| ||
NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE |
Fund Performance
2 Invesco American Value Fund
3 Invesco American Value Fund
Letters to Shareholders
Bruce Crockett |
Dear Fellow Shareholders: While the members of the Invesco Funds Board, which I chair, cant dictate the performance of the Invesco funds, be assured that your Board works diligently throughout the year to focus on how your investments are managed. Our job is to represent you and your interests on a variety of fund management-related matters. We regularly monitor how the portfolio management teams of the Invesco funds are performing in light of ever-changing and often unpredictable economic and market conditions, and we review the investment strategies and investment process employed by each funds management team as explained in the funds prospectus. Perhaps our most significant responsibility is conducting the annual review of the funds advisory and sub-advisory contracts with Invesco Advisers and its affiliates. This annual review, which is required by the Investment Company Act of 1940, focuses on the nature |
and quality of the services Invesco provides as the adviser to the Invesco funds and the reasonableness of the fees that it charges for those services. Each year, we spend months carefully reviewing information from Invesco that allows us to evaluate the quality of its services and the reasonableness of its fees. We also use information from a variety of independent sources, including materials provided by the independent senior officer of the Invesco funds, who reports directly to the independent trustees on the Board. Additionally, we meet with legal counsel and review performance and fee data prepared for us by Lipper Inc., an independent, third-party firm widely recognized as a leader in its field.
After a careful review, the members of the Invesco Funds Board approved the continuation of advisory and sub-advisory contracts with Invesco Advisers and its affiliates.
As always, please contact me at bruce@brucecrockett.com with any questions or concerns you may have. On behalf of the Board, we look forward to continuing to represent your interests and serving your needs.
Sincerely,
Bruce L. Crockett
Independent Chair
Invesco Funds Board of Trustees
Philip Taylor |
Dear Shareholders: This semiannual report includes information about your Fund, including performance data and a list of its investments as of the close of the reporting period. I hope you find this report of interest. Our website, invesco.com/us, offers a wide range of market insights and investment perspectives. On the website, youll find detailed information about our funds, including prices, performance, holdings and portfolio manager commentaries. You can access information about your individual Invesco account whenever its convenient for you; just complete a simple, secure online registration. Use the Log In box on our home page to get started. Invescos mobile app for iPad® (available free from the App StoreSM) allows you to obtain the same detailed information about your Fund and the same investment insights from our |
investment leaders, market strategists, economists and retirement experts on the go.
Also, you can obtain timely updates to help you stay informed about the markets, the economy and investing by connecting with Invesco on Twitter, LinkedIn or Facebook. You can access our blog at blog.invesco.us.com.
For questions about your account, feel free to contact an Invesco client services representative at 800 959 4246. For Invesco-related questions or comments, please email me directly at phil@invesco.com.
Thank you for investing with us.
Sincerely,
Philip Taylor
Senior Managing Director, Invesco Ltd.
iPad is a trademark of Apple Inc., registered in the US and other countries. App Store is a service mark of Apple Inc. Invesco Distributors, Inc. is not affiliated with Apple Inc.
4 Invesco American Value Fund
Schedule of Investments(a)
October 31, 2014
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco American Value Fund
Notes to Schedule of Investments:
(a) | Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poors. |
(b) | Non-income producing security. |
(c) | The money market fund and the Fund are affiliated by having the same investment adviser. |
Portfolio Composition
By sector, based on Net Assets
as of October 31, 2014
Financials |
25.9 | % | ||
Industrials |
18.1 | |||
Information Technology |
12.4 | |||
Health Care |
11.1 | |||
Consumer Discretionary |
9.9 | |||
Energy |
5.5 | |||
Materials |
4.5 | |||
Consumer Staples |
3.4 | |||
Utilities |
3.1 | |||
Telecommunication Services |
2.9 | |||
Money Market Funds Plus Other Assets Less Liabilities |
3.2 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco American Value Fund
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco American Value Fund
Statement of Operations
For the six months ended October 31, 2014
(Unaudited)
Investment income: |
| |||
Dividends |
$ | 12,498,733 | ||
Dividends from affiliated money market funds |
20,147 | |||
Total investment income |
12,518,880 | |||
Expenses: |
||||
Advisory fees |
7,071,020 | |||
Administrative services fees |
225,125 | |||
Custodian fees |
29,672 | |||
Distribution fees: |
||||
Class A |
1,457,845 | |||
Class B |
38,958 | |||
Class C |
571,134 | |||
Class R |
189,008 | |||
Transfer agent fees A, B, C, R and Y |
1,858,883 | |||
Transfer agent fees R5 |
40,303 | |||
Transfer agent fees R6 |
2,984 | |||
Trustees and officers fees and benefits |
22,050 | |||
Other |
206,674 | |||
Total expenses |
11,713,656 | |||
Less: Fees waived and expense offset arrangement(s) |
(87,931 | ) | ||
Net expenses |
11,625,725 | |||
Net investment income |
893,155 | |||
Realized and unrealized gain from: |
||||
Net realized gain from: |
||||
Investment securities |
93,142,409 | |||
Foreign currencies |
10,680 | |||
Forward foreign currency contracts |
1,239,681 | |||
94,392,770 | ||||
Change in net unrealized appreciation of: |
||||
Investment securities |
7,629,490 | |||
Forward foreign currency contracts |
291,327 | |||
7,920,817 | ||||
Net realized and unrealized gain |
102,313,587 | |||
Net increase in net assets resulting from operations |
$ | 103,206,742 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
8 Invesco American Value Fund
Statement of Changes in Net Assets
For the six months ended October 31, 2014 and the year ended April 30, 2014
(Unaudited)
October 31, 2014 |
April 30, 2014 |
|||||||
Operations: |
||||||||
Net investment income |
$ | 893,155 | $ | 2,955,781 | ||||
Net realized gain |
94,392,770 | 180,450,335 | ||||||
Change in net unrealized appreciation |
7,920,817 | 114,634,049 | ||||||
Net increase in net assets resulting from operations |
103,206,742 | 298,040,165 | ||||||
Distributions to shareholders from net investment income: |
||||||||
Class A |
(589,146 | ) | (2,921,288 | ) | ||||
Class B |
(15,936 | ) | (115,678 | ) | ||||
Class C |
| (59,002 | ) | |||||
Class R |
| (67,746 | ) | |||||
Class Y |
(863,631 | ) | (2,059,394 | ) | ||||
Class R5 |
(191,445 | ) | (260,647 | ) | ||||
Class R6 |
(290,795 | ) | (482,829 | ) | ||||
Total distributions from net investment income |
(1,950,953 | ) | (5,966,584 | ) | ||||
Distributions to shareholders from net realized gains: |
||||||||
Class A |
| (65,262,898 | ) | |||||
Class B |
| (2,667,870 | ) | |||||
Class C |
| (7,911,290 | ) | |||||
Class R |
| (3,994,256 | ) | |||||
Class Y |
| (26,375,247 | ) | |||||
Class R5 |
| (2,761,945 | ) | |||||
Class R6 |
| (4,498,288 | ) | |||||
Total distributions from net realized gains |
| (113,471,794 | ) | |||||
Share transactionsnet: |
||||||||
Class A |
41,216,723 | 134,318,718 | ||||||
Class B |
(5,244,089 | ) | (8,668,383 | ) | ||||
Class C |
1,611,047 | 13,048,376 | ||||||
Class R |
3,479,901 | 2,790,913 | ||||||
Class Y |
(17,013,623 | ) | 125,795,105 | |||||
Class R5 |
9,230,372 | 42,142,923 | ||||||
Class R6 |
30,216,099 | 24,677,701 | ||||||
Net increase in net assets resulting from share transactions |
63,496,430 | 334,106,353 | ||||||
Net increase in net assets |
164,752,219 | 512,708,140 | ||||||
Net assets: |
||||||||
Beginning of period |
1,908,165,570 | 1,395,457,430 | ||||||
End of period (includes undistributed net investment income of $(1,188,387) and $(130,589), respectively) |
$ | 2,072,917,789 | $ | 1,908,165,570 |
Notes to Financial Statements
October 31, 2014
(Unaudited)
NOTE 1Significant Accounting Policies
Invesco American Value Fund (the Fund) is a series portfolio of AIM Sector Funds (Invesco Sector Funds) (the Trust). The Trust is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end series management investment company consisting of ten separate portfolios, each authorized to issue an unlimited number of shares of beneficial interest. The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each portfolio or class will be voted on exclusively by the shareholders of such portfolio or class.
9 Invesco American Value Fund
The Funds investment objective is total return through growth of capital and current income.
The Fund currently consists of seven different classes of shares: Class A, Class B, Class C, Class R, Class Y, Class R5 and Class R6. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met and under certain circumstances load waived shares may be subject to contingent deferred sales charges (CDSC). Class C shares are sold with a CDSC. Class R, Class Y, Class R5 and Class R6 shares are sold at net asset value. Effective November 30, 2010, new or additional investments in Class B shares are no longer permitted. Existing shareholders of Class B shares may continue to reinvest dividends and capital gains distributions in Class B shares until they convert to Class A shares. Also, shareholders in Class B shares will be able to exchange those shares for Class B shares of other Invesco Funds offering such shares until they convert to Class A shares. Generally, Class B shares will automatically convert to Class A shares on or about the month-end, which is at least eight years after the date of purchase. Redemption of Class B shares prior to the conversion date will be subject to a CDSC.
The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.
A. | Security Valuations Securities, including restricted securities, are valued according to the following policy. |
A security listed or traded on an exchange (except convertible securities) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (NYSE).
Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
Debt obligations (including convertible securities) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate (for unlisted equities), yield (for debt obligations), quality, type of issue, coupon rate (for debt obligations), maturity (for debt obligations), individual trading characteristics and other market data. Debt obligations are subject to interest rate and credit risks. In addition, all debt obligations involve some risk of default with respect to interest and/or principal payments.
Foreign securities (including foreign exchange contracts) prices are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange-traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that the Adviser determines are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities prices meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and ask prices is used to value debt obligations, including corporate loans.
Securities for which market quotations are not readily available or became unreliable are valued at fair value as determined in good faith by or under the supervision of the Trusts officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a securitys fair value.
The Fund may invest in securities that are subject to interest rate risk, meaning the risk that the prices will generally fall as interest rates rise and, conversely, the prices will generally rise as interest rates fall. Specific securities differ in their sensitivity to changes in interest rates depending on their individual characteristics. Changes in interest rates may result in increased market volatility, which may affect the value and/or liquidity of certain of the Funds investments.
Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuers assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B. | Securities Transactions and Investment Income Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income (net of withholding tax, if any) is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. |
The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
10 Invesco American Value Fund
Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Funds net asset value and, accordingly, they reduce the Funds total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C. | Country Determination For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuers securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted. |
D. | Distributions Distributions from net investment income, if any, are declared and paid quarterly and are recorded on the ex-dividend date. Distributions from net realized capital gain, if any, are generally declared and paid annually and recorded on the ex-dividend date. The Fund may elect to treat a portion of the proceeds from redemptions as distributions for federal income tax purposes. |
E. | Federal Income Taxes The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code of 1986, as amended (the Internal Revenue Code), necessary to qualify as a regulated investment company and to distribute substantially all of the Funds taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements. |
The Fund recognizes the tax benefits of uncertain tax positions only when the position is more likely than not to be sustained. Management has analyzed the Funds uncertain tax positions and concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions. Management is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next 12 months.
The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally, the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F. | Expenses Fees provided for under the Rule 12b-1 plan of a particular class of the Fund are charged to the operations of such class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses attributable to Class R5 and Class R6 are allocated to each share class based on relative net assets. Sub-accounting fees attributable to Class R5 are charged to the operations of the class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses relating to all other classes are allocated among those classes based on relative net assets. All other expenses are allocated among the classes based on relative net assets. Prior to June 1, 2010, incremental transfer agency fees which were unique to each class of shares were charged to the operations of such class. |
G. | Accounting Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print. |
H. | Indemnifications Under the Trusts organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of the performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Funds servicing agreements, that contain a variety of indemnification clauses. The Funds maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote. |
I. | Foreign Currency Translations Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (1) sales of foreign currencies, (2) currency gains or losses realized between the trade and settlement dates on securities transactions, and (3) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Funds books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates. |
The Fund may invest in foreign securities, which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable. Foreign taxes, if any, are recorded based on the tax regulations and rates that exist in the foreign markets in which the Fund invests and are shown in the Statement of Operations.
J. | Forward Foreign Currency Contracts The Fund may engage in foreign currency transactions either on a spot (i.e. for prompt delivery and settlement) basis or through forward foreign currency contracts to manage or minimize currency or exchange rate risk. |
11 Invesco American Value Fund
The Fund may also enter into forward foreign currency contracts for the purchase or sale of a security denominated in a foreign currency in order to lock in the U.S. dollar price of that security, or the Fund may also enter into forward foreign currency contracts that do not provide for physical settlement of the two currencies, but instead are settled by a single cash payment calculated as the difference between the agreed upon exchange rate and the spot rate at settlement based upon an agreed upon notional amount (non-deliverable forwards). The Fund will set aside liquid assets in an amount equal to daily mark-to-market obligation for forward foreign currency contracts.
A forward foreign currency contract is an obligation between two parties (Counterparties) to purchase or sell a specific currency for an agreed-upon price at a future date. The use of forward foreign currency contracts does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with forward foreign currency contracts include failure of the Counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities.
NOTE 2Advisory Fees and Other Fees Paid to Affiliates
The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the Adviser or Invesco). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Funds average daily net assets as follows:
Average Daily Net Assets | Rate | |||||
First $500 million |
0 | .72% | ||||
Next $535 million |
0 | .715% | ||||
Next $31.965 billion |
0 | .65% | ||||
Over $33 billion |
0 | .64% |
For the six months ended October 31, 2014, the effective advisory fees incurred by the Fund was 0.68%.
Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Canada Ltd. (collectively, the Affiliated Sub-Advisers) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide(s) discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).
The Adviser has contractually agreed, through at least June 30, 2015, to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver and/or expense reimbursement (excluding certain items discussed below) of Class A, Class B, Class C, Class R, Class Y, Class R5 and Class R6 shares to 2.00%, 2.75%, 2.75%, 2.25%, 1.75%, 1.75% and 1.75%, respectively, of average daily net assets. In determining the Advisers obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver and/or expense reimbursement to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items, including litigation expenses; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless Invesco continues the fee waiver agreement, it will terminate on June 30, 2015. The fee waiver agreement cannot be terminated during its term. The Adviser did not waive fees and/or reimburse expenses during the period under this expense limitation.
Further, the Adviser has contractually agreed, through at least June 30, 2016, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market funds.
For the six months ended October 31, 2014, the Adviser waived advisory fees of $85,139.
The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco for certain administrative costs incurred in providing accounting services to the Fund. For the six months ended October 31, 2014, expenses incurred under the agreement are shown in the Statement of Operations as Administrative services fees.
The Trust has entered into a transfer agency and service agreement with Invesco Investment Services, Inc. (IIS) pursuant to which the Fund has agreed to pay IIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IIS for certain expenses incurred by IIS in the course of providing such services. IIS may make payments to intermediaries that provide omnibus account services, sub-accounting services and/or networking services. All fees payable by IIS to intermediaries that provide omnibus account services or sub-accounting are charged back to the Fund, subject to certain limitations approved by the Trusts Board of Trustees. For the six months ended October 31, 2014, expenses incurred under the agreement are shown in the Statement of Operations as Transfer agent fees.
Shares of the Fund are distributed by Invesco Distributors, Inc. (IDI). The Fund has adopted a distribution plan pursuant to Rule 12b-1 under the 1940 Act, and a service plan (collectively, the Plans) for Class A, Class B, Class C and Class R shares to compensate IDI for the sale, distribution, shareholder servicing and maintenance of shareholder accounts for these shares. Under the Plans, the Fund will incur annual fees of up to 0.25% of Class A average daily net assets, up to 1.00% each of Class B and Class C average daily net assets and up to 0.50% of Class R average daily net assets.
With respect to Class B and Class C shares, the Fund is authorized to reimburse in future years any distribution related expenses that exceed the maximum annual reimbursement rate for such class, so long as such reimbursement does not cause the Fund to exceed the Class B and Class C maximum annual reimbursement rate, respectively. With respect to Class A shares, distribution related expenses that exceed the maximum annual reimbursement rate for such class are not carried forward to future years and the Fund will not reimburse IDI for any such expenses.
For the six months ended October 31, 2014, expenses incurred under these agreements are shown in the Statement of Operations as Distribution fees.
12 Invesco American Value Fund
Front-end sales commissions and CDSC (collectively, the sales charges) are not recorded as expenses of the Fund. Front-end sales commissions are deducted from proceeds from the sales of Fund shares prior to investment in Class A shares of the Fund. CDSC are deducted from redemption proceeds prior to remittance to the shareholder. During the six months ended October 31, 2014, IDI advised the Fund that IDI retained $221,406 in front-end sales commissions from the sale of Class A shares and $6,635, $3,678 and $1,705 from Class A, Class B and Class C shares, respectively, for CDSC imposed on redemptions by shareholders.
For the six months ended October 31, 2014, the Fund incurred $23,771 in brokerage commissions with Invesco Capital Markets, Inc., an affiliate of the Adviser and IDI, for portfolio transactions executed on behalf of the Fund.
Certain officers and trustees of the Trust are officers and directors of the Adviser, IIS and/or IDI.
NOTE 3Additional Valuation Information
GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods, giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3), generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investments assigned level:
Level 1 | Prices are determined using quoted prices in an active market for identical assets. |
Level 2 | Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others. |
Level 3 | Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Funds own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information. |
The following is a summary of the tiered valuation input levels, as of October 31, 2014. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Equity Securities |
$ | 2,031,369,940 | $ | 35,952,662 | $ | | $ | 2,067,322,602 | ||||||||
Forward Foreign Currency Contracts* |
| 208,633 | | 208,633 | ||||||||||||
Total Investments |
$ | 2,031,369,940 | $ | 36,161,295 | $ | | $ | 2,067,531,235 |
* | Unrealized appreciation. |
NOTE 4Derivative Investments
Value of Derivative Investments at Period-End
The table below summarizes the value of the Funds derivative investments, detailed by primary risk exposure, held as of October 31, 2014:
Value | ||||||||
Risk Exposure/Derivative Type | Assets | Liabilities | ||||||
Currency risk: |
||||||||
Forward foreign currency contracts(a) |
$ | 208,633 | $ | |
(a) | Values are disclosed on the Statement of Assets and Liabilities under the caption Forward foreign currency contracts outstanding. |
Effect of Derivative Investments for the six months ended October 31, 2014
The table below summarizes the gains on derivative investments, detailed by primary risk exposure, recognized in earnings during the period:
Location of Gain on Statement of Operations |
||||
Forward Foreign Currency Contracts |
||||
Realized Gain: |
||||
Currency risk |
$ | 1,239,681 | ||
Change in Unrealized Appreciation: |
||||
Currency risk |
291,327 | |||
Total |
$ | 1,531,008 |
13 Invesco American Value Fund
The table below summarizes the average notional value of forward foreign currency contracts outstanding during the period.
Forward Foreign Currency Contracts |
||||
Average notional value |
$ | 28,389,874 |
Open Forward Foreign Currency Contracts | ||||||||||||||||||||||||||
Settlement
|
Counterparty |
Contract to | Notional Value |
Unrealized Appreciation |
||||||||||||||||||||||
Deliver | Receive | |||||||||||||||||||||||||
12/04/14 |
State Street Bank and Trust Co. |
GBP | 8,111,868 | USD | 13,078,197 | $ | 12,974,149 | $ | 104,048 | |||||||||||||||||
12/04/14 |
Bank of New York Mellon (The) | GBP | 8,093,861 | USD | 13,049,934 | 12,945,349 | 104,585 | |||||||||||||||||||
Total forward foreign currency contracts Currency Risk |
$ | 208,633 |
Currency Abbreviations:
GBP | British Pound Sterling | |
USD | U.S. Dollar |
Offsetting Assets and Liabilities
Accounting Standards Update (ASU) No. 2011-11, Disclosures about Offsetting Assets and Liabilities, which was subsequently clarified in Financial Accounting Standards Board ASU 2013-01 Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities is intended to enhance disclosures about financial instruments and derivative instruments that are subject to offsetting arrangements on the Statement of Assets and Liabilities and to enable investors to better understand the effect of those arrangements on its financial position. In order for an arrangement to be eligible for netting, the Fund must have a basis to conclude that such netting arrangements are legally enforceable. The Fund enters into netting agreements and collateral agreements in an attempt to reduce the Funds Counterparty credit risk by providing for a single net settlement with a Counterparty of all financial transactions covered by the agreement in an event of default as defined under such agreement.
There were no derivative instruments subject to a netting agreement for which the Fund is not currently netting. The following tables present derivative instruments that are either subject to an enforceable netting agreement or offset by collateral arrangements as of October 31, 2014.
Assets: | ||||||||||||||||||||||||
Gross amounts presented in Statement of Assets & Liabilities* |
Gross amounts offset in Statement of Assets & Liabilities |
Net amounts of assets presented in the Statement of Assets & Liabilities |
Collateral Received | |||||||||||||||||||||
Counterparty | Financial Instruments |
Cash | Net Amount |
|||||||||||||||||||||
State Street Bank and Trust Co. |
$ | 104,048 | $ | | $ | 104,048 | $ | | $ | | $ | 104,048 | ||||||||||||
Bank of New York Mellon (The) |
104,585 | | 104,585 | | | 104,585 | ||||||||||||||||||
Total |
$ | 208,633 | $ | | $ | 208,633 | $ | | $ | | $ | 208,633 |
* | Includes cumulative appreciation of foreign forward currency contracts. |
NOTE 5Security Transactions with Affiliated Funds
The Fund is permitted to purchase or sell securities from or to certain other Invesco Funds under specified conditions outlined in procedures adopted by the Board of Trustees of the Trust. The procedures have been designed to ensure that any purchase or sale of securities by the Fund from or to another fund or portfolio that is or could be considered an affiliate by virtue of having a common investment adviser (or affiliated investment advisers), common Trustees and/or common officers complies with Rule 17a-7 of the 1940 Act. Further, as defined under the procedures, each transaction is effected at the current market price. Pursuant to these procedures, for the six months ended October 31, 2014, the Fund engaged in securities purchases of $4,018,685.
NOTE 6Expense Offset Arrangement(s)
The expense offset arrangement is comprised of transfer agency credits which result from balances in demand deposit accounts used by the transfer agent for clearing shareholder transactions. For the six months ended October 31, 2014, the Fund received credits from this arrangement, which resulted in the reduction of the Funds total expenses of $2,792.
NOTE 7Trustees and Officers Fees and Benefits
Trustees and Officers Fees and Benefits include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and Trustees and Officers Fees and Benefits also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees were eligible to participate in a retirement plan that provided for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. Trustees and Officers Fees and Benefits include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.
14 Invesco American Value Fund
NOTE 8Cash Balances
The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with State Street Bank and Trust Company, the custodian bank. Such balances, if any at period end, are shown in the Statement of Assets and Liabilities under the payable caption Amount due custodian. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.
NOTE 9Tax Information
The amount and character of income and gains to be distributed are determined in accordance with income tax regulations, which may differ from GAAP. Reclassifications are made to the Funds capital accounts to reflect income and gains available for distribution (or available capital loss carryforward) under income tax regulations. The tax character of distributions paid during the year and the tax components of net assets will be reported at the Funds fiscal year-end.
Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. Capital losses generated in years beginning after December 22, 2010 can be carried forward for an unlimited period, whereas previous losses expire in 8 tax years. Capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Capital loss carryforwards with no expiration date will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss carryforwards in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.
The Fund did not have a capital loss carryforward as of April 30, 2014.
NOTE 10Investment Securities
The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the six months ended October 31, 2014 was $473,739,154 and $350,444,262, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed federal income tax reporting period-end.
Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis | ||||
Aggregate unrealized appreciation of investment securities |
$ | 404,632,561 | ||
Aggregate unrealized (depreciation) of investment securities |
(58,080,821 | ) | ||
Net unrealized appreciation of investment securities |
$ | 346,551,740 |
Cost of investments for tax purposes is $1,720,770,862.
15 Invesco American Value Fund
NOTE 11Share Information
Summary of Share Activity | ||||||||||||||||
Six months ended October 31, 2014(a) |
Year ended April 30, 2014 |
|||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Sold: |
||||||||||||||||
Class A |
3,805,281 | $ | 158,507,015 | 6,914,216 | $ | 270,185,034 | ||||||||||
Class B |
7,056 | 266,878 | 53,592 | 1,880,118 | ||||||||||||
Class C |
288,618 | 10,582,335 | 650,749 | 22,610,785 | ||||||||||||
Class R |
494,446 | 20,500,549 | 768,903 | 30,171,880 | ||||||||||||
Class Y |
1,916,915 | 80,206,428 | 4,663,504 | 180,559,215 | ||||||||||||
Class R5 |
374,401 | 15,667,473 | 1,177,807 | 46,562,604 | ||||||||||||
Class R6 |
938,223 | 39,216,834 | 716,280 | 28,311,884 | ||||||||||||
Issued as reinvestment of dividends: |
||||||||||||||||
Class A |
12,852 | 549,200 | 1,703,427 | 64,672,942 | ||||||||||||
Class B |
395 | 15,268 | 78,053 | 2,681,171 | ||||||||||||
Class C |
| | 223,066 | 7,497,781 | ||||||||||||
Class R |
| | 107,103 | 4,062,002 | ||||||||||||
Class Y |
17,736 | 761,300 | 679,521 | 25,911,785 | ||||||||||||
Class R5 |
4,456 | 191,321 | 79,175 | 3,020,660 | ||||||||||||
Class R6 |
6,772 | 290,758 | 130,554 | 4,980,150 | ||||||||||||
Automatic conversion of Class B shares to Class A shares: |
||||||||||||||||
Class A |
78,802 | 3,295,926 | 200,674 | 7,857,830 | ||||||||||||
Class B |
(87,121 | ) | (3,295,926 | ) | (221,108 | ) | (7,857,830 | ) | ||||||||
Reacquired: |
||||||||||||||||
Class A |
(2,925,861 | ) | (121,135,418 | ) | (5,398,222 | ) | (208,396,088 | ) | ||||||||
Class B |
(59,579 | ) | (2,230,309 | ) | (152,046 | ) | (5,371,842 | ) | ||||||||
Class C |
(245,288 | ) | (8,971,288 | ) | (492,505 | ) | (17,060,190 | ) | ||||||||
Class R |
(408,919 | ) | (17,020,648 | ) | (818,057 | ) | (31,442,969 | ) | ||||||||
Class Y |
(2,366,461 | ) | (97,981,351 | ) | (2,058,244 | ) | (80,675,895 | ) | ||||||||
Class R5 |
(159,600 | ) | (6,628,422 | ) | (189,139 | ) | (7,440,341 | ) | ||||||||
Class R6 |
(225,903 | ) | (9,291,493 | ) | (219,527 | ) | (8,614,333 | ) | ||||||||
Net increase in share activity |
1,467,221 | $ | 63,496,430 | 8,597,776 | $ | 334,106,353 |
(a) | There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 34% of the outstanding shares of the Fund. IDI has an agreement with these entities to sell Fund shares. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as securities brokerage, distribution, third party record keeping and account servicing. The Fund has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially. |
16 Invesco American Value Fund
NOTE 12Financial Highlights
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
Net asset value, beginning of period |
Net investment income (loss)(a) |
Net gains (losses) on securities (both realized and unrealized) |
Total from investment operations |
Dividends from net investment income |
Distributions from net realized gains |
Total distributions |
Net asset value, end of period |
Total return |
Net assets, end of period (000s omitted) |
Ratio of expenses to average net assets with fee waivers and/or expenses absorbed |
Ratio of expenses to average net assets without fee waivers and/or expenses absorbed |
Ratio of net investment income (loss) to average net assets |
Portfolio turnover(b) |
|||||||||||||||||||||||||||||||||||||||||||
Class A |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 10/31/14 |
$ | 40.11 | $ | 0.01 | $ | 2.17 | $ | 2.18 | $ | (0.02 | ) | $ | | $ | (0.02 | ) | $ | 42.27 | 5.44 | %(c) | $ | 1,186,041 | 1.17 | %(d) | 1.18 | %(d) | 0.04 | %(d) | 18 | % | ||||||||||||||||||||||||||
Year ended 04/30/14 |
35.77 | 0.06 | 7.14 | 7.20 | (0.12 | ) | (2.74 | ) | (2.86 | ) | 40.11 | 20.62 | (c) | 1,086,506 | 1.19 | 1.20 | 0.15 | 46 | ||||||||||||||||||||||||||||||||||||||
Year ended 04/30/13 |
30.90 | 0.17 | 4.86 | 5.03 | (0.16 | ) | | (0.16 | ) | 35.77 | 16.35 | (c) | 846,516 | 1.22 | 1.23 | 0.54 | 28 | |||||||||||||||||||||||||||||||||||||||
Year ended 04/30/12 |
29.86 | 0.14 | 0.98 | 1.12 | (0.08 | ) | | (0.08 | ) | 30.90 | 3.80 | (c) | 700,857 | 1.31 | 1.32 | 0.52 | 30 | |||||||||||||||||||||||||||||||||||||||
Ten months ended 04/30/11 |
22.22 | 0.07 | 7.61 | 7.68 | (0.04 | ) | | (0.04 | ) | 29.86 | 34.57 | (c) | 549,428 | 1.26 | (e) | 1.27 | (e) | 0.34 | (e) | 28 | ||||||||||||||||||||||||||||||||||||
Year ended 06/30/10 |
17.44 | 0.11 | 4.78 | 4.89 | (0.11 | ) | | (0.11 | ) | 22.22 | 28.07 | (c) | 450,675 | 1.31 | 1.31 | 0.50 | 50 | |||||||||||||||||||||||||||||||||||||||
Year ended 06/30/09 |
24.18 | 0.16 | (6.54 | ) | (6.38 | ) | (0.14 | ) | (0.22 | ) | (0.36 | ) | 17.44 | (26.17 | )(f) | 398,513 | 1.41 | 1.41 | 0.90 | 60 | ||||||||||||||||||||||||||||||||||||
Class B |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 10/31/14 |
36.28 | 0.01 | 1.97 | 1.98 | (0.02 | ) | | (0.02 | ) | 38.24 | 5.45 | (c)(g) | 28,532 | 1.17 | (d)(g) | 1.18 | (d)(g) | 0.04 | (d)(g) | 18 | ||||||||||||||||||||||||||||||||||||
Year ended 04/30/14 |
32.58 | 0.05 | 6.50 | 6.55 | (0.11 | ) | (2.74 | ) | (2.85 | ) | 36.28 | 20.63 | (c)(g) | 32,127 | 1.19 | (g) | 1.20 | (g) | 0.15 | (g) | 46 | |||||||||||||||||||||||||||||||||||
Year ended 04/30/13 |
28.15 | 0.16 | 4.42 | 4.58 | (0.15 | ) | | (0.15 | ) | 32.58 | 16.33 | (c)(g) | 36,720 | 1.22 | (g) | 1.23 | (g) | 0.54 | (g) | 28 | ||||||||||||||||||||||||||||||||||||
Year ended 04/30/12 |
27.19 | 0.14 | 0.90 | 1.04 | (0.08 | ) | | (0.08 | ) | 28.15 | 3.84 | (c)(g) | 43,561 | 1.27 | (g) | 1.28 | (g) | 0.56 | (g) | 30 | ||||||||||||||||||||||||||||||||||||
Ten months ended 04/30/11 |
20.23 | 0.04 | 6.93 | 6.97 | (0.01 | ) | | (0.01 | ) | 27.19 | 34.45 | (c)(g) | 37,780 | 1.38 | (e)(g) | 1.39 | (e)(g) | 0.22 | (e)(g) | 28 | ||||||||||||||||||||||||||||||||||||
Year ended 06/30/10 |
15.89 | 0.05 | 4.37 | 4.42 | (0.08 | ) | | (0.08 | ) | 20.23 | 27.82 | (c)(g) | 33,933 | 1.55 | (g) | 1.55 | (g) | 0.26 | (g) | 50 | ||||||||||||||||||||||||||||||||||||
Year ended 06/30/09 |
22.11 | 0.14 | (6.00 | ) | (5.86 | ) | (0.14 | ) | (0.22 | ) | (0.36 | ) | 15.89 | (26.22 | )(h)(i) | 31,586 | 1.48 | (i) | 1.48 | (i) | 0.82 | (i) | 60 | |||||||||||||||||||||||||||||||||
Class C |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 10/31/14 |
35.41 | (0.13 | ) | 1.91 | 1.78 | | | | 37.19 | 5.03 | (c)(j) | 118,693 | 1.89 | (d)(j) | 1.90 | (d)(j) | (0.68 | )(d)(j) | 18 | |||||||||||||||||||||||||||||||||||||
Year ended 04/30/14 |
32.00 | (0.20 | ) | 6.37 | 6.17 | (0.02 | ) | (2.74 | ) | (2.76 | ) | 35.41 | 19.76 | (c)(j) | 111,455 | 1.91 | (j) | 1.92 | (j) | (0.57 | )(j) | 46 | ||||||||||||||||||||||||||||||||||
Year ended 04/30/13 |
27.70 | (0.06 | ) | 4.36 | 4.30 | | | | 32.00 | 15.52 | (c) | 88,519 | 1.97 | 1.98 | (0.21 | ) | 28 | |||||||||||||||||||||||||||||||||||||||
Year ended 04/30/12 |
26.89 | (0.05 | ) | 0.86 | 0.81 | | | | 27.70 | 3.01 | (c)(j) | 76,053 | 2.03 | (j) | 2.04 | (j) | (0.20 | )(j) | 30 | |||||||||||||||||||||||||||||||||||||
Ten months ended 04/30/11 |
20.11 | (0.07 | ) | 6.85 | 6.78 | | | | 26.89 | 33.72 | (c)(j) | 46,700 | 1.97 | (e)(j) | 1.98 | (e)(j) | (0.37 | )(e)(j) | 28 | |||||||||||||||||||||||||||||||||||||
Year ended 06/30/10 |
15.82 | (0.05 | ) | 4.35 | 4.30 | (0.01 | ) | | (0.01 | ) | 20.11 | 27.18 | (c) | 38,952 | 2.06 | 2.06 | (0.25 | ) | 50 | |||||||||||||||||||||||||||||||||||||
Year ended 06/30/09 |
22.03 | 0.03 | (5.96 | ) | (5.93 | ) | (0.06 | ) | (0.22 | ) | (0.28 | ) | 15.82 | (26.68 | )(i)(k) | 33,390 | 2.11 | (i) | 2.11 | (i) | 0.19 | (i) | 60 | |||||||||||||||||||||||||||||||||
Class R |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 10/31/14 |
40.06 | (0.04 | ) | 2.16 | 2.12 | | | | 42.18 | 5.29 | (c) | 74,603 | 1.42 | (d) | 1.43 | (d) | (0.21 | )(d) | 18 | |||||||||||||||||||||||||||||||||||||
Year ended 04/30/14 |
35.74 | (0.04 | ) | 7.15 | 7.11 | (0.05 | ) | (2.74 | ) | (2.79 | ) | 40.06 | 20.34 | (c) | 67,420 | 1.44 | 1.45 | (0.10 | ) | 46 | ||||||||||||||||||||||||||||||||||||
Year ended 04/30/13 |
30.87 | 0.10 | 4.86 | 4.96 | (0.09 | ) | | (0.09 | ) | 35.74 | 16.08 | (c) | 58,086 | 1.47 | 1.48 | 0.29 | 28 | |||||||||||||||||||||||||||||||||||||||
Year ended 04/30/12 |
29.84 | 0.08 | 0.97 | 1.05 | (0.02 | ) | | (0.02 | ) | 30.87 | 3.51 | (c) | 36,695 | 1.56 | 1.57 | 0.27 | 30 | |||||||||||||||||||||||||||||||||||||||
Ten months ended 04/30/11 |
22.23 | 0.02 | 7.59 | 7.61 | (0.00 | ) | | (0.00 | ) | 29.84 | 34.24 | (c) | 17,440 | 1.51 | (e) | 1.52 | (e) | 0.09 | (e) | 28 | ||||||||||||||||||||||||||||||||||||
Year ended 06/30/10 |
17.44 | 0.06 | 4.79 | 4.85 | (0.06 | ) | | (0.06 | ) | 22.23 | 27.84 | (c) | 12,052 | 1.56 | 1.56 | 0.27 | 50 | |||||||||||||||||||||||||||||||||||||||
Year ended 06/30/09 |
24.19 | 0.12 | (6.55 | ) | (6.43 | ) | (0.10 | ) | (0.22 | ) | (0.32 | ) | 17.44 | (26.36 | )(l) | 4,132 | 1.70 | 1.70 | 0.73 | 60 | ||||||||||||||||||||||||||||||||||||
Class Y |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 10/31/14 |
40.26 | 0.06 | 2.18 | 2.24 | (0.07 | ) | | (0.07 | ) | 42.43 | 5.57 | (c) | 458,631 | 0.92 | (d) | 0.93 | (d) | 0.29 | (d) | 18 | ||||||||||||||||||||||||||||||||||||
Year ended 04/30/14 |
35.90 | 0.16 | 7.16 | 7.32 | (0.22 | ) | (2.74 | ) | (2.96 | ) | 40.26 | 20.91 | (c) | 452,580 | 0.94 | 0.95 | 0.40 | 46 | ||||||||||||||||||||||||||||||||||||||
Year ended 04/30/13 |
31.01 | 0.25 | 4.88 | 5.13 | (0.24 | ) | | (0.24 | ) | 35.90 | 16.65 | (c) | 285,560 | 0.97 | 0.98 | 0.79 | 28 | |||||||||||||||||||||||||||||||||||||||
Year ended 04/30/12 |
29.98 | 0.21 | 0.97 | 1.18 | (0.15 | ) | | (0.15 | ) | 31.01 | 4.01 | (c) | 259,308 | 1.06 | 1.07 | 0.77 | 30 | |||||||||||||||||||||||||||||||||||||||
Ten months ended 04/30/11 |
22.31 | 0.13 | 7.63 | 7.76 | (0.09 | ) | | (0.09 | ) | 29.98 | 34.81 | (c) | 37,488 | 1.01 | (e) | 1.02 | (e) | 0.59 | (e) | 28 | ||||||||||||||||||||||||||||||||||||
Year ended 06/30/10(m) |
17.50 | 0.17 | 4.81 | 4.98 | (0.17 | ) | | (0.17 | ) | 22.31 | 28.47 | (c) | 10,772 | 1.06 | 1.06 | 0.76 | 50 | |||||||||||||||||||||||||||||||||||||||
Year ended 06/30/09 |
24.27 | 0.21 | (6.58 | ) | (6.37 | ) | (0.18 | ) | (0.22 | ) | (0.40 | ) | 17.50 | (25.99 | )(n) | 8,135 | 1.19 | 1.19 | 1.23 | 60 | ||||||||||||||||||||||||||||||||||||
Class R5 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 10/31/14 |
40.28 | 0.08 | 2.18 | 2.26 | (0.10 | ) | | (0.10 | ) | 42.44 | 5.61 | (c) | 85,970 | 0.82 | (d) | 0.83 | (d) | 0.39 | (d) | 18 | ||||||||||||||||||||||||||||||||||||
Year ended 04/30/14 |
35.91 | 0.20 | 7.18 | 7.38 | (0.27 | ) | (2.74 | ) | (3.01 | ) | 40.28 | 21.06 | (c) | 72,753 | 0.84 | 0.85 | 0.50 | 46 | ||||||||||||||||||||||||||||||||||||||
Year ended 04/30/13 |
31.02 | 0.29 | 4.89 | 5.18 | (0.29 | ) | | (0.29 | ) | 35.91 | 16.81 | (c) | 26,519 | 0.86 | 0.87 | 0.90 | 28 | |||||||||||||||||||||||||||||||||||||||
Year ended 04/30/12 |
29.98 | 0.28 | 0.97 | 1.25 | (0.21 | ) | | (0.21 | ) | 31.02 | 4.26 | (c) | 12,340 | 0.87 | 0.88 | 0.96 | 30 | |||||||||||||||||||||||||||||||||||||||
Ten months ended 04/30/11 |
22.31 | 0.15 | 7.64 | 7.79 | (0.12 | ) | | (0.12 | ) | 29.98 | 34.98 | (c) | 24 | 0.79 | (e) | 0.80 | (e) | 0.81 | (e) | 28 | ||||||||||||||||||||||||||||||||||||
Year ended 06/30/10(o) |
23.19 | 0.03 | (0.88 | ) | (0.85 | ) | (0.03 | ) | | (0.03 | ) | 22.31 | (3.69 | )(c) | 2,592 | 0.62 | (e) | 0.62 | (e) | 1.37 | (e) | 50 | ||||||||||||||||||||||||||||||||||
Class R6 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 10/31/14 |
40.28 | 0.10 | 2.18 | 2.28 | (0.11 | ) | | (0.11 | ) | 42.45 | 5.67 | (c) | 120,447 | 0.73 | (d) | 0.74 | (d) | 0.48 | (d) | 18 | ||||||||||||||||||||||||||||||||||||
Year ended 04/30/14 |
35.90 | 0.23 | 7.18 | 7.41 | (0.29 | ) | (2.74 | ) | (3.03 | ) | 40.28 | 21.19 | (c) | 85,325 | 0.75 | 0.76 | 0.59 | 46 | ||||||||||||||||||||||||||||||||||||||
Year ended 04/30/13(o) |
31.40 | 0.22 | 4.45 | 4.67 | (0.17 | ) | | (0.17 | ) | 35.90 | 14.92 | (c) | 53,538 | 0.75 | (e) | 0.76 | (e) | 1.01 | (e) | 28 |
(a) | Calculated using average shares outstanding. |
(b) | Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable. For the year ended April 30, 2012, the portfolio turnover calculation excludes the value of securities purchased of $397,951,008 and sold of $108,111,947 in the effort to realign the Funds portfolio holdings after the reorganization of Invesco Mid-Cap Value Fund, Invesco Mid Cap Basic Value Fund and Invesco U.S. Mid Cap Value Fund into the Fund. |
(c) | Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable. |
(d) | Ratios are annualized and based on average daily net assets (000s omitted) of $1,156,768, $30,913, $116,307, $74,987, $485,928, $79,952 and $105,761 for Class A, Class B, Class C, Class R, Class Y, Class R5 and Class R6 shares, respectively. |
(e) | Annualized. |
(f) | Assumes reinvestment of all distributions for the period and does not include payment of the maximum sales charge of 5.75% or contingent deferred sales charge (CDSC). On purchases of $1 million or more, a CDSC of 1% may be imposed on certain redemptions made within eighteen months of purchase. If the sales charges were included, total returns would be lower. These returns include combined Rule 12b-1 fees and service fees of up to 0.25% and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. |
(g) | The total return, ratio of expenses to average net assets and ratio of net investment income (loss) to average net assets reflect actual 12b-1 fees of 0.25%, 0.25%, 0.25%, 0.21%, 0.37% and 0.49% for the six months ended October 31, 2014, the years ended April 30, 2014, 2013, 2012, the ten months ended April 30, 2011 and the year ended June 30, 2010, respectively. |
17 Invesco American Value Fund
(h) | Assumes reinvestment of all distributions for the period and does not include payment of the maximum CDSC of 5%, charged on certain redemptions made within one year of purchase and declining to 0% after the fifth year. If the sales charge was included, total returns would be lower. These returns include combined Rule 12b-1 fees and service fees of up to 1% and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. |
(i) | The total return, ratio of expenses to average net assets and ratio of net investment income (loss) to average net assets reflect actual 12b-1 fees of less than 1%. |
(j) | The total return, ratio of expenses to average net assets and ratio of net investment income (loss) to average net assets reflect actual 12b-1 fees of 0.97%, 0.98%, 0.97% and 0.96% for the six months ended October 31, 2014, the years ended April 30, 2014, 2012 and the ten months ended April 30, 2011. |
(k) | Assumes reinvestment of all distributions for the period and does not include payment of the maximum CDSC of 1%, charged on certain redemptions made within one year of purchase. If the sales charge was included, total returns would be lower. These returns include combined Rule 12b-1 fees and service fees of up to 1% and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. |
(l) | Assumes reinvestment of all distributions for the period. These returns include combined Rule 12b-1 fees and service fees of up to 0.50% and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption on Fund shares. |
(m) | On June 1, 2010, the Class I shares of Van Kampen American Value Fund were reorganized into Class Y shares. |
(n) | Assumes reinvestment of all distributions for the period. These returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption on Fund shares. |
(o) | Commencement date June 1, 2010 and September 24, 2012 for Class R5 and Class R6 shares, respectively. |
18 Invesco American Value Fund
Calculating your ongoing Fund expenses
Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, if any; and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period May 1, 2014 through October 31, 2014.
Actual expenses
The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled Actual Expenses Paid During Period to estimate the expenses you paid on your account during this period.
Hypothetical example for comparison purposes
The table below also provides information about hypothetical account values and hypothetical expenses based on the Funds actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Funds actual return.
The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, if any. Therefore, the hypothetical information is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
Class | Beginning Account Value (05/01/14) |
ACTUAL | HYPOTHETICAL (5% annual return before expenses) |
Annualized Expense Ratio |
||||||||||||||||||||
Ending Account Value (10/31/14)1 |
Expenses Paid During Period2 |
Ending Account Value (10/31/14) |
Expenses Paid During Period2 |
|||||||||||||||||||||
A | $ | 1,000.00 | $ | 1,054.40 | $ | 6.06 | $ | 1,019.31 | $ | 5.96 | 1.17 | % | ||||||||||||
B | 1,000.00 | 1,054.30 | 6.06 | 1,019.31 | 5.96 | 1.17 | ||||||||||||||||||
C | 1,000.00 | 1,050.30 | 9.77 | 1,015.68 | 9.60 | 1.89 | ||||||||||||||||||
R | 1,000.00 | 1,052.90 | 7.35 | 1,018.05 | 7.22 | 1.42 | ||||||||||||||||||
Y | 1,000.00 | 1,055.40 | 4.77 | 1,020.57 | 4.69 | 0.92 | ||||||||||||||||||
R5 | 1,000.00 | 1,056.10 | 4.25 | 1,021.07 | 4.18 | 0.82 | ||||||||||||||||||
R6 | 1,000.00 | 1,056.70 | 3.78 | 1,021.53 | 3.72 | 0.73 |
1 | The actual ending account value is based on the actual total return of the Fund for the period May 1, 2014 through October 31, 2014, after actual expenses and will differ from the hypothetical ending account value which is based on the Funds expense ratio and a hypothetical annual return of 5% before expenses. |
2 | Expenses are equal to the Funds annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 184/365 to reflect the most recent fiscal half year. |
19 Invesco American Value Fund
Approval of Investment Advisory and Sub-Advisory Contracts
20 Invesco American Value Fund
21 Invesco American Value Fund
Invesco mailing information
Send general correspondence to Invesco Investment Services, Inc., P.O. Box 219078, Kansas City, MO 64121-9078.
Important notice regarding delivery of security holder documents
To reduce Fund expenses, only one copy of most shareholder documents may be mailed to shareholders with multiple accounts at the same address (Householding). Mailing of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact Invesco Investment Services, Inc. at 800 959 4246 or contact your financial institution. We will begin sending you individual copies for each account within 30 days after receiving your request.
Fund holdings and proxy voting information
The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter ends. For the second and fourth quarters, the lists appear in the Funds semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The most recent list of portfolio holdings is available at invesco.com/completeqtrholdings. Shareholders can also look up the Funds Forms N-Q on the SEC website at sec.gov. Copies of the Funds Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are shown below.
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 959 4246 or at invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.
Information regarding how the Fund voted proxies related to its portfolio securities during the most recent 12-month period ended June 30 is available at invesco.com/proxysearch. The information is also available on the SEC website, sec.gov. Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the US distributor for Invesco Ltd.s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd. |
SEC file numbers: 811-03826 and 002-85905 | VK-AMVA-SAR-1 Invesco Distributors, Inc. |
| ||||
|
Semiannual Report to Shareholders
|
October 31, 2014 | ||
Invesco Comstock Fund | ||||
Nasdaq: |
||||
A: ACSTX ¡ B: ACSWX ¡ C: ACSYX ¡ R: ACSRX ¡ Y: ACSDX ¡ R5: ACSHX ¡ R6: ICSFX |
| ||
2
|
Fund Performance
| |
4
|
Letters to Shareholders
| |
5
|
Schedule of Investments
| |
7
|
Financial Statements
| |
9
|
Notes to Financial Statements
| |
17
|
Financial Highlights
| |
18
|
Fund Expenses
| |
19
|
Approval of Investment Advisory and Sub-Advisory Contracts
|
For the most current month-end Fund performance and commentary, please visit invesco.com/performance.
Unless otherwise noted, all data provided by Invesco.
This report must be accompanied or preceded by a currently effective Fund prospectus, which contains more complete information, including sales charges and expenses. Investors should read it carefully before investing.
| ||||||
| ||||||
NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE |
Fund Performance
2 Invesco Comstock Fund
3 Invesco Comstock Fund
Letters to Shareholders
Bruce Crockett |
Dear Fellow Shareholders: While the members of the Invesco Funds Board, which I chair, cant dictate the performance of the Invesco funds, be assured that your Board works diligently throughout the year to focus on how your investments are managed. Our job is to represent you and your interests on a variety of fund management-related matters. We regularly monitor how the portfolio management teams of the Invesco funds are performing in light of ever-changing and often unpredictable economic and market conditions, and we review the investment strategies and investment process employed by each funds management team as explained in the funds prospectus. Perhaps our most significant responsibility is conducting the annual review of the funds advisory and sub-advisory contracts with Invesco Advisers and its affiliates. This annual review, which is required by the Investment Company Act of 1940, focuses on the nature and quality of the services Invesco provides as the adviser to the Invesco funds and the reasonableness of the fees that it charges for those services. Each year, we spend months carefully reviewing |
information from Invesco that allows us to evaluate the quality of its services and the reasonableness of its fees. We also use information from a variety of independent sources, including materials provided by the independent senior officer of the Invesco funds, who reports directly to the independent trustees on the Board. Additionally, we meet with legal counsel and review performance and fee data prepared for us by Lipper Inc., an independent, third-party firm widely recognized as a leader in its field.
After a careful review, the members of the Invesco Funds Board approved the continuation of advisory and sub-advisory contracts with Invesco Advisers and its affiliates.
As always, please contact me at bruce@brucecrockett.com with any questions or concerns you may have. On behalf of the Board, we look forward to continuing to represent your interests and serving your needs.
Sincerely,
Bruce L. Crockett
Independent Chair
Invesco Funds Board of Trustees
Philip Taylor |
Dear Shareholders: This semiannual report includes information about your Fund, including performance data and a list of its investments as of the close of the reporting period. I hope you find this report of interest. Our website, invesco.com/us, offers a wide range of market insights and investment perspectives. On the website, youll find detailed information about our funds, including prices, performance, holdings and portfolio manager commentaries. You can access information about your individual Invesco account whenever its convenient for you; just complete a simple, secure online registration. Use the Log In box on our home page to get started. Invescos mobile app for iPad® (available free from the App StoreSM) allows you to obtain the same detailed information about your Fund and the same investment insights from our investment leaders, market strategists, economists and retirement experts on the go. Also, you can obtain timely updates to help you stay informed about the markets, the |
economy and investing by connecting with Invesco on Twitter, LinkedIn or Facebook. You can access our blog at blog.invesco.us.com.
For questions about your account, feel free to contact an Invesco client services representative at 800 959 4246. For Invesco-related questions or comments, please email me directly at phil@invesco.com.
Thank you for investing with us.
Sincerely,
Philip Taylor
Senior Managing Director, Invesco Ltd.
iPad is a trademark of Apple Inc., registered in the US and other countries. App Store is a service mark of Apple Inc. Invesco Distributors, Inc. is not affiliated with Apple Inc.
4 Invesco Comstock Fund
Schedule of Investments(a)
October 31, 2014
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco Comstock Fund
Investment Abbreviations:
ADR | American Depositary Receipt |
Notes to Schedule of Investments:
(a) | Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poors. |
(b) | Non-income producing security. |
(c) | The money market fund and the Fund are affiliated by having the same investment adviser. |
Portfolio Composition
By sector, based on Net Assets
as of October 31, 2014
Financials |
24.1 | % | ||||
Energy |
15.7 | |||||
Consumer Discretionary |
15.1 | |||||
Health Care |
13.5 | |||||
Information Technology |
12.7 | |||||
Industrials |
6.8 | |||||
Consumer Staples |
4.9 | |||||
Materials |
2.1 | |||||
Utilities |
1.7 | |||||
Telecommunication Services |
1.2 | |||||
Money Market Funds Plus Other Assets Less Liabilities |
2.2 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco Comstock Fund
Statement of Assets and Liabilities
October 31, 2014
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco Comstock Fund
Statement of Operations
For the six months ended October 31, 2014
(Unaudited)
Investment income: |
| |||
Dividends (net of foreign withholding taxes of $2,830,439) |
$ | 136,783,635 | ||
Dividends from affiliated money market funds |
78,465 | |||
Total investment income |
136,862,100 | |||
Expenses: |
||||
Advisory fees |
24,348,613 | |||
Administrative services fees |
437,712 | |||
Custodian fees |
100,822 | |||
Distribution fees: |
||||
Class A |
9,421,560 | |||
Class B |
219,228 | |||
Class C |
3,060,013 | |||
Class R |
995,129 | |||
Transfer agent fees A, B, C, R and Y |
11,027,668 | |||
Transfer agent fees R5 |
361,463 | |||
Transfer agent fees R6 |
2,689 | |||
Trustees and officers fees and benefits |
85,544 | |||
Other |
512,313 | |||
Total expenses |
50,572,754 | |||
Less: Fees waived and expense offset arrangement(s) |
(360,374 | ) | ||
Net expenses |
50,212,380 | |||
Net investment income |
86,649,720 | |||
Realized and unrealized gain (loss) from: |
||||
Net realized gain (loss) from: |
||||
Investment securities (includes net gains from securities sold to affiliates of $3,943,151) |
347,735,833 | |||
Foreign currencies |
(102,793 | ) | ||
Forward foreign currency contracts |
84,739,338 | |||
432,372,378 | ||||
Change in net unrealized appreciation (depreciation) of: |
||||
Investment securities |
45,009,062 | |||
Foreign currencies |
(162,205 | ) | ||
Forward foreign currency contracts |
12,302,591 | |||
57,149,448 | ||||
Net realized and unrealized gain |
489,521,826 | |||
Net increase in net assets resulting from operations |
$ | 576,171,546 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
8 Invesco Comstock Fund
Statement of Changes in Net Assets
For the six months ended October 31, 2014 and the year ended April 30, 2014
(Unaudited)
October 31, 2014 |
April 30, 2014 |
|||||||
Operations: |
|
|||||||
Net investment income |
$ | 86,649,720 | $ | 179,248,970 | ||||
Net realized gain |
432,372,378 | 372,365,094 | ||||||
Change in net unrealized appreciation |
57,149,448 | 1,579,162,646 | ||||||
Net increase in net assets resulting from operations |
576,171,546 | 2,130,776,710 | ||||||
Distributions to shareholders from net investment income: |
||||||||
Class A |
(44,804,500 | ) | (84,222,613 | ) | ||||
Class B |
(1,037,144 | ) | (2,284,461 | ) | ||||
Class C |
(1,338,510 | ) | (2,664,463 | ) | ||||
Class R |
(1,886,330 | ) | (2,833,815 | ) | ||||
Class Y |
(22,575,174 | ) | (37,063,241 | ) | ||||
Class R5 |
(5,635,173 | ) | (8,168,180 | ) | ||||
Class R6 |
(3,699,485 | ) | (4,332,817 | ) | ||||
Total distributions from net investment income |
(80,976,316 | ) | (141,569,590 | ) | ||||
Share transactionsnet: |
||||||||
Class A |
(149,058,261 | ) | 106,232,824 | |||||
Class B |
(34,160,634 | ) | (104,572,672 | ) | ||||
Class C |
2,755,081 | 24,297,960 | ||||||
Class R |
90,961,309 | 65,260,970 | ||||||
Class Y |
169,650,923 | 338,334,837 | ||||||
Class R5 |
108,402,855 | 140,372,631 | ||||||
Class R6 |
147,645,177 | 167,903,093 | ||||||
Net increase in net assets resulting from share transactions |
336,196,450 | 737,829,643 | ||||||
Net increase in net assets |
831,391,680 | 2,727,036,763 | ||||||
Net assets: |
||||||||
Beginning of period |
12,399,623,393 | 9,672,586,630 | ||||||
End of period (includes undistributed net investment income of $69,755,342 and $64,081,938, respectively) |
$ | 13,231,015,073 | $ | 12,399,623,393 |
Notes to Financial Statements
October 31, 2014
(Unaudited)
NOTE 1Significant Accounting Policies
Invesco Comstock Fund (the Fund) is a series portfolio of AIM Sector Funds (Invesco Sector Funds) (the Trust). The Trust is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end series management investment company consisting of ten separate portfolios, each authorized to issue an unlimited number of shares of beneficial interest. The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each portfolio or class will be voted on exclusively by the shareholders of such portfolio or class.
The Funds investment objective is total return through growth of capital and current income.
The Fund currently consists of seven different classes of shares: Class A, Class B, Class C, Class R, Class Y, Class R5 and Class R6. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met and under certain circumstances load waived shares may be subject to contingent deferred sales charges (CDSC). Class C shares are sold with a CDSC. Class R, Class Y, Class R5 and Class R6 shares are sold at net asset value. Effective November 30, 2010, new or additional investments in Class B shares are no longer permitted. Existing shareholders of Class B shares may continue to reinvest dividends and capital gains distributions in Class B shares until they convert to Class A shares. Also, shareholders in Class B shares will be able to exchange those shares for Class B shares of other Invesco Funds offering such shares until they convert to Class A shares. Generally, Class B shares will automatically convert to Class A shares on or about the month-end, which is at least eight years after the date of purchase. Redemption of Class B shares prior to the conversion date will be subject to a CDSC.
9 Invesco Comstock Fund
The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.
A. | Security Valuations Securities, including restricted securities, are valued according to the following policy. |
A security listed or traded on an exchange (except convertible securities) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (NYSE).
Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
Debt obligations (including convertible securities) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate (for unlisted equities), yield (for debt obligations), quality, type of issue, coupon rate (for debt obligations), maturity (for debt obligations), individual trading characteristics and other market data. Debt obligations are subject to interest rate and credit risks. In addition, all debt obligations involve some risk of default with respect to interest and/or principal payments.
Foreign securities (including foreign exchange contracts) prices are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange-traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that the Adviser determines are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities prices meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and ask prices is used to value debt obligations, including corporate loans.
Securities for which market quotations are not readily available or became unreliable are valued at fair value as determined in good faith by or under the supervision of the Trusts officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a securitys fair value.
The Fund may invest in securities that are subject to interest rate risk, meaning the risk that the prices will generally fall as interest rates rise and, conversely, the prices will generally rise as interest rates fall. Specific securities differ in their sensitivity to changes in interest rates depending on their individual characteristics. Changes in interest rates may result in increased market volatility, which may affect the value and/or liquidity of certain of the Funds investments.
Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuers assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B. | Securities Transactions and Investment Income Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income (net of withholding tax, if any) is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. |
The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Funds net asset value and, accordingly, they reduce the Funds total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
10 Invesco Comstock Fund
C. | Country Determination For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuers securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted. |
D. | Distributions Distributions from net investment income, if any, are declared and paid quarterly and are recorded on the ex-dividend date. Distributions from net realized capital gain, if any, are generally declared and paid annually and recorded on the ex-dividend date. The Fund may elect to treat a portion of the proceeds from redemptions as distributions for federal income tax purposes. |
E. | Federal Income Taxes The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code of 1986, as amended (the Internal Revenue Code), necessary to qualify as a regulated investment company and to distribute substantially all of the Funds taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements. |
The Fund recognizes the tax benefits of uncertain tax positions only when the position is more likely than not to be sustained. Management has analyzed the Funds uncertain tax positions and concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions. Management is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next 12 months.
The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally, the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F. | Expenses Fees provided for under the Rule 12b-1 plan of a particular class of the Fund are charged to the operations of such class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses attributable to Class R5 and Class R6 are allocated to each share class based on relative net assets. Sub-accounting fees attributable to Class R5 are charged to the operations of the class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses relating to all other classes are allocated among those classes based on relative net assets. All other expenses are allocated among the classes based on relative net assets. Prior to June 1, 2010, incremental transfer agency fees which were unique to each class of shares were charged to the operations of such class. |
G. | Accounting Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print. |
H. | Indemnifications Under the Trusts organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of the performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Funds servicing agreements, that contain a variety of indemnification clauses. The Funds maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote. |
I. | Foreign Currency Translations Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (1) sales of foreign currencies, (2) currency gains or losses realized between the trade and settlement dates on securities transactions, and (3) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Funds books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates. |
The Fund may invest in foreign securities, which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable. Foreign taxes, if any, are recorded based on the tax regulations and rates that exist in the foreign markets in which the Fund invests and are shown in the Statement of Operations.
J. | Forward Foreign Currency Contracts The Fund may engage in foreign currency transactions either on a spot (i.e. for prompt delivery and settlement) basis or through forward foreign currency contracts to manage or minimize currency or exchange rate risk. |
The Fund may also enter into forward foreign currency contracts for the purchase or sale of a security denominated in a foreign currency in order to lock in the U.S. dollar price of that security, or the Fund may also enter into forward foreign currency contracts that do not provide for physical settlement of the two currencies, but instead are settled by a single cash payment calculated as the difference between the agreed upon exchange rate and the spot rate at settlement based upon an agreed upon notional amount (non-deliverable forwards). The Fund will set aside liquid assets in an amount equal to daily mark-to-market obligation for forward foreign currency contracts.
A forward foreign currency contract is an obligation between two parties (Counterparties) to purchase or sell a specific currency for an agreed-upon price at a future date. The use of forward foreign currency contracts does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the
11 Invesco Comstock Fund
contracts are included in the Statement of Operations. The primary risks associated with forward foreign currency contracts include failure of the Counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities.
NOTE 2Advisory Fees and Other Fees Paid to Affiliates
The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the Adviser or Invesco). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Funds average daily net assets as follows:
Average Daily Net Assets | Rate | |||
First $1 billion |
0.50% | |||
Next $1 billion |
0.45% | |||
Next $1 billion |
0.40% | |||
Over $3 billion |
0.35% |
For the six months ended October 31, 2014, the effective advisory fees incurred by the Fund was 0.37%.
Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Canada Ltd. (collectively, the Affiliated Sub-Advisers) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide(s) discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).
The Adviser has contractually agreed, through at least June 30, 2015, to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver and/or expense reimbursement (excluding certain items discussed below) of Class A, Class B, Class C, Class R, Class Y, Class R5 and Class R6 shares to 2.00%, 2.75%, 2.75%, 2.25%, 1.75%, 1.75% and 1.75% respectively, of average daily net assets. In determining the Advisers obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver and/or expense reimbursement to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items, including litigation expenses; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless Invesco continues the fee waiver agreement, it will terminate on June 30, 2015. The fee waiver agreement cannot be terminated during its term. The Adviser did not waive fees and/or reimburse expenses during the period under this expense limitation.
Further, the Adviser has contractually agreed, through at least June 30, 2016, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market funds.
For the six months ended October 31, 2014, the Adviser waived advisory fees of $351,545.
The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco for certain administrative costs incurred in providing accounting services to the Fund. For the six months ended October 31, 2014, expenses incurred under the agreement are shown in the Statement of Operations as Administrative services fees.
The Trust has entered into a transfer agency and service agreement with Invesco Investment Services, Inc. (IIS) pursuant to which the Fund has agreed to pay IIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IIS for certain expenses incurred by IIS in the course of providing such services. IIS may make payments to intermediaries that provide omnibus account services, sub-accounting services and/or networking services. All fees payable by IIS to intermediaries that provide omnibus account services or sub-accounting are charged back to the Fund, subject to certain limitations approved by the Trusts Board of Trustees. For the six months ended October 31, 2014, expenses incurred under the agreement are shown in the Statement of Operations as Transfer agent fees.
Shares of the Fund are distributed by Invesco Distributors, Inc. (IDI). The Fund has adopted a distribution plan pursuant to Rule 12b-1 under the 1940 Act, and a service plan (collectively, the Plans) for Class A, Class B, Class C and Class R shares to compensate IDI for the sale, distribution, shareholder servicing and maintenance of shareholder accounts for these shares. Under the Plans, the Fund will incur annual fees of up to 0.25% of Class A average daily net assets, up to 1.00% each of Class B and Class C average daily net assets and up to 0.50% of Class R average daily net assets.
With respect to Class B and Class C shares, the Fund is authorized to reimburse in future years any distribution related expenses that exceed the maximum annual reimbursement rate for such class, so long as such reimbursement does not cause the Fund to exceed the Class B and Class C maximum annual reimbursement rate, respectively. With respect to Class A shares, distribution related expenses that exceed the maximum annual reimbursement rate for such class are not carried forward to future years and the Fund will not reimburse IDI for any such expenses.
For the six months ended October 31, 2014, expenses incurred under these agreements are shown in the Statement of Operations as Distribution fees.
Front-end sales commissions and CDSC (collectively, the sales charges) are not recorded as expenses of the Fund. Front-end sales commissions are deducted from proceeds from the sales of Fund shares prior to investment in Class A shares of the Fund. CDSC are deducted from redemption proceeds prior to remittance to the shareholder. During the six months ended October 31, 2014, IDI advised the Fund that IDI retained $537,494 in front-end sales commissions from the sale of Class A shares and $4,848, $17,870 and $6,938 from Class A, Class B and Class C shares, respectively, for CDSC imposed on redemptions by shareholders.
Certain officers and trustees of the Trust are officers and directors of the Adviser, IIS and/or IDI.
12 Invesco Comstock Fund
NOTE 3Additional Valuation Information
GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods, giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3), generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investments assigned level:
Level 1 | Prices are determined using quoted prices in an active market for identical assets. |
Level 2 | Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others. |
Level 3 | Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Funds own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information. |
The following is a summary of the tiered valuation input levels, as of October 31, 2014. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Equity Securities |
$ | 12,787,822,691 | $ | 407,039,435 | $ | | $ | 13,194,862,126 | ||||||||
Forward Foreign Currency Contracts* |
| 7,633,396 | | 7,633,396 | ||||||||||||
Total Investments |
$ | 12,787,822,691 | $ | 414,672,831 | $ | | $ | 13,202,495,522 |
* | Unrealized appreciation. |
NOTE 4Derivative Investments
Value of Derivative Investments at Period-End
The table below summarizes the value of the Funds derivative investments, detailed by primary risk exposure, held as of October 31, 2014:
Value | ||||||||
Risk Exposure/Derivative Type | Assets | Liabilities | ||||||
Currency risk: |
||||||||
Forward foreign currency contracts(a) |
$ | 8,882,203 | $ | (1,248,807 | ) |
(a) | Values are disclosed on the Statement of Assets and Liabilities under the caption Forward foreign currency contracts outstanding. |
Effect of Derivative Investments for the six months ended October 31, 2014
The table below summarizes the gains on derivative investments, detailed by primary risk exposure, recognized in earnings during the period:
Location of Gain on Statement of Operations |
||||
Forward Foreign Currency Contracts |
||||
Realized Gain: |
||||
Currency risk |
$ | 84,739,338 | ||
Change in Unrealized Appreciation: |
||||
Currency risk |
12,302,591 | |||
Total |
$ | 97,041,929 |
The table below summarizes the average notional value of forward foreign currency contracts outstanding during the period.
Forward Foreign Currency Contracts |
||||
Average notional value |
$ | 1,315,977,060 |
13 Invesco Comstock Fund
Open Forward Foreign Currency Contracts | ||||||||||||||||||||||||||
Settlement Date |
Counterparty |
Contract to | Notional Value |
Unrealized Appreciation (Depreciation) |
||||||||||||||||||||||
Deliver | Receive | |||||||||||||||||||||||||
11/14/14 |
Barclays Capital Inc. |
CAD | 63,498,702 | USD | 56,506,828 | $ | 56,327,621 | $ | 179,207 | |||||||||||||||||
11/14/14 |
CIBC World Markets Corp. |
CAD | 63,747,403 | USD | 56,733,447 | 56,548,236 | 185,211 | |||||||||||||||||||
11/14/14 |
Deutsche Bank AG |
CAD | 63,498,703 | USD | 56,499,088 | 56,327,623 | 171,465 | |||||||||||||||||||
11/14/14 |
Goldman Sachs & Co. |
CAD | 63,498,703 | USD | 56,509,093 | 56,327,622 | 181,471 | |||||||||||||||||||
11/14/14 |
Barclays Capital Inc. |
CHF | 63,310,291 | USD | 66,437,156 | 65,805,636 | 631,520 | |||||||||||||||||||
11/14/14 |
CIBC World Markets Corp. |
CHF | 63,310,291 | USD | 66,457,729 | 65,805,636 | 652,093 | |||||||||||||||||||
11/14/14 |
Deutsche Bank AG |
CHF | 63,358,982 | USD | 66,489,019 | 65,856,246 | 632,773 | |||||||||||||||||||
11/14/14 |
Goldman Sachs & Co. |
CHF | 63,310,292 | USD | 66,450,755 | 65,805,637 | 645,118 | |||||||||||||||||||
11/14/14 |
Barclays Capital Inc. |
EUR | 79,482,313 | USD | 100,746,455 | 99,610,081 | 1,136,374 | |||||||||||||||||||
11/14/14 |
CIBC World Markets Corp. |
EUR | 79,482,313 | USD | 100,699,322 | 99,610,080 | 1,089,242 | |||||||||||||||||||
11/14/14 |
Deutsche Bank AG |
EUR | 79,482,314 | USD | 100,770,539 | 99,610,081 | 1,160,458 | |||||||||||||||||||
11/14/14 |
Goldman Sachs & Co. |
EUR | 79,390,966 | USD | 100,600,263 | 99,495,601 | 1,104,662 | |||||||||||||||||||
11/14/14 |
RBC Capital Markets Corp. |
EUR | 79,482,313 | USD | 100,722,689 | 99,610,080 | 1,112,609 | |||||||||||||||||||
11/14/14 |
Barclays Capital Inc. |
GBP | 39,455,662 | USD | 62,802,445 | 63,114,815 | (312,370 | ) | ||||||||||||||||||
11/14/14 |
CIBC World Markets Corp. |
GBP | 39,455,663 | USD | 62,797,831 | 63,114,818 | (316,987 | ) | ||||||||||||||||||
11/14/14 |
Deutsche Bank AG |
GBP | 39,515,443 | USD | 62,900,287 | 63,210,444 | (310,157 | ) | ||||||||||||||||||
11/14/14 |
Goldman Sachs & Co. | GBP | 39,455,661 | USD | 62,805,521 | 63,114,814 | (309,293 | ) | ||||||||||||||||||
Total forward foreign currency contracts Currency Risk |
$ | 7,633,396 |
Currency Abbreviations:
Offsetting Assets and Liabilities
Accounting Standards Update (ASU) No. 2011-11, Disclosures about Offsetting Assets and Liabilities, which was subsequently clarified in Financial Accounting Standards Board ASU 2013-01 Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities is intended to enhance disclosures about financial instruments and derivative instruments that are subject to offsetting arrangements on the Statement of Assets and Liabilities and to enable investors to better understand the effect of those arrangements on its financial position. In order for an arrangement to be eligible for netting, the Fund must have a basis to conclude that such netting arrangements are legally enforceable. The Fund enters into netting agreements and collateral agreements in an attempt to reduce the Funds Counterparty credit risk by providing for a single net settlement with a Counterparty of all financial transactions covered by the agreement in an event of default as defined under such agreement.
There were no derivative instruments subject to a netting agreement for which the Fund is not currently netting. The following tables present derivative instruments that are either subject to an enforceable netting agreement or offset by collateral arrangements as of October 31, 2014.
Assets: | ||||||||||||||||||||||||
Gross amounts presented in Statement of Assets & Liabilities |
Gross amounts offset in Statement of Assets & Liabilities |
Net amounts of assets Liabilities |
Collateral Received | |||||||||||||||||||||
Counterparty | Financial Instruments |
Cash | Net Amount |
|||||||||||||||||||||
Barclays Capital Inc. |
$ | 1,947,101 | $ | (312,370 | ) | $ | 1,634,731 | $ | | $ | | $ | 1,634,731 | |||||||||||
CIBC World Markets Corp. |
1,926,546 | (316,987 | ) | 1,609,559 | | | 1,609,559 | |||||||||||||||||
Deutsche Bank AG |
1,964,696 | (310,157 | ) | 1,654,539 | | | 1,654,539 | |||||||||||||||||
Goldman Sachs & Co. |
1,931,251 | (309,293 | ) | 1,621,958 | | | 1,621,958 | |||||||||||||||||
RBC Capital Markets Corp. |
1,112,609 | | 1,112,609 | | | 1,112,609 | ||||||||||||||||||
Total |
$ | 8,882,203 | $ | (1,248,807 | ) | $ | 7,633,396 | $ | | $ | | $ | 7,633,396 | |||||||||||
Liabilities: | ||||||||||||||||||||||||
Gross amounts presented in Statement of Assets & Liabilities |
Gross amounts Assets & Liabilities |
Net amounts of liabilities Liabilities |
Collateral Pledged | |||||||||||||||||||||
Counterparty | Financial Instruments |
Cash | Net Amount |
|||||||||||||||||||||
Barclays Capital Inc. |
$ | 312,370 | $ | (312,370 | ) | $ | | $ | | $ | | $ | | |||||||||||
CIBC World Markets Corp. |
316,987 | (316,987 | ) | | | | | |||||||||||||||||
Deutsche Bank AG |
310,157 | (310,157 | ) | | | | | |||||||||||||||||
Goldman Sachs & Co. |
309,293 | (309,293 | ) | | | | | |||||||||||||||||
Total |
$ | 1,248,807 | $ | (1,248,807 | ) | $ | | $ | | $ | | $ | |
14 Invesco Comstock Fund
NOTE 5Security Transactions with Affiliated Funds
The Fund is permitted to purchase or sell securities from or to certain other Invesco Funds under specified conditions outlined in procedures adopted by the Board of Trustees of the Trust. The procedures have been designed to ensure that any purchase or sale of securities by the Fund from or to another fund or portfolio that is or could be considered an affiliate by virtue of having a common investment adviser (or affiliated investment advisers), common Trustees and/or common officers complies with Rule 17a-7 of the 1940 Act. Further, as defined under the procedures, each transaction is effected at the current market price. Pursuant to these procedures, for the six months ended October 31, 2014, the Fund engaged in securities sales of $5,566,766, which resulted in net realized gains of $3,943,151.
NOTE 6Expense Offset Arrangement(s)
The expense offset arrangement is comprised of transfer agency credits which result from balances in demand deposit accounts used by the transfer agent for clearing shareholder transactions. For the six months ended October 31, 2014, the Fund received credits from this arrangement, which resulted in the reduction of the Funds total expenses of $8,829.
NOTE 7Trustees and Officers Fees and Benefits
Trustees and Officers Fees and Benefits include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and Trustees and Officers Fees and Benefits also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees were eligible to participate in a retirement plan that provided for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. Trustees and Officers Fees and Benefits include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.
NOTE 8Cash Balances
The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with State Street Bank and Trust Company, the custodian bank. Such balances, if any at period end, are shown in the Statement of Assets and Liabilities under the payable caption Amount due custodian. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.
NOTE 9Tax Information
The amount and character of income and gains to be distributed are determined in accordance with income tax regulations, which may differ from GAAP. Reclassifications are made to the Funds capital accounts to reflect income and gains available for distribution (or available capital loss carryforward) under income tax regulations. The tax character of distributions paid during the year and the tax components of net assets will be reported at the Funds fiscal year-end.
Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. Capital losses generated in years beginning after December 22, 2010 can be carried forward for an unlimited period, whereas previous losses expire in 8 tax years. Capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Capital loss carryforwards with no expiration date will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss carryforwards in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.
The Fund had a capital loss carryforward as of April 30, 2014, which expires as follows:
Capital Loss Carryforward* | ||||||||||||
Expiration | Short-Term | Long-Term | Total | |||||||||
April 30, 2017 |
$ | 450,633,311 | $ | | $ | 450,633,311 | ||||||
April 30, 2018 |
8,704,738 | | 8,704,738 | |||||||||
$ | 459,338,049 | $ | | $ | 459,338,049 |
* | Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code and may be further limited depending upon a variety of factors, including the realization of net unrealized gains or losses as of the date of any reorganization. |
15 Invesco Comstock Fund
NOTE 10Investment Securities
The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the six months ended October 31, 2014 was $1,496,171,538 and $719,100,615, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed federal income tax reporting period-end.
Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis | ||||
Aggregate unrealized appreciation of investment securities |
$ | 3,334,082,630 | ||
Aggregate unrealized (depreciation) of investment securities |
(244,998,182 | ) | ||
Net unrealized appreciation of investment securities |
$ | 3,089,084,448 |
Cost of investments for tax purposes is $10,105,777,678.
NOTE 11Share Information
Summary of Share Activity | ||||||||||||||||
Six months ended October 31, 2014(a) |
Year ended April 30, 2014 |
|||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Sold: |
||||||||||||||||
Class A |
21,432,749 | $ | 534,609,781 | 51,782,926 | $ | 1,162,678,668 | ||||||||||
Class B |
34,471 | 859,444 | 199,567 | 4,436,862 | ||||||||||||
Class C |
1,494,231 | 37,246,162 | 4,077,528 | 91,731,670 | ||||||||||||
Class R |
5,767,334 | 143,645,401 | 8,041,732 | 180,732,649 | ||||||||||||
Class Y |
20,209,423 | 506,483,781 | 39,441,106 | 885,843,945 | ||||||||||||
Class R5 |
6,950,259 | 173,516,699 | 10,458,726 | 233,470,332 | ||||||||||||
Class R6 |
6,770,839 | 169,129,736 | 11,698,240 | 260,975,165 | ||||||||||||
Issued as reinvestment of dividends: |
||||||||||||||||
Class A |
1,629,074 | 41,600,465 | 3,567,338 | 79,347,411 | ||||||||||||
Class B |
38,910 | 992,856 | 98,525 | 2,209,328 | ||||||||||||
Class C |
47,372 | 1,211,477 | 110,949 | 2,461,399 | ||||||||||||
Class R |
73,785 | 1,886,326 | 126,992 | 2,833,758 | ||||||||||||
Class Y |
845,589 | 21,597,297 | 1,609,010 | 35,896,153 | ||||||||||||
Class R5 |
220,704 | 5,634,896 | 365,128 | 8,167,965 | ||||||||||||
Class R6 |
144,865 | 3,699,485 | 193,777 | 4,332,817 | ||||||||||||
Automatic conversion of Class B shares to Class A shares: |
||||||||||||||||
Class A |
952,319 | 23,947,031 | 3,492,937 | 78,081,752 | ||||||||||||
Class B |
(952,618 | ) | (23,947,031 | ) | (3,493,831 | ) | (78,081,752 | ) | ||||||||
Reacquired: |
||||||||||||||||
Class A |
(30,022,420 | ) | (749,215,538 | ) | (54,030,858 | ) | (1,213,875,007 | ) | ||||||||
Class B |
(484,345 | ) | (12,065,903 | ) | (1,488,485 | ) | (33,137,110 | ) | ||||||||
Class C |
(1,431,291 | ) | (35,702,558 | ) | (3,112,801 | ) | (69,895,109 | ) | ||||||||
Class R |
(2,185,669 | ) | (54,570,418 | ) | (5,240,664 | ) | (118,305,437 | ) | ||||||||
Class Y |
(14,325,994 | ) | (358,430,155 | ) | (26,243,831 | ) | (583,405,261 | ) | ||||||||
Class R5 |
(2,830,402 | ) | (70,748,740 | ) | (4,484,698 | ) | (101,265,666 | ) | ||||||||
Class R6 |
(1,007,988 | ) | (25,184,044 | ) | (4,409,082 | ) | (97,404,889 | ) | ||||||||
Net increase in share activity |
13,371,197 | $ | 336,196,450 | 32,760,231 | $ | 737,829,643 |
(a) | There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 29% of the outstanding shares of the Fund. IDI has an agreement with these entities to sell Fund shares. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as securities brokerage, distribution, third party record keeping and account servicing. The Fund has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially. |
16 Invesco Comstock Fund
NOTE 12Financial Highlights
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
Net asset value, beginning of period |
Net investment income(a) |
Net gains (losses) on securities (both realized and unrealized) |
Total from investment operations |
Dividends from net investment income |
Net asset value, end of period |
Total return |
Net assets, end of period (000s omitted) |
Ratio of expenses to average net assets with fee waivers and/or expenses absorbed |
Ratio of expenses to average net assets without fee waivers and/or expenses absorbed |
Ratio of net investment income to average net assets |
Portfolio turnover(b) |
|||||||||||||||||||||||||||||||||||||
Class A |
||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 10/31/14 |
$ | 24.29 | $ | 0.16 | $ | 0.96 | $ | 1.12 | $ | (0.15 | ) | $ | 25.26 | 4.60 | %(c) | $ | 7,497,763 | 0.82 | %(d) | 0.83 | %(d) | 1.28 | %(d) | 6 | % | |||||||||||||||||||||||
Year ended 04/30/14 |
20.25 | 0.36 | 3.96 | 4.32 | (0.28 | ) | 24.29 | 21.47 | (c) | 7,356,633 | 0.81 | 0.82 | 1.59 | 11 | ||||||||||||||||||||||||||||||||||
Year ended 04/30/13 |
16.93 | 0.27 | 3.32 | 3.59 | (0.27 | ) | 20.25 | 21.46 | (c) | 6,034,792 | 0.86 | 0.86 | 1.56 | 12 | ||||||||||||||||||||||||||||||||||
Year ended 04/30/12 |
17.20 | 0.25 | (0.30 | ) | (0.05 | ) | (0.22 | ) | 16.93 | (0.19 | )(c) | 5,473,149 | 0.88 | 0.88 | 1.55 | 17 | ||||||||||||||||||||||||||||||||
Four months ended 04/30/11 |
15.73 | 0.06 | 1.46 | 1.52 | (0.05 | ) | 17.20 | 9.71 | (c) | 6,092,190 | 0.84 | (e) | 0.84 | (e) | 1.18 | (e) | 10 | |||||||||||||||||||||||||||||||
Year ended 12/31/10 |
13.81 | 0.20 | 1.93 | 2.13 | (0.21 | ) | 15.73 | 15.60 | (c) | 5,760,670 | 0.86 | 0.86 | 1.39 | 18 | ||||||||||||||||||||||||||||||||||
Year ended 12/31/09 |
10.85 | 0.19 | 2.95 | 3.14 | (0.18 | ) | 13.81 | 29.45 | (f) | 5,759,425 | 0.89 | 0.89 | 1.63 | 14 | ||||||||||||||||||||||||||||||||||
Class B |
||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 10/31/14 |
24.28 | 0.16 | 0.96 | 1.12 | (0.15 | ) | 25.25 | 4.60 | (c)(g) | 157,320 | 0.82 | (d)(g) | 0.83 | (d)(g) | 1.28 | (d)(g) | 6 | |||||||||||||||||||||||||||||||
Year ended 04/30/14 |
20.23 | 0.32 | 3.97 | 4.29 | (0.24 | ) | 24.28 | 21.31 | (c)(g) | 184,409 | 0.96 | (g) | 0.97 | (g) | 1.44 | (g) | 11 | |||||||||||||||||||||||||||||||
Year ended 04/30/13 |
16.93 | 0.23 | 3.30 | 3.53 | (0.23 | ) | 20.23 | 21.11 | (c) | 248,404 | 1.09 | 1.61 | 1.33 | 12 | ||||||||||||||||||||||||||||||||||
Year ended 04/30/12 |
17.20 | 0.25 | (0.30 | ) | (0.05 | ) | (0.22 | ) | 16.93 | (0.19 | )(c)(g) | 343,166 | 0.88 | (g) | 0.88 | (g) | 1.55 | (g) | 17 | |||||||||||||||||||||||||||||
Four months ended 04/30/11 |
15.73 | 0.06 | 1.46 | 1.52 | (0.05 | ) | 17.20 | 9.71 | (c)(g) | 526,168 | 0.84 | (e)(g) | 0.84 | (e)(g) | 1.18 | (e)(g) | 10 | |||||||||||||||||||||||||||||||
Year ended 12/31/10 |
13.81 | 0.20 | 1.93 | 2.13 | (0.21 | ) | 15.73 | 15.60 | (c)(g) | 547,060 | 0.86 | (g) | 0.86 | (g) | 1.39 | (g) | 18 | |||||||||||||||||||||||||||||||
Year ended 12/31/09 |
10.85 | 0.19 | 2.95 | 3.14 | (0.18 | ) | 13.81 | 29.45 | (f)(g) | 756,515 | 0.89 | (g) | 0.89 | (g) | 1.64 | (g) | 14 | |||||||||||||||||||||||||||||||
Class C |
||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 10/31/14 |
24.28 | 0.07 | 0.95 | 1.02 | (0.06 | ) | 25.24 | 4.18 | (c) | 616,132 | 1.57 | (d) | 1.58 | (d) | 0.53 | (d) | 6 | |||||||||||||||||||||||||||||||
Year ended 04/30/14 |
20.24 | 0.19 | 3.96 | 4.15 | (0.11 | ) | 24.28 | 20.57 | (c) | 589,910 | 1.56 | 1.57 | 0.84 | 11 | ||||||||||||||||||||||||||||||||||
Year ended 04/30/13 |
16.93 | 0.14 | 3.31 | 3.45 | (0.14 | ) | 20.24 | 20.52 | (c) | 469,962 | 1.61 | 1.61 | 0.81 | 12 | ||||||||||||||||||||||||||||||||||
Year ended 04/30/12 |
17.20 | 0.13 | (0.30 | ) | (0.17 | ) | (0.10 | ) | 16.93 | (0.94 | )(c) | 448,866 | 1.63 | 1.63 | 0.80 | 17 | ||||||||||||||||||||||||||||||||
Four months ended 04/30/11 |
15.74 | 0.02 | 1.46 | 1.48 | (0.02 | ) | 17.20 | 9.43 | (c) | 524,840 | 1.59 | (e) | 1.59 | (e) | 0.43 | (e) | 10 | |||||||||||||||||||||||||||||||
Year ended 12/31/10 |
13.81 | 0.09 | 1.94 | 2.03 | (0.10 | ) | 15.74 | 14.82 | (c) | 506,742 | 1.61 | 1.61 | 0.64 | 18 | ||||||||||||||||||||||||||||||||||
Year ended 12/31/09 |
10.86 | 0.10 | 2.94 | 3.04 | (0.09 | ) | 13.81 | 28.37 | (f) | 538,048 | 1.64 | 1.64 | 0.87 | 14 | ||||||||||||||||||||||||||||||||||
Class R |
||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 10/31/14 |
24.29 | 0.13 | 0.95 | 1.08 | (0.12 | ) | 25.25 | 4.43 | (c) | 441,222 | 1.07 | (d) | 1.08 | (d) | 1.03 | (d) | 6 | |||||||||||||||||||||||||||||||
Year ended 04/30/14 |
20.24 | 0.30 | 3.97 | 4.27 | (0.22 | ) | 24.29 | 21.22 | (c) | 335,562 | 1.06 | 1.07 | 1.34 | 11 | ||||||||||||||||||||||||||||||||||
Year ended 04/30/13 |
16.93 | 0.23 | 3.31 | 3.54 | (0.23 | ) | 20.24 | 21.11 | (c) | 220,443 | 1.11 | 1.11 | 1.31 | 12 | ||||||||||||||||||||||||||||||||||
Year ended 04/30/12 |
17.19 | 0.20 | (0.28 | ) | (0.08 | ) | (0.18 | ) | 16.93 | (0.38 | )(c) | 191,685 | 1.13 | 1.13 | 1.30 | 17 | ||||||||||||||||||||||||||||||||
Four months ended 04/30/11 |
15.73 | 0.05 | 1.45 | 1.50 | (0.04 | ) | 17.19 | 9.57 | (c) | 199,254 | 1.09 | (e) | 1.09 | (e) | 0.93 | (e) | 10 | |||||||||||||||||||||||||||||||
Year ended 12/31/10 |
13.81 | 0.16 | 1.93 | 2.09 | (0.17 | ) | 15.73 | 15.32 | (c) | 184,927 | 1.11 | 1.11 | 1.14 | 18 | ||||||||||||||||||||||||||||||||||
Year ended 12/31/09 |
10.85 | 0.15 | 2.96 | 3.11 | (0.15 | ) | 13.81 | 29.13 | (f) | 164,959 | 1.14 | 1.14 | 1.35 | 14 | ||||||||||||||||||||||||||||||||||
Class Y(h) |
||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 10/31/14 |
24.29 | 0.19 | 0.96 | 1.15 | (0.18 | ) | 25.26 | 4.73 | (c) | 3,228,317 | 0.57 | (d) | 0.58 | (d) | 1.53 | (d) | 6 | |||||||||||||||||||||||||||||||
Year ended 04/30/14 |
20.25 | 0.41 | 3.97 | 4.38 | (0.34 | ) | 24.29 | 21.77 | (c) | 2,941,152 | 0.56 | 0.57 | 1.84 | 11 | ||||||||||||||||||||||||||||||||||
Year ended 04/30/13 |
16.93 | 0.32 | 3.31 | 3.63 | (0.31 | ) | 20.25 | 21.76 | (c) | 2,151,816 | 0.61 | 0.61 | 1.81 | 12 | ||||||||||||||||||||||||||||||||||
Year ended 04/30/12 |
17.20 | 0.28 | (0.29 | ) | (0.01 | ) | (0.26 | ) | 16.93 | 0.06 | (c) | 2,135,728 | 0.63 | 0.63 | 1.80 | 17 | ||||||||||||||||||||||||||||||||
Four months ended 04/30/11 |
15.73 | 0.08 | 1.45 | 1.53 | (0.06 | ) | 17.20 | 9.78 | (c) | 1,771,697 | 0.59 | (e) | 0.59 | (e) | 1.43 | (e) | 10 | |||||||||||||||||||||||||||||||
Year ended 12/31/10 |
13.80 | 0.23 | 1.94 | 2.17 | (0.24 | ) | 15.73 | 15.97 | (c) | 1,530,636 | 0.61 | 0.61 | 1.65 | 18 | ||||||||||||||||||||||||||||||||||
Year ended 12/31/09 |
10.85 | 0.21 | 2.95 | 3.16 | (0.21 | ) | 13.80 | 29.67 | (f) | 1,181,166 | 0.64 | 0.64 | 1.85 | 14 | ||||||||||||||||||||||||||||||||||
Class R5 |
||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 10/31/14 |
24.29 | 0.20 | 0.95 | 1.15 | (0.19 | ) | 25.25 | 4.74 | (c) | 766,569 | 0.48 | (d) | 0.49 | (d) | 1.62 | (d) | 6 | |||||||||||||||||||||||||||||||
Year ended 04/30/14 |
20.24 | 0.43 | 3.97 | 4.40 | (0.35 | ) | 24.29 | 21.92 | (c) | 631,780 | 0.49 | 0.50 | 1.91 | 11 | ||||||||||||||||||||||||||||||||||
Year ended 04/30/13 |
16.93 | 0.34 | 3.31 | 3.65 | (0.34 | ) | 20.24 | 21.85 | (c) | 398,311 | 0.49 | 0.49 | 1.93 | 12 | ||||||||||||||||||||||||||||||||||
Year ended 04/30/12 |
17.19 | 0.31 | (0.28 | ) | 0.03 | (0.29 | ) | 16.93 | 0.33 | (c) | 397,292 | 0.44 | 0.44 | 1.99 | 17 | |||||||||||||||||||||||||||||||||
Four months ended 04/30/11 |
15.72 | 0.09 | 1.45 | 1.54 | (0.07 | ) | 17.19 | 9.82 | (c) | 167,740 | 0.36 | (e) | 0.36 | (e) | 1.66 | (e) | 10 | |||||||||||||||||||||||||||||||
Year ended 12/31/10(i) |
13.33 | 0.14 | 2.44 | 2.58 | (0.19 | ) | 15.72 | 19.53 | (c) | 164,600 | 0.49 | (e) | 0.49 | (e) | 1.68 | (e) | 18 | |||||||||||||||||||||||||||||||
Class R6 |
||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 10/31/14 |
24.28 | 0.22 | 0.95 | 1.17 | (0.20 | ) | 25.25 | 4.83 | (c) | 523,692 | 0.38 | (d) | 0.39 | (d) | 1.72 | (d) | 6 | |||||||||||||||||||||||||||||||
Year ended 04/30/14 |
20.25 | 0.45 | 3.95 | 4.40 | (0.37 | ) | 24.28 | 21.92 | (c) | 360,178 | 0.40 | 0.41 | 2.00 | 11 | ||||||||||||||||||||||||||||||||||
Year ended 04/30/13(i) |
17.67 | 0.22 | 2.54 | 2.76 | (0.18 | ) | 20.25 | 15.73 | (c) | 148,859 | 0.41 | (e) | 0.41 | (e) | 2.01 | (e) | 12 |
(a) | Calculated using average shares outstanding. |
(b) | Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable. For the year ended April 30, 2012, the portfolio turnover calculation excludes the value of securities purchased of $279,205,287 and sold of $89,253,686 in the effort to realign the Funds portfolio holdings after the reorganization of Invesco Large Cap Basic Value Fund, Invesco Value Fund and Invesco Value II into the Fund. |
(c) | Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable. |
(d) | Ratios are annualized and based on average daily net assets (000s omitted) of $7,493,788, $173,952, $607,013, $394,807, $3,105,770, $717,116 and $450,478 for Class A, Class B, Class C, Class R, Class Y, Class R5 and Class R6 shares, respectively. |
(e) | Annualized. |
(f) | Assumes reinvestment of all distributions for all classes for the period and does not include payments of the maximum sales charge of 5.75% or contingent deferred sales charge (CDSC) on Class A shares, the maximum CDSC of 5%, charged on certain Class B shares, made within one year of purchase and declining to 0% after the fifth year or on the maximum CDSC of 1%, charged on certain redemptions of Class C shares within one year of purchase. On purchases of $1 million or more of Class A shares, a CDSC of 1% may be imposed on certain redemptions made within eighteen months of purchase. If the sales charges were included, total returns would be lower. These returns include combined Rule 12b-1 fees and service fees of up to 0.25% on Class A shares, up to 1% on Class B and Class C shares or up to 0.50% on Class R shares, and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. |
(g) | Total return, ratio of expenses to average net assets and ratio of net investment income (loss) to average net assets reflect actual 12b-1 fees of 0.25% for the six months ended October 31, 2014, 0.40% for the year ended ended April 30, 2014, 0.25% for the year ended April 30, 2012, the four months ended April 30, 2011 and the year ended December 31, 2010 and reflect actual 12b-1 fees of less than 1.00% for the year ended December 31, 2009. |
(h) | On June 1, 2010, Van Kampen Comstock Funds Class I shares were reorganized into Class Y shares. |
(i) | Commencement date of June 1, 2010 and September 24, 2012 for Class R5 shares and Class R6 shares, respectively. |
17 Invesco Comstock Fund
Calculating your ongoing Fund expenses
Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, if any; and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period May 1, 2014 through October 31, 2014.
Actual expenses
The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled Actual Expenses Paid During Period to estimate the expenses you paid on your account during this period.
Hypothetical example for comparison purposes
The table below also provides information about hypothetical account values and hypothetical expenses based on the Funds actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Funds actual return.
The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, if any. Therefore, the hypothetical information is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
Class | Beginning Account Value (05/01/14) |
ACTUAL | HYPOTHETICAL (5% annual return before expenses) |
Annualized Expense Ratio |
||||||||||||||||||||
Ending Account Value (10/31/14)1 |
Expenses Paid During Period2 |
Ending Account Value (10/31/14) |
Expenses Paid During Period2 |
|||||||||||||||||||||
A | $ | 1,000.00 | $ | 1,046.00 | $ | 4.23 | $ | 1,021.07 | $ | 4.18 | 0.82 | % | ||||||||||||
B | 1,000.00 | 1,046.00 | 4.23 | 1,021.07 | 4.18 | 0.82 | ||||||||||||||||||
C | 1,000.00 | 1,041.80 | 8.08 | 1,017.29 | 7.98 | 1.57 | ||||||||||||||||||
R | 1,000.00 | 1,044.30 | 5.51 | 1,019.81 | 5.45 | 1.07 | ||||||||||||||||||
Y | 1,000.00 | 1,047.30 | 2.94 | 1,022.33 | 2.91 | 0.57 | ||||||||||||||||||
R5 | 1,000.00 | 1,047.40 | 2.48 | 1,022.79 | 2.45 | 0.48 | ||||||||||||||||||
R6 | 1,000.00 | 1,048.30 | 1.96 | 1,023.29 | 1.94 | 0.38 |
1 | The actual ending account value is based on the actual total return of the Fund for the period May 1, 2014 through October 31, 2014, after actual expenses and will differ from the hypothetical ending account value which is based on the Funds expense ratio and a hypothetical annual return of 5% before expenses. |
2 | Expenses are equal to the Funds annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 184/365 to reflect the most recent fiscal half year. |
18 Invesco Comstock Fund
Approval of Investment Advisory and Sub-Advisory Contracts
19 Invesco Comstock Fund
20 Invesco Comstock Fund
Invesco mailing information
Send general correspondence to Invesco Investment Services, Inc., P.O. Box 219078, Kansas City, MO 64121-9078.
Important notice regarding delivery of security holder documents
To reduce Fund expenses, only one copy of most shareholder documents may be mailed to shareholders with multiple accounts at the same address (Householding). Mailing of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact Invesco Investment Services, Inc. at 800 959 4246 or contact your financial institution. We will begin sending you individual copies for each account within 30 days after receiving your request.
Fund holdings and proxy voting information
The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter ends. For the second and fourth quarters, the lists appear in the Funds semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The most recent list of portfolio holdings is available at invesco.com/completeqtrholdings. Shareholders can also look up the Funds Forms N-Q on the SEC website at sec.gov. Copies of the Funds Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are shown below.
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 959 4246 or at invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.
Information regarding how the Fund voted proxies related to its portfolio securities during the most recent 12-month period ended June 30 is available at invesco.com/proxysearch. The information is also available on the SEC website, sec.gov. Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the US distributor for Invesco Ltd.s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd. |
SEC file numbers: 811-03826 and 002-85905 | VK-COM-SAR-1 | Invesco Distributors, Inc. |
| ||||
|
Semiannual Report to Shareholders
|
October 31, 2014 | ||
Invesco Dividend Income Fund | ||||
Nasdaq: |
||||
A: IAUTX ¡ B: IBUTX ¡ C: IUTCX ¡ Y: IAUYX ¡ Investor: FSTUX ¡ R5: FSIUX ¡ R6: IFUTX |
| ||
2
|
Fund Performance | |
4
|
Letters to Shareholders | |
5
|
Schedule of Investments | |
7
|
Financial Statements | |
9
|
Notes to Financial Statements | |
17
|
Financial Highlights | |
18
|
Fund Expenses | |
19
|
Approval of Investment Advisory and Sub-Advisory Contracts |
For the most current month-end Fund performance and commentary, please visit invesco.com/performance.
Unless otherwise noted, all data provided by Invesco.
This report must be accompanied or preceded by a currently effective Fund prospectus, which contains more complete information, including sales charges and expenses. Investors should read it carefully before investing.
| ||||||
| ||||||
NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE |
Fund Performance
2 Invesco Dividend Income Fund
3 Invesco Dividend Income Fund
Letters to Shareholders
Bruce Crockett |
Dear Fellow Shareholders: While the members of the Invesco Funds Board, which I chair, cant dictate the performance of the Invesco funds, be assured that your Board works diligently throughout the year to focus on how your investments are managed. Our job is to represent you and your interests on a variety of fund management-related matters. We regularly monitor how the portfolio management teams of the Invesco funds are performing in light of ever-changing and often unpredictable economic and market conditions, and we review the investment strategies and investment process employed by each funds management team as explained in the funds prospectus. Perhaps our most significant responsibility is conducting the annual review of the funds advisory and sub-advisory contracts with Invesco Advisers and its affiliates. This annual review, which is required by the Investment Company Act of 1940, focuses on the nature and quality of the services Invesco provides as the adviser to the Invesco funds and the reasonableness of the fees that it charges for those services. Each year, we spend months carefully reviewing |
information from Invesco that allows us to evaluate the quality of its services and the reasonableness of its fees. We also use information from a variety of independent sources, including materials provided by the independent senior officer of the Invesco funds, who reports directly to the independent trustees on the Board. Additionally, we meet with legal counsel and review performance and fee data prepared for us by Lipper Inc., an independent, third-party firm widely recognized as a leader in its field.
After a careful review, the members of the Invesco Funds Board approved the continuation of advisory and sub-advisory contracts with Invesco Advisers and its affiliates.
As always, please contact me at bruce@brucecrockett.com with any questions or concerns you may have. On behalf of the Board, we look forward to continuing to represent your interests and serving your needs.
Sincerely,
Bruce L. Crockett
Independent Chair
Invesco Funds Board of Trustees
Philip Taylor |
Dear Shareholders: This semiannual report includes information about your Fund, including performance data and a list of its investments as of the close of the reporting period. I hope you find this report of interest. Our website, invesco.com/us, offers a wide range of market insights and investment perspectives. On the website, youll find detailed information about our funds, including prices, performance, holdings and portfolio manager commentaries. You can access information about your individual Invesco account whenever its convenient for you; just complete a simple, secure online registration. Use the Log In box on our home page to get started. Invescos mobile app for iPad® (available free from the App StoreSM) allows you to obtain the same detailed information about your Fund and the same investment insights from our investment leaders, market strategists, economists and retirement experts on the go. Also, you can obtain timely updates to help you stay informed about the markets, the economy |
and investing by connecting with Invesco on Twitter, LinkedIn or Facebook. You can access our blog at blog.invesco.us.com.
For questions about your account, feel free to contact an Invesco client services representative at 800 959 4246. For Invesco-related questions or comments, please email me directly at phil@invesco.com.
Thank you for investing with us.
Sincerely,
Philip Taylor
Senior Managing Director, Invesco Ltd.
iPad is a trademark of Apple Inc., registered in the US and other countries. App Store is a service mark of Apple Inc. Invesco Distributors, Inc. is not affiliated with Apple Inc.
4 Invesco Dividend Income Fund
Schedule of Investments(a)
October 31, 2014
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco Dividend Income Fund
Investment Abbreviations:
REIT | Real Estate Investment Trust |
Notes to Schedule of Investments:
(a) | Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poors. |
(b) | The money market fund and the Fund are affiliated by having the same investment adviser. |
Portfolio Composition
By sector, based on Net Assets
as of October 31, 2014
Utilities |
25.5 | % | ||
Consumer Staples |
21.2 | |||
Industrials |
8.3 | |||
Telecommunication Services |
7.5 | |||
Financials |
7.3 | |||
Health Care |
7.2 | |||
Consumer Discretionary |
5.4 | |||
Energy |
4.1 | |||
Information Technology |
2.7 | |||
Materials |
1.7 | |||
Money Market Funds Plus Other Assets Less Liabilities |
9.1 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco Dividend Income Fund
Statement of Assets and Liabilities
October 31, 2014
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco Dividend Income Fund
Statement of Operations
For the six months ended October 31, 2014
(Unaudited)
Investment income: |
| |||
Dividends (net of foreign withholding taxes of $29,735) |
$ | 9,248,488 | ||
Dividends from affiliated money market funds |
10,023 | |||
Total investment income |
9,258,511 | |||
Expenses: |
||||
Advisory fees |
|
1,999,063 |
| |
Administrative services fees |
79,616 | |||
Custodian fees |
8,919 | |||
Distribution fees: |
||||
Class A |
447,203 | |||
Class B |
59,761 | |||
Class C |
231,865 | |||
Investor Class |
89,666 | |||
Transfer agent fees A, B, C, Y and Investor |
483,798 | |||
Transfer agent fees R5 |
121 | |||
Transfer agent fees R6 |
514 | |||
Trustees and officers fees and benefits |
13,105 | |||
Other |
101,416 | |||
Total expenses |
3,515,047 | |||
Less: Fees waived, expenses reimbursed and expense offset arrangement(s) |
(318,001 | ) | ||
Net expenses |
3,197,046 | |||
Net investment income |
6,061,465 | |||
Realized and unrealized gain (loss) from: |
||||
Net realized gain (loss) from: |
||||
Investment securities |
3,984,352 | |||
Foreign currencies |
(15,438 | ) | ||
Forward foreign currency contracts |
619,315 | |||
4,588,229 | ||||
Change in net unrealized appreciation (depreciation) of: |
||||
Investment securities |
18,088,247 | |||
Foreign currencies |
(18,309 | ) | ||
Forward foreign currency contracts |
246,036 | |||
18,315,974 | ||||
Net realized and unrealized gain |
22,904,203 | |||
Net increase in net assets resulting from operations |
$ | 28,965,668 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
8 Invesco Dividend Income Fund
Statement of Changes in Net Assets
For the six months ended October 31, 2014 and the year ended April 30, 2014
(Unaudited)
October 31, 2014 |
April 30, 2014 |
|||||||
Operations: |
|
|||||||
Net investment income |
$ | 6,061,465 | $ | 9,507,345 | ||||
Net realized gain |
4,588,229 | 2,614,884 | ||||||
Change in net unrealized appreciation |
18,315,974 | 50,938,511 | ||||||
Net increase in net assets resulting from operations |
28,965,668 | 63,060,740 | ||||||
Distributions to shareholders from net investment income: |
||||||||
Class A |
(3,689,800 | ) | (7,465,414 | ) | ||||
Class B |
(79,198 | ) | (248,836 | ) | ||||
Class C |
(307,340 | ) | (605,690 | ) | ||||
Class Y |
(410,270 | ) | (225,817 | ) | ||||
Investor Class |
(740,206 | ) | (1,703,963 | ) | ||||
Class R5 |
(8,525 | ) | (18,497 | ) | ||||
Class R6 |
(442,880 | ) | (764,182 | ) | ||||
Total distributions from net investment income |
(5,678,219 | ) | (11,032,399 | ) | ||||
Distributions to shareholders from net realized gains: |
||||||||
Class A |
| (3,703,335 | ) | |||||
Class B |
| (160,681 | ) | |||||
Class C |
| (422,438 | ) | |||||
Class Y |
| (110,312 | ) | |||||
Investor Class |
| (817,151 | ) | |||||
Class R5 |
| (7,633 | ) | |||||
Class R6 |
| (344,109 | ) | |||||
Total distributions from net realized gains |
| (5,565,659 | ) | |||||
Share transactionsnet: |
||||||||
Class A |
30,938,452 | 42,906,868 | ||||||
Class B |
(1,669,372 | ) | (3,868,976 | ) | ||||
Class C |
6,444,048 | 10,692,234 | ||||||
Class Y |
22,573,394 | 16,279,772 | ||||||
Investor Class |
(1,101,753 | ) | (2,917,559 | ) | ||||
Class R5 |
55,661 | (71,542 | ) | |||||
Class R6 |
4,925,223 | 9,638,731 | ||||||
Net increase in net assets resulting from share transactions |
62,165,653 | 72,659,528 | ||||||
Net increase in net assets |
85,453,102 | 119,122,210 | ||||||
Net assets: |
||||||||
Beginning of period |
518,442,983 | 399,320,773 | ||||||
End of period (includes undistributed net investment income of $251,887 and $(131,359), respectively) |
$ | 603,896,085 | $ | 518,442,983 |
Notes to Financial Statements
October 31, 2014
(Unaudited)
NOTE 1Significant Accounting Policies
Invesco Dividend Income Fund (the Fund) is a series portfolio of AIM Sector Funds (Invesco Sector Funds) (the Trust). The Trust is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end series management investment company consisting of ten separate portfolios, each authorized to issue an unlimited number of shares of beneficial interest. The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each portfolio or class will be voted on exclusively by the shareholders of such portfolio or class.
9 Invesco Dividend Income Fund
The Funds investment objective is current income and long-term growth of capital.
The Fund currently consists of seven different classes of shares: Class A, Class B, Class C, Class Y, Investor Class, Class R5 and Class R6. Investor Class shares of the Fund are offered only to certain grandfathered investors. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met and under certain circumstances load waived shares may be subject to contingent deferred sales charges (CDSC). Class C shares are sold with a CDSC. Class Y, Investor Class, Class R5 and Class R6 shares are sold at net asset value. Effective November 30, 2010, new or additional investments in Class B shares are no longer permitted. Existing shareholders of Class B shares may continue to reinvest dividends and capital gains distributions in Class B shares until they convert to Class A shares. Also, shareholders in Class B shares will be able to exchange those shares for Class B shares of other Invesco Funds offering such shares until they convert to Class A shares. Generally, Class B shares will automatically convert to Class A shares on or about the month-end, which is at least eight years after the date of purchase. Redemption of Class B shares prior to the conversion date will be subject to a CDSC.
The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.
A. | Security Valuations Securities, including restricted securities, are valued according to the following policy. |
A security listed or traded on an exchange (except convertible securities) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (NYSE).
Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
Debt obligations (including convertible securities) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate (for unlisted equities), yield (for debt obligations), quality, type of issue, coupon rate (for debt obligations), maturity (for debt obligations), individual trading characteristics and other market data. Debt obligations are subject to interest rate and credit risks. In addition, all debt obligations involve some risk of default with respect to interest and/or principal payments.
Foreign securities (including foreign exchange contracts) prices are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange-traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that the Adviser determines are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities prices meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and ask prices is used to value debt obligations, including corporate loans.
Securities for which market quotations are not readily available or became unreliable are valued at fair value as determined in good faith by or under the supervision of the Trusts officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a securitys fair value.
The Fund may invest in securities that are subject to interest rate risk, meaning the risk that the prices will generally fall as interest rates rise and, conversely, the prices will generally rise as interest rates fall. Specific securities differ in their sensitivity to changes in interest rates depending on their individual characteristics. Changes in interest rates may result in increased market volatility, which may affect the value and/or liquidity of certain of the Funds investments.
Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuers assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B. | Securities Transactions and Investment Income Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income (net of withholding tax, if any) is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. |
The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
10 Invesco Dividend Income Fund
Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Funds net asset value and, accordingly, they reduce the Funds total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C. | Country Determination For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuers securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted. |
D. | Distributions Distributions from net investment income, if any, are declared and paid monthly. Distributions from net realized capital gain, if any, are generally declared and paid annually and recorded on the ex-dividend date. The Fund may elect to treat a portion of the proceeds from redemptions as distributions for federal income tax purposes. |
E. | Federal Income Taxes The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code of 1986, as amended (the Internal Revenue Code), necessary to qualify as a regulated investment company and to distribute substantially all of the Funds taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements. |
The Fund recognizes the tax benefits of uncertain tax positions only when the position is more likely than not to be sustained. Management has analyzed the Funds uncertain tax positions and concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions. Management is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next 12 months.
The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally, the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F. | Expenses Fees provided for under the Rule 12b-1 plan of a particular class of the Fund are charged to the operations of such class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses attributable to Class R5 and Class R6 are allocated to each share class based on relative net assets. Sub-accounting fees attributable to Class R5 are charged to the operations of the class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses relating to all other classes are allocated among those classes based on relative net assets. All other expenses are allocated among the classes based on relative net assets. |
G. | Accounting Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print. |
H. | Indemnifications Under the Trusts organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of the performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Funds servicing agreements, that contain a variety of indemnification clauses. The Funds maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote. |
I. | Foreign Currency Translations Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (1) sales of foreign currencies, (2) currency gains or losses realized between the trade and settlement dates on securities transactions, and (3) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Funds books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates. |
The Fund may invest in foreign securities, which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable. Foreign taxes, if any, are recorded based on the tax regulations and rates that exist in the foreign markets in which the Fund invests and are shown in the Statement of Operations.
J. | Forward Foreign Currency Contracts The Fund may engage in foreign currency transactions either on a spot (i.e. for prompt delivery and settlement) basis or through forward foreign currency contracts to manage or minimize currency or exchange rate risk. |
The Fund may also enter into forward foreign currency contracts for the purchase or sale of a security denominated in a foreign currency in order to lock in the U.S. dollar price of that security, or the Fund may also enter into forward foreign currency contracts that do not provide for
11 Invesco Dividend Income Fund
physical settlement of the two currencies, but instead are settled by a single cash payment calculated as the difference between the agreed upon exchange rate and the spot rate at settlement based upon an agreed upon notional amount (non-deliverable forwards). The Fund will set aside liquid assets in an amount equal to daily mark-to-market obligation for forward foreign currency contracts.
A forward foreign currency contract is an obligation between two parties (Counterparties) to purchase or sell a specific currency for an agreed-upon price at a future date. The use of forward foreign currency contracts does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with forward foreign currency contracts include failure of the Counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities.
NOTE 2Advisory Fees and Other Fees Paid to Affiliates
The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the Adviser or Invesco). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Funds average daily net assets as follows:
Average Daily Net Assets | Rate | |||||
First $350 million |
0 | .75% | ||||
Next $350 million |
0 | .65% | ||||
Next $1.3 billion |
0 | .55% | ||||
Next $2 billion |
0 | .45% | ||||
Next $2 billion |
0 | .40% | ||||
Next $2 billion |
0 | .375% | ||||
Over $8 billion |
0 | .35% |
For the year ended October 31, 2014, the effective advisory fees incurred by the Fund was 0.71%.
Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Canada Ltd. (collectively, the Affiliated Sub-Advisers) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide(s) discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).
Effective September 1, 2014, the Adviser has contractually agreed, through at least August 31, 2015, to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver and/or expense reimbursement (excluding certain items discussed below) of Class A, Class B, Class C, Class Y, Investor Class, Class R5 and Class R6 shares to 1.14%, 1.89%, 1.89%, 0.89%, 1.14%, 0.89% and 0.89%, respectively, of average daily net assets. Prior to September 1, 2014, the Adviser had contractually agreed to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver and/or expense reimbursement (excluding certain items discussed below) of Class A, Class B, Class C, Class Y, Investor Class, Class R5 and Class R6 shares to 1.10%, 1.85%, 1.85%, 0.85%, 1.10%, 0.85% and 0.85%, respectively, of average daily net assets. In determining the Advisers obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waivers and/or expense reimbursement to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items, including litigation expenses; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless Invesco continues the fee waiver agreement, it will terminate on August 31, 2015. The fee waiver agreement cannot be terminated during its term. To the extent that the annualized expense ratio does not exceed the expense limitation, the Adviser will retain its ability to be reimbursed prior to the end of each fiscal year.
Further, the Adviser has contractually agreed, through at least June 30, 2016, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market funds.
For the six months ended October 31, 2014, the Adviser waived advisory fees of $36,968 and reimbursed class level expenses of $190,632, $6,369, $24,709, $18,646 and $38,223 of Class A, Class B, Class C, Class Y and Investor Class shares, respectively.
The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco for certain administrative costs incurred in providing accounting services to the Fund. For the six months ended October 31, 2014, expenses incurred under the agreement are shown in the Statement of Operations as Administrative services fees.
The Trust has entered into a transfer agency and service agreement with Invesco Investment Services, Inc. (IIS) pursuant to which the Fund has agreed to pay IIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IIS for certain expenses incurred by IIS in the course of providing such services. IIS may make payments to intermediaries that provide omnibus account services, sub-accounting services and/or networking services. All fees payable by IIS to intermediaries that provide omnibus account services or sub-accounting are charged back to the Fund, subject to certain limitations approved by the Trusts Board of Trustees. For the six months ended October 31, 2014, expenses incurred under the agreement are shown in the Statement of Operations as Transfer agent fees.
The Trust has entered into master distribution agreements with Invesco Distributors, Inc. (IDI) to serve as the distributor for the Class A, Class B, Class C, Class Y, Investor Class, Class R5 and Class R6 shares of the Fund. The Trust has adopted plans pursuant to Rule 12b-1 under the 1940 Act with respect to the Funds Class A, Class B, Class C and Investor Class shares (collectively, the Plans). The Fund, pursuant to the Plans, pays IDI compensation at the annual rate of 0.25% of the Funds average daily net assets of Class A shares, 1.00% of the average daily net assets of Class B and Class C shares and 0.25% of the average daily net assets of Investor Class shares. Of the Plan payments, up to 0.25% of the average daily net
12 Invesco Dividend Income Fund
assets of each class of shares may be paid to furnish continuing personal shareholder services to customers who purchase and own shares of such classes. Any amounts not paid as a service fee under the Plans would constitute an asset-based sales charge. Rules of the Financial Industry Regulatory Authority (FINRA) impose a cap on the total sales charges, including asset-based sales charges, that may be paid by any class of shares of the Fund. For the six months ended October 31, 2014, expenses incurred under the Plan are shown in the Statement of Operations as Distribution fees.
Front-end sales commissions and CDSC (collectively, the sales charges) are not recorded as expenses of the Fund. Front-end sales commissions are deducted from proceeds from the sales of Fund shares prior to investment in Class A shares of the Fund. CDSC are deducted from redemption proceeds prior to remittance to the shareholder. During the six months ended October 31, 2014, IDI advised the Fund that IDI retained $95,740 in front-end sales commissions from the sale of Class A shares and $1,422, $1,727 and $1,945 from Class A, Class B and Class C shares, respectively, for CDSC imposed on redemptions by shareholders.
For the six months ended October 31, 2014, the Fund incurred $302 in brokerage commissions with Invesco Capital Markets, Inc., an affiliate of the Adviser and IDI, for portfolio transactions executed on behalf of the Fund.
Certain officers and trustees of the Trust are officers and directors of the Adviser, IIS and/or IDI.
NOTE 3Additional Valuation Information
GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods, giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3), generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investments assigned level:
Level 1 | Prices are determined using quoted prices in an active market for identical assets. |
Level 2 | Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others. |
Level 3 | Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Funds own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information. |
The following is a summary of the tiered valuation input levels, as of October 31, 2014. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Equity Securities |
$ | 573,341,678 | $ | 33,580,809 | $ | | $ | 606,922,487 | ||||||||
Forward Foreign Currency Contracts* |
| 220,504 | | 220,504 | ||||||||||||
Total Investments |
$ | 573,341,678 | $ | 33,801,313 | $ | | $ | 607,142,991 |
* | Unrealized appreciation. |
NOTE 4Derivative Investments
Value of Derivative Investments at Period-End
The table below summarizes the value of the Funds derivative investments, detailed by primary risk exposure, held as of October 31, 2014:
Value | ||||||||
Risk Exposure/Derivative Type | Assets | Liabilities | ||||||
Currency risk: |
||||||||
Forward foreign currency contracts(a) |
$ | 220,504 | $ | ( | ) |
(a) | Values are disclosed on the Statement of Assets and Liabilities under the caption Forward foreign currency contracts outstanding. |
Effect of Derivative Investments for the six months ended October 31, 2014
The table below summarizes the gains on derivative investments, detailed by primary risk exposure, recognized in earnings during the period:
Location of Gain on Statement of Operations |
||||
Forward Foreign Currency Contracts |
||||
Realized Gain: |
||||
Currency risk |
$ | 619,315 | ||
Change in Unrealized Appreciation: |
||||
Currency risk |
246,036 | |||
Total |
$ | 865,351 |
13 Invesco Dividend Income Fund
The table below summarizes the average notional value of forward foreign currency contracts outstanding during the period.
Forward Foreign Currency Contracts |
||||
Average notional value |
$ | 8,489,220 |
Open Forward Foreign Currency Contracts | ||||||||||||||||||||||||||
Settlement
|
Counterparty |
Contract to | Notional Value |
Unrealized Appreciation |
||||||||||||||||||||||
Deliver | Receive | |||||||||||||||||||||||||
11/19/14 |
Citigroup Global Markets Inc. |
EUR | 2,828,713 | USD | 3,653,142 | $ | 3,545,182 | $ | 107,960 | |||||||||||||||||
11/19/14 |
Deutsche Bank Securities Inc. |
EUR | 2,948,810 | USD | 3,808,241 | 3,695,697 | 112,544 | |||||||||||||||||||
Total open forward foreign currency contracts Currency Risk |
$ | 220,504 |
Currency Abbreviations:
EUR | Euro | |
USD | U.S. Dollar |
Offsetting Assets and Liabilities
Accounting Standards Update (ASU) No. 2011-11, Disclosures about Offsetting Assets and Liabilities, which was subsequently clarified in Financial Accounting Standards Board ASU 2013-01 Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities is intended to enhance disclosures about financial instruments and derivative instruments that are subject to offsetting arrangements on the Statement of Assets and Liabilities and to enable investors to better understand the effect of those arrangements on its financial position. In order for an arrangement to be eligible for netting, the Fund must have a basis to conclude that such netting arrangements are legally enforceable. The Fund enters into netting agreements and collateral agreements in an attempt to reduce the Funds Counterparty credit risk by providing for a single net settlement with a Counterparty of all financial transactions covered by the agreement in an event of default as defined under such agreement.
There were no derivative instruments subject to a netting agreement for which the Fund is not currently netting. The following tables present derivative instruments that are either subject to an enforceable netting agreement or offset by collateral arrangements as of October 31, 2014.
Assets: | ||||||||||||||||||||||||
Gross amounts presented in Statement of Assets & Liabilities |
Gross amounts offset in Statement of Assets & Liabilities |
Net amounts of assets presented in the Statement of Assets & Liabilities |
Collateral Received | |||||||||||||||||||||
Counterparty | Financial Instruments |
Cash | Net Amount |
|||||||||||||||||||||
Citigroup Global Markets Inc. |
$ | 107,960 | $ | | $ | 107,960 | $ | | $ | | $ | 107,960 | ||||||||||||
Deutsche Bank Securities Inc. |
112,544 | | 115,544 | | | 112,544 | ||||||||||||||||||
Total |
$ | 220,504 | $ | | $ | 220,504 | $ | | $ | | $ | 220,504 |
NOTE 5Expense Offset Arrangement(s)
The expense offset arrangement is comprised of transfer agency credits which result from balances in demand deposit accounts used by the transfer agent for clearing shareholder transactions. For the six months ended October 31, 2014, the Fund received credits from this arrangement, which resulted in the reduction of the Funds total expenses of $2,454.
NOTE 6Trustees and Officers Fees and Benefits
Trustees and Officers Fees and Benefits include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and Trustees and Officers Fees and Benefits also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees were eligible to participate in a retirement plan that provided for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. Trustees and Officers Fees and Benefits include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.
NOTE 7Cash Balances
The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with State Street Bank and Trust Company, the custodian bank. Such balances, if any at period end, are shown in the Statement of Assets and Liabilities under the payable caption Amount due custodian. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.
14 Invesco Dividend Income Fund
NOTE 8Tax Information
The amount and character of income and gains to be distributed are determined in accordance with income tax regulations, which may differ from GAAP. Reclassifications are made to the Funds capital accounts to reflect income and gains available for distribution (or available capital loss carryforward) under income tax regulations. The tax character of distributions paid during the year and the tax components of net assets will be reported at the Funds fiscal year-end.
Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. Capital losses generated in years beginning after December 22, 2010 can be carried forward for an unlimited period, whereas previous losses expire in 8 tax years. Capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Capital loss carryforwards with no expiration date will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss carryforwards in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.
The Fund did not have a capital loss carryforward as of April 30, 2014.
NOTE 9Investment Securities
The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the six months ended October 31, 2014 was $61,339,698 and $13,084,081, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed federal income tax reporting period-end.
Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis | ||||
Aggregate unrealized appreciation of investment securities |
$ | 125,920,864 | ||
Aggregate unrealized (depreciation) of investment securities |
(200,793 | ) | ||
Net unrealized appreciation of investment securities |
$ | 125,720,071 |
Cost of investments for tax purposes is $481,202,416.
15 Invesco Dividend Income Fund
NOTE 10Share Information
Summary of Share Activity | ||||||||||||||||
Six months ended October 31, 2014(a) |
Year ended April 30, 2014 |
|||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Sold: |
||||||||||||||||
Class A |
2,741,093 | $ | 54,648,771 | 4,507,848 | $ | 82,809,206 | ||||||||||
Class B |
16,118 | 323,309 | 67,867 | 1,254,215 | ||||||||||||
Class C |
489,791 | 9,898,303 | 902,835 | 16,827,229 | ||||||||||||
Class Y |
1,317,677 | 26,602,357 | 1,040,815 | 19,770,626 | ||||||||||||
Investor Class |
86,378 | 1,746,895 | 227,718 | 4,234,571 | ||||||||||||
Class R5 |
3,483 | 69,800 | 4,719 | 87,462 | ||||||||||||
Class R6 |
358,782 | 7,183,422 | 503,712 | 9,243,501 | ||||||||||||
Issued as reinvestment of dividends: |
||||||||||||||||
Class A |
159,047 | 3,171,476 | 541,241 | 9,889,831 | ||||||||||||
Class B |
3,588 | 71,787 | 20,769 | 379,402 | ||||||||||||
Class C |
12,709 | 256,513 | 48,724 | 900,063 | ||||||||||||
Class Y |
13,305 | 267,548 | 15,319 | 284,228 | ||||||||||||
Investor Class |
34,431 | 692,697 | 128,423 | 2,365,210 | ||||||||||||
Class R5 |
426 | 8,509 | 1,428 | 26,080 | ||||||||||||
Class R6 |
22,196 | 442,880 | 60,536 | 1,108,291 | ||||||||||||
Automatic conversion of Class B shares to Class A shares: |
||||||||||||||||
Class A |
67,717 | 1,358,616 | 187,961 | 3,472,541 | ||||||||||||
Class B |
(67,515 | ) | (1,358,616 | ) | (187,394 | ) | (3,472,541 | ) | ||||||||
Reacquired: |
||||||||||||||||
Class A |
(1,410,088 | ) | (28,240,411 | ) | (2,896,811 | ) | (53,264,710 | ) | ||||||||
Class B |
(35,270 | ) | (705,852 | ) | (110,637 | ) | (2,030,052 | ) | ||||||||
Class C |
(183,164 | ) | (3,710,768 | ) | (380,177 | ) | (7,035,058 | ) | ||||||||
Class Y |
(211,956 | ) | (4,296,511 | ) | (207,849 | ) | (3,775,082 | ) | ||||||||
Investor Class |
(176,135 | ) | (3,541,345 | ) | (515,384 | ) | (9,517,340 | ) | ||||||||
Class R5 |
(1,130 | ) | (22,648 | ) | (10,125 | ) | (185,084 | ) | ||||||||
Class R6 |
(134,069 | ) | (2,701,079 | ) | (39,122 | ) | (713,061 | ) | ||||||||
Net increase in share activity |
3,107,414 | $ | 62,165,653 | 3,912,416 | $ | 72,659,528 |
(a) | There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 30% of the outstanding shares of the Fund. IDI has an agreement with these entities to sell Fund shares. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as securities brokerage, distribution, third party record keeping and account servicing. The Fund has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially. |
In addition, 7% of the outstanding shares of the Fund are owned by affiliated mutual funds. Affiliated mutual funds are other mutual funds that are also advised by Invesco. |
16 Invesco Dividend Income Fund
NOTE 11Financial Highlights
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
Net asset value, beginning of period |
Net investment income (loss)(a) |
Net gains on securities (both realized and unrealized) |
Total from investment operations |
Dividends from net investment income |
Distributions from net realized gains |
Total distributions |
Net asset value, end of period |
Total return(b) |
Net assets, end of period (000s omitted) |
Ratio
of expenses to average net assets with fee waivers and/or expenses absorbed |
Ratio of expenses to average net assets without fee waivers and/or expenses absorbed |
Ratio of net investment income (loss) to average net assets |
Portfolio turnover(c) |
|||||||||||||||||||||||||||||||||||||||||||
Class A |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 10/31/14 |
$ | 19.88 | $ | 0.22 | $ | 0.79 | $ | 1.01 | $ | (0.21 | ) | $ | | $ | (0.21 | ) | $ | 20.68 | 5.11 | % | $ | 381,604 | 1.10 | %(d) | 1.22 | %(d) | 2.20 | %(d) | 3 | % | ||||||||||||||||||||||||||
Year ended 04/30/14 |
18.02 | 0.41 | 2.16 | 2.57 | (0.48 | ) | (0.23 | ) | (0.71 | ) | 19.88 | 14.66 | 335,837 | 1.09 | 1.29 | 2.22 | 4 | |||||||||||||||||||||||||||||||||||||||
Year ended 04/30/13 |
16.93 | 0.50 | 2.21 | 2.71 | (0.52 | ) | (1.10 | ) | (1.62 | ) | 18.02 | 16.83 | 262,332 | 1.26 | 1.34 | 2.87 | 66 | |||||||||||||||||||||||||||||||||||||||
Year ended 04/30/12 |
16.18 | 0.43 | 0.73 | 1.16 | (0.41 | ) | | (0.41 | ) | 16.93 | 7.31 | 241,103 | 1.32 | 1.37 | 2.66 | 14 | ||||||||||||||||||||||||||||||||||||||||
Year ended 04/30/11 |
14.28 | 0.40 | 1.87 | 2.27 | (0.37 | ) | | (0.37 | ) | 16.18 | 16.24 | 132,403 | 1.45 | 1.46 | 2.75 | 17 | ||||||||||||||||||||||||||||||||||||||||
One month ended 04/30/10 |
14.00 | 0.01 | 0.27 | 0.28 | | | | 14.28 | 2.00 | 130,406 | 1.49 | (e) | 1.50 | (e) | 0.53 | (e) | 0 | |||||||||||||||||||||||||||||||||||||||
Year ended 03/31/10 |
11.57 | 0.34 | 2.43 | 2.77 | (0.34 | ) | | (0.34 | ) | 14.00 | 24.06 | 129,685 | 1.53 | 1.54 | 2.58 | 14 | ||||||||||||||||||||||||||||||||||||||||
Class B |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 10/31/14 |
19.93 | 0.14 | 0.80 | 0.94 | (0.13 | ) | | (0.13 | ) | 20.74 | 4.76 | 11,260 | 1.85 | (d) | 1.97 | (d) | 1.45 | (d) | 3 | |||||||||||||||||||||||||||||||||||||
Year ended 04/30/14 |
18.07 | 0.27 | 2.16 | 2.43 | (0.34 | ) | (0.23 | ) | (0.57 | ) | 19.93 | 13.76 | 12,479 | 1.84 | 2.04 | 1.47 | 4 | |||||||||||||||||||||||||||||||||||||||
Year ended 04/30/13 |
16.97 | 0.37 | 2.21 | 2.58 | (0.38 | ) | (1.10 | ) | (1.48 | ) | 18.07 | 15.92 | 15,099 | 2.01 | 2.09 | 2.12 | 66 | |||||||||||||||||||||||||||||||||||||||
Year ended 04/30/12 |
16.22 | 0.31 | 0.73 | 1.04 | (0.29 | ) | | (0.29 | ) | 16.97 | 6.50 | 18,620 | 2.07 | 2.12 | 1.91 | 14 | ||||||||||||||||||||||||||||||||||||||||
Year ended 04/30/11 |
14.31 | 0.29 | 1.88 | 2.17 | (0.26 | ) | | (0.26 | ) | 16.22 | 15.42 | 13,669 | 2.20 | 2.21 | 2.00 | 17 | ||||||||||||||||||||||||||||||||||||||||
One month ended 04/30/10 |
14.04 | (0.00 | ) | 0.27 | 0.27 | | | | 14.31 | 1.92 | 15,680 | 2.24 | (e) | 2.25 | (e) | (0.22 | )(e) | 0 | ||||||||||||||||||||||||||||||||||||||
Year ended 03/31/10 |
11.60 | 0.24 | 2.44 | 2.68 | (0.24 | ) | | (0.24 | ) | 14.04 | 23.19 | 15,828 | 2.28 | 2.29 | 1.83 | 14 | ||||||||||||||||||||||||||||||||||||||||
Class C |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 10/31/14 |
20.11 | 0.14 | 0.81 | 0.95 | (0.13 | ) | | (0.13 | ) | 20.93 | 4.78 | 50,531 | 1.85 | (d) | 1.97 | (d) | 1.45 | (d) | 3 | |||||||||||||||||||||||||||||||||||||
Year ended 04/30/14 |
18.24 | 0.27 | 2.17 | 2.44 | (0.34 | ) | (0.23 | ) | (0.57 | ) | 20.11 | 13.71 | 42,150 | 1.84 | 2.04 | 1.47 | 4 | |||||||||||||||||||||||||||||||||||||||
Year ended 04/30/13 |
17.11 | 0.37 | 2.24 | 2.61 | (0.38 | ) | (1.10 | ) | (1.48 | ) | 18.24 | 15.99 | 27,793 | 2.01 | 2.09 | 2.12 | 66 | |||||||||||||||||||||||||||||||||||||||
Year ended 04/30/12 |
16.36 | 0.31 | 0.73 | 1.04 | (0.29 | ) | | (0.29 | ) | 17.11 | 6.46 | 26,511 | 2.07 | 2.12 | 1.91 | 14 | ||||||||||||||||||||||||||||||||||||||||
Year ended 04/30/11 |
14.43 | 0.30 | 1.90 | 2.20 | (0.27 | ) | | (0.27 | ) | 16.36 | 15.45 | 13,433 | 2.20 | 2.21 | 2.00 | 17 | ||||||||||||||||||||||||||||||||||||||||
One month ended 04/30/10 |
14.15 | (0.00 | ) | 0.28 | 0.28 | | | | 14.43 | 1.98 | 12,457 | 2.24 | (e) | 2.25 | (e) | (0.22 | )(e) | 0 | ||||||||||||||||||||||||||||||||||||||
Year ended 03/31/10 |
11.70 | 0.25 | 2.45 | 2.70 | (0.25 | ) | | (0.25 | ) | 14.15 | 23.09 | 12,723 | 2.28 | 2.29 | 1.83 | 14 | ||||||||||||||||||||||||||||||||||||||||
Class Y |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 10/31/14 |
20.06 | 0.25 | 0.79 | 1.04 | (0.24 | ) | | (0.24 | ) | 20.86 | 5.21 | 46,952 | 0.85 | (d) | 0.97 | (d) | 2.45 | (d) | 3 | |||||||||||||||||||||||||||||||||||||
Year ended 04/30/14 |
18.18 | 0.46 | 2.17 | 2.63 | (0.52 | ) | (0.23 | ) | (0.75 | ) | 20.06 | 14.95 | 22,690 | 0.84 | 1.04 | 2.47 | 4 | |||||||||||||||||||||||||||||||||||||||
Year ended 04/30/13 |
17.07 | 0.54 | 2.24 | 2.78 | (0.57 | ) | (1.10 | ) | (1.67 | ) | 18.18 | 17.16 | 5,146 | 1.01 | 1.09 | 3.12 | 66 | |||||||||||||||||||||||||||||||||||||||
Year ended 04/30/12 |
16.32 | 0.48 | 0.73 | 1.21 | (0.46 | ) | | (0.46 | ) | 17.07 | 7.54 | 5,622 | 1.07 | 1.12 | 2.91 | 14 | ||||||||||||||||||||||||||||||||||||||||
Year ended 04/30/11 |
14.40 | 0.44 | 1.89 | 2.33 | (0.41 | ) | | (0.41 | ) | 16.32 | 16.56 | 1,393 | 1.20 | 1.21 | 3.00 | 17 | ||||||||||||||||||||||||||||||||||||||||
One month ended 04/30/10 |
14.11 | 0.01 | 0.28 | 0.29 | | | | 14.40 | 2.06 | 1,057 | 1.24 | (e) | 1.25 | (e) | 0.78 | (e) | 0 | |||||||||||||||||||||||||||||||||||||||
Year ended 03/31/10 |
11.67 | 0.39 | 2.43 | 2.82 | (0.38 | ) | | (0.38 | ) | 14.11 | 24.26 | 1,038 | 1.28 | 1.29 | 2.83 | 14 | ||||||||||||||||||||||||||||||||||||||||
Investor Class |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 10/31/14 |
20.05 | 0.22 | 0.80 | 1.02 | (0.21 | ) | | (0.21 | ) | 20.86 | 5.13 | 72,558 | 1.10 | (d) | 1.22 | (d) | 2.20 | (d) | 3 | |||||||||||||||||||||||||||||||||||||
Year ended 04/30/14 |
18.18 | 0.41 | 2.17 | 2.58 | (0.48 | ) | (0.23 | ) | (0.71 | ) | 20.05 | 14.61 | 70,853 | 1.09 | 1.29 | 2.22 | 4 | |||||||||||||||||||||||||||||||||||||||
Year ended 04/30/13 |
17.07 | 0.50 | 2.23 | 2.73 | (0.52 | ) | (1.10 | ) | (1.62 | ) | 18.18 | 16.84 | 67,130 | 1.26 | 1.34 | 2.87 | 66 | |||||||||||||||||||||||||||||||||||||||
Year ended 04/30/12 |
16.32 | 0.44 | 0.73 | 1.17 | (0.42 | ) | | (0.42 | ) | 17.07 | 7.28 | 62,707 | 1.32 | 1.37 | 2.66 | 14 | ||||||||||||||||||||||||||||||||||||||||
Year ended 04/30/11 |
14.40 | 0.41 | 1.89 | 2.30 | (0.38 | ) | | (0.38 | ) | 16.32 | 16.27 | 60,196 | 1.45 | 1.46 | 2.75 | 17 | ||||||||||||||||||||||||||||||||||||||||
One month ended 04/30/10 |
14.11 | 0.01 | 0.28 | 0.29 | | | | 14.40 | 2.06 | 59,707 | 1.49 | (e) | 1.50 | (e) | 0.53 | (e) | 0 | |||||||||||||||||||||||||||||||||||||||
Year ended 03/31/10 |
11.67 | 0.35 | 2.44 | 2.79 | (0.35 | ) | | (0.35 | ) | 14.11 | 23.96 | 59,381 | 1.53 | 1.54 | 2.58 | 14 | ||||||||||||||||||||||||||||||||||||||||
Class R5 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 10/31/14 |
19.88 | 0.25 | 0.80 | 1.05 | (0.24 | ) | | (0.24 | ) | 20.69 | 5.32 | 756 | 0.81 | (d) | 0.82 | (d) | 2.49 | (d) | 3 | |||||||||||||||||||||||||||||||||||||
Year ended 04/30/14 |
18.03 | 0.45 | 2.15 | 2.60 | (0.52 | ) | (0.23 | ) | (0.75 | ) | 19.88 | 14.87 | 671 | 0.84 | 0.87 | 2.47 | 4 | |||||||||||||||||||||||||||||||||||||||
Year ended 04/30/13 |
16.94 | 0.56 | 2.22 | 2.78 | (0.59 | ) | (1.10 | ) | (1.69 | ) | 18.03 | 17.32 | 680 | 0.87 | 0.88 | 3.26 | 66 | |||||||||||||||||||||||||||||||||||||||
Year ended 04/30/12 |
16.19 | 0.51 | 0.72 | 1.23 | (0.48 | ) | | (0.48 | ) | 16.94 | 7.77 | 8,692 | 0.85 | 0.86 | 3.13 | 14 | ||||||||||||||||||||||||||||||||||||||||
Year ended 04/30/11 |
14.28 | 0.48 | 1.88 | 2.36 | (0.45 | ) | | (0.45 | ) | 16.19 | 16.94 | 7,820 | 0.93 | 0.94 | 3.27 | 17 | ||||||||||||||||||||||||||||||||||||||||
One month ended 04/30/10 |
14.00 | 0.01 | 0.27 | 0.28 | | | | 14.28 | 2.00 | 10,034 | 0.98 | (e) | 0.99 | (e) | 1.04 | (e) | 0 | |||||||||||||||||||||||||||||||||||||||
Year ended 03/31/10 |
11.57 | 0.42 | 2.43 | 2.85 | (0.42 | ) | | (0.42 | ) | 14.00 | 24.75 | 9,934 | 0.97 | 0.98 | 3.14 | 14 | ||||||||||||||||||||||||||||||||||||||||
Class R6 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 10/31/14 |
19.89 | 0.25 | 0.80 | 1.05 | (0.24 | ) | | (0.24 | ) | 20.70 | 5.33 | 40,236 | 0.78 | (d) | 0.79 | (d) | 2.52 | (d) | 3 | |||||||||||||||||||||||||||||||||||||
Year ended 04/30/14 |
18.04 | 0.46 | 2.15 | 2.61 | (0.53 | ) | (0.23 | ) | (0.76 | ) | 19.89 | 14.89 | 33,762 | 0.82 | 0.83 | 2.49 | 4 | |||||||||||||||||||||||||||||||||||||||
Year ended 04/30/13(f) |
17.55 | 0.34 | 1.58 | 1.92 | (0.33 | ) | (1.10 | ) | (1.43 | ) | 18.04 | 11.58 | 21,141 | 0.89 | (e) | 0.89 | (e) | 3.24 | (e) | 66 |
(a) | Calculated using average shares outstanding. |
(b) | Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable. |
(c) | Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable. For the period ended April 30, 2012, the portfolio turnover calculation excludes the value of securities purchased of $96,656,625 and sold of $8,278,596 in the effort to realign the Funds portfolio holdings after the reorganization of Invesco Van Kampen Utility Fund into the Fund. |
(d) | Ratios are annualized and based on average daily net assets (000s omitted) of $354,846, $11,855, $45,995, $34,709, $71,148, $718 and $36,965 for Class A, Class B, Class C, Class Y, Investor Class, Class R5 and Class R6 shares, respectively. |
(e) | Annualized. |
(f) | Commencement date of September 24, 2012 for Class R6 shares. |
17 Invesco Dividend Income Fund
Calculating your ongoing Fund expenses
Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, if any; and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period May 1, 2014 through October 31, 2014.
Actual expenses
The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled Actual Expenses Paid During Period to estimate the expenses you paid on your account during this period.
Hypothetical example for comparison purposes
The table below also provides information about hypothetical account values and hypothetical expenses based on the Funds actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Funds actual return.
The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, if any. Therefore, the hypothetical information is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
Class | Beginning Account Value (05/01/14) |
ACTUAL | HYPOTHETICAL (5% annual return before expenses) |
Annualized Expense Ratio |
||||||||||||||||||||
Ending Account Value (10/31/14)1 |
Expenses Paid During Period2 |
Ending Account Value (10/31/14) |
Expenses Paid During Period2 |
|||||||||||||||||||||
A | $ | 1,000.00 | $ | 1,051.10 | $ | 5.69 | $ | 1,019.66 | $ | 5.60 | 1.10 | % | ||||||||||||
B | 1,000.00 | 1,047.60 | 9.55 | 1,015.88 | 9.40 | 1.85 | ||||||||||||||||||
C | 1,000.00 | 1,047.80 | 9.55 | 1,015.88 | 9.40 | 1.85 | ||||||||||||||||||
Y | 1,000.00 | 1,052.10 | 4.40 | 1,020.92 | 4.33 | 0.85 | ||||||||||||||||||
Investor | 1,000.00 | 1,051.30 | 5.69 | 1,019.66 | 5.60 | 1.10 | ||||||||||||||||||
R5 | 1,000.00 | 1,053.20 | 4.19 | 1,021.12 | 4.13 | 0.81 | ||||||||||||||||||
R6 | 1,000.00 | 1,053.30 | 4.04 | 1,021.27 | 3.97 | 0.78 |
1 | The actual ending account value is based on the actual total return of the Fund for the period May 1, 2014 through October 31, 2014, after actual expenses and will differ from the hypothetical ending account value which is based on the Funds expense ratio and a hypothetical annual return of 5% before expenses. |
2 | Expenses are equal to the Funds annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 184/365 to reflect the most recent fiscal half year. |
18 Invesco Dividend Income Fund
Approval of Investment Advisory and Sub-Advisory Contracts
19 Invesco Dividend Income Fund
20 Invesco Dividend Income Fund
Invesco mailing information
Send general correspondence to Invesco Investment Services, Inc., P.O. Box 219078, Kansas City, MO 64121-9078.
Important notice regarding delivery of security holder documents
To reduce Fund expenses, only one copy of most shareholder documents may be mailed to shareholders with multiple accounts at the same address (Householding). Mailing of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact Invesco Investment Services, Inc. at 800 959 4246 or contact your financial institution. We will begin sending you individual copies for each account within 30 days after receiving your request.
Fund holdings and proxy voting information
The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter ends. For the second and fourth quarters, the lists appear in the Funds semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The most recent list of portfolio holdings is available at invesco.com/completeqtrholdings. Shareholders can also look up the Funds Forms
N-Q on the SEC website at sec.gov. Copies of the Funds Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are shown below.
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 959 4246 or at invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.
Information regarding how the Fund voted proxies related to its portfolio securities during the most recent 12-month period ended June 30 is available at invesco.com/proxysearch. The information is also available on the SEC website, sec.gov. Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the US distributor for Invesco Ltd.s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd. |
SEC file numbers: 811-03826 and 002-85905 | I-DIVI-SAR-1 | Invesco Distributors, Inc. |
| ||||
|
Semiannual Report to Shareholders
|
October 31, 2014 | ||
Invesco Energy Fund | ||||
Nasdaq: |
||||
A: IENAX ¡ B: IENBX ¡ C: IEFCX ¡ Y: IENYX ¡ Investor: FSTEX ¡ R5: IENIX |
2 | Fund Performance | |
4 | Letters to Shareholders | |
5 | Schedule of Investments | |
6 | Financial Statements | |
8 | Notes to Financial Statements | |
15 | Financial Highlights | |
16 | Fund Expenses | |
17 | Approval of Investment Advisory and Sub-Advisory Contracts |
For the most current month-end Fund performance and commentary, please visit invesco.com/performance.
Unless otherwise noted, all data provided by Invesco.
This report must be accompanied or preceded by a currently effective Fund prospectus, which contains more complete information, including sales charges and expenses. Investors should read it carefully before investing. | ||
NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE |
Fund Performance
2 Invesco Energy Fund
3 Invesco Energy Fund
Letters to Shareholders
Bruce Crockett |
Dear Fellow Shareholders: While the members of the Invesco Funds Board, which I chair, cant dictate the performance of the Invesco funds, be assured that your Board works diligently throughout the year to focus on how your investments are managed. Our job is to represent you and your interests on a variety of fund management-related matters. We regularly monitor how the portfolio management teams of the Invesco funds are performing in light of ever-changing and often unpredictable economic and market conditions, and we review the investment strategies and investment process employed by each funds management team as explained in the funds prospectus. Perhaps our most significant responsibility is conducting the annual review of the funds advisory and sub-advisory contracts with Invesco Advisers and its affiliates. This annual review, which is required by the Investment Company Act of 1940, focuses on the nature and quality of the services Invesco provides as the adviser to the Invesco funds and the reasonableness of the fees that it charges for those services. Each year, we spend months |
carefully reviewing information from Invesco that allows us to evaluate the quality of its services and the reasonableness of its fees. We also use information from a variety of independent sources, including materials provided by the independent senior officer of the Invesco funds, who reports directly to the independent trustees on the Board. Additionally, we meet with legal counsel and review performance and fee data prepared for us by Lipper Inc., an independent, third-party firm widely recognized as a leader in its field.
After a careful review, the members of the Invesco Funds Board approved the continuation of advisory and sub-advisory contracts with Invesco Advisers and its affiliates.
As always, please contact me at bruce@brucecrockett.com with any questions or concerns you may have. On behalf of the Board, we look forward to continuing to represent your interests and serving your needs.
Sincerely,
Bruce L. Crockett
Independent Chair
Invesco Funds Board of Trustees
Philip Taylor |
Dear Shareholders: This semiannual report includes information about your Fund, including performance data and a list of its investments as of the close of the reporting period. I hope you find this report of interest. Our website, invesco.com/us, offers a wide range of market insights and investment perspectives. On the website, youll find detailed information about our funds, including prices, performance, holdings and portfolio manager commentaries. You can access information about your individual Invesco account whenever its convenient for you; just complete a simple, secure online registration. Use the Log In box on our home page to get started. Invescos mobile app for iPad® (available free from the App StoreSM) allows you to obtain the same detailed information about your Fund and the same investment insights from our investment leaders, market strategists, economists and retirement experts on the go. | |
Also, you can obtain timely updates to help you stay informed about the markets, the economy |
and investing by connecting with Invesco on Twitter, LinkedIn or Facebook. You can access our blog at blog.invesco.us.com.
For questions about your account, feel free to contact an Invesco client services representative at 800 959 4246. For Invesco-related questions or comments, please email me directly at phil@invesco.com.
Thank you for investing with us.
Sincerely,
Philip Taylor
Senior Managing Director, Invesco Ltd.
iPad is a trademark of Apple Inc., registered in the US and other countries. App Store is a service mark of Apple Inc. Invesco Distributors, Inc. is not affiliated with Apple Inc.
4 Invesco Energy Fund
Schedule of Investments(a)
October 31, 2014
(Unaudited)
Investment Abbreviations:
ADR | American Depositary Receipt |
Notes to Schedule of Investments:
(a) | Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poors. |
(b) | Non-income producing security. |
(c) | The money market fund and the Fund are affiliated by having the same investment adviser. |
Portfolio Composition
By industry, based on Net Assets
as of October 31, 2014
Oil & Gas Exploration & Production |
44.2 | % | ||
Integrated Oil & Gas |
29.4 | |||
Oil & Gas Equipment & Services |
13.0 | |||
Oil & Gas Drilling |
4.9 | |||
Oil & Gas Refining & Marketing |
4.5 | |||
Diversified Chemicals |
1.0 | |||
Money Market Funds Plus Other Assets Less Liabilities |
3.0 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco Energy Fund
Statement of Assets and Liabilities
October 31, 2014
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco Energy Fund
Statement of Operations
For the six months ended October 31, 2014
(Unaudited)
Investment income: |
| |||
Dividends (net of foreign withholding taxes of $472,093) |
$ | 11,551,157 | ||
Dividends from affiliated money market funds (includes securities lending income of $211,138) |
226,979 | |||
Total investment income |
11,778,136 | |||
Expenses: |
||||
Advisory fees |
4,348,725 | |||
Administrative services fees |
172,323 | |||
Custodian fees |
40,091 | |||
Distribution fees: |
||||
Class A |
831,210 | |||
Class B |
172,263 | |||
Class C |
882,300 | |||
Investor Class |
507,857 | |||
Transfer agent fees A, B, C, Y and Investor |
1,379,327 | |||
Transfer agent fees R5 |
16,408 | |||
Trustees and officers fees and benefits |
18,472 | |||
Other |
186,654 | |||
Total expenses |
8,555,630 | |||
Less: Fees waived and expense offset arrangement(s) |
(65,316 | ) | ||
Net expenses |
8,490,314 | |||
Net investment income |
3,287,822 | |||
Realized and unrealized gain (loss) from: |
||||
Net realized gain (loss) from: |
||||
Investment securities |
67,684,892 | |||
Foreign currencies |
(82,529 | ) | ||
67,602,363 | ||||
Change in net unrealized appreciation (depreciation) of: |
||||
Investment securities |
(234,476,793 | ) | ||
Foreign currencies |
(13,479 | ) | ||
(234,490,272 | ) | |||
Net realized and unrealized gain (loss) |
(166,887,909 | ) | ||
Net increase (decrease) in net assets resulting from operations |
$ | (163,600,087 | ) |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco Energy Fund
Statement of Changes in Net Assets
For the six months ended October 31, 2014 and the year ended April 30, 2014
(Unaudited)
October 31, 2014 |
April 30, 2014 |
|||||||
Operations: |
|
|||||||
Net investment income |
$ | 3,287,822 | $ | 4,118,207 | ||||
Net realized gain |
67,602,363 | 82,409,125 | ||||||
Change in net unrealized appreciation (depreciation) |
(234,490,272 | ) | 190,741,982 | |||||
Net increase (decrease) in net assets resulting from operations |
(163,600,087 | ) | 277,269,314 | |||||
Distributions to shareholders from net investment income: |
||||||||
Class A |
| (2,722,136 | ) | |||||
Class Y |
| (495,187 | ) | |||||
Investor Class |
| (1,685,810 | ) | |||||
Class R5 |
| (297,938 | ) | |||||
Total distributions from net investment income |
| (5,201,071 | ) | |||||
Distributions to shareholders from net realized gains: |
||||||||
Class A |
| (2,850,986 | ) | |||||
Class B |
| (216,887 | ) | |||||
Class C |
| (881,681 | ) | |||||
Class Y |
| (266,347 | ) | |||||
Investor Class |
| (1,765,606 | ) | |||||
Class R5 |
| (131,513 | ) | |||||
Total distributions from net realized gains |
| (6,113,020 | ) | |||||
Share transactionsnet: |
||||||||
Class A |
(22,093,306 | ) | (83,008,300 | ) | ||||
Class B |
(6,613,966 | ) | (21,625,139 | ) | ||||
Class C |
(3,993,689 | ) | (21,853,420 | ) | ||||
Class Y |
8,957,546 | (2,297,513 | ) | |||||
Investor Class |
(35,876,460 | ) | (23,754,879 | ) | ||||
Class R5 |
4,300,418 | 1,483,471 | ||||||
Net increase (decrease) in net assets resulting from share transactions |
(55,319,457 | ) | (151,055,780 | ) | ||||
Net increase (decrease) in net assets |
(218,919,544 | ) | 114,899,443 | |||||
Net assets: |
||||||||
Beginning of period |
1,393,814,392 | 1,278,914,949 | ||||||
End of period (includes undistributed net investment income of $3,223,934 and $(63,888), respectively) |
$ | 1,174,894,848 | $ | 1,393,814,392 |
Notes to Financial Statements
October 31, 2014
(Unaudited)
NOTE 1Significant Accounting Policies
Invesco Energy Fund (the Fund) is a series portfolio of AIM Sector Funds (Invesco Sector Funds) (the Trust). The Trust is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end series management investment company consisting of ten separate portfolios, each authorized to issue an unlimited number of shares of beneficial interest. The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each portfolio or class will be voted on exclusively by the shareholders of such portfolio or class.
The Funds investment objective is long-term growth of capital.
The Fund currently consists of six different classes of shares: Class A, Class B, Class C, Class Y, Investor Class and Class R5. Investor Class shares of the Fund are offered only to certain grandfathered investors. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met and under certain circumstances load waived shares may be subject to contingent deferred sales charges (CDSC). Class C shares are sold with a CDSC. Class Y, Investor Class and Class R5 shares are sold at net asset value. Effective November 30, 2010, new or additional investments in Class B shares are no longer permitted. Existing shareholders of Class B shares may continue to reinvest dividends and capital gains distributions in Class B shares until they convert to Class A shares. Also, shareholders in Class B shares will be able to exchange those shares for Class B shares of
8 Invesco Energy Fund
other Invesco Funds offering such shares until they convert to Class A shares. Generally, Class B shares will automatically convert to Class A shares on or about the month-end, which is at least eight years after the date of purchase. Redemption of Class B shares prior to the conversion date will be subject to a CDSC.
The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.
A. | Security Valuations Securities, including restricted securities, are valued according to the following policy. |
A security listed or traded on an exchange (except convertible securities) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (NYSE).
Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
Debt obligations (including convertible securities) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate (for unlisted equities), yield (for debt obligations), quality, type of issue, coupon rate (for debt obligations), maturity (for debt obligations), individual trading characteristics and other market data. Debt obligations are subject to interest rate and credit risks. In addition, all debt obligations involve some risk of default with respect to interest and/or principal payments.
Foreign securities (including foreign exchange contracts) prices are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange-traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that the Adviser determines are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities prices meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and ask prices is used to value debt obligations, including corporate loans.
Securities for which market quotations are not readily available or became unreliable are valued at fair value as determined in good faith by or under the supervision of the Trusts officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a securitys fair value.
The Fund may invest in securities that are subject to interest rate risk, meaning the risk that the prices will generally fall as interest rates rise and, conversely, the prices will generally rise as interest rates fall. Specific securities differ in their sensitivity to changes in interest rates depending on their individual characteristics. Changes in interest rates may result in increased market volatility, which may affect the value and/or liquidity of certain of the Funds investments.
Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuers assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B. | Securities Transactions and Investment Income Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income (net of withholding tax, if any) is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. |
The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Funds net asset value and, accordingly, they reduce the Funds total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment
9 Invesco Energy Fund
income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C. | Country Determination For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuers securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted. |
D. | Distributions Distributions from net investment income and net realized capital gain, if any, are generally declared and paid annually and recorded on the ex-dividend date. The Fund may elect to treat a portion of the proceeds from redemptions as distributions for federal income tax purposes. |
E. | Federal Income Taxes The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code of 1986, as amended (the Internal Revenue Code), necessary to qualify as a regulated investment company and to distribute substantially all of the Funds taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements. |
The Fund recognizes the tax benefits of uncertain tax positions only when the position is more likely than not to be sustained. Management has analyzed the Funds uncertain tax positions and concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions. Management is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next 12 months.
The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally, the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F. | Expenses Fees provided for under the Rule 12b-1 plan of a particular class of the Fund are charged to the operations of such class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses attributable to Class R5 are charged to such class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses relating to all other classes are allocated among those classes based on relative net assets. All other expenses are allocated among the classes based on relative net assets. |
G. | Accounting Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print. |
H. | Indemnifications Under the Trusts organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of the performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Funds servicing agreements, that contain a variety of indemnification clauses. The Funds maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote. |
I. | Securities Lending The Fund may lend portfolio securities having a market value up to one-third of the Funds total assets. Such loans are secured by collateral equal to no less than the market value of the loaned securities determined daily by the securities lending provider. Such collateral will be cash or debt securities issued or guaranteed by the U.S. Government or any of its sponsored agencies. Cash collateral received in connection with these loans is invested in short-term money market instruments or affiliated money market funds and is shown as such on the Schedule of Investments. It is the Funds policy to obtain additional collateral from or return excess collateral to the borrower by the end of the next business day, following the valuation date of the securities loaned. Therefore, the value of the collateral held may be temporarily less than the value of the securities on loan. Lending securities entails a risk of loss to the Fund if, and to the extent that, the market value of the securities loaned were to increase and the borrower did not increase the collateral accordingly, and the borrower failed to return the securities. Upon the failure of the borrower to return the securities, collateral may be liquidated and the securities may be purchased on the open market to replace the loaned securities. The Fund could experience delays and costs in gaining access to the collateral. The Fund bears the risk of any deficiency in the amount of the collateral available for return to the borrower due to any loss on the collateral invested. Dividends received on cash collateral investments for securities lending transactions, which are net of compensation to counterparties, is included in Dividends from affiliated money market funds on the Statement of Operations. The aggregate value of securities out on loan is shown as a footnote on the Statement of Assets and Liabilities, if any. |
J. | Foreign Currency Translations Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (1) sales of foreign currencies, (2) currency gains or losses realized between the trade and settlement dates on securities transactions, and (3) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Funds books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates. |
10 Invesco Energy Fund
The Fund may invest in foreign securities, which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable. Foreign taxes, if any, are recorded based on the tax regulations and rates that exist in the foreign markets in which the Fund invests and are shown in the Statement of Operations.
K. | Forward Foreign Currency Contracts The Fund may engage in foreign currency transactions either on a spot (i.e. for prompt delivery and settlement) basis or through forward foreign currency contracts to manage or minimize currency or exchange rate risk. |
The Fund may also enter into forward foreign currency contracts for the purchase or sale of a security denominated in a foreign currency in order to lock in the U.S. dollar price of that security, or the Fund may also enter into forward foreign currency contracts that do not provide for physical settlement of the two currencies, but instead are settled by a single cash payment calculated as the difference between the agreed upon exchange rate and the spot rate at settlement based upon an agreed upon notional amount (non-deliverable forwards). The Fund will set aside liquid assets in an amount equal to daily mark-to-market obligation for forward foreign currency contracts.
A forward foreign currency contract is an obligation between two parties (Counterparties) to purchase or sell a specific currency for an agreed-upon price at a future date. The use of forward foreign currency contracts does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with forward foreign currency contracts include failure of the Counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities.
L. | Other Risks The Funds investments are concentrated in a comparatively narrow segment of the economy, which may make the Fund more volatile. |
The businesses in which the Fund invests may be adversely affected by foreign, federal or state regulations governing energy production, distribution and sale. Although individual security selection drives the performance of the Fund, short-term fluctuations in commodity prices may cause price fluctuations in its shares.
NOTE 2Advisory Fees and Other Fees Paid to Affiliates
The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the Adviser or Invesco). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Funds average daily net assets as follows:
Average Daily Net Assets | Rate | |||||
First $350 million |
0 | .75% | ||||
Next $350 million |
0 | .65% | ||||
Next $1.3 billion |
0 | .55% | ||||
Next $2 billion |
0 | .45% | ||||
Next $2 billion |
0 | .40% | ||||
Next $2 billion |
0 | .375% | ||||
Over $8 billion |
0 | .35% |
For the six months ended October 31, 2014, the effective advisory fees incurred by the Fund was 0.63%.
Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Canada Ltd. (collectively, the Affiliated Sub-Advisers) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide(s) discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).
The Adviser has contractually agreed, through at least June 30, 2015, to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver and/or expense reimbursement (excluding certain items discussed below) of Class A, Class B, Class C, Class Y, Investor Class and Class R5 shares to 2.00%, 2.75%, 2.75%, 1.75%, 2.00% and 1.75%, respectively, of average daily net assets. In determining the Advisers obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waivers and/or expense reimbursement to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items, including litigation expenses; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless Invesco continues the fee waiver agreement, it will terminate on June 30, 2015. The fee waiver agreement cannot be terminated during its term. The Adviser did not waive fees and/or reimburse expenses during the period under this expense limitation.
Further, the Adviser has contractually agreed, through at least June 30, 2016, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash (excluding investments of cash collateral from securities lending) in such affiliated money market funds.
For the six months ended October 31, 2014, the Adviser waived advisory fees of $61,414.
The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco for certain administrative costs incurred in providing accounting services to the Fund. For the six months ended October 31, 2014, expenses incurred under the agreement are shown in the Statement of Operations as Administrative services fees.
The Trust has entered into a transfer agency and service agreement with Invesco Investment Services, Inc. (IIS) pursuant to which the Fund has agreed to pay IIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IIS for certain expenses incurred by IIS in the course of providing such services. IIS may make payments to intermediaries that provide omnibus account services, sub-accounting services and/or networking services. All fees payable by IIS to intermediaries that provide omnibus account services or sub-accounting are charged back to the Fund,
11 Invesco Energy Fund
subject to certain limitations approved by the Trusts Board of Trustees. For the six months ended October 31, 2014, expenses incurred under the agreement are shown in the Statement of Operations as Transfer agent fees.
The Trust has entered into master distribution agreements with Invesco Distributors, Inc. (IDI) to serve as the distributor for the Class A, Class B, Class C, Class Y, Investor Class and Class R5 shares of the Fund. The Trust has adopted plans pursuant to Rule 12b-1 under the 1940 Act with respect to the Funds Class A, Class B, Class C and Investor Class shares (collectively, the Plans). The Fund, pursuant to the Plans, pays IDI compensation at the annual rate of 0.25% of the Funds average daily net assets of Class A shares, 1.00% of the average daily net assets of Class B and Class C shares and 0.25% of the average daily net assets of Investor Class shares. Of the Plan payments, up to 0.25% of the average daily net assets of each class of shares may be paid to furnish continuing personal shareholder services to customers who purchase and own shares of such classes. Any amounts not paid as a service fee under the Plans would constitute an asset-based sales charge. Rules of the Financial Industry Regulatory Authority (FINRA) impose a cap on the total sales charges, including asset-based sales charges, that may be paid by any class of shares of the Fund. For the six months ended October 31, 2014, expenses incurred under the Plan are shown in the Statement of Operations as Distribution fees.
Front-end sales commissions and CDSC (collectively, the sales charges) are not recorded as expenses of the Fund. Front-end sales commissions are deducted from proceeds from the sales of Fund shares prior to investment in Class A shares of the Fund. CDSC are deducted from redemption proceeds prior to remittance to the shareholder. During the six months ended October 31, 2014, IDI advised the Fund that IDI retained $78,157 in front-end sales commissions from the sale of Class A shares and $5,582, $10,714 and $2,321 from Class A, Class B and Class C shares, respectively, for CDSC imposed on redemptions by shareholders.
Certain officers and trustees of the Trust are officers and directors of the Adviser, IIS and/or IDI.
NOTE 3Additional Valuation Information
GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods, giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3), generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investments assigned level:
Level 1 | Prices are determined using quoted prices in an active market for identical assets. |
Level 2 | Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others. |
Level 3 | Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Funds own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information. |
The following is a summary of the tiered valuation input levels, as of October 31, 2014. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Equity Securities |
$ | 1,123,913,967 | $ | 53,744,503 | $ | | $ | 1,177,658,470 |
NOTE 4Expense Offset Arrangement(s)
The expense offset arrangement is comprised of transfer agency credits which result from balances in demand deposit accounts used by the transfer agent for clearing shareholder transactions. For the six months ended October 31, 2014, the Fund received credits from this arrangement, which resulted in the reduction of the Funds total expenses of $3,902.
NOTE 5Trustees and Officers Fees and Benefits
Trustees and Officers Fees and Benefits include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and Trustees and Officers Fees and Benefits also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees were eligible to participate in a retirement plan that provided for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. Trustees and Officers Fees and Benefits include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.
NOTE 6Cash Balances
The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with State Street Bank and Trust Company, the custodian bank. Such balances, if any at period end, are shown in the Statement of Assets and Liabilities under the payable caption Amount due custodian. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.
12 Invesco Energy Fund
NOTE 7Tax Information
The amount and character of income and gains to be distributed are determined in accordance with income tax regulations, which may differ from GAAP. Reclassifications are made to the Funds capital accounts to reflect income and gains available for distribution (or available capital loss carryforward) under income tax regulations. The tax character of distributions paid during the year and the tax components of net assets will be reported at the Funds fiscal year-end.
Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. Capital losses generated in years beginning after December 22, 2010 can be carried forward for an unlimited period, whereas previous losses expire in 8 tax years. Capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Capital loss carryforwards with no expiration date will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss carryforwards in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.
The Fund did not have a capital loss carryforward as of April 30, 2014.
NOTE 8Investment Securities
The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the six months ended October 31, 2014 was $200,806,645 and $197,962,902, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed federal income tax reporting period-end.
Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis | ||||
Aggregate unrealized appreciation of investment securities |
$ | 227,097,500 | ||
Aggregate unrealized (depreciation) of investment securities |
(53,690,386 | ) | ||
Net unrealized appreciation of investment securities |
$ | 173,407,114 |
Cost of investments for tax purposes is $1,004,251,356.
13 Invesco Energy Fund
NOTE 9Share Information
Summary of Share Activity | ||||||||||||||||
Six months ended October 31, 2014(a) |
Year ended April 30, 2014 |
|||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Sold: |
||||||||||||||||
Class A |
1,862,355 | $ | 93,246,715 | 2,470,897 | $ | 110,999,182 | ||||||||||
Class B |
13,983 | 624,544 | 29,516 | 1,182,515 | ||||||||||||
Class C |
318,647 | 13,682,447 | 353,152 | 13,781,724 | ||||||||||||
Class Y |
617,487 | 31,499,478 | 444,752 | 19,815,242 | ||||||||||||
Investor Class |
808,702 | 40,034,346 | 1,278,365 | 58,270,829 | ||||||||||||
Class R5 |
239,555 | 11,897,269 | 244,722 | 11,135,840 | ||||||||||||
Issued as reinvestment of dividends: |
||||||||||||||||
Class A |
| | 117,465 | 5,128,524 | ||||||||||||
Class B |
| | 5,049 | 199,180 | ||||||||||||
Class C |
| | 21,323 | 820,726 | ||||||||||||
Class Y |
| | 14,611 | 639,105 | ||||||||||||
Investor Class |
| | 76,165 | 3,313,949 | ||||||||||||
Class R5 |
| | 9,612 | 428,406 | ||||||||||||
Automatic conversion of Class B shares to Class A shares: |
||||||||||||||||
Class A |
84,892 | 4,184,678 | 284,256 | 12,659,426 | ||||||||||||
Class B |
(94,428 | ) | (4,184,678 | ) | (315,410 | ) | (12,659,426 | ) | ||||||||
Reacquired: |
||||||||||||||||
Class A |
(2,423,006 | ) | (119,524,699 | ) | (4,878,282 | ) | (211,795,432 | ) | ||||||||
Class B |
(68,606 | ) | (3,053,832 | ) | (260,636 | ) | (10,347,408 | ) | ||||||||
Class C |
(413,204 | ) | (17,676,136 | ) | (940,648 | ) | (36,455,870 | ) | ||||||||
Class Y |
(473,621 | ) | (22,541,932 | ) | (513,092 | ) | (22,751,860 | ) | ||||||||
Investor Class |
(1,528,083 | ) | (75,910,806 | ) | (1,933,992 | ) | (85,339,657 | ) | ||||||||
Class R5 |
(149,745 | ) | (7,596,851 | ) | (222,456 | ) | (10,080,775 | ) | ||||||||
Net increase (decrease) in share activity |
(1,205,072 | ) | $ | (55,319,457 | ) | (3,714,631 | ) | $ | (151,055,780 | ) |
(a) | There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 16% of the outstanding shares of the Fund. IDI has an agreement with these entities to sell Fund shares. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as securities brokerage, distribution, third party record keeping and account servicing. The Fund has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially. |
14 Invesco Energy Fund
NOTE 10Financial Highlights
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
Net asset value, beginning of period |
Net investment income (loss)(a) |
Net gains (losses) on securities (both realized and unrealized) |
Total from investment operations |
Dividends from net investment income |
Distributions from net realized gains |
Total distributions |
Net asset value, end of period |
Total return(b) |
Net assets, end of period (000s omitted) |
Ratio of expenses to average net assets with fee waivers and/or expenses absorbed |
Ratio of expenses to average net assets without fee waivers and/or expenses absorbed |
Ratio of net investment income (loss) to average net assets |
Portfolio turnover(c) |
|||||||||||||||||||||||||||||||||||||||||||
Class A |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 10/31/14 |
$ | 49.87 | $ | 0.14 | $ | (6.11 | ) | $ | (5.97 | ) | $ | | $ | | $ | | $ | 43.90 | (11.97 | )% | $ | 562,579 | 1.13 | %(d) | 1.14 | %(d) | 0.57 | %(d) | 15 | % | ||||||||||||||||||||||||||
Year ended 04/30/14 |
40.52 | 0.19 | 9.57 | 9.76 | (0.20 | ) | (0.21 | ) | (0.41 | ) | 49.87 | 24.23 | 662,813 | 1.15 | 1.15 | 0.43 | 14 | |||||||||||||||||||||||||||||||||||||||
Year ended 04/30/13 |
39.00 | 0.14 | 1.38 | 1.52 | | | | 40.52 | 3.90 | 619,826 | 1.15 | 1.16 | 0.37 | 56 | ||||||||||||||||||||||||||||||||||||||||||
Year ended 04/30/12 |
47.26 | 0.01 | (8.27 | ) | (8.26 | ) | | | | 39.00 | (17.48 | ) | 723,304 | 1.12 | 1.13 | 0.03 | 61 | |||||||||||||||||||||||||||||||||||||||
Year ended 04/30/11 |
35.99 | (0.03 | ) | 11.33 | 11.30 | (0.03 | ) | | (0.03 | ) | 47.26 | 31.42 | 1,048,194 | 1.13 | 1.13 | (0.10 | ) | 58 | ||||||||||||||||||||||||||||||||||||||
One month ended 04/30/10 |
35.34 | (0.03 | ) | 0.68 | 0.65 | | | | 35.99 | 1.84 | 742,987 | 1.16 | (e) | 1.16 | (e) | (1.00 | )(e) | 9 | ||||||||||||||||||||||||||||||||||||||
Year ended 03/31/10 |
23.91 | 0.07 | 11.38 | 11.45 | (0.02 | ) | | (0.02 | ) | 35.34 | 47.91 | 725,470 | 1.17 | 1.18 | 0.22 | 49 | ||||||||||||||||||||||||||||||||||||||||
Class B |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 10/31/14 |
44.93 | (0.04 | ) | (5.49 | ) | (5.53 | ) | | | | 39.40 | (12.31 | ) | 26,832 | 1.88 | (d) | 1.89 | (d) | (0.18 | )(d) | 15 | |||||||||||||||||||||||||||||||||||
Year ended 04/30/14 |
36.63 | (0.13 | ) | 8.64 | 8.51 | | (0.21 | ) | (0.21 | ) | 44.93 | 23.31 | 37,293 | 1.90 | 1.90 | (0.32 | ) | 14 | ||||||||||||||||||||||||||||||||||||||
Year ended 04/30/13 |
35.52 | (0.13 | ) | 1.24 | 1.11 | | | | 36.63 | 3.12 | 50,241 | 1.90 | 1.91 | (0.38 | ) | 56 | ||||||||||||||||||||||||||||||||||||||||
Year ended 04/30/12 |
43.37 | (0.26 | ) | (7.59 | ) | (7.85 | ) | | | | 35.52 | (18.10 | ) | 73,896 | 1.87 | 1.88 | (0.72 | ) | 61 | |||||||||||||||||||||||||||||||||||||
Year ended 04/30/11 |
33.25 | (0.29 | ) | 10.41 | 10.12 | | | | 43.37 | 30.44 | 116,438 | 1.88 | 1.88 | (0.85 | ) | 58 | ||||||||||||||||||||||||||||||||||||||||
One month ended 04/30/10 |
32.68 | (0.05 | ) | 0.62 | 0.57 | | | | 33.25 | 1.75 | 109,771 | 1.91 | (e) | 1.91 | (e) | (1.75 | )(e) | 9 | ||||||||||||||||||||||||||||||||||||||
Year ended 03/31/10 |
22.26 | (0.16 | ) | 10.58 | 10.42 | | | | 32.68 | 46.81 | 108,880 | 1.92 | 1.93 | (0.53 | ) | 49 | ||||||||||||||||||||||||||||||||||||||||
Class C |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 10/31/14 |
43.83 | (0.04 | ) | (5.35 | ) | (5.39 | ) | | | | 38.44 | (12.30 | ) | 152,027 | 1.88 | (d) | 1.89 | (d) | (0.18 | )(d) | 15 | |||||||||||||||||||||||||||||||||||
Year ended 04/30/14 |
35.74 | (0.13 | ) | 8.43 | 8.30 | | (0.21 | ) | (0.21 | ) | 43.83 | 23.31 | 177,502 | 1.90 | 1.90 | (0.32 | ) | 14 | ||||||||||||||||||||||||||||||||||||||
Year ended 04/30/13 |
34.66 | (0.13 | ) | 1.21 | 1.08 | | | | 35.74 | 3.12 | 164,978 | 1.90 | 1.91 | (0.38 | ) | 56 | ||||||||||||||||||||||||||||||||||||||||
Year ended 04/30/12 |
42.32 | (0.26 | ) | (7.40 | ) | (7.66 | ) | | | | 34.66 | (18.10 | ) | 202,489 | 1.87 | 1.88 | (0.72 | ) | 61 | |||||||||||||||||||||||||||||||||||||
Year ended 04/30/11 |
32.44 | (0.29 | ) | 10.17 | 9.88 | | | | 42.32 | 30.46 | 283,422 | 1.88 | 1.88 | (0.85 | ) | 58 | ||||||||||||||||||||||||||||||||||||||||
One month ended 04/30/10 |
31.88 | (0.05 | ) | 0.61 | 0.56 | | | | 32.44 | 1.76 | 207,451 | 1.91 | (e) | 1.91 | (e) | (1.75 | )(e) | 9 | ||||||||||||||||||||||||||||||||||||||
Year ended 03/31/10 |
21.71 | (0.16 | ) | 10.33 | 10.17 | | | | 31.88 | 46.85 | 205,003 | 1.92 | 1.93 | (0.53 | ) | 49 | ||||||||||||||||||||||||||||||||||||||||
Class Y |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 10/31/14 |
50.00 | 0.20 | (6.13 | ) | (5.93 | ) | | | | 44.07 | (11.86 | ) | 63,740 | 0.88 | (d) | 0.89 | (d) | 0.82 | (d) | 15 | ||||||||||||||||||||||||||||||||||||
Year ended 04/30/14 |
40.70 | 0.30 | 9.60 | 9.90 | (0.39 | ) | (0.21 | ) | (0.60 | ) | 50.00 | 24.54 | 65,123 | 0.90 | 0.90 | 0.68 | 14 | |||||||||||||||||||||||||||||||||||||||
Year ended 04/30/13 |
39.07 | 0.23 | 1.40 | 1.63 | | | | 40.70 | 4.17 | 55,196 | 0.90 | 0.91 | 0.62 | 56 | ||||||||||||||||||||||||||||||||||||||||||
Year ended 04/30/12 |
47.24 | 0.11 | (8.28 | ) | (8.17 | ) | | | | 39.07 | (17.28 | ) | 74,126 | 0.87 | 0.88 | 0.28 | 61 | |||||||||||||||||||||||||||||||||||||||
Year ended 04/30/11 |
35.96 | 0.06 | 11.33 | 11.39 | (0.12 | ) | | (0.12 | ) | 47.23 | 31.73 | 83,807 | 0.88 | 0.88 | 0.15 | 58 | ||||||||||||||||||||||||||||||||||||||||
One month ended 04/30/10 |
35.31 | (0.02 | ) | 0.67 | 0.65 | | | | 35.96 | 1.84 | 48,291 | 0.91 | (e) | 0.91 | (e) | (0.75 | )(e) | 9 | ||||||||||||||||||||||||||||||||||||||
Year ended 03/31/10 |
23.86 | 0.16 | 11.36 | 11.52 | (0.07 | ) | | (0.07 | ) | 35.31 | 48.29 | 47,084 | 0.92 | 0.93 | 0.47 | 49 | ||||||||||||||||||||||||||||||||||||||||
Investor Class |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 10/31/14 |
49.69 | 0.14 | (6.09 | ) | (5.95 | ) | | | | 43.74 | (11.97 | ) | 337,512 | 1.13 | (d) | 1.14 | (d) | 0.57 | (d) | 15 | ||||||||||||||||||||||||||||||||||||
Year ended 04/30/14 |
40.38 | 0.19 | 9.53 | 9.72 | (0.20 | ) | (0.21 | ) | (0.41 | ) | 49.69 | 24.22 | 419,142 | 1.15 | 1.15 | 0.43 | 14 | |||||||||||||||||||||||||||||||||||||||
Year ended 04/30/13 |
38.86 | 0.14 | 1.38 | 1.52 | | | | 40.38 | 3.91 | 363,981 | 1.15 | 1.16 | 0.37 | 56 | ||||||||||||||||||||||||||||||||||||||||||
Year ended 04/30/12 |
47.09 | 0.01 | (8.24 | ) | (8.23 | ) | | | | 38.86 | (17.48 | ) | 428,174 | 1.12 | 1.13 | 0.03 | 61 | |||||||||||||||||||||||||||||||||||||||
Year ended 04/30/11 |
35.86 | (0.03 | ) | 11.29 | 11.26 | (0.03 | ) | | (0.03 | ) | 47.09 | 31.42 | 594,201 | 1.13 | 1.13 | (0.10 | ) | 58 | ||||||||||||||||||||||||||||||||||||||
One month ended 04/30/10 |
35.22 | (0.03 | ) | 0.67 | 0.64 | | | | 35.86 | 1.82 | 484,002 | 1.16 | (e) | 1.16 | (e) | (1.00 | )(e) | 9 | ||||||||||||||||||||||||||||||||||||||
Year ended 03/31/10 |
23.82 | 0.07 | 11.35 | 11.42 | (0.02 | ) | | (0.02 | ) | 35.22 | 47.96 | 475,026 | 1.17 | 1.18 | 0.22 | 49 | ||||||||||||||||||||||||||||||||||||||||
Class R5 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 10/31/14 |
50.97 | 0.23 | (6.25 | ) | (6.02 | ) | | | | 44.95 | (11.81 | ) | 32,205 | 0.78 | (d) | 0.79 | (d) | 0.92 | (d) | 15 | ||||||||||||||||||||||||||||||||||||
Year ended 04/30/14 |
41.51 | 0.35 | 9.80 | 10.15 | (0.48 | ) | (0.21 | ) | (0.69 | ) | 50.97 | 24.68 | 31,942 | 0.79 | 0.79 | 0.79 | 14 | |||||||||||||||||||||||||||||||||||||||
Year ended 04/30/13 |
39.81 | 0.29 | 1.41 | 1.70 | | | | 41.51 | 4.27 | 24,693 | 0.78 | 0.79 | 0.74 | 56 | ||||||||||||||||||||||||||||||||||||||||||
Year ended 04/30/12 |
48.07 | 0.16 | (8.42 | ) | (8.26 | ) | | | | 39.81 | (17.18 | ) | 19,996 | 0.76 | 0.77 | 0.39 | 61 | |||||||||||||||||||||||||||||||||||||||
Year ended 04/30/11 |
36.60 | 0.10 | 11.55 | 11.65 | (0.18 | ) | | (0.18 | ) | 48.07 | 31.92 | 13,915 | 0.77 | 0.77 | 0.26 | 58 | ||||||||||||||||||||||||||||||||||||||||
One month ended 04/30/10 |
35.93 | (0.02 | ) | 0.69 | 0.67 | | | | 36.60 | 1.87 | 7,667 | 0.77 | (e) | 0.77 | (e) | (0.61 | )(e) | 9 | ||||||||||||||||||||||||||||||||||||||
Year ended 03/31/10 |
24.32 | 0.21 | 11.59 | 11.80 | (0.19 | ) | | (0.19 | ) | 35.93 | 48.57 | 6,411 | 0.74 | 0.75 | 0.65 | 49 |
(a) | Calculated using average shares outstanding. |
(b) | Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable. |
(c) | Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable. |
(d) | Ratios are based on average daily net assets (000s omitted) of $659,547, $34,172, $175,022, $73,319, $402,973 and $32,521 for Class A, Class B, Class C, Class Y, Investor Class and Class R5 shares, respectively. |
(e) | Annualized. |
15 Invesco Energy Fund
Calculating your ongoing Fund expenses
Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, if any; and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period May 1, 2014 through October 31, 2014.
Actual expenses
The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled Actual Expenses Paid During Period to estimate the expenses you paid on your account during this period.
Hypothetical example for comparison purposes
The table below also provides information about hypothetical account values and hypothetical expenses based on the Funds actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Funds actual return.
The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, if any. Therefore, the hypothetical information is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
Class | Beginning Account Value (05/01/14) |
ACTUAL | HYPOTHETICAL (5% annual return before |
Annualized Expense Ratio |
||||||||||||||||||||
Ending Account Value (10/31/14)1 |
Expenses Paid During Period2 |
Ending Account Value (10/31/14) |
Expenses Paid During Period2 |
|||||||||||||||||||||
A | $ | 1,000.00 | $ | 880.30 | $ | 5.36 | $ | 1,019.51 | $ | 5.75 | 1.13 | % | ||||||||||||
B | 1,000.00 | 876.90 | 8.89 | 1,015.73 | 9.55 | 1.88 | ||||||||||||||||||
C | 1,000.00 | 877.00 | 8.89 | 1,015.73 | 9.55 | 1.88 | ||||||||||||||||||
Y | 1,000.00 | 881.40 | 4.17 | 1,020.77 | 4.48 | 0.88 | ||||||||||||||||||
Investor | 1,000.00 | 880.30 | 5.36 | 1,019.51 | 5.75 | 1.13 | ||||||||||||||||||
R5 | 1,000.00 | 881.90 | 3.70 | 1,021.27 | 3.97 | 0.78 |
1 | The actual ending account value is based on the actual total return of the Fund for the period May 1, 2014 through October 31, 2014, after actual expenses and will differ from the hypothetical ending account value which is based on the Funds expense ratio and a hypothetical annual return of 5% before expenses. |
2 | Expenses are equal to the Funds annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 184/365 to reflect the most recent fiscal half year. |
16 Invesco Energy Fund
Approval of Investment Advisory and Sub-Advisory Contracts
17 Invesco Energy Fund
18 Invesco Energy Fund
Invesco mailing information
Send general correspondence to Invesco Investment Services, Inc., P.O. Box 219078, Kansas City, MO 64121-9078.
Important notice regarding delivery of security holder documents
To reduce Fund expenses, only one copy of most shareholder documents may be mailed to shareholders with multiple accounts at the same address (Householding). Mailing of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact Invesco Investment Services, Inc. at 800 959 4246 or contact your financial institution. We will begin sending you individual copies for each account within 30 days after receiving your request.
Fund holdings and proxy voting information
The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter ends. For the second and fourth quarters, the lists appear in the Funds semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The most recent list of portfolio holdings is available at invesco.com/completeqtrholdings. Shareholders can also look up the Funds Forms N-Q on the SEC website at sec.gov. Copies of the Funds Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are shown below.
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 959 4246 or at invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.
Information regarding how the Fund voted proxies related to its portfolio securities during the most recent 12-month period ended June 30 is available at invesco.com/proxysearch. The information is also available on the SEC website, sec.gov. Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the US distributor for Invesco Ltd.s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd. |
SEC file numbers: 811-03826 and 002-85905 | I-ENE-SAR-1 | Invesco Distributors, Inc. |
| ||||
|
Semiannual Report to Shareholders
|
October 31, 2014 | ||
Invesco Gold & Precious Metals Fund | ||||
Nasdaq: |
||||
A: IGDAX n B: IGDBX n C: IGDCX n Y: IGDYX n Investor: FGLDX |
| ||
2
|
Fund Performance | |
4
|
Letters to Shareholders | |
5
|
Schedule of Investments | |
6
|
Financial Statements | |
8
|
Notes to Financial Statements | |
14
|
Financial Highlights | |
15
|
Fund Expenses | |
16
|
Approval of Investment Advisory and Sub-Advisory Contracts |
For the most current month-end Fund performance and commentary, please visit invesco.com/performance.
Unless otherwise noted, all data provided by Invesco.
This report must be accompanied or preceded by a currently effective Fund prospectus, which contains more complete information, including sales charges and expenses. Investors should read it carefully before investing.
| ||||||
| ||||||
NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE |
Fund Performance
2 Invesco Gold & Precious Metals Fund
3 Invesco Gold & Precious Metals Fund
Letters to Shareholders
Bruce Crockett |
Dear Fellow Shareholders: While the members of the Invesco Funds Board, which I chair, cant dictate the performance of the Invesco funds, be assured that your Board works diligently throughout the year to focus on how your investments are managed. Our job is to represent you and your interests on a variety of fund management-related matters. We regularly monitor how the portfolio management teams of the Invesco funds are performing in light of ever-changing and often unpredictable economic and market conditions, and we review the investment strategies and investment process employed by each funds management team as explained in the funds prospectus. Perhaps our most significant responsibility is conducting the annual review of the funds advisory and sub-advisory contracts with Invesco Advisers and its affiliates. This annual review, which is required by the Investment Company Act of 1940, focuses on the nature and quality of the services Invesco provides as the adviser to the Invesco funds and the reasonableness of the |
fees that it charges for those services. Each year, we spend months carefully reviewing information from Invesco that allows us to evaluate the quality of its services and the reasonableness of its fees. We also use information from a variety of independent sources, including materials provided by the independent senior officer of the Invesco funds, who reports directly to the independent trustees on the Board. Additionally, we meet with legal counsel and review performance and fee data prepared for us by Lipper Inc., an independent, third-party firm widely recognized as a leader in its field.
After a careful review, the members of the Invesco Funds Board approved the continuation of advisory and sub-advisory contracts with Invesco Advisers and its affiliates.
As always, please contact me at bruce@brucecrockett.com with any questions or concerns you may have. On behalf of the Board, we look forward to continuing to represent your interests and serving your needs.
Sincerely,
Bruce L. Crockett
Independent Chair
Invesco Funds Board of Trustees
Philip Taylor |
Dear Shareholders: This semiannual report includes information about your Fund, including performance data and a list of its investments as of the close of the reporting period. I hope you find this report of interest. Our website, invesco.com/us, offers a wide range of market insights and investment perspectives. On the website, youll find detailed information about our funds, including prices, performance, holdings and portfolio manager commentaries. You can access information about your individual Invesco account whenever its convenient for you; just complete a simple, secure online registration. Use the Log In box on our home page to get started. Invescos mobile app for iPad® (available free from the App StoreSM) allows you to obtain the same detailed information about your Fund and the same investment insights from our investment leaders, market strategists, economists and retirement experts on the go. Also, you can obtain timely updates to help you stay informed about the markets, the |
economy and investing by connecting with Invesco on Twitter, LinkedIn or Facebook. You can access our blog at blog.invesco.us.com.
For questions about your account, feel free to contact an Invesco client services representative at 800 959 4246. For Invesco-related questions or comments, please email me directly at phil@invesco.com.
Thank you for investing with us.
Sincerely,
Philip Taylor
Senior Managing Director, Invesco Ltd.
iPad is a trademark of Apple Inc., registered in the US and other countries. App Store is a service mark of Apple Inc. Invesco Distributors, Inc. is not affiliated with Apple Inc.
4 Invesco Gold & Precious Metals Fund
Schedule of Investments
October 31, 2014
(Unaudited)
Investment Abbreviations:
ADR | American Depositary Receipt | |
ETF | Exchange-Traded Fund | |
SPDR | Standard & Poors Depositary Receipt | |
Wts. | Warrants |
Notes to Schedule of Investments:
(a) | Non-income producing security. |
(b) | The money market fund and the Fund are affiliated by having the same investment adviser. |
Portfolio Composition
By industry, based on Net Assets as of October 31, 2014
Gold |
66.3 | % | ||
Precious Metals & Minerals |
8.3 | |||
Investment Companies Exchange Traded Funds |
7.8 | |||
Diversified Metals & Mining |
6.8 | |||
Silver |
5.0 | |||
Construction & Engineering |
0.8 | |||
Money Market Funds Plus Other Assets Less Liabilities |
5.0 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco Gold & Precious Metals Fund
Statement of Assets and Liabilities
October 31, 2014
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco Gold & Precious Metals Fund
Statement of Operations
For the six months ended October 31, 2014
(Unaudited)
Investment income: |
| |||
Dividends (net of foreign withholding taxes of $146,637) |
$ | 886,823 | ||
Dividends from affiliated money market funds (includes securities lending income of $82,226) |
85,200 | |||
Total investment income |
972,023 | |||
Expenses: |
||||
Advisory fees |
1,294,885 | |||
Administrative services fees |
49,792 | |||
Custodian fees |
29,542 | |||
Distribution fees: |
||||
Class A |
186,821 | |||
Class B |
46,618 | |||
Class C |
175,399 | |||
Investor Class |
130,245 | |||
Transfer agent fees |
506,762 | |||
Trustees and officers fees and benefits |
11,862 | |||
Other |
108,167 | |||
Total expenses |
2,540,093 | |||
Less: Fees waived and expense offset arrangement(s) |
(14,997 | ) | ||
Net expenses |
2,525,096 | |||
Net investment income (loss) |
(1,553,073 | ) | ||
Realized and unrealized gain (loss) from: |
||||
Net realized gain (loss) from: |
||||
Investment securities |
(26,996,231 | ) | ||
Foreign currencies |
128,919 | |||
(26,867,312 | ) | |||
Change in net unrealized appreciation (depreciation) of: |
||||
Investment securities |
(52,041,538 | ) | ||
Foreign currencies |
6,807 | |||
(52,034,731 | ) | |||
Net realized and unrealized gain (loss) |
(78,902,043 | ) | ||
Net increase (decrease) in net assets resulting from operations |
$ | (80,455,116 | ) |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco Gold & Precious Metals Fund
Statement of Changes in Net Assets
For the six months ended October 31, 2014 and the year ended April 30, 2014
(Unaudited)
October 31, 2014 |
April 30, 2014 |
|||||||
Operations: |
|
|||||||
Net investment income (loss) |
$ | (1,553,073 | ) | $ | (1,711,647 | ) | ||
Net realized gain (loss) |
(26,867,312 | ) | (38,142,898 | ) | ||||
Change in net unrealized appreciation (depreciation) |
(52,034,731 | ) | (3,805,820 | ) | ||||
Net increase (decrease) in net assets resulting from operations |
(80,455,116 | ) | (43,660,365 | ) | ||||
Share transactionsnet: |
||||||||
Class A |
3,344,716 | 27,535,786 | ||||||
Class B |
(1,621,068 | ) | (4,811,808 | ) | ||||
Class C |
1,621,826 | 2,759,777 | ||||||
Class Y |
(1,372,208 | ) | 20,185,340 | |||||
Investor Class |
3,202,797 | (6,658,126 | ) | |||||
Net increase in net assets resulting from share transactions |
5,176,063 | 39,010,969 | ||||||
Net increase (decrease) in net assets |
(75,279,053 | ) | (4,649,396 | ) | ||||
Net assets: |
||||||||
Beginning of period |
321,090,615 | 325,740,011 | ||||||
End of period (includes undistributed net investment income (loss) of $(27,884,803) and $(26,331,730), respectively) |
$ | 245,811,562 | $ | 321,090,615 |
Notes to Financial Statements
October 31, 2014
(Unaudited)
NOTE 1Significant Accounting Policies
Invesco Gold & Precious Metals Fund (the Fund) is a series portfolio of AIM Sector Funds (Invesco Sector Funds) (the Trust). The Trust is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end series management investment company consisting of ten separate portfolios, each authorized to issue an unlimited number of shares of beneficial interest. The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each portfolio or class will be voted on exclusively by the shareholders of such portfolio or class.
The Funds investment objective is long-term growth of capital.
The Fund currently consists of five different classes of shares: Class A, Class B, Class C, Class Y and Investor Class. Investor Class shares of the Fund are offered only to certain grandfathered investors. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met and under certain circumstances load waived shares may be subject to contingent deferred sales charges (CDSC). Class C shares are sold with a CDSC. Class Y and Investor Class shares are sold at net asset value. Effective November 30, 2010, new or additional investments in Class B shares are no longer permitted. Existing shareholders of Class B shares may continue to reinvest dividends and capital gains distributions in Class B shares until they convert to Class A shares. Also, shareholders in Class B shares will be able to exchange those shares for Class B shares of other Invesco Funds offering such shares until they convert to Class A shares. Generally, Class B shares will automatically convert to Class A shares on or about the month-end, which is at least eight years after the date of purchase. Redemption of Class B shares prior to the conversion date will be subject to a CDSC.
The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.
A. | Security Valuations Securities, including restricted securities, are valued according to the following policy. |
A security listed or traded on an exchange (except convertible securities) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (NYSE).
Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
Debt obligations (including convertible securities) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect
8 Invesco Gold & Precious Metals Fund
appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate (for unlisted equities), yield (for debt obligations), quality, type of issue, coupon rate (for debt obligations), maturity (for debt obligations), individual trading characteristics and other market data. Debt obligations are subject to interest rate and credit risks. In addition, all debt obligations involve some risk of default with respect to interest and/or principal payments.
Foreign securities (including foreign exchange contracts) prices are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange-traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that the Adviser determines are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities prices meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and ask prices is used to value debt obligations, including corporate loans.
Securities for which market quotations are not readily available or became unreliable are valued at fair value as determined in good faith by or under the supervision of the Trusts officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a securitys fair value.
The Fund may invest in securities that are subject to interest rate risk, meaning the risk that the prices will generally fall as interest rates rise and, conversely, the prices will generally rise as interest rates fall. Specific securities differ in their sensitivity to changes in interest rates depending on their individual characteristics. Changes in interest rates may result in increased market volatility, which may affect the value and/or liquidity of certain of the Funds investments.
Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuers assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B. | Securities Transactions and Investment Income Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income (net of withholding tax, if any) is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. |
The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Funds net asset value and, accordingly, they reduce the Funds total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C. | Country Determination For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuers securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted. |
D. | Distributions Distributions from net investment income and net realized capital gain, if any, are generally declared and paid annually and recorded on the ex-dividend date. The Fund may elect to treat a portion of the proceeds from redemptions as distributions for federal income tax purposes. |
E. | Federal Income Taxes The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code of 1986, as amended (the Internal Revenue Code), necessary to qualify as a regulated investment company and to distribute substantially all of the Funds taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements. |
The Fund recognizes the tax benefits of uncertain tax positions only when the position is more likely than not to be sustained. Management has analyzed the Funds uncertain tax positions and concluded that no liability for unrecognized tax benefits should be recorded related to uncertain
9 Invesco Gold & Precious Metals Fund
tax positions. Management is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next 12 months.
The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally, the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F. | Expenses Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets. |
G. | Accounting Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print. |
H. | Indemnifications Under the Trusts organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of the performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Funds servicing agreements, that contain a variety of indemnification clauses. The Funds maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote. |
I. | Securities Lending The Fund may lend portfolio securities having a market value up to one-third of the Funds total assets. Such loans are secured by collateral equal to no less than the market value of the loaned securities determined daily by the securities lending provider. Such collateral will be cash or debt securities issued or guaranteed by the U.S. Government or any of its sponsored agencies. Cash collateral received in connection with these loans is invested in short-term money market instruments or affiliated money market funds and is shown as such on the Schedule of Investments. It is the Funds policy to obtain additional collateral from or return excess collateral to the borrower by the end of the next business day, following the valuation date of the securities loaned. Therefore, the value of the collateral held may be temporarily less than the value of the securities on loan. Lending securities entails a risk of loss to the Fund if, and to the extent that, the market value of the securities loaned were to increase and the borrower did not increase the collateral accordingly, and the borrower failed to return the securities. Upon the failure of the borrower to return the securities, collateral may be liquidated and the securities may be purchased on the open market to replace the loaned securities. The Fund could experience delays and costs in gaining access to the collateral. The Fund bears the risk of any deficiency in the amount of the collateral available for return to the borrower due to any loss on the collateral invested. Dividends received on cash collateral investments for securities lending transactions, which are net of compensation to counterparties, is included in Dividends from affiliated money market funds on the Statement of Operations. The aggregate value of securities out on loan is shown as a footnote on the Statement of Assets and Liabilities, if any. |
J. | Foreign Currency Translations Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (1) sales of foreign currencies, (2) currency gains or losses realized between the trade and settlement dates on securities transactions, and (3) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Funds books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates. |
The Fund may invest in foreign securities, which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable. Foreign taxes, if any, are recorded based on the tax regulations and rates that exist in the foreign markets in which the Fund invests and are shown in the Statement of Operations.
K. | Forward Foreign Currency Contracts The Fund may engage in foreign currency transactions either on a spot (i.e. for prompt delivery and settlement) basis or through forward foreign currency contracts to manage or minimize currency or exchange rate risk. |
The Fund may also enter into forward foreign currency contracts for the purchase or sale of a security denominated in a foreign currency in order to lock in the U.S. dollar price of that security, or the Fund may also enter into forward foreign currency contracts that do not provide for physical settlement of the two currencies, but instead are settled by a single cash payment calculated as the difference between the agreed upon exchange rate and the spot rate at settlement based upon an agreed upon notional amount (non-deliverable forwards). The Fund will set aside liquid assets in an amount equal to daily mark-to-market obligation for forward foreign currency contracts.
A forward foreign currency contract is an obligation between two parties (Counterparties) to purchase or sell a specific currency for an agreed-upon price at a future date. The use of forward foreign currency contracts does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with forward foreign currency contracts include failure of the Counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities.
L. | Other Risks The Funds investments are concentrated in a comparatively narrow segment of the economy, which may make the Fund more volatile. |
10 Invesco Gold & Precious Metals Fund
The Fund may invest a large percentage of its assets in a limited number of securities or other instruments, which could negatively affect the value of the Fund.
Fluctuations in the price of gold and precious metals may affect the profitability of companies in the gold and precious metals sector. Changes in the political or economic conditions of countries where companies in the gold and precious metals sector are located may have a direct effect on the price of gold and precious metals.
NOTE 2Advisory Fees and Other Fees Paid to Affiliates
The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the Adviser or Invesco). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Funds average daily net assets as follows:
Average Daily Net Assets | Rate | |||||
First $350 million |
0 | .75% | ||||
Next $350 million |
0 | .65% | ||||
Next $1.3 billion |
0 | .55% | ||||
Next $2 billion |
0 | .45% | ||||
Next $2 billion |
0 | .40% | ||||
Next $2 billion |
0 | .375% | ||||
Over $8 billion |
0 | .35% |
For the six months ended October 31, 2014, the effective advisory fees incurred by the Fund was 0.75%.
Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Canada Ltd. (collectively, the Affiliated Sub-Advisers) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide(s) discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).
The Adviser has contractually agreed, through at least June 30, 2015, to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver and/or expense reimbursement (excluding certain items discussed below) of Class A, Class B, Class C, Class Y and Investor Class shares to 2.00%, 2.75%, 2.75%, 1.75% and 2.00%, respectively, of average daily net assets. In determining the Advisers obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waivers and/or expense reimbursement to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items, including litigation expenses; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless Invesco continues the fee waiver agreement, it will terminate on June 30, 2015. The fee waiver agreement cannot be terminated during its term. The Adviser did not waive fees and/or reimburse expenses during the period under this expense limitation.
Further, the Adviser has contractually agreed, through at least June 30, 2016, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash (excluding investments of cash collateral from securities lending) in such affiliated money market funds.
For the six months ended October 31, 2014, the Adviser waived advisory fees of $12,459.
The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco for certain administrative costs incurred in providing accounting services to the Fund. For the six months ended October 31, 2014, expenses incurred under the agreement are shown in the Statement of Operations as Administrative services fees.
The Trust has entered into a transfer agency and service agreement with Invesco Investment Services, Inc. (IIS) pursuant to which the Fund has agreed to pay IIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IIS for certain expenses incurred by IIS in the course of providing such services. IIS may make payments to intermediaries that provide omnibus account services, sub-accounting services and/or networking services. All fees payable by IIS to intermediaries that provide omnibus account services or sub-accounting are charged back to the Fund, subject to certain limitations approved by the Trusts Board of Trustees. For the six months ended October 31, 2014, expenses incurred under the agreement are shown in the Statement of Operations as Transfer agent fees.
The Trust has entered into master distribution agreements with Invesco Distributors, Inc. (IDI) to serve as the distributor for the Class A, Class B, Class C, Class Y and Investor Class shares of the Fund. The Trust has adopted plans pursuant to Rule 12b-1 under the 1940 Act with respect to the Funds Class A, Class B, Class C and Investor Class shares (collectively, the Plans). The Fund, pursuant to the Plans, pays IDI compensation at the annual rate of 0.25% of the Funds average daily net assets of Class A shares, 1.00% of the average daily net assets of Class B and Class C shares and 0.25% of the average daily net assets of Investor Class shares. Of the Plan payments, up to 0.25% of the average daily net assets of each class of shares may be paid to furnish continuing personal shareholder services to customers who purchase and own shares of such classes. Any amounts not paid as a service fee under the Plans would constitute an asset-based sales charge. Rules of the Financial Industry Regulatory Authority (FINRA) impose a cap on the total sales charges, including asset-based sales charges, that may be paid by any class of shares of the Fund. For the six months ended October 31, 2014, expenses incurred under the Plans are shown in the Statement of Operations as Distribution fees.
Front-end sales commissions and CDSC (collectively, the sales charges) are not recorded as expenses of the Fund. Front-end sales commissions are deducted from proceeds from the sales of Fund shares prior to investment in Class A shares of the Fund. CDSC are deducted from redemption proceeds prior to remittance to the shareholder. During the six months ended October 31, 2014, IDI advised the Fund that IDI retained $32,340 in front-end sales commissions from the sale of Class A shares and $100, $6,206 and $2,010 from Class A, Class B and Class C shares, respectively, for CDSC imposed on redemptions by shareholders.
Certain officers and trustees of the Trust are officers and directors of the Adviser, IIS and/or IDI.
11 Invesco Gold & Precious Metals Fund
NOTE 3Additional Valuation Information
GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods, giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3), generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investments assigned level:
Level 1 | Prices are determined using quoted prices in an active market for identical assets. |
Level 2 | Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others. |
Level 3 | Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Funds own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information. |
The following is a summary of the tiered valuation input levels, as of October 31, 2014. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Brazil |
$ | 8,152,330 | $ | | $ | | $ | 8,152,330 | ||||||||
Canada |
170,852,663 | | | 170,852,663 | ||||||||||||
Mali |
8,654,896 | | | 8,654,896 | ||||||||||||
Mexico |
| 8,597,561 | | 8,597,561 | ||||||||||||
South Africa |
1,590,212 | | | 1,590,212 | ||||||||||||
United States |
48,125,545 | 1,899,184 | | 50,024,729 | ||||||||||||
Total Investments |
$ | 237,375,646 | $ | 10,496,745 | $ | | $ | 247,872,391 |
NOTE 4Expense Offset Arrangement(s)
The expense offset arrangement is comprised of transfer agency credits which result from balances in demand deposit accounts used by the transfer agent for clearing shareholder transactions. For the six months ended October 31, 2014, the Fund received credits from this arrangement, which resulted in the reduction of the Funds total expenses of $2,538.
NOTE 5Trustees and Officers Fees and Benefits
Trustees and Officers Fees and Benefits include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and Trustees and Officers Fees and Benefits also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees were eligible to participate in a retirement plan that provided for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. Trustees and Officers Fees and Benefits include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.
NOTE 6Cash Balances
The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with State Street Bank and Trust Company, the custodian bank. Such balances, if any at period end, are shown in the Statement of Assets and Liabilities under the payable caption Amount due custodian. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.
NOTE 7Tax Information
The amount and character of income and gains to be distributed are determined in accordance with income tax regulations, which may differ from GAAP. Reclassifications are made to the Funds capital accounts to reflect income and gains available for distribution (or available capital loss carryforward) under income tax regulations. The tax character of distributions paid during the year and the tax components of net assets will be reported at the Funds fiscal year-end.
Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. Capital losses generated in years beginning after December 22, 2010 can be carried forward for an unlimited period, whereas previous losses expire in 8 tax years. Capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Capital loss carryforwards with no expiration date will
12 Invesco Gold & Precious Metals Fund
retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss carryforwards in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.
The Fund had a capital loss carryforward as of April 30, 2014:
Capital Loss Carryforward* | ||||||||||||
Expiration | Short-Term | Long-Term | Total | |||||||||
Not subject to expiration |
$ | 6,617,125 | $ | 61,549,955 | $ | 68,167,080 |
* | Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code and may be further limited depending upon a variety of factors, including the realization of net unrealized gains or losses as of the date of any reorganization. |
NOTE 8Investment Securities
The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the six months ended October 31, 2014 was $74,700,134 and $67,354,634, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed federal income tax reporting period-end.
Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis | ||||
Aggregate unrealized appreciation of investment securities |
$ | 19,958,099 | ||
Aggregate unrealized (depreciation) of investment securities |
(167,337,411 | ) | ||
Net unrealized appreciation (depreciation) of investment securities |
$ | (147,379,312 | ) |
Cost of investments for tax purposes is $395,251,703.
NOTE 9Share Information
Summary of Share Activity | ||||||||||||||||
Six months ended October 31, 2014(a) |
Year ended April 30, 2014 |
|||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Sold: |
||||||||||||||||
Class A |
5,553,236 | $ | 26,951,139 | 17,588,440 | $ | 84,151,428 | ||||||||||
Class B |
53,658 | 247,985 | 176,845 | 821,967 | ||||||||||||
Class C |
1,059,914 | 5,293,157 | 2,837,578 | 13,791,529 | ||||||||||||
Class Y |
5,894,973 | 30,978,531 | 7,578,739 | 36,227,530 | ||||||||||||
Investor Class |
2,872,412 | 12,770,466 | 4,192,789 | 20,483,078 | ||||||||||||
Automatic conversion of Class B shares to Class A shares: |
||||||||||||||||
Class A |
205,162 | 995,016 | 405,073 | 1,935,060 | ||||||||||||
Class B |
(215,519 | ) | (995,016 | ) | (423,579 | ) | (1,935,060 | ) | ||||||||
Reacquired: |
||||||||||||||||
Class A |
(5,064,769 | ) | (24,601,439 | ) | (12,406,372 | ) | (58,550,702 | ) | ||||||||
Class B |
(189,827 | ) | (874,037 | ) | (817,068 | ) | (3,698,715 | ) | ||||||||
Class C |
(751,543 | ) | (3,671,331 | ) | (2,309,333 | ) | (11,031,752 | ) | ||||||||
Class Y |
(7,397,228 | ) | (32,350,739 | ) | (3,257,352 | ) | (16,042,190 | ) | ||||||||
Investor Class |
(1,971,801 | ) | (9,567,669 | ) | (5,745,543 | ) | (27,141,204 | ) | ||||||||
Net increase in share activity |
48,668 | $ | 5,176,063 | 7,820,217 | $ | 39,010,969 |
(a) | There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 30% of the outstanding shares of the Fund. IDI has an agreement with these entities to sell Fund shares. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as securities brokerage, distribution, third party record keeping and account servicing. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially. |
13 Invesco Gold & Precious Metals Fund
NOTE 10Financial Highlights
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
Net asset value, beginning of period |
Net investment income (loss)(a) |
Net gains (losses) on securities (both realized and unrealized) |
Total from investment operations |
Dividends from net investment income |
Distributions from net realized gains |
Total distributions |
Net asset
value, end of period(b) |
Total return(c) |
Net assets, end of period (000s omitted) |
Ratio of expenses to average net assets with fee waivers and/or expenses absorbed |
Ratio of expenses to average net assets without fee waivers and/or expenses absorbed |
Ratio of net investment income (loss) to average net assets |
Portfolio turnover(d) |
|||||||||||||||||||||||||||||||||||||||||||
Class A |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 10/31/14 |
$ | 4.75 | $ | (0.02 | ) | $ | (1.10 | ) | $ | (1.12 | ) | $ | | $ | | $ | | $ | 3.63 | (23.58 | )% | $ | 110,599 | 1.40 | %(e) | 1.41 | %(e) | (0.84 | )%(e) | 21 | % | |||||||||||||||||||||||||
Year ended 04/30/14 |
5.44 | (0.02 | ) | (0.67 | ) | (0.69 | ) | | | | 4.75 | (12.68 | ) | 141,237 | 1.45 | 1.46 | (0.47 | ) | 18 | |||||||||||||||||||||||||||||||||||||
Year ended 04/30/13 |
7.78 | (0.02 | ) | (2.17 | ) | (2.19 | ) | | (0.15 | ) | (0.15 | ) | 5.44 | (28.65 | ) | 131,605 | 1.32 | 1.32 | (0.21 | ) | 25 | |||||||||||||||||||||||||||||||||||
Year ended 04/30/12 |
11.22 | (0.04 | ) | (2.69 | ) | (2.73 | ) | (0.23 | ) | (0.48 | ) | (0.71 | ) | 7.78 | (25.24 | ) | 198,717 | 1.27 | 1.27 | (0.39 | ) | 14 | ||||||||||||||||||||||||||||||||||
Year ended 04/30/11 |
8.64 | (0.06 | ) | 2.97 | 2.91 | (0.33 | ) | | (0.33 | ) | 11.22 | 33.86 | 274,558 | 1.23 | 1.23 | (0.65 | ) | 30 | ||||||||||||||||||||||||||||||||||||||
One month ended 04/30/10 |
7.84 | (0.01 | ) | 0.81 | 0.80 | | | | 8.64 | 10.20 | 179,158 | 1.29 | (f) | 1.30 | (f) | (0.77 | )(f) | 2 | ||||||||||||||||||||||||||||||||||||||
Year ended 03/31/10 |
5.91 | (0.06 | ) | 2.13 | 2.07 | (0.14 | ) | | (0.14 | ) | 7.84 | 34.88 | 157,681 | 1.31 | 1.32 | (0.79 | ) | 3 | ||||||||||||||||||||||||||||||||||||||
Class B |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 10/31/14 |
4.52 | (0.04 | ) | (1.03 | ) | (1.07 | ) | | | | 3.45 | (23.67 | ) | 6,207 | 2.15 | (e) | 2.16 | (e) | (1.59 | )(e) | 21 | |||||||||||||||||||||||||||||||||||
Year ended 04/30/14 |
5.24 | (0.06 | ) | (0.66 | ) | (0.72 | ) | | | | 4.52 | (13.74 | ) | 9,733 | 2.20 | 2.21 | (1.22 | ) | 18 | |||||||||||||||||||||||||||||||||||||
Year ended 04/30/13 |
7.54 | (0.07 | ) | (2.08 | ) | (2.15 | ) | | (0.15 | ) | (0.15 | ) | 5.24 | (29.03 | ) | 16,834 | 2.07 | 2.07 | (0.96 | ) | 25 | |||||||||||||||||||||||||||||||||||
Year ended 04/30/12 |
10.95 | (0.11 | ) | (2.61 | ) | (2.72 | ) | (0.21 | ) | (0.48 | ) | (0.69 | ) | 7.54 | (25.82 | ) | 32,217 | 2.02 | 2.02 | (1.14 | ) | 14 | ||||||||||||||||||||||||||||||||||
Year ended 04/30/11 |
8.46 | (0.13 | ) | 2.89 | 2.76 | (0.27 | ) | | (0.27 | ) | 10.95 | 32.73 | 55,497 | 1.98 | 1.98 | (1.40 | ) | 30 | ||||||||||||||||||||||||||||||||||||||
One month ended 04/30/10 |
7.68 | (0.01 | ) | 0.79 | 0.78 | | | | 8.46 | 10.16 | 45,239 | 2.04 | (f) | 2.05 | (f) | (1.52 | )(f) | 2 | ||||||||||||||||||||||||||||||||||||||
Year ended 03/31/10 |
5.77 | (0.11 | ) | 2.08 | 1.97 | (0.06 | ) | | (0.06 | ) | 7.68 | 34.07 | 41,467 | 2.06 | 2.07 | (1.54 | ) | 3 | ||||||||||||||||||||||||||||||||||||||
Class C |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 10/31/14 |
4.84 | (0.04 | ) | (1.11 | ) | (1.15 | ) | | | | 3.69 | (23.76 | ) | 26,020 | 2.15 | (e) | 2.16 | (e) | (1.59 | )(e) | 21 | |||||||||||||||||||||||||||||||||||
Year ended 04/30/14 |
5.60 | (0.06 | ) | (0.70 | ) | (0.76 | ) | | | | 4.84 | (13.57 | ) | 32,640 | 2.20 | 2.21 | (1.22 | ) | 18 | |||||||||||||||||||||||||||||||||||||
Year ended 04/30/13 |
8.05 | (0.07 | ) | (2.23 | ) | (2.30 | ) | | (0.15 | ) | (0.15 | ) | 5.60 | (29.05 | ) | 34,820 | 2.07 | 2.07 | (0.96 | ) | 25 | |||||||||||||||||||||||||||||||||||
Year ended 04/30/12 |
11.63 | (0.11 | ) | (2.78 | ) | (2.89 | ) | (0.21 | ) | (0.48 | ) | (0.69 | ) | 8.05 | (25.77 | ) | 51,017 | 2.02 | 2.02 | (1.14 | ) | 14 | ||||||||||||||||||||||||||||||||||
Year ended 04/30/11 |
8.97 | (0.14 | ) | 3.07 | 2.93 | (0.27 | ) | | (0.27 | ) | 11.63 | 32.77 | 80,280 | 1.98 | 1.98 | (1.40 | ) | 30 | ||||||||||||||||||||||||||||||||||||||
One month ended 04/30/10 |
8.15 | (0.01 | ) | 0.83 | 0.82 | | | | 8.97 | 10.06 | 53,588 | 2.04 | (f) | 2.05 | (f) | (1.52 | )(f) | 2 | ||||||||||||||||||||||||||||||||||||||
Year ended 03/31/10 |
6.12 | (0.12 | ) | 2.21 | 2.09 | (0.06 | ) | | (0.06 | ) | 8.15 | 34.08 | 51,104 | 2.06 | 2.07 | (1.54 | ) | 3 | ||||||||||||||||||||||||||||||||||||||
Class Y |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 10/31/14 |
4.82 | (0.01 | ) | (1.12 | ) | (1.13 | ) | | | | 3.69 | (23.44 | ) | 22,284 | 1.15 | (e) | 1.16 | (e) | (0.59 | )(e) | 21 | |||||||||||||||||||||||||||||||||||
Year ended 04/30/14 |
5.52 | (0.01 | ) | (0.69 | ) | (0.70 | ) | | | | 4.82 | (12.68 | ) | 36,328 | 1.20 | 1.21 | (0.22 | ) | 18 | |||||||||||||||||||||||||||||||||||||
Year ended 04/30/13 |
7.86 | (0.00 | ) | (2.19 | ) | (2.19 | ) | | (0.15 | ) | (0.15 | ) | 5.52 | (28.35 | ) | 17,777 | 1.07 | 1.07 | 0.04 | 25 | ||||||||||||||||||||||||||||||||||||
Year ended 04/30/12 |
11.32 | (0.01 | ) | (2.73 | ) | (2.74 | ) | (0.24 | ) | (0.48 | ) | (0.72 | ) | 7.86 | (25.14 | ) | 20,131 | 1.02 | 1.02 | (0.14 | ) | 14 | ||||||||||||||||||||||||||||||||||
Year ended 04/30/11 |
8.71 | (0.04 | ) | 3.00 | 2.96 | (0.35 | ) | | (0.35 | ) | 11.32 | 34.19 | 15,493 | 0.98 | 0.98 | (0.40 | ) | 30 | ||||||||||||||||||||||||||||||||||||||
One month ended 04/30/10 |
7.91 | (0.00 | ) | 0.80 | 0.80 | | | | 8.71 | 10.11 | 5,690 | 1.04 | (f) | 1.05 | (f) | (0.52 | )(f) | 2 | ||||||||||||||||||||||||||||||||||||||
Year ended 03/31/10 |
5.95 | (0.04 | ) | 2.15 | 2.11 | (0.15 | ) | | (0.15 | ) | 7.91 | 35.46 | 4,973 | 1.06 | 1.07 | (0.54 | ) | 3 | ||||||||||||||||||||||||||||||||||||||
Investor Class |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 10/31/14 |
4.77 | (0.02 | ) | (1.10 | ) | (1.12 | ) | | | | 3.65 | (23.48 | ) | 80,701 | 1.40 | (e) | 1.41 | (e) | (0.84 | )(e) | 21 | |||||||||||||||||||||||||||||||||||
Year ended 04/30/14 |
5.48 | (0.02 | ) | (0.69 | ) | (0.71 | ) | | | | 4.77 | (12.96 | ) | 101,153 | 1.45 | 1.46 | (0.47 | ) | 18 | |||||||||||||||||||||||||||||||||||||
Year ended 04/30/13 |
7.83 | (0.02 | ) | (2.18 | ) | (2.20 | ) | | (0.15 | ) | (0.15 | ) | 5.48 | (28.59 | ) | 124,703 | 1.32 | 1.32 | (0.21 | ) | 25 | |||||||||||||||||||||||||||||||||||
Year ended 04/30/12 |
11.28 | (0.04 | ) | (2.70 | ) | (2.74 | ) | (0.23 | ) | (0.48 | ) | (0.71 | ) | 7.83 | (25.20 | ) | 188,933 | 1.27 | 1.27 | (0.39 | ) | 14 | ||||||||||||||||||||||||||||||||||
Year ended 04/30/11 |
8.69 | (0.06 | ) | 2.98 | 2.92 | (0.33 | ) | | (0.33 | ) | 11.28 | 33.78 | 279,686 | 1.23 | 1.23 | (0.65 | ) | 30 | ||||||||||||||||||||||||||||||||||||||
One month ended 04/30/10 |
7.89 | (0.01 | ) | 0.81 | 0.80 | | | | 8.69 | 10.14 | 205,022 | 1.29 | (f) | 1.30 | (f) | (0.77 | )(f) | 2 | ||||||||||||||||||||||||||||||||||||||
Year ended 03/31/10 |
5.94 | (0.06 | ) | 2.15 | 2.09 | (0.14 | ) | | (0.14 | ) | 7.89 | 35.04 | 187,995 | 1.31 | 1.32 | (0.79 | ) | 3 |
(a) | Calculated using average shares outstanding. |
(b) | Includes redemption fees added to shares of beneficial interest for Class A Class B, Class C, Class Y and Investor Class shares, which were less than $0.005 per share for the fiscal years ended April 30, 2012 and prior. |
(c) | Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable. |
(d) | Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable. |
(e) | Ratios are annualized and based on average daily net assets (000s omitted) of $148,238, $9,248, $34,794 $46,861 and $103,347 for Class A, Class B, Class C, Class Y and Investor Class shares, respectively. |
(f) | Annualized. |
14 Invesco Gold & Precious Metals Fund
Calculating your ongoing Fund expenses
Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, if any; and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period May 1, 2014 through October 31, 2014.
Actual expenses
The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled Actual Expenses Paid During Period to estimate the expenses you paid on your account during this period.
Hypothetical example for comparison purposes
The table below also provides information about hypothetical account values and hypothetical expenses based on the Funds actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Funds actual return.
The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, if any. Therefore, the hypothetical information is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
Class | Beginning Account Value (05/01/14) |
ACTUAL | HYPOTHETICAL (5% annual return before expenses) |
Annualized Expense Ratio |
||||||||||||||||||||
Ending Account Value (10/31/14)1 |
Expenses Paid During Period2 |
Ending Account Value (10/31/14) |
Expenses Paid During Period2 |
|||||||||||||||||||||
A | $ | 1,000.00 | $ | 764.20 | $ | 6.23 | $ | 1,018.15 | $ | 7.12 | 1.40 | % | ||||||||||||
B | 1,000.00 | 763.30 | 9.56 | 1,014.37 | 10.92 | 2.15 | ||||||||||||||||||
C | 1,000.00 | 762.40 | 9.55 | 1,014.37 | 10.92 | 2.15 | ||||||||||||||||||
Y | 1,000.00 | 765.60 | 5.12 | 1,019.41 | 5.85 | 1.15 | ||||||||||||||||||
Investor | 1,000.00 | 765.20 | 6.23 | 1,018.15 | 7.12 | 1.40 |
1 | The actual ending account value is based on the actual total return of the Fund for the period May 1, 2014 through October 31, 2014, after actual expenses and will differ from the hypothetical ending account value which is based on the Funds expense ratio and a hypothetical annual return of 5% before expenses. |
2 | Expenses are equal to the Funds annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 184/365 to reflect the most recent fiscal half year |
15 Invesco Gold & Precious Metals Fund
Approval of Investment Advisory and Sub-Advisory Contracts
16 Invesco Gold & Precious Metals Fund
17 Invesco Gold & Precious Metals Fund
Invesco mailing information
Send general correspondence to Invesco Investment Services, Inc., P.O. Box 219078, Kansas City, MO 64121-9078.
Important notice regarding delivery of security holder documents
To reduce Fund expenses, only one copy of most shareholder documents may be mailed to shareholders with multiple accounts at the same address (Householding). Mailing of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact Invesco Investment Services, Inc. at 800 959 4246 or contact your financial institution. We will begin sending you individual copies for each account within 30 days after receiving your request.
Fund holdings and proxy voting information
The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter ends. For the second and fourth quarters, the lists appear in the Funds semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The most recent list of portfolio holdings is available at invesco.com/completeqtrholdings. Shareholders can also look up the Funds Forms N-Q on the SEC website at sec.gov. Copies of the Funds Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are shown below.
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 959 4246 or at invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.
Information regarding how the Fund voted proxies related to its portfolio securities during the most recent 12-month period ended June 30 is available at invesco.com/proxysearch. The information is also available on the SEC website, sec.gov. Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the US distributor for Invesco Ltd.s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd. |
SEC file numbers: 811-03826 and 002-85905 | I-GPM-SAR-1 | Invesco Distributors, Inc. |
| ||||
Semiannual Report to Shareholders
|
October 31, 2014
| |||
Invesco Mid Cap Growth Fund | ||||
Nasdaq: |
||||
A: VGRAX n B: VGRBX n C: VGRCX n R: VGRRX n Y: VGRDX n R5: VGRJX n R6: VGRFX |
| ||||
2 |
Fund Performance | |||
4 | Letters to Shareholders | |||
5 | Schedule of Investments | |||
8 | Financial Statements | |||
10 | Notes to Financial Statements | |||
17 | Financial Highlights | |||
19 | Fund Expenses | |||
20 | Approval of Investment Advisory and Sub-Advisory Contracts | |||
For the most current month-end Fund performance and commentary, please visit invesco.com/performance. | ||||
Unless otherwise noted, all data provided by Invesco. | ||||
This report must be accompanied or preceded by a currently effective Fund prospectus, which contains more complete information, including sales charges and expenses. Investors should read it carefully before investing.
| ||||
| ||||
NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE |
Fund Performance
Performance summary
|
| |||
Fund vs. Indexes Cumulative total returns, 4/30/14 to 10/31/14, at net asset value (NAV). Performance shown does not include applicable contingent deferred sales charges (CDSC) or front-end sales charges, which would have reduced performance.
|
| |||
Class A Shares |
5.55 | % | ||
Class B Shares |
5.57 | |||
Class C Shares |
5.17 | |||
Class R Shares |
5.44 | |||
Class Y Shares |
5.70 | |||
Class R5 Shares |
5.75 | |||
Class R6 Shares |
5.78 | |||
S&P 500 Indexq (Broad Market Index) |
8.22 | |||
Russell Midcap Growth Indexq (Style-Specific Index) |
8.06 | |||
Lipper Mid-Cap Growth Funds Indexn (Peer Group Index) |
7.16 | |||
Source(s): qFactSet Research Systems Inc.; nLipper Inc. | ||||
The S&P 500® Index is an unmanaged index considered representative of the US stock market. The Russell Midcap® Growth Index is an unmanaged index considered representative of mid-cap growth stocks. The Russell Midcap Growth Index is a trademark/service mark of the Frank Russell Co. Russell® is a trademark of the Frank Russell Co. The Lipper Mid-Cap Growth Funds Index is an unmanaged index considered representative of mid-cap growth funds tracked by Lipper. The Fund is not managed to track the performance of any particular index, including the index(es) described here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es). A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not. |
|
2 Invesco Mid Cap Growth Fund
3 Invesco Mid Cap Growth Fund
Letters to Shareholders
Bruce Crockett |
Dear Fellow Shareholders: While the members of the Invesco Funds Board, which I chair, cant dictate the performance of the Invesco funds, be assured that your Board works diligently throughout the year to focus on how your investments are managed. Our job is to represent you and your interests on a variety of fund management-related matters. We regularly monitor how the portfolio management teams of the Invesco funds are performing in light of ever-changing and often unpredictable economic and market conditions, and we review the investment strategies and investment process employed by each funds management team as explained in the funds prospectus. Perhaps our most significant responsibility is conducting the annual review of the funds advisory and sub-advisory contracts with Invesco Advisers and its affiliates. This annual review, which is required by the Investment Company Act of 1940, focuses on the nature and quality of the services Invesco provides as the adviser to the Invesco funds and the reasonableness of the fees that it charges for those services. Each year, we spend months carefully reviewing | |
information from Invesco that allows us to evaluate the quality of its services and the reasonableness of its fees. We also use information from a variety of independent sources, including materials provided by the independent senior officer of the Invesco funds, who reports directly to the independent trustees on the Board. Additionally, we meet with legal counsel and review performance and fee data prepared for us by Lipper Inc., an independent, third-party firm widely recognized as a leader in its field. |
After a careful review, the members of the Invesco Funds Board approved the continuation of advisory and sub-advisory contracts with Invesco Advisers and its affiliates.
As always, please contact me at bruce@brucecrockett.com with any questions or concerns you may have. On behalf of the Board, we look forward to continuing to represent your interests and serving your needs.
Sincerely,
Bruce L. Crockett
Independent Chair
Invesco Funds Board of Trustees
Philip Taylor |
Dear Shareholders: This semiannual report includes information about your Fund, including performance data and a list of its investments as of the close of the reporting period. I hope you find this report of interest. Our website, invesco.com/us, offers a wide range of market insights and investment perspectives. On the website, youll find detailed information about our funds, including prices, performance, holdings and portfolio manager commentaries. You can access information about your individual Invesco account whenever its convenient for you; just complete a simple, secure online registration. Use the Log In box on our home page to get started. Invescos mobile app for iPad® (available free from the App StoreSM) allows you to obtain the same detailed information about your Fund and the same investment insights from our investment leaders, market strategists, economists and retirement experts on the go. Also, you can obtain timely updates to help you stay informed about the markets, the economy | |
and investing by connecting with Invesco on Twitter, LinkedIn or Facebook. You can access our blog at blog.invesco.us.com. |
For questions about your account, feel free to contact an Invesco client services representative at 800 959 4246. For Invesco-related questions or comments, please email me directly at phil@invesco.com.
Thank you for investing with us.
Sincerely,
Philip Taylor
Senior Managing Director, Invesco Ltd.
iPad is a trademark of Apple Inc., registered in the US and other countries. App Store is a service mark of Apple Inc. Invesco Distributors, Inc. is not affiliated with Apple Inc.
4 Invesco Mid Cap Growth Fund
Schedule of Investments(a)
October 31, 2014
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco Mid Cap Growth Fund
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco Mid Cap Growth Fund
Notes to Schedule of Investments:
(a) | Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poors. |
(b) | Non-income producing security. |
(c) | All or a portion of this security was out on loan at October 31, 2014. |
(d) | The money market fund and the Fund are affiliated by having the same investment adviser. |
(e) | The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrowers return of the securities loaned. See Note 1I. |
The following table presents the Funds gross and net amount of assets available for offset by the Fund as of October 31, 2014. |
Counterparty | Gross Amount of Securities on Loan at Value |
Cash Collateral Received for Securities Loaned* |
Net Amount |
|||||||||
Brown Brothers Harriman |
$ | 26,813,154 | $ | (26,813,154 | ) | $ | |
* | Amount does not include excess collateral received. |
Portfolio Composition
By sector, based on Net Assets
as of October 31, 2014
Consumer Discretionary |
22.3 | % | ||
Industrials |
18.6 | |||
Information Technology |
17.1 | |||
Health Care |
15.2 | |||
Financials |
8.4 | |||
Energy |
6.2 | |||
Consumer Staples |
5.2 | |||
Materials |
3.9 | |||
Telecommunication Services |
2.0 | |||
Money Market Funds Plus Other Assets Less Liabilities |
1.1 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco Mid Cap Growth Fund
Statement of Assets and Liabilities
October 31, 2014
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
8 Invesco Mid Cap Growth Fund
Statement of Operations
For the six months ended October 31, 2014
(Unaudited)
Investment income: |
| |||
Dividends |
$ | 10,213,875 | ||
Dividends from affiliated money market funds (includes securities lending income of $18,295) |
24,665 | |||
Total investment income |
10,238,540 | |||
Expenses: |
||||
Advisory fees |
9,931,687 | |||
Administrative services fees |
281,812 | |||
Custodian fees |
34,231 | |||
Distribution fees: |
||||
Class A |
3,016,911 | |||
Class B |
115,663 | |||
Class C |
822,604 | |||
Class R |
86,942 | |||
Transfer agent fees A, B, C, R and Y |
3,192,387 | |||
Transfer agent fees R5 |
36,400 | |||
Transfer agent fees R6 |
2,017 | |||
Trustees and officers fees and benefits |
27,952 | |||
Other |
299,379 | |||
Total expenses |
17,847,985 | |||
Less: Fees waived, expenses reimbursed and expense offset arrangement(s) |
(725,515 | ) | ||
Net expenses |
17,122,470 | |||
Net investment income (loss) |
(6,883,930 | ) | ||
Realized and unrealized gain (loss) from: |
||||
Net realized gain from investment securities (includes net gains (losses) from securities sold to affiliates of $(139,970)) |
181,929,660 | |||
Change in net unrealized appreciation (depreciation) of investment securities |
(17,618,898 | ) | ||
Net realized and unrealized gain |
164,310,762 | |||
Net increase in net assets resulting from operations |
$ | 157,426,832 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
9 Invesco Mid Cap Growth Fund
Statement of Changes in Net Assets
For the six months ended October 31, 2014 and the year ended April 30, 2014
(Unaudited)
October 31, 2014 |
April 30, 2014 |
|||||||
Operations: |
|
|||||||
Net investment income (loss) |
$ | (6,883,930 | ) | $ | (12,490,328 | ) | ||
Net realized gain |
181,929,660 | 439,916,264 | ||||||
Change in net unrealized appreciation (depreciation) |
(17,618,898 | ) | 85,407,034 | |||||
Net increase in net assets resulting from operations |
157,426,832 | 512,832,970 | ||||||
Distributions to shareholders from net realized gains: |
||||||||
Class A |
| (57,673,212 | ) | |||||
Class B |
| (3,148,742 | ) | |||||
Class C |
| (4,920,905 | ) | |||||
Class R |
| (933,434 | ) | |||||
Class Y |
| (1,536,931 | ) | |||||
Class R5 |
| (1,871,598 | ) | |||||
Class R6 |
| (1,924,507 | ) | |||||
Total distributions from net realized gains |
| (72,009,329 | ) | |||||
Share transactionsnet: |
||||||||
Class A |
(139,969,430 | ) | 533,080,852 | |||||
Class B |
(17,674,810 | ) | (29,304,277 | ) | ||||
Class C |
(10,318,400 | ) | 10,020,569 | |||||
Class R |
(5,043,459 | ) | (1,470,548 | ) | ||||
Class Y |
3,750,697 | 2,897,954 | ||||||
Class R5 |
(6,759,639 | ) | 48,197,877 | |||||
Class R6 |
7,113,409 | 70,626,726 | ||||||
Net increase (decrease) in net assets resulting from share transactions |
(168,901,632 | ) | 634,049,153 | |||||
Net increase (decrease) in net assets |
(11,474,800 | ) | 1,074,872,794 | |||||
Net assets: |
||||||||
Beginning of period |
2,907,346,835 | 1,832,474,041 | ||||||
End of period (includes undistributed net investment income (loss) of $(13,302,645) and $(6,418,715), respectively) |
$ | 2,895,872,035 | $ | 2,907,346,835 |
Notes to Financial Statements
October 31, 2014
(Unaudited)
NOTE 1Significant Accounting Policies
Invesco Mid Cap Growth Fund (the Fund) is a series portfolio of AIM Sector Funds (Invesco Sector Funds) (the Trust). The Trust is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end series management investment company consisting of ten separate portfolios, each authorized to issue an unlimited number of shares of beneficial interest. The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each portfolio or class will be voted on exclusively by the shareholders of such portfolio or class.
The Funds investment objective is to seek capital growth.
The Fund currently consists of seven different classes of shares: Class A, Class B, Class C, Class R, Class Y, Class R5 and Class R6. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met and under certain circumstances load waived shares may be subject to contingent deferred sales charges (CDSC). Class C shares are sold with a CDSC. Class R, Class Y, Class R5 and Class R6 shares are sold at net asset value. Effective November 30, 2010, new or additional investments in Class B shares are no longer permitted. Existing shareholders of Class B shares may continue to reinvest dividends and capital gains distributions in Class B shares until they convert to Class A shares. Also, shareholders in Class B shares will be able to exchange those shares for Class B shares of other Invesco Funds offering such shares until they convert to Class A shares. Generally, Class B shares will automatically convert to Class A shares on or about the month-end, which is at least eight years after the date of purchase. Redemption of Class B shares prior to the conversion date will be subject to a CDSC.
The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.
A. | Security Valuations Securities, including restricted securities, are valued according to the following policy. |
A security listed or traded on an exchange (except convertible securities) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based
10 Invesco Mid Cap Growth Fund
on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (NYSE).
Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
Debt obligations (including convertible securities) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate (for unlisted equities), yield (for debt obligations), quality, type of issue, coupon rate (for debt obligations), maturity (for debt obligations), individual trading characteristics and other market data. Debt obligations are subject to interest rate and credit risks. In addition, all debt obligations involve some risk of default with respect to interest and/or principal payments.
Foreign securities (including foreign exchange contracts) prices are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange-traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that the Adviser determines are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities prices meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and ask prices is used to value debt obligations, including corporate loans.
Securities for which market quotations are not readily available or became unreliable are valued at fair value as determined in good faith by or under the supervision of the Trusts officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a securitys fair value.
The Fund may invest in securities that are subject to interest rate risk, meaning the risk that the prices will generally fall as interest rates rise and, conversely, the prices will generally rise as interest rates fall. Specific securities differ in their sensitivity to changes in interest rates depending on their individual characteristics. Changes in interest rates may result in increased market volatility, which may affect the value and/or liquidity of certain of the Funds investments.
Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuers assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B. | Securities Transactions and Investment Income Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income (net of withholding tax, if any) is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. |
The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Funds net asset value and, accordingly, they reduce the Funds total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C. | Country Determination For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuers securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, |
11 Invesco Mid Cap Growth Fund
the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted. |
D. | Distributions Distributions from net investment income and net realized capital gain, if any, are generally declared and paid annually and recorded on the ex-dividend date. The Fund may elect to treat a portion of the proceeds from redemptions as distributions for federal income tax purposes. |
E. | Federal Income Taxes The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code of 1986, as amended (the Internal Revenue Code), necessary to qualify as a regulated investment company and to distribute substantially all of the Funds taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements. |
The Fund recognizes the tax benefits of uncertain tax positions only when the position is more likely than not to be sustained. Management has analyzed the Funds uncertain tax positions and concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions. Management is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next 12 months.
The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally, the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F. | Expenses Fees provided for under the Rule 12b-1 plan of a particular class of the Fund are charged to the operations of such class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses attributable to Class R5 and Class R6 are allocated to each share class based on relative net assets. Sub-accounting fees attributable to Class R5 are charged to the operations of the class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses relating to all other classes are allocated among those classes based on relative net assets. All other expenses are allocated among the classes based on relative net assets. Prior to June 1, 2010, incremental transfer agency fees which were unique to each class of shares were charged to the operations of such class. |
G. | Accounting Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print. |
H. | Indemnifications Under the Trusts organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of the performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Funds servicing agreements, that contain a variety of indemnification clauses. The Funds maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote. |
I. | Securities Lending The Fund may lend portfolio securities having a market value up to one-third of the Funds total assets. Such loans are secured by collateral equal to no less than the market value of the loaned securities determined daily by the securities lending provider. Such collateral will be cash or debt securities issued or guaranteed by the U.S. Government or any of its sponsored agencies. Cash collateral received in connection with these loans is invested in short-term money market instruments or affiliated money market funds and is shown as such on the Schedule of Investments. It is the Funds policy to obtain additional collateral from or return excess collateral to the borrower by the end of the next business day, following the valuation date of the securities loaned. Therefore, the value of the collateral held may be temporarily less than the value of the securities on loan. Lending securities entails a risk of loss to the Fund if, and to the extent that, the market value of the securities loaned were to increase and the borrower did not increase the collateral accordingly, and the borrower failed to return the securities. Upon the failure of the borrower to return the securities, collateral may be liquidated and the securities may be purchased on the open market to replace the loaned securities. The Fund could experience delays and costs in gaining access to the collateral. The Fund bears the risk of any deficiency in the amount of the collateral available for return to the borrower due to any loss on the collateral invested. Dividends received on cash collateral investments for securities lending transactions, which are net of compensation to counterparties, is included in Dividends from affiliated money market funds on the Statement of Operations. The aggregate value of securities out on loan is shown as a footnote on the Statement of Assets and Liabilities, if any. |
J. | Foreign Currency Translations Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (1) sales of foreign currencies, (2) currency gains or losses realized between the trade and settlement dates on securities transactions, and (3) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Funds books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates. |
The Fund may invest in foreign securities, which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable. Foreign taxes, if any, are recorded based on the tax regulations and rates that exist in the foreign markets in which the Fund invests and are shown in the Statement of Operations.
K. | Forward Foreign Currency Contracts The Fund may engage in foreign currency transactions either on a spot (i.e. for prompt delivery and settlement) basis or through forward foreign currency contracts to manage or minimize currency or exchange rate risk. |
12 Invesco Mid Cap Growth Fund
The Fund may also enter into forward foreign currency contracts for the purchase or sale of a security denominated in a foreign currency in order to lock in the U.S. dollar price of that security, or the Fund may also enter into forward foreign currency contracts that do not provide for physical settlement of the two currencies, but instead are settled by a single cash payment calculated as the difference between the agreed upon exchange rate and the spot rate at settlement based upon an agreed upon notional amount (non-deliverable forwards). The Fund will set aside liquid assets in an amount equal to daily mark-to-market obligation for forward foreign currency contracts.
A forward foreign currency contract is an obligation between two parties (Counterparties) to purchase or sell a specific currency for an agreed-upon price at a future date. The use of forward foreign currency contracts does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with forward foreign currency contracts include failure of the Counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities.
NOTE 2Advisory Fees and Other Fees Paid to Affiliates
The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the Adviser or Invesco). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Funds average daily net assets as follows:
Average Daily Net Assets | Rate | |||
First $500 million |
0.75% | |||
Next $500 million |
0.70% | |||
Over $1 billion |
0.65% |
For the six months ended October 31, 2014, the effective advisory fees incurred by the Fund was 0.68%.
Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Canada Ltd. (collectively, the Affiliated Sub-Advisers) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide(s) discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).
The Adviser has contractually agreed, through at least July 31, 2015, to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver and/or expense reimbursement (excluding certain items discussed above) of Class A, Class B, Class C, Class R, Class Y, Class R5 and Class R6 shares to 1.15%, 1.90%, 1.90%, 1.40%, 0.90%, 0.90% and 0.90%, respectively, of average daily net assets. In determining the Advisers obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver and/or expense reimbursement to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items, including litigation expenses; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless Invesco continues the fee waiver agreement, it will terminate on July 31, 2015. The fee waiver agreement cannot be terminated during its term. To the extent that the annualized expense ratio does not exceed the expense limitation, the Adviser will retain its ability to be reimbursed for such fee waivers or reimbursements prior to the end of each fiscal year.
Further, the Adviser has contractually agreed, through at least June 30, 2016, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash (excluding investments of cash collateral from securities lending) in such affiliated money market funds.
For the six months ended October 31, 2014, the Adviser waived advisory fees of $25,929 and reimbursed class level expenses of $596,953, $22,886, $42,535, $8,601 and $16,287 of Class A, Class B, Class C, Class R and Class Y shares, respectively.
The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco for certain administrative costs incurred in providing accounting services to the Fund. For the six months ended October 31, 2014, expenses incurred under the agreement are shown in the Statement of Operations as Administrative services fees.
The Trust has entered into a transfer agency and service agreement with Invesco Investment Services, Inc. (IIS) pursuant to which the Fund has agreed to pay IIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IIS for certain expenses incurred by IIS in the course of providing such services. IIS may make payments to intermediaries that provide omnibus account services, sub-accounting services and/or networking services. All fees payable by IIS to intermediaries that provide omnibus account services or sub-accounting are charged back to the Fund, subject to certain limitations approved by the Trusts Board of Trustees. For the six months ended October 31, 2014, expenses incurred under the agreement are shown in the Statement of Operations as Transfer agent fees.
Shares of the Fund are distributed by Invesco Distributors, Inc. (IDI). The Fund has adopted a distribution plan pursuant to Rule 12b-1 under the 1940 Act, and a service plan (collectively, the Plans) for Class A, Class B, Class C and Class R shares to compensate IDI for the sale, distribution, shareholder servicing and maintenance of shareholder accounts for these shares. Under the Plans, the Fund will incur annual fees of up to 0.25% of Class A average daily net assets, up to 1.00% each of Class B and Class C average daily net assets and up to 0.50% of Class R average daily net assets.
With respect to Class B and Class C shares, the Fund is authorized to reimburse in future years any distribution related expenses that exceed the maximum annual reimbursement rate for such class, so long as such reimbursement does not cause the Fund to exceed the Class B and Class C maximum annual reimbursement rate, respectively. With respect to Class A shares, distribution related expenses that exceed the maximum annual reimbursement rate for such class are not carried forward to future years and the Fund will not reimburse IDI for any such expenses.
For the six months ended October 31, 2014, expenses incurred under these agreements are shown in the Statement of Operations as Distribution fees.
13 Invesco Mid Cap Growth Fund
Front-end sales commissions and CDSC (collectively, the sales charges) are not recorded as expenses of the Fund. Front-end sales commissions are deducted from proceeds from the sales of Fund shares prior to investment in Class A shares of the Fund. CDSC are deducted from redemption proceeds prior to remittance to the shareholder. During the six months ended October 31, 2014, IDI advised the Fund that IDI retained $112,863 in front-end sales commissions from the sale of Class A shares and $205, $14,560 and $1,895 from Class A, Class B and Class C shares, respectively, for CDSC imposed on redemptions by shareholders.
For the six months ended October 31, 2014, the Fund incurred $6,929 in brokerage commissions with Invesco Capital Markets, Inc., an affiliate of the Adviser and IDI, for portfolio transactions executed on behalf of the Fund.
Certain officers and trustees of the Trust are officers and directors of the Adviser, IIS and/or IDI.
NOTE 3Additional Valuation Information
GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods, giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3), generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investments assigned level:
Level 1 | Prices are determined using quoted prices in an active market for identical assets. |
Level 2 | Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others. |
Level 3 | Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Funds own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information. |
As of October 31, 2014, all of the securities in this Fund were valued based on Level 1 inputs (see the Schedule of Investments for security categories). The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
NOTE 4Security Transactions with Affiliated Funds
The Fund is permitted to purchase or sell securities from or to certain other Invesco Funds under specified conditions outlined in procedures adopted by the Board of Trustees of the Trust. The procedures have been designed to ensure that any purchase or sale of securities by the Fund from or to another fund or portfolio that is or could be considered an affiliate by virtue of having a common investment adviser (or affiliated investment advisers), common Trustees and/or common officers complies with Rule 17a-7 of the 1940 Act. Further, as defined under the procedures, each transaction is effected at the current market price. Pursuant to these procedures, for the six months ended October 31, 2014, the Fund engaged in securities sales of $1,991,470, which resulted in net realized gains (losses) of $(139,970).
NOTE 5Expense Offset Arrangement(s)
The expense offset arrangement is comprised of transfer agency credits which result from balances in demand deposit accounts used by the transfer agent for clearing shareholder transactions. For the six months ended October 31, 2014, the Fund received credits from this arrangement, which resulted in the reduction of the Funds total expenses of $12,324.
NOTE 6Trustees and Officers Fees and Benefits
Trustees and Officers Fees and Benefits include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and Trustees and Officers Fees and Benefits also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees were eligible to participate in a retirement plan that provided for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. Trustees and Officers Fees and Benefits include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.
NOTE 7Cash Balances
The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with State Street Bank and Trust Company, the custodian bank. Such balances, if any at period end, are shown in the Statement of Assets and Liabilities under the payable caption Amount due custodian. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.
14 Invesco Mid Cap Growth Fund
NOTE 8Tax Information
The amount and character of income and gains to be distributed are determined in accordance with income tax regulations, which may differ from GAAP. Reclassifications are made to the Funds capital accounts to reflect income and gains available for distribution (or available capital loss carryforward) under income tax regulations. The tax character of distributions paid during the year and the tax components of net assets will be reported at the Funds fiscal year-end.
Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. Capital losses generated in years beginning after December 22, 2010 can be carried forward for an unlimited period, whereas previous losses expire in 8 tax years. Capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Capital loss carryforwards with no expiration date will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss carryforwards in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.
The Fund had a capital loss carryforward as of April 30, 2014, which expires as follows:
Capital Loss Carryforward* | ||||||||||||
Expiration | Short-Term | Long-Term | Total | |||||||||
April 30, 2016 |
$ | 50,022,438 | $ | | $ | 50,022,438 | ||||||
April 30, 2017 |
170,799,073 | | 170,799,073 | |||||||||
$ | 220,821,511 | $ | | $ | 220,821,511 |
* | Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code and may be further limited depending upon a variety of factors, including the realization of net unrealized gains or losses as of the date of any reorganization. |
NOTE 9Investment Securities
The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the six months ended October 31, 2014 was $928,422,578 and $1,122,643,192, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed federal income tax reporting period-end.
Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis | ||||
Aggregate unrealized appreciation of investment securities |
$ | 701,928,580 | ||
Aggregate unrealized (depreciation) of investment securities |
(56,826,389 | ) | ||
Net unrealized appreciation of investment securities |
$ | 645,102,191 |
Cost of investments for tax purposes is $2,272,730,406.
15 Invesco Mid Cap Growth Fund
NOTE 10Share Information
Summary of Share Activity | ||||||||||||||||
Six months ended October 31, 2014(a) |
Year ended April 30, 2014 |
|||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Sold: |
||||||||||||||||
Class A |
1,622,467 | $ | 62,304,042 | 5,709,998 | $ | 203,069,561 | ||||||||||
Class B |
10,503 | 348,993 | 43,435 | 1,358,804 | ||||||||||||
Class C |
128,567 | 4,075,115 | 484,509 | 14,575,527 | ||||||||||||
Class R |
109,119 | 4,123,968 | 240,288 | 8,530,322 | ||||||||||||
Class Y |
292,761 | 11,730,662 | 425,246 | 15,367,624 | ||||||||||||
Class R5 |
169,600 | 6,750,783 | 386,941 | 14,107,680 | ||||||||||||
Class R6(b) |
326,893 | 13,288,988 | 1,032,687 | 37,762,356 | ||||||||||||
Issued as reinvestment of dividends: |
||||||||||||||||
Class A |
| | 1,528,509 | 54,842,895 | ||||||||||||
Class B |
| | 98,472 | 3,060,500 | ||||||||||||
Class C |
| | 156,653 | 4,676,082 | ||||||||||||
Class R |
| | 26,310 | 930,829 | ||||||||||||
Class Y |
| | 33,864 | 1,244,509 | ||||||||||||
Class R5 |
| | 50,564 | 1,865,300 | ||||||||||||
Class R6 |
| | 52,146 | 1,924,196 | ||||||||||||
Issued in connection with acquisitions:(c) |
||||||||||||||||
Class A |
| | 19,732,915 | 664,347,737 | ||||||||||||
Class B |
| | 207,446 | 6,075,090 | ||||||||||||
Class C |
| | 576,247 | 16,273,578 | ||||||||||||
Class R |
| | 73,859 | 2,455,383 | ||||||||||||
Class Y |
| | 370,038 | 12,741,282 | ||||||||||||
Class R5 |
| | 2,256,389 | 77,957,730 | ||||||||||||
Class R6 |
| | 1,365,854 | 47,184,427 | ||||||||||||
Automatic conversion of Class B shares to Class A shares: |
||||||||||||||||
Class A |
305,038 | 11,840,774 | 706,339 | 25,366,888 | ||||||||||||
Class B |
(352,146 | ) | (11,840,774 | ) | (814,135 | ) | (25,366,888 | ) | ||||||||
Reacquired: |
||||||||||||||||
Class A |
(5,564,391 | ) | (214,114,246 | ) | (11,733,325 | ) | (414,546,229 | ) | ||||||||
Class B |
(185,153 | ) | (6,183,029 | ) | (473,593 | ) | (14,431,783 | ) | ||||||||
Class C |
(451,734 | ) | (14,393,515 | ) | (863,354 | ) | (25,504,618 | ) | ||||||||
Class R |
(245,402 | ) | (9,167,427 | ) | (378,185 | ) | (13,387,082 | ) | ||||||||
Class Y |
(202,122 | ) | (7,979,965 | ) | (711,421 | ) | (26,455,461 | ) | ||||||||
Class R5 |
(339,794 | ) | (13,510,422 | ) | (1,244,765 | ) | (45,732,833 | ) | ||||||||
Class R6 |
(155,979 | ) | (6,175,579 | ) | (435,948 | ) | (16,244,253 | ) | ||||||||
Net increase (decrease) in share activity |
(4,531,773 | ) | $ | (168,901,632 | ) | 18,903,983 | $ | 634,049,153 |
(a) | There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 28% of the outstanding shares of the Fund. IDI has an agreement with these entities to sell Fund shares. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as securities brokerage, distribution, third party record keeping and account servicing. The Fund has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially. |
(b) | Commencement date of July 15, 2013. |
(c) | As of the opening of business on July 15, 2013, the Fund acquired all the net assets of Invesco Dynamics Fund (the Target Fund) pursuant to a plan of reorganization approved by the Trustees of the Fund on December 6, 2012 and by the shareholders of the Target Fund on April 24, 2013. The acquisition was accomplished by a tax-free exchange of 24,582,748 shares of the Fund for 29,596,460 shares outstanding of the Target Fund as of the close of business on July 12, 2013. Each class of the Target Fund was exchanged for the like class of shares of the Fund based on the relative net asset value of the Target Fund to the net asset value of the Fund at the close of business on July 12, 2013. The Target Funds net assets at that date of $827,035,227, including $197,905,378 of unrealized appreciation, were combined with those of the Fund. The net assets of the Fund immediately before the acquisition were $1,952,684,708 and $2,779,719,935 immediately after the acquisition. |
The pro forma results of operations for the year ended April 30, 2014 assuming the reorganization had been completed on May 1, 2013, the beginning of the annual reporting period, are as follows: |
Net investment income (loss) |
$ | (12,892,373 | ) | |
Net realized/unrealized gains |
614,289,807 | |||
Change in net assets resulting from operations |
$ | 601,397,434 |
The combined investment portfolios have been managed as a single integrated portfolio since the acquisition was completed; it is not practicable to separate the amounts of revenue and earnings of the Target Fund that has been included in the Funds Statement of Operations since July 15, 2013. |
16 Invesco Mid Cap Growth Fund
NOTE 11Financial Highlights
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
Net asset value, beginning of period |
Net investment income (loss)(a) |
Net gains (losses) on securities (both realized and unrealized) |
Total from investment operations |
Distributions from net realized gains |
Net asset value, end of period |
Total return |
Net assets, end of period (000s omitted) |
Ratio
of expenses to average net assets with fee waivers and/or expenses absorbed |
Ratio of expenses to average net assets without fee waivers and/or expenses absorbed |
Ratio of net investment income (loss) to average net assets |
Portfolio turnover(b) |
|||||||||||||||||||||||||||||||||||||
Class A |
||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 10/31/14 |
$ | 37.30 | $ | (0.09 | ) | $ | 2.16 | $ | 2.07 | $ | | $ | 39.37 | 5.55 | %(c) | $ | 2,374,082 | 1.15 | %(d) | 1.20 | %(d) | (0.45 | )%(d) | 32 | % | |||||||||||||||||||||||
Year ended 04/30/14 |
31.09 | (0.16 | ) | 7.27 | 7.11 | (0.90 | ) | 37.30 | 22.99 | (c) | 2,384,362 | 1.16 | 1.21 | (0.44 | ) | 95 | ||||||||||||||||||||||||||||||||
Year ended 04/30/13 |
28.15 | (0.03 | )(e) | 2.97 | 2.94 | | 31.09 | 10.44 | (c) | 1,491,997 | 1.29 | 1.29 | (0.11 | )(e) | 88 | |||||||||||||||||||||||||||||||||
Year ended 04/30/12 |
33.15 | (0.16 | ) | (2.82 | ) | (2.98 | ) | (2.02 | ) | 28.15 | (8.37 | )(c) | 1,199,482 | 1.31 | 1.31 | (0.57 | ) | 109 | ||||||||||||||||||||||||||||||
One month ended 04/30/11 |
31.79 | (0.03 | ) | 1.39 | 1.36 | | 33.15 | 4.28 | (c) | 1,539,895 | 1.28 | (f) | 1.28 | (f) | (1.10 | )(f) | 21 | |||||||||||||||||||||||||||||||
Year ended 03/31/11 |
24.65 | (0.16 | ) | 7.30 | 7.14 | | 31.79 | 28.97 | (c) | 1,485,888 | 1.29 | 1.29 | (0.61 | ) | 162 | |||||||||||||||||||||||||||||||||
Year ended 03/31/10 |
14.37 | (0.10 | ) | 10.38 | 10.28 | | 24.65 | 71.54 | (g) | 1,441,286 | 1.24 | 1.31 | (0.49 | ) | 25 | |||||||||||||||||||||||||||||||||
Class B |
||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 10/31/14 |
32.30 | (0.08 | ) | 1.89 | 1.81 | | 34.11 | 5.60 | (c)(h) | 84,512 | 1.15 | (d)(h) | 1.20 | (d)(h) | (0.45 | )(d)(h) | 32 | |||||||||||||||||||||||||||||||
Year ended 04/30/14 |
27.03 | (0.14 | ) | 6.31 | 6.17 | (0.90 | ) | 32.30 | 22.96 | (c)(h) | 97,068 | 1.16 | (h) | 1.21 | (h) | (0.44 | )(h) | 95 | ||||||||||||||||||||||||||||||
Year ended 04/30/13 |
24.47 | (0.03 | )(e) | 2.59 | 2.56 | | 27.03 | 10.46 | (c)(h) | 106,586 | 1.29 | (h) | 1.29 | (h) | (0.11 | )(e)(h) | 88 | |||||||||||||||||||||||||||||||
Year ended 04/30/12 |
29.11 | (0.11 | ) | (2.51 | ) | (2.62 | ) | (2.02 | ) | 24.47 | (8.29 | )(c)(h) | 109,449 | 1.21 | (h) | 1.21 | (h) | (0.47 | )(h) | 109 | ||||||||||||||||||||||||||||
One month ended 04/30/11 |
27.91 | (0.03 | ) | 1.23 | 1.20 | | 29.11 | 4.30 | (c)(j) | 167,947 | 1.35 | (f)(j) | 1.35 | (f)(j) | (1.17 | )(f)(j) | 21 | |||||||||||||||||||||||||||||||
Year ended 03/31/11 |
21.69 | (0.20 | ) | 6.42 | 6.22 | | 27.91 | 28.68 | (c)(j) | 165,822 | 1.53 | (j) | 1.53 | (j) | (0.85 | )(j) | 162 | |||||||||||||||||||||||||||||||
Year ended 03/31/10 |
12.68 | (0.13 | ) | 9.14 | 9.01 | | 21.69 | 71.06 | (k)(l) | 224,558 | 1.50 | (k) | 1.57 | (k) | (0.74 | )(k) | 25 | |||||||||||||||||||||||||||||||
Class C |
||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 10/31/14 |
30.95 | (0.19 | ) | 1.79 | 1.60 | | 32.55 | 5.17 | (c)(i) | 168,693 | 1.86 | (d)(i) | 1.91 | (d)(i) | (1.16 | )(d)(i) | 32 | |||||||||||||||||||||||||||||||
Year ended 04/30/14 |
26.11 | (0.34 | ) | 6.08 | 5.74 | (0.90 | ) | 30.95 | 22.12 | (c)(i) | 170,355 | 1.88 | (i) | 1.93 | (i) | (1.16 | )(i) | 95 | ||||||||||||||||||||||||||||||
Year ended 04/30/13 |
23.82 | (0.20 | )(e) | 2.49 | 2.29 | | 26.11 | 9.62 | (c) | 134,484 | 2.04 | 2.04 | (0.86 | )(e) | 88 | |||||||||||||||||||||||||||||||||
Year ended 04/30/12 |
28.63 | (0.32 | ) | (2.47 | ) | (2.79 | ) | (2.02 | ) | 23.82 | (9.06 | )(c) | 95,998 | 2.06 | 2.06 | (1.32 | ) | 109 | ||||||||||||||||||||||||||||||
One month ended 04/30/11 |
27.47 | (0.04 | ) | 1.20 | 1.16 | | 28.63 | 4.22 | (c) | 132,885 | 2.03 | (f) | 2.03 | (f) | (1.85 | )(f) | 21 | |||||||||||||||||||||||||||||||
Year ended 03/31/11 |
21.45 | (0.32 | ) | 6.34 | 6.02 | | 27.47 | 28.07 | (c) | 128,536 | 2.04 | 2.04 | (1.36 | ) | 162 | |||||||||||||||||||||||||||||||||
Year ended 03/31/10 |
12.60 | (0.23 | ) | 9.08 | 8.85 | | 21.45 | 70.24 | (m) | 112,608 | 1.99 | 2.06 | (1.24 | ) | 25 | |||||||||||||||||||||||||||||||||
Class R |
||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 10/31/14 |
36.74 | (0.13 | ) | 2.13 | 2.00 | | 38.74 | 5.44 | (c) | 32,873 | 1.40 | (d) | 1.45 | (d) | (0.70 | )(d) | 32 | |||||||||||||||||||||||||||||||
Year ended 04/30/14 |
30.72 | (0.24 | ) | 7.16 | 6.92 | (0.90 | ) | 36.74 | 22.64 | (c) | 36,184 | 1.41 | 1.46 | (0.69 | ) | 95 | ||||||||||||||||||||||||||||||||
Year ended 04/30/13 |
27.88 | (0.10 | )(e) | 2.94 | 2.84 | | 30.72 | 10.19 | (c) | 31,410 | 1.54 | 1.54 | (0.36 | )(e) | 88 | |||||||||||||||||||||||||||||||||
Year ended 04/30/12 |
32.94 | (0.23 | ) | (2.81 | ) | (3.04 | ) | (2.02 | ) | 27.88 | (8.62 | )(c) | 16,080 | 1.56 | 1.56 | (0.82 | ) | 109 | ||||||||||||||||||||||||||||||
One month ended 04/30/11 |
31.59 | (0.04 | ) | 1.39 | 1.35 | | 32.94 | 4.27 | (c) | 12,443 | 1.53 | (f) | 1.53 | (f) | (1.35 | )(f) | 21 | |||||||||||||||||||||||||||||||
Year ended 03/31/11 |
24.55 | (0.24 | ) | 7.28 | 7.04 | | 31.59 | 28.68 | (c) | 11,742 | 1.54 | 1.54 | (0.86 | ) | 162 | |||||||||||||||||||||||||||||||||
Year ended 03/31/10 |
14.35 | (0.22 | ) | 10.42 | 10.20 | | 24.55 | 71.08 | (n) | 4,118 | 1.49 | 1.56 | (0.96 | ) | 25 | |||||||||||||||||||||||||||||||||
Class Y |
||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 10/31/14 |
38.23 | (0.04 | ) | 2.23 | 2.19 | | 40.42 | 5.73 | (c) | 69,623 | 0.90 | (d) | 0.95 | (d) | (0.20 | )(d) | 32 | |||||||||||||||||||||||||||||||
Year ended 04/30/14 |
31.78 | (0.07 | ) | 7.42 | 7.35 | (0.90 | ) | 38.23 | 23.24 | (c) | 62,398 | 0.91 | 0.96 | (0.19 | ) | 95 | ||||||||||||||||||||||||||||||||
Year ended 04/30/13 |
28.70 | 0.04 | (e) | 3.04 | 3.08 | | 31.78 | 10.73 | (c) | 48,115 | 1.04 | 1.04 | 0.14 | (e) | 88 | |||||||||||||||||||||||||||||||||
Year ended 04/30/12 |
33.66 | (0.09 | ) | (2.85 | ) | (2.94 | ) | (2.02 | ) | 28.70 | (8.12 | )(c) | 52,408 | 1.06 | 1.06 | (0.32 | ) | 109 | ||||||||||||||||||||||||||||||
One month ended 04/30/11 |
32.27 | (0.02 | ) | 1.41 | 1.39 | | 33.66 | 4.31 | (c) | 46,867 | 1.03 | (f) | 1.03 | (f) | (0.85 | )(f) | 21 | |||||||||||||||||||||||||||||||
Year ended 03/31/11(p) |
24.96 | (0.09 | ) | 7.40 | 7.31 | | 32.27 | 29.29 | (c) | 41,968 | 1.04 | 1.04 | (0.36 | ) | 162 | |||||||||||||||||||||||||||||||||
Year ended 03/31/10 |
14.52 | (0.05 | ) | 10.49 | 10.44 | | 24.96 | 71.90 | (q) | 143,273 | 0.99 | 1.06 | (0.24 | ) | 25 | |||||||||||||||||||||||||||||||||
Class R5 |
||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 10/31/14 |
38.39 | (0.02 | ) | 2.23 | 2.21 | | 40.60 | 5.75 | (c) | 77,256 | 0.81 | (d) | 0.81 | (d) | (0.11 | )(d) | 32 | |||||||||||||||||||||||||||||||
Year ended 04/30/14 |
31.87 | (0.04 | ) | 7.46 | 7.42 | (0.90 | ) | 38.39 | 23.40 | (c) | 79,584 | 0.83 | 0.83 | (0.11 | ) | 95 | ||||||||||||||||||||||||||||||||
Year ended 04/30/13 |
28.73 | 0.10 | (e) | 3.04 | 3.14 | | 31.87 | 10.93 | (c) | 19,881 | 0.84 | 0.84 | 0.34 | (e) | 88 | |||||||||||||||||||||||||||||||||
Year ended 04/30/12 |
33.64 | (0.03 | ) | (2.86 | ) | (2.89 | ) | (2.02 | ) | 28.73 | (7.97 | )(c) | 2,656 | 0.85 | 0.85 | (0.11 | ) | 109 | ||||||||||||||||||||||||||||||
One month ended 04/30/11 |
32.24 | (0.02 | ) | 1.42 | 1.40 | | 33.64 | 4.34 | (c) | 14 | 0.85 | (f) | 0.85 | (f) | (0.67 | )(f) | 21 | |||||||||||||||||||||||||||||||
Year ended 03/31/11(o) |
24.57 | (0.05 | ) | 7.72 | 7.67 | | 32.24 | 31.22 | (c) | 13 | 0.82 | (f) | 0.82 | (f) | (0.26 | )(f) | 162 | |||||||||||||||||||||||||||||||
Class R6 |
||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 10/31/14 |
38.41 | (0.01 | ) | 2.24 | 2.23 | | 40.64 | 5.81 | (c) | 88,834 | 0.72 | (d) | 0.72 | (d) | (0.02 | )(d) | 32 | |||||||||||||||||||||||||||||||
Year ended 04/30/14(o) |
34.50 | (0.01 | ) | 4.82 | 4.81 | (0.90 | ) | 38.41 | 14.05 | (c) | 77,395 | 0.73 | (f) | 0.73 | (f) | (0.01 | )(f) | 95 |
(a) | Calculated using average shares outstanding. |
(b) | Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable. For years ended April 30, 2014 and 2013, the portfolio turnover calculation excludes the value of securities purchased of $641,584,142 and $463,100,189 and sold of $274,784,240 and $427,869,406 in the effort to realign the Funds portfolio holdings after the reorganization of Invesco Dynamics Fund and Invesco Capital Development Fund, respectively, into the Fund. |
(c) | Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable. |
(d) | Ratios are annualized and based on average daily net assets (000s omitted) of $2,393,853, $91,776, $170,569, $34,493, $65,313, $78,159 and $81,443 for Class A, Class B, Class C, Class R, Class Y, Class R5 and Class R6 shares, respectively. |
(e) | Net investment income (loss) per share and the ratio of net investment income (loss) to average net assets include significant cash dividends received during the period. Net investment income (loss) per share and the ratio of net investment income (loss) to average net assets excluding the special dividends are $(0.18) and (0.63)%, $(0.15) and (0.63)%, $(0.32) and (1.38)%, $(0.24) and (0.88)%, $(0.11) and (0.38)% and $(0.05) and (0.18)% for Class A, Class B, Class C, Class R, Class Y and Class R5 shares, respectively. |
(f) | Annualized. |
17 Invesco Mid Cap Growth Fund
(g) | Assumes reinvestment of all distributions for the period and does not include payment of the maximum sales charge of 5.75% or contingent deferred sales charge (CDSC). On purchases of $1 million or more, a CDSC of 1% may be imposed on certain redemptions made within eighteen months of purchase. If the sales charges were included, total returns would be lower. These returns include combined Rule 12b-1 fees and service fees of up to 0.25% and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. |
(h) | The Total return, Ratio of expenses to average net assets and Ratio of net investment income (loss) to average net assets reflect actual 12b-1 fees of 0.25%, 0.25%, 0.25% and 0.15% for the six months ended October 31, 2014, years ended April 30, 2014, 2013 and 2012, respectively. |
(i) | The Total return, Ratio of expenses to average net assets and Ratio of net investment income (loss) to average net assets reflect actual 12b-1 fees of 0.96% and 0.96% for the six months ended October 31, 2014 and year ended April 30, 2014, respectively. |
(j) | The Total return, Ratio of expenses to average net assets and Ratio of net investment income (loss) to average net assets reflect actual 12b-1 fees of 0.32% and 0.49% for the one month ended April 30, 2011 and the year ended March 31, 2011, respectively. |
(k) | The total return, ratio of expenses to average net assets and ratio of net investment income (loss) to average net assets reflect actual 12b-1 fees of less than 1%. |
(l) | Assumes reinvestment of all distributions for the period and does not include payment of the maximum CDSC of 5%, charged on certain redemptions made within one year of purchase and declining to 0% after the fifth year. If the sales charge was included, total returns would be lower. These returns include combined Rule 12b-1 fees and service fees of up to 1% and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. |
(m) | Assumes reinvestment of all distributions for the period and does not include payment of the maximum CDSC of 1%, charged on certain redemptions made within one year of purchase. If the sales charge was included, total returns would be lower. These returns include combined Rule 12b-1 fees and service fees of up to 1% and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. |
(n) | Assumes reinvestment of all distributions for the period. These returns include combined Rule 12b-1 fees and service fees of up to 0.50% and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption on Fund shares. |
(o) | Commencement date of June 1, 2010 and July 15, 2013 for Class R5 and Class R6 shares, respectively. |
(p) | On June 1, 2010, Class I shares of Van Kampen Mid Cap Growth Fund were reorganized into Class Y shares of the Fund. |
(q) | Assumes reinvestment of all distributions for the period. These returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption on Fund shares. |
18 Invesco Mid Cap Growth Fund
Calculating your ongoing Fund expenses
Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, if any; and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period May 1, 2014 through October 31, 2014.
Actual expenses
The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled Actual Expenses Paid During Period to estimate the expenses you paid on your account during this period.
Hypothetical example for comparison purposes
The table below also provides information about hypothetical account values and hypothetical expenses based on the Funds actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Funds actual return.
The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, if any. Therefore, the hypothetical information is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
Class | Beginning Account Value (05/01/14) |
ACTUAL | HYPOTHETICAL (5% annual return before expenses) |
Annualized Expense Ratio |
||||||||||||||||||||
Ending Account Value (10/31/14)1 |
Expenses Paid During Period2 |
Ending Account Value (10/31/14) |
Expenses Paid During Period2 |
|||||||||||||||||||||
A | $ | 1,000.00 | $ | 1,055.50 | $ | 5.96 | $ | 1,019.41 | $ | 5.85 | 1.15 | % | ||||||||||||
B | 1,000.00 | 1,055.70 | 5.96 | 1,019.41 | 5.85 | 1.15 | ||||||||||||||||||
C | 1,000.00 | 1,051.70 | 9.62 | 1,015.83 | 9.45 | 1.86 | ||||||||||||||||||
R | 1,000.00 | 1,054.40 | 7.25 | 1,018.15 | 7.12 | 1.40 | ||||||||||||||||||
Y | 1,000.00 | 1,057.00 | 4.67 | 1,020.67 | 4.58 | 0.90 | ||||||||||||||||||
R5 | 1,000.00 | 1,057.50 | 4.20 | 1,021.12 | 4.13 | 0.81 | ||||||||||||||||||
R6 | 1,000.00 | 1,057.80 | 3.73 | 1,021.58 | 3.67 | 0.72 |
1 | The actual ending account value is based on the actual total return of the Fund for the period May 1, 2014 through October 31, 2014, after actual expenses and will differ from the hypothetical ending account value which is based on the Funds expense ratio and a hypothetical annual return of 5% before expenses. |
2 | Expenses are equal to the Funds annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 184/365 to reflect the most recent fiscal half year. |
19 Invesco Mid Cap Growth Fund
Approval of Investment Advisory and Sub-Advisory Contracts
20 Invesco Mid Cap Growth Fund
21 Invesco Mid Cap Growth Fund
Invesco mailing information
Send general correspondence to Invesco Investment Services, Inc., P.O. Box 219078, Kansas City, MO 64121-9078.
Important notice regarding delivery of security holder documents
To reduce Fund expenses, only one copy of most shareholder documents may be mailed to shareholders with multiple accounts at the same address (Householding). Mailing of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact Invesco Investment Services, Inc. at 800 959 4246 or contact your financial institution. We will begin sending you individual copies for each account within 30 days after receiving your request.
Fund holdings and proxy voting information
The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter ends. For the second and fourth quarters, the lists appear in the Funds semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The most recent list of portfolio holdings is available at invesco.com/completeqtrholdings. Shareholders can also look up the Funds Forms
N-Q on the SEC website at sec.gov. Copies of the Funds Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are shown below.
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 959 4246 or at invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.
Information regarding how the Fund voted proxies related to its portfolio securities during the most recent 12-month period ended June 30 is available at invesco.com/proxysearch. The information is also available on the SEC website, sec.gov. Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the US distributor for Invesco Ltd.s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd. |
SEC file numbers: 811-03826 and 002-85905 | VK-MCG-SAR-1 | Invesco Distributors, Inc. |
| ||||
|
Semiannual Report to Shareholders
|
October 31, 2014 | ||
Invesco Small Cap Value Fund | ||||
Nasdaq: |
||||
A: VSCAX n B: VSMBX n C: VSMCX n Y: VSMIX |
2 | Fund Performance | |
4 | Letters to Shareholders | |
5 | Schedule of Investments | |
7 | Financial Statements | |
9 | Notes to Financial Statements | |
15 | Financial Highlights | |
16 | Fund Expenses | |
17 | Approval of Investment Advisory and Sub-Advisory Contracts |
For the most current month-end Fund performance and commentary, please visit invesco.com/performance.
Unless otherwise noted, all data provided by Invesco.
This report must be accompanied or preceded by a currently effective Fund prospectus, which contains more complete information, including sales charges and expenses. Investors should read it carefully before investing. | ||
NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE |
Fund Performance
Performance summary
Fund vs. Indexes
Cumulative total returns, 4/30/14 to 10/31/14, at net asset value (NAV). Performance shown does not include applicable contingent deferred sales charges (CDSC) or front-end sales charges, which would have reduced performance.
Class A Shares |
-3.21 | % | ||
Class B Shares |
-3.58 | |||
Class C Shares |
-3.58 | |||
Class Y Shares |
-3.09 | |||
S&P 500 Indexq (Broad Market Index) |
8.22 | |||
Russell 2000 Value Indexq (Style-Specific Index) |
2.78 | |||
Lipper Small-Cap Value Funds Indexn (Peer Group Index) |
1.06 | |||
Source(s): qFactSet Research Systems Inc.; nLipper Inc. |
The S&P 500® Index is an unmanaged index considered representative of the US stock market.
The Russell 2000® Value Index is an unmanaged index considered representative of small-cap value stocks. The Russell 2000 Value Index is a trademark/service mark of the Frank Russell Co. Russell® is a trademark of the Frank Russell Co.
The Lipper Small-Cap Value Funds Index is an unmanaged index considered representative of small-cap value funds tracked by Lipper.
The Fund is not managed to track the performance of any particular index, including the index(es) described here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es).
A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.
2 Invesco Small Cap Value Fund
3 Invesco Small Cap Value Fund
Letters to Shareholders
Bruce Crockett |
Dear Fellow Shareholders: While the members of the Invesco Funds Board, which I chair, cant dictate the performance of the Invesco funds, be assured that your Board works diligently throughout the year to focus on how your investments are managed. Our job is to represent you and your interests on a variety of fund management-related matters. We regularly monitor how the portfolio management teams of the Invesco funds are performing in light of ever-changing and often unpredictable economic and market conditions, and we review the investment strategies and investment process employed by each funds management team as explained in the funds prospectus. Perhaps our most significant responsibility is conducting the annual review of the funds advisory and sub-advisory contracts with Invesco Advisers and its affiliates. This annual review, which is required by the Investment Company Act of 1940, focuses on the nature and quality of the services Invesco provides as the adviser to the Invesco funds and the reasonableness of |
the fees that it charges for those services. Each year, we spend months carefully reviewing information from Invesco that allows us to evaluate the quality of its services and the reasonableness of its fees. We also use information from a variety of independent sources, including materials provided by the independent senior officer of the Invesco funds, who reports directly to the independent trustees on the Board. Additionally, we meet with legal counsel and review performance and fee data prepared for us by Lipper Inc., an independent, third-party firm widely recognized as a leader in its field.
After a careful review, the members of the Invesco Funds Board approved the continuation of advisory and sub-advisory contracts with Invesco Advisers and its affiliates.
As always, please contact me at bruce@brucecrockett.com with any questions or concerns you may have. On behalf of the Board, we look forward to continuing to represent your interests and serving your needs.
Sincerely,
Bruce L. Crockett
Independent Chair
Invesco Funds Board of Trustees
Philip Taylor |
Dear Shareholders: This semiannual report includes information about your Fund, including performance data and a list of its investments as of the close of the reporting period. I hope you find this report of interest. Our website, invesco.com/us, offers a wide range of market insights and investment perspectives. On the website, youll find detailed information about our funds, including prices, performance, holdings and portfolio manager commentaries. You can access information about your individual Invesco account whenever its convenient for you; just complete a simple, secure online registration. Use the Log In box on our home page to get started. Invescos mobile app for iPad® (available free from the App StoreSM) allows you to obtain the same detailed information about your Fund and the same investment insights from our investment leaders, market strategists, economists and retirement experts on the go. | |
Also, you can obtain timely updates to help you stay informed about the markets, the economy |
and investing by connecting with Invesco on Twitter, LinkedIn or Facebook. You can access our blog at blog.invesco.us.com.
For questions about your account, feel free to contact an Invesco client services representative at 800 959 4246. For Invesco-related questions or comments, please email me directly at phil@invesco.com.
Thank you for investing with us.
Sincerely,
Philip Taylor
Senior Managing Director, Invesco Ltd.
iPad is a trademark of Apple Inc., registered in the US and other countries. App Store is a service mark of Apple Inc. Invesco Distributors, Inc. is not affiliated with Apple Inc.
4 Invesco Small Cap Value Fund
Schedule of Investments(a)
October 31, 2014
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco Small Cap Value Fund
Notes to Schedule of Investments:
(a) | Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poors. |
(b) | Non-income producing security. |
(c) | Affiliated company during the period. The Investment Company Act of 1940 defines affiliates as those companies in which a fund holds 5% or more of the outstanding voting securities. The Fund has not owned enough of the outstanding voting securities of the issuer to have control (as defined in the Investment Company Act of 1940) of that issuer. The aggregate value of these securities as of October 31, 2014 was $470,851,200, which represented 14.34% of the Funds Net Assets. See Note 4. |
(d) | The money market fund and the Fund are affiliated by having the same investment adviser. |
Portfolio Composition
By sector, based on Net Assets
as of October 31, 2014
Financials |
24.5 | % | ||
Industrials |
21.2 | |||
Consumer Discretionary |
17.8 | |||
Information Technology |
13.0 | |||
Health Care |
11.5 | |||
Consumer Staples |
4.9 | |||
Materials |
4.4 | |||
Energy |
1.2 | |||
Money Market Funds Plus Other Assets Less Liabilities |
1.5 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco Small Cap Value Fund
Statement of Assets and Liabilities
October 31, 2014
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco Small Cap Value Fund
Statement of Operations
For the six months ended October 31, 2014
(Unaudited)
Investment income: |
| |||
Dividends (net of foreign withholding taxes of $94,710) |
$ | 16,549,994 | ||
Dividends from affiliates |
667,965 | |||
Total investment income |
17,217,959 | |||
Expenses: |
||||
Advisory fees |
|
11,098,494 |
| |
Administrative services fees |
287,199 | |||
Custodian fees |
46,383 | |||
Distribution fees: |
||||
Class A |
2,331,187 | |||
Class B |
139,239 | |||
Class C |
809,768 | |||
Transfer agent fees |
3,455,181 | |||
Trustees and officers fees and benefits |
29,352 | |||
Other |
233,136 | |||
Total expenses |
18,429,939 | |||
Less: Fees waived and expense offset arrangement(s) |
(93,348 | ) | ||
Net expenses |
18,336,591 | |||
Net investment income (loss) |
(1,118,632 | ) | ||
Realized and unrealized gain (loss) from: |
||||
Net realized gain (loss) from: |
||||
Investment securities |
348,640,694 | |||
Foreign currencies |
(3,355 | ) | ||
348,637,339 | ||||
Change in net unrealized appreciation (depreciation) of investment securities |
(460,031,652 | ) | ||
Net realized and unrealized gain (loss) |
(111,394,313 | ) | ||
Net increase (decrease) in net assets resulting from operations |
$ | (112,512,945 | ) |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
8 Invesco Small Cap Value Fund
Statement of Changes in Net Assets
For the six months ended October 31, 2014 and the year ended April 30, 2014
(Unaudited)
October 31, 2014 |
April 30, 2014 |
|||||||
Operations: |
|
|||||||
Net investment income (loss) |
$ | (1,118,632 | ) | $ | (7,568,566 | ) | ||
Net realized gain |
348,637,339 | 388,058,492 | ||||||
Change in net unrealized appreciation (depreciation) |
(460,031,652 | ) | 481,923,786 | |||||
Net increase (decrease) in net assets resulting from operations |
(112,512,945 | ) | 862,413,712 | |||||
Distributions to shareholders from net realized gains: |
||||||||
Class A |
| (140,218,944 | ) | |||||
Class B |
| (2,819,099 | ) | |||||
Class C |
| (15,150,452 | ) | |||||
Class Y |
| (97,321,634 | ) | |||||
Total distributions from net realized gains |
| (255,510,129 | ) | |||||
Share transactionsnet: |
||||||||
Class A |
(129,879,718 | ) | 111,569,713 | |||||
Class B |
(3,479,854 | ) | (4,709,605 | ) | ||||
Class C |
(7,420,839 | ) | (1,271,818 | ) | ||||
Class Y |
46,826,516 | 271,007,699 | ||||||
Net increase (decrease) in net assets resulting from share transactions |
(93,953,895 | ) | 376,595,989 | |||||
Net increase (decrease) in net assets |
(206,466,840 | ) | 983,499,572 | |||||
Net assets: |
||||||||
Beginning of period |
3,489,616,968 | 2,506,117,396 | ||||||
End of period (includes undistributed net investment income(loss) of $(1,364,729) and $(246,097), respectively) |
$ | 3,283,150,128 | $ | 3,489,616,968 |
Notes to Financial Statements
October 31, 2014
(Unaudited)
NOTE 1Significant Accounting Policies
Invesco Small Cap Value Fund (the Fund) is a series portfolio of AIM Sector Funds (Invesco Sector Funds) (the Trust). The Trust is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end series management investment company consisting of ten separate portfolios, each authorized to issue an unlimited number of shares of beneficial interest. The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each portfolio or class will be voted on exclusively by the shareholders of such portfolio or class.
The Funds investment objective is long-term growth of capital.
The Fund currently consists of four different classes of shares: Class A, Class B, Class C and Class Y. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met and under certain circumstances load waived shares may be subject to contingent deferred sales charges (CDSC). Class C shares are sold with a CDSC. Class Y shares are sold at net asset value. Effective November 30, 2010, new or additional investments in Class B shares are no longer permitted. Existing shareholders of Class B shares may continue to reinvest dividends and capital gains distributions in Class B shares until they convert to Class A shares. Also, shareholders in Class B shares will be able to exchange those shares for Class B shares of other Invesco Funds offering such shares until they convert to Class A shares. Generally, Class B shares will automatically convert to Class A shares on or about the month-end, which is at least eight years after the date of purchase. Redemption of Class B shares prior to the conversion date will be subject to a CDSC.
The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.
A. | Security Valuations Securities, including restricted securities, are valued according to the following policy. |
A security listed or traded on an exchange (except convertible securities) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (NYSE).
9 Invesco Small Cap Value Fund
Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
Debt obligations (including convertible securities) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate (for unlisted equities), yield (for debt obligations), quality, type of issue, coupon rate (for debt obligations), maturity (for debt obligations), individual trading characteristics and other market data. Debt obligations are subject to interest rate and credit risks. In addition, all debt obligations involve some risk of default with respect to interest and/or principal payments.
Foreign securities (including foreign exchange contracts) prices are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange-traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that the Adviser determines are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities prices meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and ask prices is used to value debt obligations, including corporate loans.
Securities for which market quotations are not readily available or became unreliable are valued at fair value as determined in good faith by or under the supervision of the Trusts officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a securitys fair value.
The Fund may invest in securities that are subject to interest rate risk, meaning the risk that the prices will generally fall as interest rates rise and, conversely, the prices will generally rise as interest rates fall. Specific securities differ in their sensitivity to changes in interest rates depending on their individual characteristics. Changes in interest rates may result in increased market volatility, which may affect the value and/or liquidity of certain of the Funds investments.
Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuers assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B. | Securities Transactions and Investment Income Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income (net of withholding tax, if any) is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. |
The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Funds net asset value and, accordingly, they reduce the Funds total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C. | Country Determination For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuers securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted. |
D. | Distributions Distributions from net investment income and net realized capital gain, if any, are generally declared and paid annually and recorded on the ex-dividend date. The Fund may elect to treat a portion of the proceeds from redemptions as distributions for federal income tax purposes. |
E. | Federal Income Taxes The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code of 1986, as amended (the Internal Revenue Code), necessary to qualify as a regulated investment company and to distribute substantially all of the Funds |
10 Invesco Small Cap Value Fund
taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements. |
The Fund recognizes the tax benefits of uncertain tax positions only when the position is more likely than not to be sustained. Management has analyzed the Funds uncertain tax positions and concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions. Management is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next 12 months.
The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally, the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F. | Expenses Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets. Prior to June 1, 2010, incremental transfer agency fees which were unique to each class of shares were charged to the operations of such class. |
G. | Accounting Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print. |
H. | Indemnifications Under the Trusts organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of the performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Funds servicing agreements, that contain a variety of indemnification clauses. The Funds maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote. |
I. | Foreign Currency Translations Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (1) sales of foreign currencies, (2) currency gains or losses realized between the trade and settlement dates on securities transactions, and (3) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Funds books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates. |
The Fund may invest in foreign securities, which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable. Foreign taxes, if any, are recorded based on the tax regulations and rates that exist in the foreign markets in which the Fund invests and are shown in the Statement of Operations.
J. | Forward Foreign Currency Contracts The Fund may engage in foreign currency transactions either on a spot (i.e. for prompt delivery and settlement) basis or through forward foreign currency contracts to manage or minimize currency or exchange rate risk. |
The Fund may also enter into forward foreign currency contracts for the purchase or sale of a security denominated in a foreign currency in order to lock in the U.S. dollar price of that security, or the Fund may also enter into forward foreign currency contracts that do not provide for physical settlement of the two currencies, but instead are settled by a single cash payment calculated as the difference between the agreed upon exchange rate and the spot rate at settlement based upon an agreed upon notional amount (non-deliverable forwards). The Fund will set aside liquid assets in an amount equal to daily mark-to-market obligation for forward foreign currency contracts.
A forward foreign currency contract is an obligation between two parties (Counterparties) to purchase or sell a specific currency for an agreed-upon price at a future date. The use of forward foreign currency contracts does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with forward foreign currency contracts include failure of the Counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities.
NOTE 2Advisory Fees and Other Fees Paid to Affiliates
The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the Adviser or Invesco). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Funds average daily net assets as follows:
Average Daily Net Assets | Rate | |||||
First $500 million |
0 | .67% | ||||
Next $500 million |
0 | .645% | ||||
Over $1 billion |
0 | .62% |
For the six months ended October 31, 2014, the effective advisory fees incurred by the Fund was 0.63%
Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured
11 Invesco Small Cap Value Fund
Management, Inc. and Invesco Canada Ltd. (collectively, the Affiliated Sub-Advisers) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide(s) discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).
The Adviser has contractually agreed, through at least June 30, 2015, to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waivers and/or expense reimbursements (excluding certain items discussed below) of Class A, Class B, Class C, and Class Y shares to 2.00%, 2.75%, 2.75% and 1.75%, respectively, of average daily net assets. In determining the Advisers obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver and/or expense reimbursement to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items, including litigation expenses; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless Invesco continues the fee waiver agreement, it will terminate on June 30, 2015. The fee waiver agreement cannot be terminated during its term. To the extent that the annualized expense ratio does not exceed the expense limitation, the Adviser will retain its ability to be reimbursed prior to the end of each fiscal year. The Adviser did not waive fees and/or reimburse expenses during the period under this expense limitation.
Further, the Adviser has contractually agreed, through at least June 30, 2016, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market funds.
For the six months ended October 31, 2014, the Adviser waived advisory fees of $92,032.
The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco for certain administrative costs incurred in providing accounting services to the Fund. For the six months ended October 31, 2014, expenses incurred under the agreement are shown in the Statement of Operations as Administrative services fees.
The Trust has entered into a transfer agency and service agreement with Invesco Investment Services, Inc. (IIS) pursuant to which the Fund has agreed to pay IIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IIS for certain expenses incurred by IIS in the course of providing such services. IIS may make payments to intermediaries that provide omnibus account services, sub-accounting services and/or networking services. All fees payable by IIS to intermediaries that provide omnibus account services or sub-accounting are charged back to the Fund, subject to certain limitations approved by the Trusts Board of Trustees. For the six months ended October 31, 2014, expenses incurred under the agreement are shown in the Statement of Operations as Transfer agent fees.
Shares of the Fund are distributed by Invesco Distributors, Inc. (IDI). The Fund has adopted a distribution plan pursuant to Rule 12b-1 under the 1940 Act, and a service plan (collectively, the Plans) for Class A shares, Class B shares and Class C shares to compensate IDI for the sale, distribution, shareholder servicing and maintenance of shareholder accounts for these shares. Under the Plans, the Fund will incur annual fees of up to 0.25% of Class A average daily net assets and up to 1.00% each of Class B and Class C average daily net assets.
With respect to Class B and Class C shares, the Fund is authorized to reimburse in future years any distribution related expenses that exceed the maximum annual reimbursement rate for such class, so long as such reimbursement does not cause the Fund to exceed the Class B and Class C maximum annual reimbursement rate, respectively. With respect to Class A shares, distribution related expenses that exceed the maximum annual reimbursement rate for such class are not carried forward to future years and the Fund will not reimburse IDI for any such expenses.
Front-end sales commissions and CDSC (collectively, the sales charges) are not recorded as expenses of the Fund. Front-end sales commissions are deducted from proceeds from the sales of Fund shares prior to investment in Class A shares of the Fund. CDSC are deducted from redemption proceeds prior to remittance to the shareholder. During the six months ended October 31, 2014, IDI advised the Fund that IDI retained $15,211 in front-end sales commissions from the sale of Class A shares and $191, $4,255 and $666 from Class A, Class B and Class C shares, respectively, for CDSC imposed on redemptions by shareholders.
Certain officers and trustees of the Trust are officers and directors of the Adviser, IIS and/or IDI.
NOTE 3Additional Valuation Information
GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods, giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3), generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investments assigned level:
Level 1 | Prices are determined using quoted prices in an active market for identical assets. |
Level 2 | Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others. |
Level 3 | Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Funds own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information. |
The following is a summary of the tiered valuation input levels, as of October 31, 2014. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Equity Securities |
$ | 3,315,596,434 | $ | 50,228,264 | $ | | $ | 3,365,824,698 |
12 Invesco Small Cap Value Fund
NOTE 4Investments in Other Affiliates
The 1940 Act defines affiliates as those issuances in which a fund holds 5% or more of the outstanding voting securities. The Fund has not owned enough of the outstanding voting securities of the issuer to have control (as defined in the 1940 Act) of that issuer. The following is a summary of the investments in other affiliates for the six months ended October 31, 2014.
Value 04/30/14 |
Purchases at Cost |
Proceeds from Sales |
Change in Unrealized Appreciation (Depreciation) |
Realized Gain (Loss) |
Value 10/31/14 |
Interest/ Dividend Income |
||||||||||||||||||||||
Abercrombie & Fitch Co. Class A(a) |
$ | 135,389,800 | $ | | $ | (20,889,931 | ) | $ | (6,311,417 | ) | $ | (557,818 | ) | $ | 107,630,634 | $ | 1,379,570 | |||||||||||
Advanced Energy Industries, Inc. |
| 37,668,391 | | 2,699,464 | | 40,367,855 | | |||||||||||||||||||||
Aegion Corp. |
55,376,668 | | | (15,576,724 | ) | | 39,799,944 | | ||||||||||||||||||||
Callaway Golf Co. |
44,081,641 | | | (4,403,103 | ) | | 39,678,538 | 101,221 | ||||||||||||||||||||
Ciber, Inc. |
29,165,616 | | | (7,088,865 | ) | | 22,076,751 | | ||||||||||||||||||||
Elizabeth Arden, Inc. |
51,817,949 | 66,067,944 | | (36,733,018 | ) | | 81,152,875 | | ||||||||||||||||||||
Goodrich Petroleum Corp. |
97,219,563 | | (28,859,256 | ) | (59,714,078 | ) | 14,912,804 | 23,559,033 | | |||||||||||||||||||
Hanger, Inc. |
| 71,146,201 | | 5,477,659 | | 76,623,860 | | |||||||||||||||||||||
Installed Building Products Inc. |
| 22,897,170 | | 4,849,490 | | 27,746,660 | | |||||||||||||||||||||
JAKKS Pacific, Inc.(a) |
21,226,356 | | (18,426,002 | ) | (4,566,857 | ) | 1,766,503 | | | |||||||||||||||||||
KEMET Corp. |
18,757,951 | | | (786,261 | ) | | 17,971,690 | | ||||||||||||||||||||
Quicksilver, Inc. |
37,702,734 | 68,445,893 | | (60,394,688 | ) | | 45,753,939 | | ||||||||||||||||||||
Resources Connection Inc. |
49,372,589 | | | 6,747,466 | | 56,120,055 | 544,151 | |||||||||||||||||||||
Total |
$ | 540,110,867 | $ | 266,225,599 | $ | (68,175,189 | ) | $ | (175,800,932 | ) | $ | 16,121,489 | $ | 578,481,834 | $ | 2,024,942 |
(a) | As of October 31, 2014, this security is no longer considered an affiliate of the Fund. |
NOTE 5Expense Offset Arrangement(s)
The expense offset arrangement is comprised of transfer agency credits which result from balances in demand deposit accounts used by the transfer agent for clearing shareholder transactions. For the six months ended October 31, 2014, the Fund received credits from this arrangement, which resulted in the reduction of the Funds total expenses of $1,316.
NOTE 6Trustees and Officers Fees and Benefits
Trustees and Officers Fees and Benefits include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and Trustees and Officers Fees and Benefits also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees were eligible to participate in a retirement plan that provided for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. Trustees and Officers Fees and Benefits include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.
NOTE 7Cash Balances
The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with State Street Bank and Trust Company, the custodian bank. Such balances, if any at period end, are shown in the Statement of Assets and Liabilities under the payable caption Amount due custodian. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.
NOTE 8Tax Information
The amount and character of income and gains to be distributed are determined in accordance with income tax regulations, which may differ from GAAP. Reclassifications are made to the Funds capital accounts to reflect income and gains available for distribution (or available capital loss carryforward) under income tax regulations. The tax character of distributions paid during the year and the tax components of net assets will be reported at the Funds fiscal year-end.
Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. Capital losses generated in years beginning after December 22, 2010 can be carried forward for an unlimited period, whereas previous losses expire in eight tax years. Capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Capital loss carryforwards with no expiration date will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss carryforwards in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.
13 Invesco Small Cap Value Fund
The Fund had a capital loss carryforward as of April 30, 2014, which expires as follows:
Capital Loss Carryforward* | ||||||||||||
Expiration | Short-Term | Long-Term | Total | |||||||||
April 30, 2017 |
$ | 1,507,533 | $ | | $ | 1,507,533 |
* | Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code and may be further limited depending upon a variety of factors, including the realization of net unrealized gains or losses as of the date of any reorganization. |
NOTE 9Investment Securities
The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the six months ended October 31, 2014 was $905,607,927 and $913,201,965, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed federal income tax reporting period-end.
Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis | ||||
Aggregate unrealized appreciation of investment securities |
$ | 773,918,941 | ||
Aggregate unrealized (depreciation) of investment securities |
(202,026,070 | ) | ||
Net unrealized appreciation of investment securities |
$ | 571,892,871 |
Cost of investments for tax purposes is $2,793,931,827.
NOTE 10Share Information
Summary of Share Activity | ||||||||||||||||
Six months ended October 31, 2014(a) |
Year ended April 30, 2014 |
|||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Sold: |
||||||||||||||||
Class A |
9,296,898 | $ | 208,754,515 | 19,403,074 | $ | 413,269,050 | ||||||||||
Class B |
7,010 | 135,444 | 36,534 | 673,194 | ||||||||||||
Class C |
242,252 | 4,549,785 | 509,935 | 9,167,914 | ||||||||||||
Class Y |
14,328,846 | 332,483,564 | 20,698,967 | 451,641,641 | ||||||||||||
Issued as reinvestment of dividends: |
||||||||||||||||
Class A |
| | 6,434,228 | 131,579,960 | ||||||||||||
Class B |
| | 151,244 | 2,664,919 | ||||||||||||
Class C |
| | 834,568 | 14,304,491 | ||||||||||||
Class Y |
| | 4,362,624 | 91,309,714 | ||||||||||||
Automatic conversion of Class B shares to Class A shares: |
||||||||||||||||
Class A |
79,902 | 1,801,725 | 174,791 | 3,716,065 | ||||||||||||
Class B |
(93,224 | ) | (1,801,725 | ) | (201,487 | ) | (3,716,065 | ) | ||||||||
Reacquired: |
||||||||||||||||
Class A |
(15,091,263 | ) | (340,435,958 | ) | (20,544,220 | ) | (436,995,362 | ) | ||||||||
Class B |
(94,259 | ) | (1,813,573 | ) | (234,326 | ) | (4,331,653 | ) | ||||||||
Class C |
(635,176 | ) | (11,970,624 | ) | (1,371,731 | ) | (24,744,223 | ) | ||||||||
Class Y |
(12,521,633 | ) | (285,657,048 | ) | (12,437,048 | ) | (271,943,656 | ) | ||||||||
Net increase (decrease) in share activity |
(4,480,647 | ) | $ | (93,953,895 | ) | 17,817,153 | $ | 376,595,989 |
(a) | There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 34% of the outstanding shares of the Fund. IDI has an agreement with these entities to sell Fund shares. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as securities brokerage, distribution, third party record keeping and account servicing. The Fund has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially. |
14 Invesco Small Cap Value Fund
NOTE 11Financial Highlights
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
Net asset value, beginning of period |
Net investment income (loss)(a) |
Net gains (losses) on securities (both realized and unrealized) |
Total from investment operations |
Dividends from net investment income |
Distributions from net realized gains |
Total distributions |
Net asset value, end of period(b) |
Total return |
Net assets, end of period (000s omitted) |
Ratio of expenses to average net assets with fee waivers and/or expenses absorbed |
Ratio of expenses to average net assets without fee waivers and/or expenses absorbed |
Ratio of net investment income (loss) to average net assets |
Portfolio turnover(c) |
|||||||||||||||||||||||||||||||||||||||||||
Class A |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 10/31/14 |
$ | 22.75 | $ | (0.01 | ) | $ | (0.72 | ) | $ | (0.73 | ) | $ | | $ | | $ | | $ | 22.02 | (3.21 | )%(d) | $ | 1,722,144 | 1.10 | %(e) | 1.11 | %(e) | (0.13 | )%(e) | 27 | % | |||||||||||||||||||||||||
Year ended 04/30/14 |
18.53 | (0.06 | ) | 6.11 | 6.05 | | (1.83 | ) | (1.83 | ) | 22.75 | 33.78 | (d) | 1,909,149 | 1.11 | 1.11 | (0.29 | ) | 33 | |||||||||||||||||||||||||||||||||||||
Year ended 04/30/13 |
17.80 | (0.02 | )(f) | 3.17 | 3.15 | | (2.42 | ) | (2.42 | ) | 18.53 | 20.27 | (d) | 1,454,001 | 1.12 | 1.15 | (0.13 | )(f) | 35 | |||||||||||||||||||||||||||||||||||||
Year ended 04/30/12 |
19.71 | (0.04 | ) | (0.75 | ) | (0.79 | ) | | (1.12 | ) | (1.12 | ) | 17.80 | (3.18 | )(d) | 1,326,668 | 1.03 | 1.17 | (0.24 | ) | 50 | |||||||||||||||||||||||||||||||||||
One month ended 04/30/11 |
19.17 | (0.01 | ) | 0.55 | 0.54 | | | | 19.71 | 2.82 | (d) | 1,067,286 | 1.33 | (g) | 1.36 | (g) | (0.84 | )(g) | 5 | |||||||||||||||||||||||||||||||||||||
Year ended 03/31/11 |
16.06 | (0.03 | ) | 3.75 | 3.72 | | (0.61 | ) | (0.61 | ) | 19.17 | 23.46 | (d) | 1,045,598 | 1.19 | 1.18 | (0.19 | ) | 67 | |||||||||||||||||||||||||||||||||||||
Year ended 03/31/10 |
9.56 | (0.05 | ) | 6.55 | 6.50 | (0.00 | )(h) | | (0.00 | )(h) | 16.06 | 68.04 | (i) | 675,936 | 1.25 | 1.25 | (0.38 | ) | 28 | |||||||||||||||||||||||||||||||||||||
Class B |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 10/31/14 |
19.54 | (0.09 | ) | (0.61 | ) | (0.70 | ) | | | | 18.84 | (3.58 | )(d) | 24,865 | 1.85 | (e) | 1.86 | (e) | (0.88 | )(e) | 27 | |||||||||||||||||||||||||||||||||||
Year ended 04/30/14 |
16.25 | (0.19 | ) | 5.31 | 5.12 | | (1.83 | ) | (1.83 | ) | 19.54 | 32.75 | (d) | 29,312 | 1.86 | 1.86 | (1.04 | ) | 33 | |||||||||||||||||||||||||||||||||||||
Year ended 04/30/13 |
16.01 | (0.13 | )(f) | 2.79 | 2.66 | | (2.42 | ) | (2.42 | ) | 16.25 | 19.44 | (d) | 28,408 | 1.81 | 1.90 | (0.82 | )(f) | 35 | |||||||||||||||||||||||||||||||||||||
Year ended 04/30/12 |
17.91 | (0.08 | ) | (0.70 | ) | (0.78 | ) | | (1.12 | ) | (1.12 | ) | 16.01 | (3.45 | )(d) | 34,194 | 1.33 | 1.81 | (0.54 | ) | 50 | |||||||||||||||||||||||||||||||||||
One month ended 04/30/11 |
17.42 | (0.01 | ) | 0.50 | 0.49 | | | | 17.91 | 2.81 | (d)(j) | 40,226 | 1.33 | (g)(j) | 1.36 | (g)(j) | (0.84 | )(g)(j) | 5 | |||||||||||||||||||||||||||||||||||||
Year ended 03/31/11 |
14.69 | (0.09 | ) | 3.43 | 3.34 | | (0.61 | ) | (0.61 | ) | 17.42 | 23.07 | (d)(j) | 40,485 | 1.57 | (j) | 1.56 | (j) | (0.57 | )(j) | 67 | |||||||||||||||||||||||||||||||||||
Year ended 03/31/10 |
8.77 | (0.09 | ) | 6.01 | 5.92 | | | | 14.69 | 67.50 | (k)(l) | 49,140 | 1.62 | (l) | 1.62 | (l) | (0.78 | )(l) | 28 | |||||||||||||||||||||||||||||||||||||
Class C |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 10/31/14 |
19.02 | (0.08 | ) | (0.60 | ) | (0.68 | ) | | | | 18.34 | (3.58 | )(d) | 152,327 | 1.85 | (e) | 1.86 | (e) | (0.88 | )(e) | 27 | |||||||||||||||||||||||||||||||||||
Year ended 04/30/14 |
15.86 | (0.19 | ) | 5.18 | 4.99 | | (1.83 | ) | (1.83 | ) | 19.02 | 32.75 | (d) | 165,438 | 1.86 | 1.86 | (1.04 | ) | 33 | |||||||||||||||||||||||||||||||||||||
Year ended 04/30/13 |
15.69 | (0.13 | )(f) | 2.72 | 2.59 | | (2.42 | ) | (2.42 | ) | 15.86 | 19.39 | (d) | 138,382 | 1.87 | 1.90 | (0.88 | )(f) | 35 | |||||||||||||||||||||||||||||||||||||
Year ended 04/30/12 |
17.65 | (0.15 | ) | (0.69 | ) | (0.84 | ) | | (1.12 | ) | (1.12 | ) | 15.69 | (3.85 | )(d) | 140,342 | 1.76 | 1.90 | (0.97 | ) | 50 | |||||||||||||||||||||||||||||||||||
One month ended 04/30/11 |
17.17 | (0.02 | ) | 0.50 | 0.48 | | | | 17.65 | 2.80 | (d) | 148,624 | 2.08 | (g) | 2.11 | (g) | (1.59 | )(g) | 5 | |||||||||||||||||||||||||||||||||||||
Year ended 03/31/11 |
14.55 | (0.14 | ) | 3.37 | 3.23 | | (0.61 | ) | (0.61 | ) | 17.17 | 22.52 | (d) | 146,633 | 1.94 | 1.93 | (0.94 | ) | 67 | |||||||||||||||||||||||||||||||||||||
Year ended 03/31/10 |
8.72 | (0.14 | ) | 5.97 | 5.83 | | | | 14.55 | 66.86 | (m) | 109,871 | 2.00 | 2.00 | (1.14 | ) | 28 | |||||||||||||||||||||||||||||||||||||||
Class Y(n) |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 10/31/14 |
23.31 | 0.01 | (0.73 | ) | (0.72 | ) | | | | 22.59 | (3.09 | )(d) | 1,383,814 | 0.85 | (e) | 0.86 | (e) | 0.12 | (e) | 27 | ||||||||||||||||||||||||||||||||||||
Year ended 04/30/14 |
18.90 | (0.01 | ) | 6.25 | 6.24 | | (1.83 | ) | (1.83 | ) | 23.31 | 34.13 | (d) | 1,385,718 | 0.86 | 0.86 | (0.04 | ) | 33 | |||||||||||||||||||||||||||||||||||||
Year ended 04/30/13 |
18.07 | 0.02 | (f) | 3.23 | 3.25 | | (2.42 | ) | (2.42 | ) | 18.90 | 20.54 | (d) | 885,327 | 0.87 | 0.90 | 0.12 | (f) | 35 | |||||||||||||||||||||||||||||||||||||
Year ended 04/30/12 |
19.94 | 0.00 | (0.75 | ) | (0.75 | ) | | (1.12 | ) | (1.12 | ) | 18.07 | (2.93 | )(d) | 744,163 | 0.78 | 0.92 | 0.01 | 50 | |||||||||||||||||||||||||||||||||||||
One month ended 04/30/11 |
19.38 | (0.01 | ) | 0.57 | 0.56 | | | | 19.94 | 2.89 | (d) | 192,429 | 1.08 | (g) | 1.11 | (g) | (0.59 | )(g) | 5 | |||||||||||||||||||||||||||||||||||||
Year ended 03/31/11 |
16.19 | 0.01 | 3.79 | 3.80 | | (0.61 | ) | (0.61 | ) | 19.38 | 23.77 | (d) | 178,627 | 0.94 | 0.93 | 0.06 | 67 | |||||||||||||||||||||||||||||||||||||||
Year ended 03/31/10 |
9.63 | (0.02 | ) | 6.61 | 6.59 | (0.03 | ) | | (0.03 | ) | 16.19 | 68.43 | (o) | 128,802 | 1.00 | 1.00 | (0.13 | ) | 28 |
(a) | Calculated using average shares outstanding. |
(b) | Includes redemption fees added to shares of beneficial interest which were less than $0.005 per share, for fiscal years prior to April 30, 2013. |
(c) | Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable. For the period ending April 30, 2012, the portfolio turnover calculation excludes the value of securities purchased of $983,090,206 and sold of $586,342,254 in the effort to realign the Funds portfolio holdings after the reorganization of Invesco Special Value Fund, Invesco Small-Mid Special Value Fund, Invesco U.S. Small Cap Value Fund and Invesco U.S. Small-Mid Cap Value Fund into the Fund. |
(d) | Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable. |
(e) | Ratios are annualized and based on average daily net assets (000s omitted) of $1,849,746, $27,621, $160,633 and $1,452,489 for Class A, Class B, Class C and Class Y shares, respectively. |
(f) | Net investment income (loss) per share and the ratio of net investment income (loss) to average net assets includes significant dividends received during the period. Net investment income (loss) per share and the ratio of net investment income (loss) to average net assets excluding the significant dividends are $(0.06) and (0.35)%, $(0.17) and (1.04)%, $(0.17) and (1.10)% and $(0.02) and (0.10)% for Class A, Class B, Class C and Class Y shares, respectively. |
(g) | Annualized. |
(h) | Amount is less than $0.01 per share. |
(i) | Assumes reinvestment of all distributions for the period and does not include payment of the maximum sales charge of 5.75% or contingent deferred sales charge (CDSC). On purchases of $1 million or more, a CDSC of 1% may be imposed on certain redemptions made within eighteen months of purchase. If the sales charges were included, total returns would be lower. These returns include combined Rule 12b-1 fees and service fees of up to 0.25% and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. |
(j) | The total return, ratio of expenses to average net assets and ratio of net investment income (loss) to average net assets reflect actual 12b-1 fees of 0.25% and 0.63% for the period April 1, 2011 to April 30, 2011 and the year ended March 31, 2011, respectively. |
(k) | Assumes reinvestment of all distributions for the period and does not include payment of the maximum CDSC of 5%, charged on certain redemptions made within one year of purchase and declining to 0% after the fifth year. If the sales charge was included, total returns would be lower. These returns include combined Rule 12b-1 fees and service fees of up to 1% and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. |
(l) | The total return, ratio of expenses to average net assets and ratio of net investment income (loss) to average net assets reflect actual 12b-1 fees of less than 1%. |
(m) | Assumes reinvestment of all distributions for the period and does not include payment of the maximum CDSC of 1%, charged on certain redemptions made within one year of purchase. If the sales charge was included, total returns would be lower. These returns include combined Rule 12b-1 fees and service fees of up to 1% and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. |
(n) | On June 1, 2010, Van Kampen Growth Funds Class I shares were reorganized into Class Y shares. |
(o) | Assumes reinvestment of all distributions for the period. These returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption on Fund shares. |
15 Invesco Small Cap Value Fund
Calculating your ongoing Fund expenses
Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, if any; and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period May 1, 2014 through October 31, 2014.
Actual expenses
The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled Actual Expenses Paid During Period to estimate the expenses you paid on your account during this period.
Hypothetical example for comparison purposes
The table below also provides information about hypothetical account values and hypothetical expenses based on the Funds actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Funds actual return.
The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, if any. Therefore, the hypothetical information is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
Class | Beginning Account Value (05/01/14) |
ACTUAL | HYPOTHETICAL (5% annual return before expenses) |
Annualized Expense Ratio |
||||||||||||||||||||
Ending Account Value (10/31/14)1 |
Expenses Paid During Period2 |
Ending Account Value (10/31/14) |
Expenses Paid During Period2 |
|||||||||||||||||||||
A | $ | 1,000.00 | $ | 967.90 | $ | 5.46 | $ | 1,019.66 | $ | 5.60 | 1.10 | % | ||||||||||||
B | 1,000.00 | 964.20 | 9.16 | 1,015.88 | 9.40 | 1.85 | ||||||||||||||||||
C | 1,000.00 | 964.20 | 9.16 | 1,015.88 | 9.40 | 1.85 | ||||||||||||||||||
Y | 1,000.00 | 969.10 | 4.22 | 1,020.92 | 4.33 | 0.85 |
1 | The actual ending account value is based on the actual total return of the Fund for the period May 1, 2014 through October 31, 2014, after actual expenses and will differ from the hypothetical ending account value which is based on the Funds expense ratio and a hypothetical annual return of 5% before expenses. |
2 | Expenses are equal to the Funds annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 184/365 to reflect the most recent fiscal half year. |
16 Invesco Small Cap Value Fund
Approval of Investment Advisory and Sub-Advisory Contracts
17 Invesco Small Cap Value Fund
18 Invesco Small Cap Value Fund
Invesco mailing information
Send general correspondence to Invesco Investment Services, Inc., P.O. Box 219078, Kansas City, MO 64121-9078.
Important notice regarding delivery of security holder documents
To reduce Fund expenses, only one copy of most shareholder documents may be mailed to shareholders with multiple accounts at the same address (Householding). Mailing of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact Invesco Investment Services, Inc. at 800 959 4246 or contact your financial institution. We will begin sending you individual copies for each account within 30 days after receiving your request.
Fund holdings and proxy voting information
The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter ends. For the second and fourth quarters, the lists appear in the Funds semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The most recent list of portfolio holdings is available at invesco.com/completeqtrholdings. Shareholders can also look up the Funds Forms N-Q on the SEC website at sec.gov. Copies of the Funds Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are shown below.
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 959 4246 or at invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.
Information regarding how the Fund voted proxies related to its portfolio securities during the most recent 12-month period ended June 30 is available at invesco.com/proxysearch. The information is also available on the SEC website, sec.gov. Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the US distributor for Invesco Ltd.s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd. |
SEC file numbers: 811-03826 and 002-85905 | VK-SCV-SAR-1 | Invesco Distributors, Inc. |
| ||||
|
Semiannual Report to Shareholders
|
October 31, 2014 | ||
Invesco Technology Fund | ||||
Nasdaq: |
||||
A: ITYAX ¡ B: ITYBX ¡ C: ITHCX ¡ Y: ITYYX ¡ Investor: FTCHX ¡ R5: FTPIX |
| ||
2
|
Fund Performance | |
4
|
Letters to Shareholders | |
5
|
Schedule of Investments | |
7
|
Financial Statements | |
9
|
Notes to Financial Statements | |
16
|
Financial Highlights | |
17
|
Fund Expenses | |
18
|
Approval of Investment Advisory and Sub-Advisory Contracts |
For the most current month-end Fund performance and commentary, please visit invesco.com/performance.
Unless otherwise noted, all data provided by Invesco.
This report must be accompanied or preceded by a currently effective Fund prospectus, which contains more complete information, including sales charges and expenses. Investors should read it carefully before investing.
| ||||||
| ||||||
NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE |
Fund Performance
2 Invesco Technology Fund
3 Invesco Technology Fund
Letters to Shareholders
Bruce Crockett |
Dear Fellow Shareholders: While the members of the Invesco Funds Board, which I chair, cant dictate the performance of the Invesco funds, be assured that your Board works diligently throughout the year to focus on how your investments are managed. Our job is to represent you and your interests on a variety of fund management-related matters. We regularly monitor how the portfolio management teams of the Invesco funds are performing in light of ever-changing and often unpredictable economic and market conditions, and we review the investment strategies and investment process employed by each funds management team as explained in the funds prospectus. Perhaps our most significant responsibility is conducting the annual review of the funds advisory and sub-advisory contracts with Invesco Advisers and its affiliates. This annual review, which is required by the Investment Company Act of 1940, focuses on the nature and quality of the services Invesco provides as the adviser to the Invesco funds and the reasonableness of the fees that it charges for those services. Each year, we spend months carefully reviewing |
information from Invesco that allows us to evaluate the quality of its services and the reasonableness of its fees. We also use information from a variety of independent sources, including materials provided by the independent senior officer of the Invesco funds, who reports directly to the independent trustees on the Board. Additionally, we meet with legal counsel and review performance and fee data prepared for us by Lipper Inc., an independent, third-party firm widely recognized as a leader in its field.
After a careful review, the members of the Invesco Funds Board approved the continuation of advisory and sub-advisory contracts with Invesco Advisers and its affiliates.
As always, please contact me at bruce@brucecrockett.com with any questions or concerns you may have. On behalf of the Board, we look forward to continuing to represent your interests and serving your needs.
Sincerely,
Bruce L. Crockett
Independent Chair
Invesco Funds Board of Trustees
Philip Taylor |
Dear Shareholders: This semiannual report includes information about your Fund, including performance data and a list of its investments as of the close of the reporting period. I hope you find this report of interest. Our website, invesco.com/us, offers a wide range of market insights and investment perspectives. On the website, youll find detailed information about our funds, including prices, performance, holdings and portfolio manager commentaries. You can access information about your individual Invesco account whenever its convenient for you; just complete a simple, secure online registration. Use the Log In box on our home page to get started. Invescos mobile app for iPad® (available free from the App StoreSM) allows you to obtain the same detailed information about your Fund and the same investment insights from our investment leaders, market strategists, economists and retirement experts on the go. Also, you can obtain timely updates to help you stay informed about the markets, |
the economy and investing by connecting with Invesco on Twitter, LinkedIn or Facebook. You can access our blog at blog.invesco.us.com.
For questions about your account, feel free to contact an Invesco client services representative at 800 959 4246. For Invesco-related questions or comments, please email me directly at phil@invesco.com.
Thank you for investing with us.
Sincerely,
Philip Taylor
Senior Managing Director, Invesco Ltd.
iPad is a trademark of Apple Inc., registered in the US and other countries. App Store is a service mark of Apple Inc. Invesco Distributors, Inc. is not affiliated with Apple Inc.
4 Invesco Technology Fund
Schedule of Investments(a)
October 31, 2014
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco Technology Fund
Investment Abbreviations:
ADR | American Depositary Receipt |
Notes to Schedule of Investments:
(a) | Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poors. |
(b) | Non-income producing security. |
(c) | The money market fund and the Fund are affiliated by having the same investment adviser. |
Portfolio Composition
By sector, based on Net Assets
as of October 31, 2014
Information Technology |
81.2 | % | ||
Health Care |
6.0 | |||
Consumer Discretionary |
8.5 | |||
Telecommunication Services |
2.5 | |||
Money Market Funds Plus Other Assets Less Liabilities |
1.8 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco Technology Fund
Statement of Assets and Liabilities
October 31, 2014
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco Technology Fund
Statement of Operations
For the six months ended October 31, 2014
(Unaudited)
Investment income: |
| |||
Dividends (net of foreign withholding taxes of $1,177) |
$ | 1,511,441 | ||
Dividends from affiliated money market funds (includes securities lending income of $84,993) |
87,284 | |||
Total investment income |
1,598,725 | |||
Expenses: |
||||
Advisory fees |
2,545,763 | |||
Administrative services fees |
96,927 | |||
Custodian fees |
14,897 | |||
Distribution fees: |
||||
Class A |
373,673 | |||
Class B |
62,087 | |||
Class C |
145,394 | |||
Investor Class |
298,347 | |||
Transfer agent fees A, B, C, Y and Investor |
1,451,251 | |||
Transfer agent fees R5 |
698 | |||
Trustees and officers fees and benefits |
14,488 | |||
Other |
154,240 | |||
Total expenses |
5,157,765 | |||
Less: Fees waived and expense offset arrangement(s) |
(16,577 | ) | ||
Net expenses |
5,141,188 | |||
Net investment income (loss) |
(3,542,463 | ) | ||
Realized and unrealized (loss) gain from: |
||||
Net realized gain (loss) from: |
||||
Investment securities (includes net gains from securities sold to affiliates of $809,457) |
41,743,331 | |||
Foreign currencies |
(1,754 | ) | ||
41,741,577 | ||||
Change in net unrealized appreciation of: |
||||
Investment securities |
40,387,207 | |||
Foreign currencies |
623 | |||
40,387,830 | ||||
Net realized and unrealized gain |
82,129,407 | |||
Net increase in net assets resulting from operations |
$ | 78,586,944 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
8 Invesco Technology Fund
Statement of Changes in Net Assets
For the six months ended October 31, 2014 and the year ended April 30, 2014
(Unaudited)
October 31, 2014 |
April 30, 2014 |
|||||||
Operations: |
||||||||
Net investment income (loss) |
$ | (3,542,463 | ) | $ | (5,521,920 | ) | ||
Net realized gain |
41,741,577 | 62,113,826 | ||||||
Change in net unrealized appreciation |
40,387,830 | 68,160,325 | ||||||
Net increase in net assets resulting from operations |
78,586,944 | 124,752,231 | ||||||
Distributions to shareholders from net realized gains: |
||||||||
Class A |
| (23,347,730 | ) | |||||
Class B |
| (1,301,043 | ) | |||||
Class C |
| (2,586,213 | ) | |||||
Class Y |
| (440,101 | ) | |||||
Investor Class |
| (31,387,699 | ) | |||||
Class R5 |
| (106,252 | ) | |||||
Total distributions from net realized gains |
| (59,169,038 | ) | |||||
Share transactionsnet: |
||||||||
Class A |
(12,094,023 | ) | 8,440,219 | |||||
Class B |
(2,296,197 | ) | (3,781,710 | ) | ||||
Class C |
(1,017,410 | ) | 1,055,368 | |||||
Class Y |
1,332,384 | 1,807,862 | ||||||
Investor Class |
(17,864,690 | ) | (12,128,025 | ) | ||||
Class R5 |
693,123 | 129,505 | ||||||
Net increase (decrease) in net assets resulting from share transactions |
(31,246,813 | ) | (4,476,781 | ) | ||||
Net increase in net assets |
47,340,131 | 61,106,412 | ||||||
Net assets: |
||||||||
Beginning of period |
701,010,562 | 639,904,150 | ||||||
End of period (includes undistributed net investment income (loss) of $(3,765,337) and $(222,874), respectively) |
$ | 748,350,693 | $ | 701,010,562 |
Notes to Financial Statements
October 31, 2014
(Unaudited)
NOTE 1Significant Accounting Policies
Invesco Technology Fund (the Fund) is a series portfolio of AIM Sector Funds (Invesco Sector Funds) (the Trust). The Trust is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end series management investment company consisting of ten separate portfolios, each authorized to issue an unlimited number of shares of beneficial interest. The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each portfolio or class will be voted on exclusively by the shareholders of such portfolio or class.
The Funds investment objective is long-term growth of capital.
The Fund currently consists of six different classes of shares: Class A, Class B, Class C, Class Y, Investor Class and Class R5. Investor Class shares of the Fund are offered only to certain grandfathered investors. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met and under certain circumstances load waived shares may be subject to contingent deferred sales charges (CDSC). Class C shares are sold with a CDSC. Class Y, Investor Class and Class R5 shares are sold at net asset value. Effective November 30, 2010, new or additional investments in Class B shares are no longer permitted. Existing shareholders of Class B shares may continue to reinvest dividends and capital gains distributions in Class B shares until they convert to Class A shares. Also, shareholders in Class B shares will be able to exchange those shares for Class B shares of other Invesco Funds offering such shares until they convert to Class A shares. Generally, Class B shares will automatically convert to Class A shares on or about the month-end, which is at least eight years after the date of purchase. Redemption of Class B shares prior to the conversion date will be subject to a CDSC.
The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.
A. | Security Valuations Securities, including restricted securities, are valued according to the following policy. |
A security listed or traded on an exchange (except convertible securities) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a
9 Invesco Technology Fund
particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (NYSE).
Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
Debt obligations (including convertible securities) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate (for unlisted equities), yield (for debt obligations), quality, type of issue, coupon rate (for debt obligations), maturity (for debt obligations), individual trading characteristics and other market data. Debt obligations are subject to interest rate and credit risks. In addition, all debt obligations involve some risk of default with respect to interest and/or principal payments.
Foreign securities (including foreign exchange contracts) prices are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange-traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that the Adviser determines are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities prices meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and ask prices is used to value debt obligations, including corporate loans.
Securities for which market quotations are not readily available or became unreliable are valued at fair value as determined in good faith by or under the supervision of the Trusts officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a securitys fair value.
The Fund may invest in securities that are subject to interest rate risk, meaning the risk that the prices will generally fall as interest rates rise and, conversely, the prices will generally rise as interest rates fall. Specific securities differ in their sensitivity to changes in interest rates depending on their individual characteristics. Changes in interest rates may result in increased market volatility, which may affect the value and/or liquidity of certain of the Funds investments.
Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuers assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B. | Securities Transactions and Investment Income Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income (net of withholding tax, if any) is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. |
The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Funds net asset value and, accordingly, they reduce the Funds total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C. | Country Determination For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuers securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, |
10 Invesco Technology Fund
the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted. |
D. | Distributions Distributions from net investment income and net realized capital gain, if any, are generally declared and paid annually and recorded on the ex-dividend date. The Fund may elect to treat a portion of the proceeds from redemptions as distributions for federal income tax purposes. |
E. | Federal Income Taxes The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code of 1986, as amended (the Internal Revenue Code), necessary to qualify as a regulated investment company and to distribute substantially all of the Funds taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements. |
The Fund recognizes the tax benefits of uncertain tax positions only when the position is more likely than not to be sustained. Management has analyzed the Funds uncertain tax positions and concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions. Management is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next 12 months.
The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally, the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F. | Expenses Fees provided for under the Rule 12b-1 plan of a particular class of the Fund are charged to the operations of such class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses attributable to Class R5 are charged to such class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses relating to all other classes are allocated among those classes based on relative net assets. All other expenses are allocated among the classes based on relative net assets. |
G. | Accounting Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print. |
H. | Indemnifications Under the Trusts organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of the performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Funds servicing agreements, that contain a variety of indemnification clauses. The Funds maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote. |
I. | Securities Lending The Fund may lend portfolio securities having a market value up to one-third of the Funds total assets. Such loans are secured by collateral equal to no less than the market value of the loaned securities determined daily by the securities lending provider. Such collateral will be cash or debt securities issued or guaranteed by the U.S. Government or any of its sponsored agencies. Cash collateral received in connection with these loans is invested in short-term money market instruments or affiliated money market funds and is shown as such on the Schedule of Investments. It is the Funds policy to obtain additional collateral from or return excess collateral to the borrower by the end of the next business day, following the valuation date of the securities loaned. Therefore, the value of the collateral held may be temporarily less than the value of the securities on loan. Lending securities entails a risk of loss to the Fund if, and to the extent that, the market value of the securities loaned were to increase and the borrower did not increase the collateral accordingly, and the borrower failed to return the securities. Upon the failure of the borrower to return the securities, collateral may be liquidated and the securities may be purchased on the open market to replace the loaned securities. The Fund could experience delays and costs in gaining access to the collateral. The Fund bears the risk of any deficiency in the amount of the collateral available for return to the borrower due to any loss on the collateral invested. Dividends received on cash collateral investments for securities lending transactions, which are net of compensation to counterparties, is included in Dividends from affiliated money market funds on the Statement of Operations. The aggregate value of securities out on loan is shown as a footnote on the Statement of Assets and Liabilities, if any. |
J. | Foreign Currency Translations Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (1) sales of foreign currencies, (2) currency gains or losses realized between the trade and settlement dates on securities transactions, and (3) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Funds books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates. |
The Fund may invest in foreign securities, which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable. Foreign taxes, if any, are recorded based on the tax regulations and rates that exist in the foreign markets in which the Fund invests and are shown in the Statement of Operations.
K. | Forward Foreign Currency Contracts The Fund may engage in foreign currency transactions either on a spot (i.e. for prompt delivery and settlement) basis or through forward foreign currency contracts to manage or minimize currency or exchange rate risk. |
The Fund may also enter into forward foreign currency contracts for the purchase or sale of a security denominated in a foreign currency in order to lock in the U.S. dollar price of that security, or the Fund may also enter into forward foreign currency contracts that do not provide for physical settlement of the two currencies, but instead are settled by a single cash payment calculated as the difference between the agreed upon
11 Invesco Technology Fund
exchange rate and the spot rate at settlement based upon an agreed upon notional amount (non-deliverable forwards). The Fund will set aside liquid assets in an amount equal to daily mark-to-market obligation for forward foreign currency contracts.
A forward foreign currency contract is an obligation between two parties (Counterparties) to purchase or sell a specific currency for an agreed-upon price at a future date. The use of forward foreign currency contracts does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with forward foreign currency contracts include failure of the Counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities.
L. | Other Risks The Funds investments are concentrated in a comparatively narrow segment of the economy, which may make the Fund more volatile. |
Many products and services offered in technology-related industries are subject to rapid obsolescence, which may lower the value of the issuers in this sector.
NOTE 2Advisory Fees and Other Fees Paid to Affiliates
The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the Adviser or Invesco). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Funds average daily net assets as follows:
Average Daily Net Assets | Rate | |||||
First $350 million |
0 | .75% | ||||
Next $350 million |
0 | .65% | ||||
Next $1.3 billion |
0 | .55% | ||||
Next $2 billion |
0 | .45% | ||||
Next $2 billion |
0 | .40% | ||||
Next $2 billion |
0 | .375% | ||||
Over $8 billion |
0 | .35% |
For the six months ended October 31, 2014, the effective advisory fees incurred by the Fund was 0.69%.
Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Canada Ltd. (collectively, the Affiliated Sub-Advisers) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide(s) discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).
The Adviser has contractually agreed, through at least June 30, 2015, to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver and/or expense reimbursement (excluding certain items discussed above) of Class A, Class B, Class C, Class Y, Investor Class and Class R5 shares to 2.00%, 2.75%, 2.75%, 1.75%, 2.00% and 1.75%, respectively, of average daily net assets. In determining the Advisers obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waivers and/or expense reimbursement to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items, including litigation expenses; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless Invesco continues the fee waiver agreement, it will terminate on June 30, 2015. The fee waiver agreement cannot be terminated during its term. The Adviser did not waive fees and/or reimburse expenses during the period under this expense limitation.
Further, the Adviser has contractually agreed, through at least June 30, 2016, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash (excluding investments of cash collateral from securities lending) in such affiliated money market funds.
For the six months ended October 31, 2014, the Adviser waived advisory fees of $8,535.
The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco for certain administrative costs incurred in providing accounting services to the Fund. For the six months ended October 31, 2014, expenses incurred under the agreement are shown in the Statement of Operations as Administrative services fees.
The Trust has entered into a transfer agency and service agreement with Invesco Investment Services, Inc. (IIS) pursuant to which the Fund has agreed to pay IIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IIS for certain expenses incurred by IIS in the course of providing such services. IIS may make payments to intermediaries that provide omnibus account services, sub-accounting services and/or networking services. All fees payable by IIS to intermediaries that provide omnibus account services or sub-accounting are charged back to the Fund, subject to certain limitations approved by the Trusts Board of Trustees. For the six months ended October 31, 2014, expenses incurred under the agreement are shown in the Statement of Operations as Transfer agent fees.
The Trust has entered into master distribution agreements with Invesco Distributors, Inc. (IDI) to serve as the distributor for the Class A, Class B, Class C, Class Y, Investor Class and Class R5 shares of the Fund. The Trust has adopted plans pursuant to Rule 12b-1 under the 1940 Act with respect to the Funds Class A, Class B, Class C and Investor Class shares (collectively, the Plans). The Fund, pursuant to the Plans, pays IDI compensation at the annual rate of 0.25% of the Funds average daily net assets of Class A shares, 1.00% of the average daily net assets of Class B and Class C shares. The Fund, pursuant to the Investor Class Plan, reimburses IDI for its allocated share of expenses incurred pursuant to the Investor Class Plan for the period, up to a maximum annual rate of 0.25% of the average daily net assets of Investor Class shares. Of the Plan payments, up to 0.25% of the average daily net assets of each class of shares may be paid to furnish continuing personal shareholder services to customers who purchase and
12 Invesco Technology Fund
own shares of such classes. Any amounts not paid as a service fee under the Plans would constitute an asset-based sales charge. Rules of the Financial Industry Regulatory Authority (FINRA) impose a cap on the total sales charges, including asset-based sales charges, that may be paid by any class of shares of the Fund. For the six months ended October 31, 2014, expenses incurred under the Plans are shown in the Statement of Operations as Distribution fees.
Front-end sales commissions and CDSC (collectively, the sales charges) are not recorded as expenses of the Fund. Front-end sales commissions are deducted from proceeds from the sales of Fund shares prior to investment in Class A shares of the Fund. CDSC are deducted from redemption proceeds prior to remittance to the shareholder. During the six months ended October 31, 2014, IDI advised the Fund that IDI retained $16,900 in front-end sales commissions from the sale of Class A shares and $57, $1,940 and $655 from Class A, Class B and Class C shares, respectively, for CDSC imposed on redemptions by shareholders.
For the six months ended October 31, 2014, the Fund incurred $12,137 in brokerage commissions with Invesco Capital Markets, Inc., an affiliate of the Adviser and IDI, for portfolio transactions executed on behalf of the Fund.
Certain officers and trustees of the Trust are officers and directors of the Adviser, IIS and/or IDI.
NOTE 3Additional Valuation Information
GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods, giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3), generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investments assigned level:
Level 1 | Prices are determined using quoted prices in an active market for identical assets. |
Level 2 | Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others. |
Level 3 | Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Funds own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information. |
As of October 31, 2014, all of the securities in this Fund were valued based on Level 1 inputs (see the Schedule of Investments for security categories). The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
NOTE 4Security Transactions with Affiliated Funds
The Fund is permitted to purchase or sell securities from or to certain other Invesco Funds under specified conditions outlined in procedures adopted by the Board of Trustees of the Trust. The procedures have been designed to ensure that any purchase or sale of securities by the Fund from or to another fund or portfolio that is or could be considered an affiliate by virtue of having a common investment adviser (or affiliated investment advisers), common Trustees and/or common officers complies with Rule 17a-7 of the 1940 Act. Further, as defined under the procedures, each transaction is effected at the current market price. Pursuant to these procedures, for the six months ended October 31, 2014, the Fund engaged in securities sales of $3,574,055, which resulted in net realized gains of $809,457.
NOTE 5Expense Offset Arrangement(s)
The expense offset arrangement is comprised of transfer agency credits which result from balances in demand deposit accounts used by the transfer agent for clearing shareholder transactions. For the six months ended October 31, 2014, the Fund received credits from this arrangement, which resulted in the reduction of the Funds total expenses of $8,042.
NOTE 6Trustees and Officers Fees and Benefits
Trustees and Officers Fees and Benefits include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and Trustees and Officers Fees and Benefits also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees were eligible to participate in a retirement plan that provided for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. Trustees and Officers Fees and Benefits include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.
13 Invesco Technology Fund
NOTE 7Cash Balances
The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with State Street Bank and Trust Company, the custodian bank. Such balances, if any at period end, are shown in the Statement of Assets and Liabilities under the payable caption Amount due custodian. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.
NOTE 8Tax Information
The amount and character of income and gains to be distributed are determined in accordance with income tax regulations, which may differ from GAAP. Reclassifications are made to the Funds capital accounts to reflect income and gains available for distribution (or available capital loss carryforward) under income tax regulations. The tax character of distributions paid during the year and the tax components of net assets will be reported at the Funds fiscal year-end.
Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. Capital losses generated in years beginning after December 22, 2010 can be carried forward for an unlimited period, whereas previous losses expire in eight tax years. Capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Capital loss carryforwards with no expiration date will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss carryforwards in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.
The Fund did not have a capital loss carryforward as of April 30, 2014.
NOTE 9Investment Securities
The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the six months ended October 31, 2014 was $197,357,575 and $230,108,586, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed federal income tax reporting period-end.
Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis | ||||
Aggregate unrealized appreciation of investment securities |
$ | 268,971,988 | ||
Aggregate unrealized (depreciation) of investment securities |
(21,628,076 | ) | ||
Net unrealized appreciation of investment securities |
$ | 247,343,912 |
Cost of investments for tax purposes is $501,274,556.
14 Invesco Technology Fund
NOTE 10Share Information
Summary of Share Activity | ||||||||||||||||
Six months ended October 31, 2014(a) |
Year ended April 30, 2014 |
|||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Sold: |
||||||||||||||||
Class A |
403,445 | $ | 16,157,561 | 846,846 | $ | 32,742,795 | ||||||||||
Class B |
5,375 | 194,192 | 19,470 | 676,920 | ||||||||||||
Class C |
50,135 | 1,778,259 | 109,629 | 3,727,275 | ||||||||||||
Class Y |
49,295 | 1,979,109 | 78,609 | 3,034,632 | ||||||||||||
Investor Class |
167,689 | 6,669,784 | 390,961 | 14,755,259 | ||||||||||||
Class R5 |
16,770 | 744,846 | 6,834 | 295,047 | ||||||||||||
Issued as reinvestment of dividends: |
||||||||||||||||
Class A |
| | 609,270 | 21,988,559 | ||||||||||||
Class B |
| | 38,161 | 1,258,555 | ||||||||||||
Class C |
| | 77,035 | 2,462,802 | ||||||||||||
Class Y |
| | 11,153 | 402,840 | ||||||||||||
Investor Class |
| | 841,397 | 30,147,238 | ||||||||||||
Class R5 |
| | 2,638 | 105,177 | ||||||||||||
Automatic conversion of Class B shares to Class A shares: |
||||||||||||||||
Class A |
35,775 | 1,451,153 | 93,019 | 3,515,773 | ||||||||||||
Class B |
(39,345 | ) | (1,451,153 | ) | (101,313 | ) | (3,515,773 | ) | ||||||||
Reacquired: |
||||||||||||||||
Class A |
(743,520 | ) | (29,702,737 | ) | (1,311,290 | ) | (49,806,908 | ) | ||||||||
Class B |
(28,528 | ) | (1,039,236 | ) | (62,993 | ) | (2,201,412 | ) | ||||||||
Class C |
(79,738 | ) | (2,795,669 | ) | (151,821 | ) | (5,134,709 | ) | ||||||||
Class Y |
(15,959 | ) | (646,725 | ) | (43,247 | ) | (1,629,610 | ) | ||||||||
Investor Class |
(616,028 | ) | (24,534,474 | ) | (1,514,441 | ) | (57,030,522 | ) | ||||||||
Class R5 |
(1,205 | ) | (51,723 | ) | (6,452 | ) | (270,719 | ) | ||||||||
Net increase (decrease) in share activity |
(795,839 | ) | $ | (31,246,813 | ) | (66,535 | ) | $ | (4,476,781 | ) |
(a) | There is an entity that is a record owner of more than 5% of the outstanding shares of the Fund and owns 8% of the outstanding shares of the Fund. IDI has an agreement with this entity to sell Fund shares. The Fund, Invesco and/or Invesco affiliates may make payments to this entity, which is considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as, securities brokerage, distribution, third party record keeping and account servicing. The Fund has no knowledge as to whether all or any portion of the shares owned of record by this entity are also owned beneficially. |
15 Invesco Technology Fund
NOTE 11Financial Highlights
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
Net asset value, beginning of period |
Net investment income (loss)(a) |
Net gains (both |
Total from investment operations |
Dividends from net investment income |
Distributions from net realized gains |
Total distributions |
Net asset value, end of period |
Total return(b) |
Net assets, end of period (000s omitted) |
Ratio of expenses to average net assets with fee waivers and/or expenses absorbed |
Ratio of expenses to average net assets without fee waivers and/or expenses absorbed |
Ratio of net investment income (loss) to average net assets |
Portfolio turnover(c) |
|||||||||||||||||||||||||||||||||||||||||||
Class A |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 10/31/14 |
$ | 37.61 | $ | (0.20 | ) | $ | 4.49 | $ | 4.29 | $ | | $ | | $ | | $ | 41.90 | 11.41 | % | $ | 307,288 | 1.41 | %(d) | 1.41 | %(d) | (0.97 | )%(d) | 27 | % | |||||||||||||||||||||||||||
Year ended 04/30/14 |
34.19 | (0.30 | ) | 7.07 | 6.77 | | (3.35 | ) | (3.35 | ) | 37.61 | 20.22 | 287,236 | 1.45 | 1.45 | (0.80 | ) | 69 | ||||||||||||||||||||||||||||||||||||||
Year ended 04/30/13 |
37.33 | (0.24 | )(e) | (1.57 | )(f) | (1.81 | ) | (0.27 | ) | (1.06 | ) | (1.33 | ) | 34.19 | (4.70 | )(f) | 253,013 | 1.52 | 1.52 | (0.70 | )(e) | 41 | ||||||||||||||||||||||||||||||||||
Year ended 04/30/12 |
35.86 | (0.36 | ) | 1.83 | 1.47 | | | | 37.33 | 4.10 | 312,389 | 1.55 | 1.56 | (1.06 | ) | 48 | ||||||||||||||||||||||||||||||||||||||||
Year ended 04/30/11 |
28.53 | (0.22 | ) | 7.55 | (g) | 7.33 | | | | 35.86 | 25.69 | 229,174 | 1.55 | 1.55 | (0.73 | ) | 42 | |||||||||||||||||||||||||||||||||||||||
One month ended 04/30/10 |
27.91 | (0.04 | ) | 0.66 | 0.62 | | | | 28.53 | 2.22 | 191,274 | 1.66 | (h) | 1.66 | (h) | (1.56 | )(h) | 4 | ||||||||||||||||||||||||||||||||||||||
Year ended 03/31/10 |
17.77 | (0.20 | ) | 10.34 | 10.14 | | | | 27.91 | 57.06 | 187,989 | 1.66 | 1.75 | (0.87 | ) | 35 | ||||||||||||||||||||||||||||||||||||||||
Class B |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 10/31/14 |
34.27 | (0.32 | ) | 4.09 | 3.77 | | | | 38.04 | 11.00 | 11,573 | 2.16 | (d) | 2.16 | (d) | (1.72 | )(d) | 27 | ||||||||||||||||||||||||||||||||||||||
Year ended 04/30/14 |
31.64 | (0.54 | ) | 6.52 | 5.98 | | (3.35 | ) | (3.35 | ) | 34.27 | 19.32 | 12,567 | 2.20 | 2.20 | (1.55 | ) | 69 | ||||||||||||||||||||||||||||||||||||||
Year ended 04/30/13 |
34.61 | (0.46 | )(e) | (1.45 | )(f) | (1.91 | ) | | (1.06 | ) | (1.06 | ) | 31.64 | (5.39 | )(f) | 14,979 | 2.27 | 2.27 | (1.45 | )(e) | 41 | |||||||||||||||||||||||||||||||||||
Year ended 04/30/12 |
33.47 | (0.57 | ) | 1.71 | 1.14 | | | | 34.61 | 3.41 | 23,803 | 2.30 | 2.31 | (1.81 | ) | 48 | ||||||||||||||||||||||||||||||||||||||||
Year ended 04/30/11 |
26.83 | (0.41 | ) | 7.05 | (g) | 6.64 | | | | 33.47 | 24.75 | 16,253 | 2.30 | 2.30 | (1.48 | ) | 42 | |||||||||||||||||||||||||||||||||||||||
One month ended 04/30/10 |
26.26 | (0.05 | ) | 0.62 | 0.57 | | | | 26.83 | 2.17 | 18,853 | 2.41 | (h) | 2.41 | (h) | (2.31 | )(h) | 4 | ||||||||||||||||||||||||||||||||||||||
Year ended 03/31/10 |
16.84 | (0.35 | ) | 9.77 | 9.42 | | | | 26.26 | 55.94 | 19,173 | 2.41 | 2.50 | (1.62 | ) | 35 | ||||||||||||||||||||||||||||||||||||||||
Class C |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 10/31/14 |
33.22 | (0.31 | ) | 3.96 | 3.65 | | | | 36.87 | 10.99 | 29,818 | 2.16 | (d) | 2.16 | (d) | (1.72 | )(d) | 27 | ||||||||||||||||||||||||||||||||||||||
Year ended 04/30/14 |
30.76 | (0.53 | ) | 6.34 | 5.81 | | (3.35 | ) | (3.35 | ) | 33.22 | 19.32 | 27,846 | 2.20 | 2.20 | (1.55 | ) | 69 | ||||||||||||||||||||||||||||||||||||||
Year ended 04/30/13 |
33.68 | (0.45 | )(e) | (1.41 | )(f) | (1.86 | ) | | (1.06 | ) | (1.06 | ) | 30.76 | (5.39 | )(f) | 24,716 | 2.27 | 2.27 | (1.45 | )(e) | 41 | |||||||||||||||||||||||||||||||||||
Year ended 04/30/12 |
32.58 | (0.55 | ) | 1.65 | 1.10 | | | | 33.68 | 3.38 | 31,836 | 2.30 | 2.31 | (1.81 | ) | 48 | ||||||||||||||||||||||||||||||||||||||||
Year ended 04/30/11 |
26.12 | (0.41 | ) | 6.87 | (g) | 6.46 | | | | 32.58 | 24.73 | 21,875 | 2.30 | 2.30 | (1.48 | ) | 42 | |||||||||||||||||||||||||||||||||||||||
One month ended 04/30/10 |
25.57 | (0.05 | ) | 0.60 | 0.55 | | | | 26.12 | 2.15 | 16,931 | 2.41 | (h) | 2.41 | (h) | (2.31 | )(h) | 4 | ||||||||||||||||||||||||||||||||||||||
Year ended 03/31/10 |
16.40 | (0.35 | ) | 9.52 | 9.17 | | | | 25.57 | 55.92 | 16,689 | 2.41 | 2.50 | (1.62 | ) | 35 | ||||||||||||||||||||||||||||||||||||||||
Class Y |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 10/31/14 |
37.67 | (0.15 | ) | 4.51 | 4.36 | | | | 42.03 | 11.57 | 7,927 | 1.16 | (d) | 1.16 | (d) | (0.72 | )(d) | 27 | ||||||||||||||||||||||||||||||||||||||
Year ended 04/30/14 |
34.16 | (0.21 | ) | 7.07 | 6.86 | | (3.35 | ) | (3.35 | ) | 37.67 | 20.51 | 5,850 | 1.20 | 1.20 | (0.55 | ) | 69 | ||||||||||||||||||||||||||||||||||||||
Year ended 04/30/13 |
37.31 | (0.16 | )(e) | (1.57 | )(f) | (1.73 | ) | (0.36 | ) | (1.06 | ) | (1.42 | ) | 34.16 | (4.46 | )(f) | 3,716 | 1.27 | 1.27 | (0.45 | )(e) | 41 | ||||||||||||||||||||||||||||||||||
Year ended 04/30/12 |
35.74 | (0.27 | ) | 1.84 | 1.57 | | | | 37.31 | 4.39 | 4,937 | 1.30 | 1.31 | (0.81 | ) | 48 | ||||||||||||||||||||||||||||||||||||||||
Year ended 04/30/11 |
28.37 | (0.14 | ) | 7.51 | (g) | 7.37 | | | | 35.74 | 25.98 | 3,683 | 1.30 | 1.30 | (0.48 | ) | 42 | |||||||||||||||||||||||||||||||||||||||
One month ended 04/30/10 |
27.74 | (0.03 | ) | 0.66 | 0.63 | | | | 28.37 | 2.27 | 2,931 | 1.41 | (h) | 1.41 | (h) | (1.31 | )(h) | 4 | ||||||||||||||||||||||||||||||||||||||
Year ended 03/31/10 |
17.63 | (0.14 | ) | 10.25 | 10.11 | | | | 27.74 | 57.34 | 2,856 | 1.41 | 1.50 | (0.62 | ) | 35 | ||||||||||||||||||||||||||||||||||||||||
Investor Class |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 10/31/14 |
37.34 | (0.18 | ) | 4.47 | 4.29 | | | | 41.63 | 11.49 | 389,392 | 1.32 | (d)(i) | 1.32 | (d)(i) | (0.88 | )(d)(i) | 27 | ||||||||||||||||||||||||||||||||||||||
Year ended 04/30/14 |
33.94 | (0.27 | ) | 7.02 | 6.75 | | (3.35 | ) | (3.35 | ) | 37.34 | 20.31 | (i) | 366,054 | 1.36 | (i) | 1.36 | (i) | (0.71 | )(i) | 69 | |||||||||||||||||||||||||||||||||||
Year ended 04/30/13 |
37.06 | (0.22 | )(e) | (1.56 | )(f) | (1.78 | ) | (0.28 | ) | (1.06 | ) | (1.34 | ) | 33.94 | (4.64 | )(f)(i) | 342,287 | 1.48 | (i) | 1.48 | (i) | (0.66 | )(e)(i) | 41 | ||||||||||||||||||||||||||||||||
Year ended 04/30/12 |
35.58 | (0.35 | ) | 1.83 | 1.48 | | | | 37.06 | 4.16 | 414,003 | 1.52 | 1.53 | (1.03 | ) | 48 | ||||||||||||||||||||||||||||||||||||||||
Year ended 04/30/11 |
28.29 | (0.19 | ) | 7.48 | (g) | 7.29 | | | | 35.58 | 25.77 | 434,078 | 1.46 | 1.46 | (0.64 | ) | 42 | |||||||||||||||||||||||||||||||||||||||
One month ended 04/30/10 |
27.67 | (0.04 | ) | 0.66 | 0.62 | | | | 28.29 | 2.24 | 396,631 | 1.65 | (h) | 1.65 | (h) | (1.55 | )(h) | 4 | ||||||||||||||||||||||||||||||||||||||
Year ended 03/31/10 |
17.61 | (0.20 | ) | 10.26 | 10.06 | | | | 27.67 | 57.13 | 391,424 | 1.66 | 1.75 | (0.87 | ) | 35 | ||||||||||||||||||||||||||||||||||||||||
Class R5 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 10/31/14 |
41.63 | (0.09 | ) | 4.98 | 4.89 | | | | 46.52 | 11.75 | 2,352 | 0.85 | (d) | 0.85 | (d) | (0.41 | )(d) | 27 | ||||||||||||||||||||||||||||||||||||||
Year ended 04/30/14 |
37.33 | (0.10 | ) | 7.75 | 7.65 | | (3.35 | ) | (3.35 | ) | 41.63 | 20.89 | 1,457 | 0.89 | 0.89 | (0.24 | ) | 69 | ||||||||||||||||||||||||||||||||||||||
Year ended 04/30/13 |
40.64 | (0.03 | )(e) | (1.70 | )(f) | (1.73 | ) | (0.52 | ) | (1.06 | ) | (1.58 | ) | 37.33 | (4.08 | )(f) | 1,194 | 0.89 | 0.89 | (0.07 | )(e) | 41 | ||||||||||||||||||||||||||||||||||
Year ended 04/30/12 |
38.77 | (0.14 | ) | 2.01 | 1.87 | | | | 40.64 | 4.82 | 1,038 | 0.88 | 0.89 | (0.39 | ) | 48 | ||||||||||||||||||||||||||||||||||||||||
Year ended 04/30/11 |
30.64 | (0.02 | ) | 8.15 | (g) | 8.13 | | | | 38.77 | 26.53 | 635 | 0.89 | 0.89 | (0.07 | ) | 42 | |||||||||||||||||||||||||||||||||||||||
One month ended 04/30/10 |
29.95 | (0.02 | ) | 0.71 | 0.69 | | | | 30.64 | 2.30 | 516 | 0.90 | (h) | 0.90 | (h) | (0.80 | )(h) | 4 | ||||||||||||||||||||||||||||||||||||||
Year ended 03/31/10 |
18.93 | (0.03 | ) | 11.05 | 11.02 | | | | 29.95 | 58.21 | 522 | 0.91 | 0.91 | (0.12 | ) | 35 |
(a) | Calculated using average shares outstanding. |
(b) | Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable. |
(c) | Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable. For the year ended April 30, 2012, the portfolio turnover calculation excludes the value of securities purchased of $90,282,548 and sold of $44,478,217 in the effort to realign the Funds portfolio holdings after the reorganization of Invesco Van Kampen Technology Fund into the Fund. |
(d) | Ratios are annualized and based on average daily net assets (000s omitted) of $296,501, $12,316, $28,842, $6,834, $381,110 and $1,673 for Class A, Class B, Class C, Class Y, Investor Class and Class R5 shares, respectively. |
(e) | Net investment income (loss) per share and the ratio of net investment income (loss) to average net assets includes significant dividends received during the period. Net investment income (loss) per share and the ratio of net investment income (loss) to average net assets excluding the significant dividends are $(0.34) and (1.00)%, $(0.56) and (1.75)%, $(0.54) and (1.75)%, $(0.26) and (0.75)%, $(0.33) and (0.96)% and $(0.14) and (0.37)% for Class A, Class B, Class C, Class Y, Investor Class and Class R5 shares, respectively. |
(f) | Includes litigation proceeds received during the period. Had the litigation proceeds not been received net gains (losses) on securities (both realized and unrealized) per share for the year ended April 30, 2013 would have been $(1.74), $(1.62), $(1.58), $(1.74), $(1.73) and $(1.87) for Class A, Class B, Class C, Class Y, Investor Class and Class R5 shares, respectively and total returns would have been lower. |
(g) | Net gains (losses) on securities (both realized and unrealized) include capital gains realized on a distribution from BlueStream Ventures L.P. on October 17, 2010. Net gains (losses) on securities (both realized and unrealized), excluding the capital gains, are $7.29, $6.81, $6.63, $7.25, $7.22 and $7.87 for Class A, Class B, Class C, Class Y, Investor Class and Class R5 shares, respectively. |
(h) | Annualized. |
(i) | The total return, ratio of expenses to average net assets and ratio of net investment income (loss) to average net assets reflect actual 12b-1 fees of 0.16%, 0.16% and 0.20% for the six months ended October 31, 2014, years ended April 30, 2014 and April 30, 2013, respectively. |
16 Invesco Technology Fund
Calculating your ongoing Fund expenses
Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, if any; and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period May 1, 2014 through October 31, 2014.
Actual expenses
The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled Actual Expenses Paid During Period to estimate the expenses you paid on your account during this period.
Hypothetical example for comparison purposes
The table below also provides information about hypothetical account values and hypothetical expenses based on the Funds actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Funds actual return.
The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, if any. Therefore, the hypothetical information is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
Class | Beginning Account Value (05/01/14) |
ACTUAL | HYPOTHETICAL (5% annual return before expenses) |
Annualized Expense Ratio |
||||||||||||||||||||
Ending Account Value (10/31/14)1 |
Expenses Paid During Period2 |
Ending Account Value (10/31/14) |
Expenses Paid During Period2 |
|||||||||||||||||||||
A | $ | 1,000.00 | $ | 1,114.10 | $ | 7.51 | $ | 1,018.10 | $ | 7.17 | 1.41 | % | ||||||||||||
B | 1,000.00 | 1,109.70 | 11.49 | 1,014.32 | 10.97 | 2.16 | ||||||||||||||||||
C | 1,000.00 | 1,109.90 | 11.49 | 1,014.32 | 10.97 | 2.16 | ||||||||||||||||||
Y | 1,000.00 | 1,115.70 | 6.19 | 1,019.36 | 5.90 | 1.16 | ||||||||||||||||||
Investor | 1,000.00 | 1,114.90 | 7.04 | 1,018.55 | 6.72 | 1.32 | ||||||||||||||||||
R5 | 1,000.00 | 1,117.50 | 4.54 | 1,020.92 | 4.33 | 0.85 |
1 | The actual ending account value is based on the actual total return of the Fund for the period May 1, 2014 through October 31, 2014, after actual expenses and will differ from the hypothetical ending account value which is based on the Funds expense ratio and a hypothetical annual return of 5% before expenses. |
2 | Expenses are equal to the Funds annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 184/365 to reflect the most recent fiscal half year. |
17 Invesco Technology Fund
Approval of Investment Advisory and Sub-Advisory Contracts
18 Invesco Technology Fund
19 Invesco Technology Fund
Invesco mailing information
Send general correspondence to Invesco Investment Services, Inc., P.O. Box 219078, Kansas City, MO 64121-9078.
Important notice regarding delivery of security holder documents
To reduce Fund expenses, only one copy of most shareholder documents may be mailed to shareholders with multiple accounts at the same address (Householding). Mailing of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact Invesco Investment Services, Inc. at 800 959 4246 or contact your financial institution. We will begin sending you individual copies for each account within 30 days after receiving your request.
Fund holdings and proxy voting information
The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter ends. For the second and fourth quarters, the lists appear in the Funds semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The most recent list of portfolio holdings is available at invesco.com/completeqtrholdings. Shareholders can also look up the Funds Forms
N-Q on the SEC website at sec.gov. Copies of the Funds Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are shown below.
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 959 4246 or at invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.
Information regarding how the Fund voted proxies related to its portfolio securities during the most recent 12-month period ended June 30 is available at invesco.com/proxysearch. The information is also available on the SEC website, sec.gov. Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the US distributor for Invesco Ltd.s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd. |
SEC file numbers: 811-03826 and 002-85905 | I-TEC-SAR-1 | Invesco Distributors, Inc. |
| ||||
Semiannual Report to Shareholders
|
October 31, 2014 | |||
| ||||
Invesco Technology Sector Fund | ||||
Nasdaq: |
||||
A: IFOAX n B: IFOBX n C: IFOCX n Y: IFODX |
| ||||
2 | Fund Performance | |||
3 | Letters to Shareholders | |||
4 | Schedule of Investments | |||
6 | Financial Statements | |||
8 | Notes to Financial Statements | |||
14 | Financial Highlights | |||
15 | Fund Expenses | |||
16 | Approval of Investment Advisory and Sub-Advisory Contracts | |||
For the most current month-end Fund performance and commentary, please visit invesco.com/performance. | ||||
Unless otherwise noted, all data provided by Invesco. | ||||
This report must be accompanied or preceded by a currently effective Fund prospectus, which contains more complete information, including sales charges and expenses. Investors should read it carefully before investing. | ||||
| ||||
NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE |
Fund Performance
2 Invesco Technology Sector Fund |
Letters to Shareholders
Bruce Crockett |
Dear Fellow Shareholders: While the members of the Invesco Funds Board, which I chair, cant dictate the performance of the Invesco funds, be assured that your Board works diligently throughout the year to focus on how your investments are managed. Our job is to represent you and your interests on a variety of fund management-related matters. We regularly monitor how the portfolio management teams of the Invesco funds are performing in light of ever-changing and often unpredictable economic and market conditions, and we review the investment strategies and investment process employed by each funds management team as explained in the funds prospectus. Perhaps our most significant responsibility is conducting the annual review of the funds advisory and sub-advisory contracts with Invesco Advisers and its affiliates. This annual review, which is required by the Investment Company Act of 1940, focuses on the nature and quality of the services Invesco provides as the adviser to the Invesco funds and the reasonableness of the fees that it charges for those services. Each year, we spend months |
carefully reviewing information from Invesco that allows us to evaluate the quality of its services and the reasonableness of its fees. We also use information from a variety of independent sources, including materials provided by the independent senior officer of the Invesco funds, who reports directly to the independent trustees on the Board. Additionally, we meet with legal counsel and review performance and fee data prepared for us by Lipper Inc., an independent, third-party firm widely recognized as a leader in its field.
After a careful review, the members of the Invesco Funds Board approved the continuation of advisory and sub-advisory contracts with Invesco Advisers and its affiliates.
As always, please contact me at bruce@brucecrockett.com with any questions or concerns you may have. On behalf of the Board, we look forward to continuing to represent your interests and serving your needs.
Sincerely,
Bruce L. Crockett
Independent Chair
Invesco Funds Board of Trustees
Philip Taylor |
Dear Shareholders: This semiannual report includes information about your Fund, including performance data and a list of its investments as of the close of the reporting period. I hope you find this report of interest. Our website, invesco.com/us, offers a wide range of market insights and investment perspectives. On the website, youll find detailed information about our funds, including prices, performance, holdings and portfolio manager commentaries. You can access information about your individual Invesco account whenever its convenient for you; just complete a simple, secure online registration. Use the Log In box on our home page to get started. Invescos mobile app for iPad® (available free from the App StoreSM) allows you to obtain the same detailed information about your Fund and the same investment insights from our investment leaders, market strategists, economists and retirement experts on the go. Also, you can obtain timely updates to help you stay informed about the markets, the |
economy and investing by connecting with Invesco on Twitter, LinkedIn or Facebook. You can access our blog at blog.invesco.us.com.
For questions about your account, feel free to contact an Invesco client services representative at 800 959 4246. For Invesco-related questions or comments, please email me directly at phil@invesco.com.
Thank you for investing with us.
Sincerely,
Philip Taylor
Senior Managing Director, Invesco Ltd.
iPad is a trademark of Apple Inc., registered in the US and other countries. App Store is a service mark of Apple Inc. Invesco Distributors, Inc. is not affiliated with Apple Inc.
3 Invesco Technology Sector Fund |
Schedule of Investments(a)
October 31, 2014
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
4 Invesco Technology Sector Fund
Investment Abbreviations:
ADR | American Depositary Receipt |
Notes to Schedule of Investments:
(a) | Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poors. |
(b) | Non-income producing security. |
(c) | The money market fund and the Fund are affiliated by having the same investment adviser. |
Portfolio Composition
By sector, based on Net Assets
as of October 31, 2014
Information Technology |
81.4 | % | ||
Consumer Discretionary |
8.5 | |||
Health Care |
6.3 | |||
Telecommunication Services |
2.5 | |||
Money Market Funds Plus Other Assets Less Liabilities |
1.3 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco Technology Sector Fund
Statement of Assets and Liabilities
October 31, 2014
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco Technology Sector Fund
Statement of Operations
For the six months ended October 31, 2014
(Unaudited)
Investment income: |
| |||
Dividends |
$ | 203,517 | ||
Dividends from affiliated money market funds (includes securities lending income of $11,135) |
11,412 | |||
Total investment income |
214,929 | |||
Expenses: |
||||
Advisory fees |
329,608 | |||
Administrative services fees |
25,206 | |||
Custodian fees |
7,404 | |||
Distribution fees: |
||||
Class A |
108,519 | |||
Class B |
8,275 | |||
Class C |
40,380 | |||
Transfer agent fees |
219,660 | |||
Trustees and officers fees and benefits |
10,724 | |||
Other |
78,904 | |||
Total expenses |
828,680 | |||
Less: Fees waived and expense offset arrangement(s) |
(1,243 | ) | ||
Net expenses |
827,437 | |||
Net investment income (loss) |
(612,508 | ) | ||
Realized and unrealized gain from: |
||||
Net realized gain (loss) from: |
||||
Investment securities (includes net gains from securities sold to affiliates of $110,590) |
6,121,177 | |||
Foreign currencies |
(209 | ) | ||
6,120,968 | ||||
Change in net unrealized appreciation of: |
||||
Investment securities |
5,251,467 | |||
Foreign currencies |
103 | |||
5,251,570 | ||||
Net realized and unrealized gain |
11,372,538 | |||
Net increase in net assets resulting from operations |
$ | 10,760,030 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco Technology Sector Fund
Statement of Changes in Net Assets
For the six months ended October 31, 2014 and the year ended April 30, 2014
(Unaudited)
October 31, 2014 |
April 30, 2014 |
|||||||
Operations: |
||||||||
Net investment income (loss) |
$ | (612,508 | ) | $ | (1,057,906 | ) | ||
Net realized gain |
6,120,968 | 12,197,753 | ||||||
Change in net unrealized appreciation |
5,251,570 | 6,814,907 | ||||||
Net increase in net assets resulting from operations |
10,760,030 | 17,954,754 | ||||||
Share transactionsnet: |
||||||||
Class A |
(4,571,793 | ) | (12,872,794 | ) | ||||
Class B |
(350,024 | ) | (1,132,280 | ) | ||||
Class C |
(631,142 | ) | (1,334,393 | ) | ||||
Class Y |
100,669 | (120,418 | ) | |||||
Net increase (decrease) in net assets resulting from share transactions |
(5,452,290 | ) | (15,459,885 | ) | ||||
Net increase in net assets |
5,307,740 | 2,494,869 | ||||||
Net assets: |
||||||||
Beginning of period |
94,240,136 | 91,745,267 | ||||||
End of period (includes undistributed net investment income (loss) of $(1,013,100) and $(400,592), respectively) |
$ | 99,547,876 | $ | 94,240,136 |
Notes to Financial Statements
For the six months ended October 31, 2014
(Unaudited)
NOTE 1Significant Accounting Policies
Invesco Technology Sector Fund (the Fund) is a series portfolio of AIM Sector Funds (Invesco Sector Funds) (the Trust). The Trust is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end series management investment company consisting of ten separate portfolios, each authorized to issue an unlimited number of shares of beneficial interest. The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each portfolio or class will be voted on exclusively by the shareholders of such portfolio or class.
The Funds investment objective is long-term growth of capital.
The Fund currently consists of four different classes of shares: Class A, Class B, Class C and Class Y. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met and under certain circumstances load waived shares may be subject to contingent deferred sales charges (CDSC). Class C shares are sold with a CDSC. Class Y shares are sold at net asset value. Effective November 30, 2010, new or additional investments in Class B shares are no longer permitted. Existing shareholders of Class B shares may continue to reinvest dividends and capital gains distributions in Class B shares until they convert to Class A shares. Also, shareholders in Class B shares will be able to exchange those shares for Class B shares of other Invesco Funds offering such shares until they convert to Class A shares. Generally, Class B shares will automatically convert to Class A shares on or about the month-end, which is at least eight years after the date of purchase. Redemption of Class B shares prior to the conversion date will be subject to a CDSC.
The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.
A. | Security Valuations Securities, including restricted securities, are valued according to the following policy. |
A security listed or traded on an exchange (except convertible securities) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (NYSE).
Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
Debt obligations (including convertible securities) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate (for unlisted equities), yield (for debt obligations), quality, type of issue, coupon rate (for debt obligations), maturity (for debt obligations), individual
8 Invesco Technology Sector Fund
trading characteristics and other market data. Debt obligations are subject to interest rate and credit risks. In addition, all debt obligations involve some risk of default with respect to interest and/or principal payments.
Foreign securities (including foreign exchange contracts) prices are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange-traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that the Adviser determines are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities prices meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and ask prices is used to value debt obligations, including corporate loans.
Securities for which market quotations are not readily available or became unreliable are valued at fair value as determined in good faith by or under the supervision of the Trusts officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a securitys fair value.
The Fund may invest in securities that are subject to interest rate risk, meaning the risk that the prices will generally fall as interest rates rise and, conversely, the prices will generally rise as interest rates fall. Specific securities differ in their sensitivity to changes in interest rates depending on their individual characteristics. Changes in interest rates may result in increased market volatility, which may affect the value and/or liquidity of certain of the Funds investments.
Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuers assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B. | Securities Transactions and Investment Income Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income (net of withholding tax, if any) is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. |
The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Funds net asset value and, accordingly, they reduce the Funds total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C. | Country Determination For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuers securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted. |
D. | Distributions Distributions from net investment income and net realized capital gain, if any, are generally declared and paid annually and recorded on the ex-dividend date. The Fund may elect to treat a portion of the proceeds from redemptions as distributions for federal income tax purposes. |
E. | Federal Income Taxes The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code of 1986, as amended (the Internal Revenue Code), necessary to qualify as a regulated investment company and to distribute substantially all of the Funds taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements. |
The Fund recognizes the tax benefits of uncertain tax positions only when the position is more likely than not to be sustained. Management has analyzed the Funds uncertain tax positions and concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions. Management is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next 12 months.
9 Invesco Technology Sector Fund
The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally, the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F. | Expenses Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets. |
G. | Accounting Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print. |
H. | Indemnifications Under the Trusts organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of the performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Funds servicing agreements, that contain a variety of indemnification clauses. The Funds maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote. |
I. | Securities Lending The Fund may lend portfolio securities having a market value up to one-third of the Funds total assets. Such loans are secured by collateral equal to no less than the market value of the loaned securities determined daily by the securities lending provider. Such collateral will be cash or debt securities issued or guaranteed by the U.S. Government or any of its sponsored agencies. Cash collateral received in connection with these loans is invested in short-term money market instruments or affiliated money market funds and is shown as such on the Schedule of Investments. It is the Funds policy to obtain additional collateral from or return excess collateral to the borrower by the end of the next business day, following the valuation date of the securities loaned. Therefore, the value of the collateral held may be temporarily less than the value of the securities on loan. Lending securities entails a risk of loss to the Fund if, and to the extent that, the market value of the securities loaned were to increase and the borrower did not increase the collateral accordingly, and the borrower failed to return the securities. Upon the failure of the borrower to return the securities, collateral may be liquidated and the securities may be purchased on the open market to replace the loaned securities. The Fund could experience delays and costs in gaining access to the collateral. The Fund bears the risk of any deficiency in the amount of the collateral available for return to the borrower due to any loss on the collateral invested. Dividends received on cash collateral investments for securities lending transactions, which are net of compensation to counterparties, is included in Dividends from affiliated money market funds on the Statement of Operations. The aggregate value of securities out on loan is shown as a footnote on the Statement of Assets and Liabilities, if any. |
J. | Foreign Currency Translations Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (1) sales of foreign currencies, (2) currency gains or losses realized between the trade and settlement dates on securities transactions, and (3) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Funds books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates. |
The Fund may invest in foreign securities, which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable. Foreign taxes, if any, are recorded based on the tax regulations and rates that exist in the foreign markets in which the Fund invests and are shown in the Statement of Operations.
K. | Forward Foreign Currency Contracts The Fund may engage in foreign currency transactions either on a spot (i.e. for prompt delivery and settlement) basis or through forward foreign currency contracts to manage or minimize currency or exchange rate risk. |
The Fund may also enter into forward foreign currency contracts for the purchase or sale of a security denominated in a foreign currency in order to lock in the U.S. dollar price of that security, or the Fund may also enter into forward foreign currency contracts that do not provide for physical settlement of the two currencies, but instead are settled by a single cash payment calculated as the difference between the agreed upon exchange rate and the spot rate at settlement based upon an agreed upon notional amount (non-deliverable forwards). The Fund will set aside liquid assets in an amount equal to daily mark-to-market obligation for forward foreign currency contracts.
A forward foreign currency contract is an obligation between two parties (Counterparties) to purchase or sell a specific currency for an agreed-upon price at a future date. The use of forward foreign currency contracts does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with forward foreign currency contracts include failure of the Counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities.
L. | Other Risks The Funds investments are concentrated in a comparatively narrow segment of the economy, which may make the Fund more volatile. |
Many products and services offered in technology-related industries are subject to rapid obsolescence, which may lower the value of the issuers in this sector.
10 Invesco Technology Sector Fund
NOTE 2Advisory Fees and Other Fees Paid to Affiliates
The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the Adviser or Invesco). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Funds average daily net assets as follows:
Average Daily Net Assets | Rate | |||||
First $500 million |
0 | .67% | ||||
Next $2.5 billion |
0 | .645% | ||||
Over $3 billion |
0 | .62% |
For the six months ended October 31, 2014, the effective advisory fees incurred by the Fund was 0.67%.
Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Canada Ltd. (collectively, the Affiliated Sub-Advisers) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide(s) discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).
The Adviser has contractually agreed, through at least June 30, 2015, to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver and/or expense reimbursement (excluding certain items discussed below) of Class A, Class B, Class C, and Class Y shares to 2.00%, 2.75%, 2.75%, and 1.75%, respectively, of average daily net assets. In determining the Advisers obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver and/or expense reimbursement to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items, including litigation expenses; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless Invesco continues the fee waiver agreement, it will terminate on June 30, 2015. The fee waiver agreement cannot be terminated during its term. The Adviser did not waive fees and/or reimburse expenses during the period under this expense limitation.
Further, the Adviser has contractually agreed, through at least June 30, 2016, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash (excluding investments of cash collateral from securities lending) in such affiliated money market funds.
For the six months ended October 31, 2014, the Adviser waived advisory fees of $1,048.
The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco for certain administrative costs incurred in providing accounting services to the Fund. For the six months ended October 31, 2014, expenses incurred under the agreement are shown in the Statement of Operations as Administrative services fees.
The Trust has entered into a transfer agency and service agreement with Invesco Investment Services, Inc. (IIS) pursuant to which the Fund has agreed to pay IIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IIS for certain expenses incurred by IIS in the course of providing such services. IIS may make payments to intermediaries that provide omnibus account services, sub-accounting services and/or networking services. All fees payable by IIS to intermediaries that provide omnibus account services or sub-accounting are charged back to the Fund, subject to certain limitations approved by the Trusts Board of Trustees. For the six months ended October 31, 2014, the expenses incurred under the agreement are shown in the Statement of Operations as Transfer agent fees.
Shares of the Fund are distributed by Invesco Distributors, Inc. (IDI), an affiliate of the Adviser. The Fund has adopted a Plan of Distribution (the Plan) pursuant to Rule 12b-1 under the 1940 Act. The Plan provides that the Fund will reimburse IDI for distribution related expenses that IDI incurs up to a maximum of the following annual rates: (1) Class A up to 0.25% of the average daily net assets of Class A shares; (2) Class B up to 1.00% of the average daily net assets of Class B shares; and (3) Class C up to 1.00% of the average daily net assets of Class C shares.
In the case of Class B shares, provided that the Plan continues in effect, any cumulative expenses incurred by IDI, but not yet reimbursed to IDI, may be recovered through the payment of future distribution fees from the Fund pursuant to the Plan and contingent deferred sales charges paid by investors upon redemption of Class B shares.
For the six months ended October 31, 2014, expenses incurred under these agreements are shown in the Statement of Operations as Distribution fees.
Front-end sales commissions and CDSC (collectively, the sales charges) are not recorded as expenses of the Fund. Front-end sales commissions are deducted from proceeds from the sales of Fund shares prior to investment in Class A shares of the Fund. CDSC are deducted from redemption proceeds prior to remittance to the shareholder. During the six months ended October 31, 2014, IDI advised the Fund that IDI retained $399 in front-end sales commissions from the sale of Class A shares $180 and $128 from Class B and Class C shares, respectively, for CDSC imposed on redemptions by shareholders.
For the six months ended October 31, 2014, the Fund incurred $1,819 in brokerage commissions with Invesco Capital Markets, Inc., an affiliate of the Adviser and IDI, for portfolio transactions executed on behalf of the Fund.
Certain officers and trustees of the Trust are officers and directors of the Adviser, IIS and/or IDI.
NOTE 3Additional Valuation Information
GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods, giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3), generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investments assigned level:
Level 1 | Prices are determined using quoted prices in an active market for identical assets. |
11 Invesco Technology Sector Fund
Level 2 | Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others. |
Level 3 | Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Funds own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information. |
As of October 31, 2014, all of the securities in the fund were valued based on Level 1 inputs (see the Schedule of Investments for security categories). The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
NOTE 4Security Transactions with Affiliated Funds
The Fund is permitted to purchase or sell securities from or to certain other Invesco Funds under specified conditions outlined in procedures adopted by the Board of Trustees of the Trust. The procedures have been designed to ensure that any purchase or sale of securities by the Fund from or to another fund or portfolio that is or could be considered an affiliate by virtue of having a common investment adviser (or affiliated investment advisers), common Trustees and/or common officers complies with Rule 17a-7 of the 1940 Act. Further, as defined under the procedures, each transaction is effected at the current market price. Pursuant to these procedures, for the six months ended October 31, 2014, the Fund engaged in securities sales of $522,958, which resulted in net realized gains of $110,590.
NOTE 5Expense Offset Arrangement(s)
The expense offset arrangement is comprised of transfer agency credits which result from balances in demand deposit accounts used by the transfer agent for clearing shareholder transactions. For the six months ended October 31, 2014, the Fund received credits from this arrangement, which resulted in the reduction of the Funds total expenses of $195.
NOTE 6Trustees and Officers Fees and Benefits
Trustees and Officers Fees and Benefits include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and Trustees and Officers Fees and Benefits also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees were eligible to participate in a retirement plan that provided for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. Trustees and Officers Fees and Benefits include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.
NOTE 7Cash Balances
The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with State Street Bank and Trust Company, the custodian bank. Such balances, if any at period end, are shown in the Statement of Assets and Liabilities under the payable caption Amount due custodian. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.
NOTE 8Tax Information
The amount and character of income and gains to be distributed are determined in accordance with income tax regulations, which may differ from GAAP. Reclassifications are made to the Funds capital accounts to reflect income and gains available for distribution (or available capital loss carryforward) under income tax regulations. The tax character of distributions paid during the year and the tax components of net assets will be reported at the Funds fiscal year-end.
Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. Capital losses generated in years beginning after December 22, 2010 can be carried forward for an unlimited period, whereas previous losses expire in eight tax years. Capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Capital loss carryforwards with no expiration date will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss carryforwards in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.
The Fund had a capital loss carryforward as of April 30, 2014, which expires as follows:
Capital Loss Carryforward* | ||||||||||||
Expiration | Short-Term | Long-Term | Total | |||||||||
April 30, 2016 |
$ | 12,866,974 | $ | | $ | 12,866,974 | ||||||
April 30, 2018 |
13,022,537 | | 13,022,537 | |||||||||
Total capital loss carryforward |
$ | 25,889,511 | $ | | $ | 25,889,511 |
* | Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code and may be further limited depending upon a variety of factors, including the realization of net unrealized gains or losses as of the date of any reorganization. |
12 Invesco Technology Sector Fund
NOTE 9Investment Securities
The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the six months ended October 31, 2014 was $26,380,917 and $31,657,834, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed federal income tax reporting period-end.
Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis | ||||
Aggregate unrealized appreciation of investment securities |
$ | 29,578,844 | ||
Aggregate unrealized (depreciation) of investment securities |
(3,530,180 | ) | ||
Net unrealized appreciation of investment securities |
$ | 26,048,664 |
Cost of investments for tax purposes is $73,801,459.
NOTE 10Share Information
Summary of Share Activity | ||||||||||||||||
Six months ended October 31, 2014(a) |
Year ended April 30, 2014 |
|||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Sold: |
||||||||||||||||
Class A |
41,453 | $ | 641,589 | 90,843 | $ | 1,263,021 | ||||||||||
Class B |
937 | 12,604 | 1,133 | 14,091 | ||||||||||||
Class C |
2,456 | 33,743 | 16,480 | 199,372 | ||||||||||||
Class Y |
15,842 | 257,652 | 25,406 | 367,619 | ||||||||||||
Automatic conversion of Class B shares to Class A shares: |
||||||||||||||||
Class A |
1,639 | 25,529 | 58,201 | 794,786 | ||||||||||||
Class B |
(1,881 | ) | (25,529 | ) | (66,317 | ) | (794,786 | ) | ||||||||
Reacquired: |
||||||||||||||||
Class A |
(339,111 | ) | (5,238,911 | ) | (1,088,745 | ) | (14,930,601 | ) | ||||||||
Class B |
(24,746 | ) | (337,099 | ) | (28,878 | ) | (351,585 | ) | ||||||||
Class C |
(49,406 | ) | (664,885 | ) | (128,047 | ) | (1,533,765 | ) | ||||||||
Class Y |
(9,693 | ) | (156,983 | ) | (32,988 | ) | (488,037 | ) | ||||||||
Net increase (decrease) in share activity |
(362,510 | ) | $ | (5,452,290 | ) | (1,152,912 | ) | $ | (15,459,885 | ) |
(a) | There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 79% of the outstanding shares of the Fund. IDI has an agreement with these entities to sell Fund shares. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as securities brokerage, distribution, third party record keeping and account servicing. The Fund has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially. |
13 Invesco Technology Sector Fund
NOTE 11Financial Highlights
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
Net asset value, beginning of period |
Net investment income (loss)(a) |
Net gains (losses) on securities (both realized and unrealized) |
Total from investment operations |
Net asset value, end of period |
Total return(b) |
Net assets, end of period (000s omitted) |
Ratio of expenses to average net assets with fee waivers and/or expenses absorbed |
Ratio of expenses to average net assets without fee waivers and/or expenses absorbed |
Ratio of net investment income to average net assets |
Portfolio turnover(c) |
||||||||||||||||||||||||||||||||||
Class A |
||||||||||||||||||||||||||||||||||||||||||||
Six months ended 10/31/14 |
$ | 14.49 | $ | (0.09 | ) | $ | 1.79 | $ | 1.70 | $ | 16.19 | 11.73 | % | $ | 88,982 | 1.61 | %(d) | 1.61 | %(d) | (1.17 | )%(d) | 27 | % | |||||||||||||||||||||
Year ended 04/30/14 |
12.01 | (0.14 | ) | 2.62 | 2.48 | 14.49 | 20.65 | 83,926 | 1.68 | 1.68 | (1.02 | ) | 69 | |||||||||||||||||||||||||||||||
Year ended 04/30/13 |
12.59 | (0.12 | )(e) | (0.46 | )(f) | (0.58 | ) | 12.01 | (4.61 | )(f) | 80,866 | 1.82 | 1.83 | (1.00 | )(e) | 43 | ||||||||||||||||||||||||||||
One month ended 04/30/12 |
12.97 | (0.01 | ) | (0.37 | ) | (0.38 | ) | 12.59 | (2.93 | ) | 99,453 | 1.71 | (g) | 1.71 | (g) | (1.34 | )(g) | 4 | ||||||||||||||||||||||||||
Year ended 03/31/12 |
11.70 | (0.15 | ) | 1.42 | (f) | 1.27 | 12.97 | 10.85 | (f) | 103,068 | 1.81 | 1.82 | (1.29 | ) | 38 | |||||||||||||||||||||||||||||
Year ended 03/31/11 |
10.27 | (0.11 | ) | 1.54 | 1.43 | 11.70 | 13.92 | 106,661 | 1.70 | 1.70 | (1.08 | ) | 214 | |||||||||||||||||||||||||||||||
Year ended 03/31/10 |
7.12 | (0.11 | ) | 3.26 | 3.15 | 10.27 | 44.24 | 106,337 | 1.92 | (h) | 1.92 | (h) | (1.23 | )(h) | 113 | |||||||||||||||||||||||||||||
Class B |
||||||||||||||||||||||||||||||||||||||||||||
Six months ended 10/31/14 |
12.66 | (0.13 | ) | 1.57 | 1.44 | 14.10 | 11.37 | 1,521 | 2.36 | (d) | 2.36 | (d) | (1.92 | )(d) | 27 | |||||||||||||||||||||||||||||
Year ended 04/30/14 |
10.58 | (0.21 | ) | 2.29 | 2.08 | 12.66 | 19.66 | 1,692 | 2.43 | 2.43 | (1.77 | ) | 69 | |||||||||||||||||||||||||||||||
Year ended 04/30/13 |
11.18 | (0.18 | )(e) | (0.42 | )(f) | (0.60 | ) | 10.58 | (5.37 | )(f) | 2,408 | 2.57 | 2.58 | (1.75 | )(e) | 43 | ||||||||||||||||||||||||||||
One month ended 04/30/12 |
11.52 | (0.02 | ) | (0.32 | ) | (0.34 | ) | 11.18 | (2.95 | ) | 4,309 | 2.46 | (g) | 2.46 | (g) | (2.09 | )(g) | 4 | ||||||||||||||||||||||||||
Year ended 03/31/12 |
10.47 | (0.20 | ) | 1.25 | (f) | 1.05 | 11.52 | 10.03 | (f) | 4,626 | 2.56 | 2.57 | (2.04 | ) | 38 | |||||||||||||||||||||||||||||
Year ended 03/31/11 |
9.26 | (0.17 | ) | 1.38 | 1.21 | 10.47 | 13.07 | 8,418 | 2.45 | 2.45 | (1.83 | ) | 214 | |||||||||||||||||||||||||||||||
Year ended 03/31/10 |
6.47 | (0.16 | ) | 2.95 | 2.79 | 9.26 | 43.12 | 14,261 | 2.67 | (h) | 2.67 | (h) | (1.98 | )(h) | 113 | |||||||||||||||||||||||||||||
Class C |
||||||||||||||||||||||||||||||||||||||||||||
Six months ended 10/31/14 |
12.67 | (0.13 | ) | 1.56 | 1.43 | 14.10 | 11.29 | (i) | 8,217 | 2.34 | (d)(i) | 2.34 | (d)(i) | (1.90 | )(d)(i) | 27 | ||||||||||||||||||||||||||||
Year ended 04/30/14 |
10.58 | (0.21 | ) | 2.30 | 2.09 | 12.67 | 19.75 | (i) | 7,976 | 2.41 | (i) | 2.41 | (i) | (1.75 | )(i) | 69 | ||||||||||||||||||||||||||||
Year ended 04/30/13 |
11.18 | (0.18 | )(e) | (0.42 | )(f) | (0.60 | ) | 10.58 | (5.37 | )(f) | 7,841 | 2.57 | 2.58 | (1.75 | )(e) | 43 | ||||||||||||||||||||||||||||
One month ended 04/30/12 |
11.52 | (0.02 | ) | (0.32 | ) | (0.34 | ) | 11.18 | (2.95 | ) | 9,745 | 2.46 | (g) | 2.46 | (g) | (2.09 | )(g) | 4 | ||||||||||||||||||||||||||
Year ended 03/31/12 |
10.46 | (0.20 | ) | 1.26 | (f) | 1.06 | 11.52 | 10.13 | (f) | 10,152 | 2.54 | 2.55 | (2.02 | ) | 38 | |||||||||||||||||||||||||||||
Year ended 03/31/11 |
9.25 | (0.17 | ) | 1.38 | 1.21 | 10.46 | 13.08 | 10,794 | 2.45 | 2.45 | (1.83 | ) | 214 | |||||||||||||||||||||||||||||||
Year ended 03/31/10 |
6.46 | (0.16 | ) | 2.95 | 2.79 | 9.25 | 43.19 | 10,981 | 2.67 | (h) | 2.67 | (h) | (1.98 | )(h) | 113 | |||||||||||||||||||||||||||||
Class Y |
||||||||||||||||||||||||||||||||||||||||||||
Six months ended 10/31/14 |
15.10 | (0.08 | ) | 1.87 | 1.79 | 16.89 | 11.85 | 828 | 1.36 | (d) | 1.36 | (d) | (0.92 | )(d) | 27 | |||||||||||||||||||||||||||||
Year ended 04/30/14 |
12.49 | (0.11 | ) | 2.72 | 2.61 | 15.10 | 20.90 | 647 | 1.43 | 1.43 | (0.77 | ) | 69 | |||||||||||||||||||||||||||||||
Year ended 04/30/13 |
13.06 | (0.09 | )(e) | (0.48 | )(f) | (0.57 | ) | 12.49 | (4.36 | )(f) | 630 | 1.57 | 1.58 | (0.75 | )(e) | 43 | ||||||||||||||||||||||||||||
One month ended 04/30/12 |
13.45 | (0.01 | ) | (0.38 | ) | (0.39 | ) | 13.06 | (2.90 | ) | 560 | 1.46 | (g) | 1.46 | (g) | (1.09 | )(g) | 4 | ||||||||||||||||||||||||||
Year ended 03/31/12 |
12.10 | (0.12 | ) | 1.47 | (f) | 1.35 | 13.45 | 11.16 | (f) | 555 | 1.56 | 1.57 | (1.04 | ) | 38 | |||||||||||||||||||||||||||||
Year ended 03/31/11 |
10.59 | (0.09 | ) | 1.60 | 1.51 | 12.10 | 14.26 | 369 | 1.45 | 1.45 | (0.83 | ) | 214 | |||||||||||||||||||||||||||||||
Year ended 03/31/10 |
7.33 | (0.09 | ) | 3.35 | 3.26 | 10.59 | 44.47 | 312 | 1.67 | (h) | 1.67 | (h) | (0.98 | )(h) | 113 |
(a) | Calculated using average shares outstanding. |
(b) | Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable. |
(c) | Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable. |
(d) | Ratios annualized and based on average daily net assets (000s omitted) of $87,025, $1,641, $8,157 and $765 for Class A, Class B, Class C, and Class Y shares, respectively. |
(e) | Net investment income (loss) per share and the ratio of net investment income (loss) to average net assets includes significant dividends received during the period. Net investment income (loss) per share and the ratio of net investment income (loss) to average net assets excluding the significant dividends are $(0.15) and (1.30)%, $(0.21) and (2.05)%, $(0.21) and (2.05)% and $(0.13) and (1.05)% for Class A, Class B, Class C and Class Y shares, respectively. |
(f) | Includes litigation proceeds received during the period. Had the litigation proceeds not been received Net gains on securities (both realized and unrealized) per share for the year ended April 30, 2013 would have been $(0.55), $(0.51), $(0.51) and $(0.57) for Class A, Class B, Class C and Class Y shares, respectively and total returns would have been lower. Net gains (losses) on securities (both realized and unrealized) per share for the year ended March 31, 2012 would have been $1.29, $1.12, $1.13 and $1.34 for Class A, Class B, Class C and Class Y shares, respectively and total returns would have been lower. |
(g) | Annualized. |
(h) | The ratios reflect the rebate of certain Fund expenses in connection with investments in a Morgan Stanley affiliate during the period. The effect of the rebate on the ratios was less than 0.005% for the years ended March 31, 2010. |
(i) | The total return, ratio of expenses to average net assets and ratio of net investment income (loss) to average net assets reflect actual 12b-1 fees of 0.98% for the six months ended October 31, 2014 and the year ended April 30, 2014. |
14 Invesco Technology Sector Fund
Calculating your ongoing Fund expenses
Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, if any; and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period May 1, 2014 through October 31, 2014.
Actual expenses
The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled Actual Expenses Paid During Period to estimate the expenses you paid on your account during this period.
Hypothetical example for comparison purposes
The table below also provides information about hypothetical account values and hypothetical expenses based on the Funds actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Funds actual return.
The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, if any. Therefore, the hypothetical information is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
Class | Beginning Account Value (05/01/14) |
ACTUAL | HYPOTHETICAL (5% annual return before expenses) |
Annualized Expense Ratio |
||||||||||||||||||||
Ending Account Value (10/31/14)1 |
Expenses Paid During Period2 |
Ending Account Value (10/31/14) |
Expenses Paid During Period2 |
|||||||||||||||||||||
A | $ | 1,000.00 | $ | 1,116.60 | $ | 8.59 | $ | 1,017.09 | $ | 8.19 | 1.61 | % | ||||||||||||
B | 1,000.00 | 1,113.00 | 12.57 | 1,013.31 | 11.98 | 2.36 | ||||||||||||||||||
C | 1,000.00 | 1,112.90 | 12.52 | 1,013.36 | 11.93 | 2.34 | ||||||||||||||||||
Y | 1,000.00 | 1,118.50 | 7.26 | 1,018.35 | 6.92 | 1.36 |
1 | The actual ending account value is based on the actual total return of the Fund for the period May 1, 2014 through October 31, 2014, after actual expenses and will differ from the hypothetical ending account value which is based on the Funds expense ratio and a hypothetical annual return of 5% before expenses. |
2 | Expenses are equal to the Funds annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 184/365 to reflect the most recent fiscal half year. |
15 Invesco Technology Sector Fund
Approval of Investment Advisory and Sub-Advisory Contracts
16 Invesco Technology Sector Fund
17 Invesco Technology Sector Fund
Invesco mailing information
Send general correspondence to Invesco Investment Services, Inc., P.O. Box 219078, Kansas City, MO 64121-9078.
Important notice regarding delivery of security holder documents
To reduce Fund expenses, only one copy of most shareholder documents may be mailed to shareholders with multiple accounts at the same address (Householding). Mailing of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact Invesco Investment Services, Inc. at 800 959 4246 or contact your financial institution. We will begin sending you individual copies for each account within 30 days after receiving your request.
Fund holdings and proxy voting information
The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter ends. For the second and fourth quarters, the lists appear in the Funds semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The most recent list of portfolio holdings is available at invesco.com/completeqtrholdings. Shareholders can also look up the Funds Forms N-Q on the SEC website at sec.gov. Copies of the Funds Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are shown below.
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 959 4246 or at invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.
Information regarding how the Fund voted proxies related to its portfolio securities during the most recent 12-month period ended June 30 is available at invesco.com/proxysearch. The information is also available on the SEC website, sec.gov. Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the US distributor for Invesco Ltd.s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd. |
SEC file numbers: 811-03826 and 002-85905 MS-TECH-SAR-1 Invesco Distributors, Inc.
| ||||
|
Semiannual Report to Shareholders
|
October 31, 2014 | ||
Invesco Value Opportunities Fund | ||||
Nasdaq: |
||||
A: VVOAX ¡ B: VVOBX ¡ C: VVOCX ¡ R: VVORX ¡ Y: VVOIX ¡ R5: VVONX |
| ||
2
|
Fund Performance | |
4
|
Letters to Shareholders | |
5
|
Schedule of Investments | |
7
|
Financial Statements | |
9
|
Notes to Financial Statements | |
15
|
Financial Highlights | |
16
|
Fund Expenses | |
17
|
Approval of Investment Advisory and Sub-Advisory Contracts |
For the most current month-end Fund performance and commentary, please visit invesco.com/performance.
Unless otherwise noted, all data provided by Invesco.
This report must be accompanied or preceded by a currently effective Fund prospectus, which contains more complete information, including sales charges and expenses. Investors should read it carefully before investing.
| ||||||
| ||||||
NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE |
Fund Performance
2 Invesco Value Opportunities Fund
3 Invesco Value Opportunities Fund
Letters to Shareholders
Bruce Crockett |
Dear Fellow Shareholders: While the members of the Invesco Funds Board, which I chair, cant dictate the performance of the Invesco funds, be assured that your Board works diligently throughout the year to focus on how your investments are managed. Our job is to represent you and your interests on a variety of fund management-related matters. We regularly monitor how the portfolio management teams of the Invesco funds are performing in light of ever-changing and often unpredictable economic and market conditions, and we review the investment strategies and investment process employed by each funds management team as explained in the funds prospectus. Perhaps our most significant responsibility is conducting the annual review of the funds advisory and sub-advisory contracts with Invesco Advisers and its affiliates. This annual review, which is required by the Investment Company Act of 1940, focuses on the nature and quality of the services Invesco provides as the adviser to the Invesco funds and the reasonableness of the |
fees that it charges for those services. Each year, we spend months carefully reviewing information from Invesco that allows us to evaluate the quality of its services and the reasonableness of its fees. We also use information from a variety of independent sources, including materials provided by the independent senior officer of the Invesco funds, who reports directly to the independent trustees on the Board. Additionally, we meet with legal counsel and review performance and fee data prepared for us by Lipper Inc., an independent, third-party firm widely recognized as a leader in its field.
After a careful review, the members of the Invesco Funds Board approved the continuation of advisory and sub-advisory contracts with Invesco Advisers and its affiliates.
As always, please contact me at bruce@brucecrockett.com with any questions or concerns you may have. On behalf of the Board, we look forward to continuing to represent your interests and serving your needs.
Sincerely,
Bruce L. Crockett
Independent Chair
Invesco Funds Board of Trustees
Philip Taylor |
Dear Shareholders: This semiannual report includes information about your Fund, including performance data and a list of its investments as of the close of the reporting period. I hope you find this report of interest. Our website, invesco.com/us, offers a wide range of market insights and investment perspectives. On the website, youll find detailed information about our funds, including prices, performance, holdings and portfolio manager commentaries. You can access information about your individual Invesco account whenever its convenient for you; just complete a simple, secure online registration. Use the Log In box on our home page to get started. Invescos mobile app for iPad® (available free from the App StoreSM) allows you to obtain the same detailed information about your Fund and the same investment insights from our investment leaders, market strategists, economists and retirement experts on the go. | |
Also, you can obtain timely updates to help you stay informed about the markets, the economy |
and investing by connecting with Invesco on Twitter, LinkedIn or Facebook. You can access our blog at blog.invesco.us.com.
For questions about your account, feel free to contact an Invesco client services representative at 800 959 4246. For Invesco-related questions or comments, please email me directly at phil@invesco.com.
Thank you for investing with us.
Sincerely,
Philip Taylor
Senior Managing Director, Invesco Ltd.
iPad is a trademark of Apple Inc., registered in the US and other countries. App Store is a service mark of Apple Inc. Invesco Distributors, Inc. is not affiliated with Apple Inc.
4 Invesco Value Opportunities Fund
Schedule of Investments(a)
October 31, 2014
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco Value Opportunities Fund
Investment Abbreviations:
ADR | American Depositary Receipt |
Notes to Schedule of Investments:
(a) | Industry and/or sector classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poors. |
(b) | Non-income producing security. |
(c) | All or a portion of this security was out on loan at October 31, 2014. |
(d) | The money market fund and the Fund are affiliated by having the same investment adviser. |
(e) | The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrowers return of the securities loaned. See Note 1I. |
The following table presents the Funds gross and net amount of assets available for offset by the Fund as of October 31, 2014. |
Counterparty | Gross Amount of Securities on Loan at Value |
Cash Collateral Received for Securities Loaned* |
Net Amount |
|||||||||
State Street Bank and Trust Co. |
$ | 8,097,121 | $ | (8,097,121 | ) | $ | |
* | Amount does not include excess collateral received. |
Portfolio Composition
By sector, based on Net Assets
as of October 31, 2014
Financials |
39.3 | % | ||
Energy |
15.9 | |||
Consumer Discretionary |
10.9 | |||
Information Technology |
9.1 | |||
Health Care |
8.9 | |||
Industrials |
4.5 | |||
Consumer Staples |
2.8 | |||
Materials |
2.5 | |||
Telecommunication Services |
1.8 | |||
Money Market Funds Plus Other Assets Less Liabilities |
4.3 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco Value Opportunities Fund
Statement of Assets and Liabilities
October 31, 2014
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco Value Opportunities Fund
Statement of Operations
For the six months ended October 31, 2014
(Unaudited)
Investment income: |
| |||
Dividends (net of foreign withholding taxes of $299,780) |
$ | 10,759,938 | ||
Dividends from affiliated money market funds (includes securities lending income of $88,162) |
95,132 | |||
Total investment income |
10,855,070 | |||
Expenses: |
||||
Advisory fees |
3,343,833 | |||
Administrative services fees |
128,470 | |||
Custodian fees |
14,435 | |||
Distribution fees: |
||||
Class A |
1,017,152 | |||
Class B |
49,063 | |||
Class C |
522,876 | |||
Class R |
58,360 | |||
Transfer agent fees A, B, C, R and Y |
1,269,658 | |||
Transfer agent fees R5 |
1,792 | |||
Trustees and officers fees and benefits |
17,262 | |||
Other |
135,709 | |||
Total expenses |
6,558,610 | |||
Less: Fees waived and expense offset arrangement(s) |
(35,848 | ) | ||
Net expenses |
6,522,762 | |||
Net investment income |
4,332,308 | |||
Realized and unrealized gain (loss) from: |
||||
Net realized gain (loss) from: |
||||
Investment securities |
43,682,613 | |||
Foreign currencies |
(110,930 | ) | ||
43,571,683 | ||||
Change in net unrealized appreciation (depreciation) of: |
||||
Investment securities |
(18,829,714 | ) | ||
Foreign currencies |
(40,732 | ) | ||
(18,870,446 | ) | |||
Net realized and unrealized gain |
24,701,237 | |||
Net increase in net assets resulting from operations |
$ | 29,033,545 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
8 Invesco Value Opportunities Fund
Statement of Changes in Net Assets
For the six months ended October 31, 2014 and the year ended April 30, 2014
(Unaudited)
October 31, 2014 |
April 30, 2014 |
|||||||
Operations: |
|
|||||||
Net investment income |
$ | 4,332,308 | $ | 16,031,248 | ||||
Net realized gain |
43,571,683 | 80,135,916 | ||||||
Change in net unrealized appreciation (depreciation) |
(18,870,446 | ) | 82,450,217 | |||||
Net increase in net assets resulting from operations |
29,033,545 | 178,617,381 | ||||||
Distributions to shareholders from net investment income: |
||||||||
Class A |
| (8,166,294 | ) | |||||
Class B |
| (499,285 | ) | |||||
Class C |
| (478,306 | ) | |||||
Class R |
| (183,768 | ) | |||||
Class Y |
| (191,550 | ) | |||||
Class R5 |
| (35,996 | ) | |||||
Total distributions from net investment income |
| (9,555,199 | ) | |||||
Share transactionsnet: |
||||||||
Class A |
(44,160,878 | ) | (76,269,064 | ) | ||||
Class B |
(6,840,329 | ) | (18,243,683 | ) | ||||
Class C |
(4,391,307 | ) | (12,420,674 | ) | ||||
Class R |
(1,019,170 | ) | (766,252 | ) | ||||
Class Y |
6,597,080 | 984,968 | ||||||
Class R5 |
2,192,892 | (186,335 | ) | |||||
Net increase (decrease) in net assets resulting from share transactions |
(47,621,712 | ) | (106,901,040 | ) | ||||
Net increase (decrease) in net assets |
(18,588,167 | ) | 62,161,142 | |||||
Net assets: |
||||||||
Beginning of period |
999,819,073 | 937,657,931 | ||||||
End of period (includes undistributed net investment income of $19,666,474 and $15,334,166, respectively) |
$ | 981,230,906 | $ | 999,819,073 |
Notes to Financial Statements
October 31, 2014
(Unaudited)
NOTE 1Significant Accounting Policies
Invesco Value Opportunities Fund (the Fund) is a series portfolio of AIM Sector Funds (Invesco Sector Funds) (the Trust). The Trust is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end series management investment company consisting of ten separate portfolios, each authorized to issue an unlimited number of shares of beneficial interest. The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each portfolio or class will be voted on exclusively by the shareholders of such portfolio or class.
The Funds investment objective is total return through growth of capital and current income.
The Fund currently consists of six different classes of shares: Class A, Class B, Class C, Class R, Class Y and Class R5. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met and under certain circumstances load waived shares may be subject to contingent deferred sales charges (CDSC). Class C shares are sold with a CDSC. Class R, Class Y and Class R5 shares are sold at net asset value. Effective November 30, 2010, new or additional investments in Class B shares are no longer permitted. Existing shareholders of Class B shares may continue to reinvest dividends and capital gains distributions in Class B shares until they convert to Class A shares. Also, shareholders in Class B shares will be able to exchange those shares for Class B shares of other Invesco Funds offering such shares until they convert to Class A shares. Generally, Class B shares will automatically convert to Class A shares on or about the month-end, which is at least eight years after the date of purchase. Redemption of Class B shares prior to the conversion date will be subject to a CDSC.
The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.
A. | Security Valuations Securities, including restricted securities, are valued according to the following policy. |
A security listed or traded on an exchange (except convertible securities) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based
9 Invesco Value Opportunities Fund
on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (NYSE).
Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
Debt obligations (including convertible securities) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate (for unlisted equities), yield (for debt obligations), quality, type of issue, coupon rate (for debt obligations), maturity (for debt obligations), individual trading characteristics and other market data. Debt obligations are subject to interest rate and credit risks. In addition, all debt obligations involve some risk of default with respect to interest and/or principal payments.
Foreign securities (including foreign exchange contracts) prices are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange-traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that the Adviser determines are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities prices meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and ask prices is used to value debt obligations, including corporate loans.
Securities for which market quotations are not readily available or became unreliable are valued at fair value as determined in good faith by or under the supervision of the Trusts officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a securitys fair value.
The Fund may invest in securities that are subject to interest rate risk, meaning the risk that the prices will generally fall as interest rates rise and, conversely, the prices will generally rise as interest rates fall. Specific securities differ in their sensitivity to changes in interest rates depending on their individual characteristics. Changes in interest rates may result in increased market volatility, which may affect the value and/or liquidity of certain of the Funds investments.
Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuers assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B. | Securities Transactions and Investment Income Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income (net of withholding tax, if any) is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. |
The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Funds net asset value and, accordingly, they reduce the Funds total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C. | Country Determination For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuers securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted. |
10 Invesco Value Opportunities Fund
D. | Distributions Distributions from net investment income and net realized capital gain, if any, are generally declared and paid annually and recorded on the ex-dividend date. The Fund may elect to treat a portion of the proceeds from redemptions as distributions for federal income tax purposes. |
E. | Federal Income Taxes The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code of 1986, as amended (the Internal Revenue Code), necessary to qualify as a regulated investment company and to distribute substantially all of the Funds taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements. |
The Fund recognizes the tax benefits of uncertain tax positions only when the position is more likely than not to be sustained. Management has analyzed the Funds uncertain tax positions and concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions. Management is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next 12 months.
The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally, the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F. | Expenses Fees provided for under the Rule 12b-1 plan of a particular class of the Fund are charged to the operations of such class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses attributable to Class R5 are charged to such class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses relating to all other classes are allocated among those classes based on relative net assets. All other expenses are allocated among the classes based on relative net assets. Prior to June 1, 2010, incremental transfer agency fees which were unique to each class of shares were charged to the operations of such class. |
G. | Accounting Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print. |
H. | Indemnifications Under the Trusts organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of the performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Funds servicing agreements, that contain a variety of indemnification clauses. The Funds maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote. |
I. | Securities Lending The Fund may lend portfolio securities having a market value up to one-third of the Funds total assets. Such loans are secured by collateral equal to no less than the market value of the loaned securities determined daily by the securities lending provider. Such collateral will be cash or debt securities issued or guaranteed by the U.S. Government or any of its sponsored agencies. Cash collateral received in connection with these loans is invested in short-term money market instruments or affiliated money market funds and is shown as such on the Schedule of Investments. It is the Funds policy to obtain additional collateral from or return excess collateral to the borrower by the end of the next business day, following the valuation date of the securities loaned. Therefore, the value of the collateral held may be temporarily less than the value of the securities on loan. Lending securities entails a risk of loss to the Fund if, and to the extent that, the market value of the securities loaned were to increase and the borrower did not increase the collateral accordingly, and the borrower failed to return the securities. Upon the failure of the borrower to return the securities, collateral may be liquidated and the securities may be purchased on the open market to replace the loaned securities. The Fund could experience delays and costs in gaining access to the collateral. The Fund bears the risk of any deficiency in the amount of the collateral available for return to the borrower due to any loss on the collateral invested. Dividends received on cash collateral investments for securities lending transactions, which are net of compensation to counterparties, is included in Dividends from affiliated money market funds on the Statement of Operations. The aggregate value of securities out on loan is shown as a footnote on the Statement of Assets and Liabilities, if any. |
J. | Foreign Currency Translations Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (1) sales of foreign currencies, (2) currency gains or losses realized between the trade and settlement dates on securities transactions, and (3) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Funds books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign currency gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates. |
The Fund may invest in foreign securities, which may be subject to foreign taxes on income, gains on investments or currency repatriation, a portion of which may be recoverable. Foreign taxes, if any, are recorded based on the tax regulations and rates that exist in the foreign markets in which the Fund invests and are shown in the Statement of Operations.
K. | Forward Foreign Currency Contracts The Fund may engage in foreign currency transactions either on a spot (i.e. for prompt delivery and settlement) basis or through forward foreign currency contracts to manage or minimize currency or exchange rate risk. |
The Fund may also enter into forward foreign currency contracts for the purchase or sale of a security denominated in a foreign currency in order to lock in the U.S. dollar price of that security, or the Fund may also enter into forward foreign currency contracts that do not provide for physical settlement of the two currencies, but instead are settled by a single cash payment calculated as the difference between the agreed upon exchange rate and the spot rate at settlement based upon an agreed upon notional amount (non-deliverable forwards). The Fund will set aside liquid assets in an amount equal to daily mark-to-market obligation for forward foreign currency contracts.
11 Invesco Value Opportunities Fund
A forward foreign currency contract is an obligation between two parties (Counterparties) to purchase or sell a specific currency for an agreed-upon price at a future date. The use of forward foreign currency contracts does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with forward foreign currency contracts include failure of the Counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities.
NOTE 2Advisory Fees and Other Fees Paid to Affiliates
The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the Adviser or Invesco). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Funds average daily net assets as follows:
Average Daily Net Assets | Rate | |||||
First $250 million |
0 | .695% | ||||
Next $250 million |
0 | .67% | ||||
Next $500 million |
0 | .645% | ||||
Next $1.5 billion |
0 | .62% | ||||
Next $2.5 billion |
0 | .595% | ||||
Next $2.5 billion |
0 | .57% | ||||
Next $2.5 billion |
0 | .545% | ||||
Over $10 billion |
0 | .52% |
For the six months ended October 31, 2014, the effective advisory fee incurred by the Fund was 0.66%.
Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Canada Ltd. (collectively, the Affiliated Sub-Advisers) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide(s) discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).
The Adviser has contractually agreed, through at least June 30, 2015, to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver and/or expense reimbursement (excluding certain items discussed above) of Class A, Class B, Class C, Class R, Class Y and Class R5 shares to 2.00%, 2.75%, 2.75%, 2.25%, 1.75% and 1.75%, respectively, of average daily net assets. In determining the Advisers obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver and/or expense reimbursement to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary or non-routine items, including litigation expenses; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless Invesco continues the fee waiver agreement, it will terminate on June 30, 2015. The fee waiver agreement cannot be terminated during its term. The Adviser did not waive fees and/or reimburse expenses during the period under this expense limitation.
Further, the Adviser has contractually agreed, through at least June 30, 2016, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash (excluding investments of cash collateral from securities lending) in such affiliated money market funds.
For the six months ended October 31, 2014, the Adviser waived advisory fees of $29,092.
The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco for certain administrative costs incurred in providing accounting services to the Fund. For the six months ended October 31, 2014, expenses incurred under the agreement are shown in the Statement of Operations as Administrative services fees.
The Trust has entered into a transfer agency and service agreement with Invesco Investment Services, Inc. (IIS) pursuant to which the Fund has agreed to pay IIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IIS for certain expenses incurred by IIS in the course of providing such services. IIS may make payments to intermediaries that provide omnibus account services, sub-accounting services and/or networking services. All fees payable by IIS to intermediaries that provide omnibus account services or sub-accounting are charged back to the Fund, subject to certain limitations approved by the Trusts Board of Trustees. For the six months ended October 31, 2014, expenses incurred under the agreement are shown in the Statement of Operations as Transfer agent fees.
Shares of the Fund are distributed by Invesco Distributors, Inc. (IDI). The Fund has adopted a distribution plan pursuant to Rule 12b-1 under the 1940 Act, and a service plan (collectively, the Plans) for Class A, Class B, Class C and Class R shares to compensate IDI for the sale, distribution, shareholder servicing and maintenance of shareholder accounts for these shares. Under the Plans, the Fund will incur annual fees of up to 0.25% of Class A average daily net assets, up to 1.00% each of Class B and Class C average daily net assets and up to 0.50% of Class R average daily net assets.
With respect to Class B and Class C shares, the Fund is authorized to reimburse in future years any distribution related expenses that exceed the maximum annual reimbursement rate for such class, so long as such reimbursement does not cause the Fund to exceed the Class B and Class C maximum annual reimbursement rate, respectively. With respect to Class A shares, distribution related expenses that exceed the maximum annual reimbursement rate for such class are not carried forward to future years and the Fund will not reimburse IDI for any such expenses.
For the six months ended October 31, 2014, expenses incurred under these agreements are shown in the Statement of Operations as Distribution fees.
12 Invesco Value Opportunities Fund
Front-end sales commissions and CDSC (collectively, the sales charges) are not recorded as expenses of the Fund. Front-end sales commissions are deducted from proceeds from the sales of Fund shares prior to investment in Class A shares of the Fund. CDSC are deducted from redemption proceeds prior to remittance to the shareholder. During the six months ended October 31, 2014, IDI advised the Fund that IDI retained $40,767 in front-end sales commissions from the sale of Class A shares and $41, $3,211 and $1,943 from Class A, Class B and Class C shares, respectively, for CDSC imposed on redemptions by shareholders.
For the six months ended October 31, 2014, the Fund incurred $4,916 in brokerage commissions with Invesco Capital Markets, Inc., an affiliate of the Adviser and IDI, for portfolio transactions executed on behalf of the Fund.
Certain officers and trustees of the Trust are officers and directors of the Adviser, IIS and/or IDI.
NOTE 3Additional Valuation Information
GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods, giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3), generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investments assigned level:
Level 1 | Prices are determined using quoted prices in an active market for identical assets. |
Level 2 | Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others. |
Level 3 | Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Funds own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information. |
The following is a summary of the tiered valuation input levels, as of October 31, 2014. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
Level 1 | Level 2 | Level 3 | Total | |||||||||||||
Equity Securities |
$ | 945,657,909 | $ | 34,532,165 | $ | | $ | 980,190,074 |
NOTE 4Expense Offset Arrangement(s)
The expense offset arrangement is comprised of transfer agency credits which result from balances in demand deposit accounts used by the transfer agent for clearing shareholder transactions. For the six months ended October 31, 2014, the Fund received credits from this arrangement, which resulted in the reduction of the Funds total expenses of $6,756.
NOTE 5Trustees and Officers Fees and Benefits
Trustees and Officers Fees and Benefits include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and Trustees and Officers Fees and Benefits also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees were eligible to participate in a retirement plan that provided for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. Trustees and Officers Fees and Benefits include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.
NOTE 6Cash Balances
The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with State Street Bank and Trust Company, the custodian bank. Such balances, if any at period end, are shown in the Statement of Assets and Liabilities under the payable caption Amount due custodian. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.
NOTE 7Tax Information
The amount and character of income and gains to be distributed are determined in accordance with income tax regulations, which may differ from GAAP. Reclassifications are made to the Funds capital accounts to reflect income and gains available for distribution (or available capital loss carryforward) under income tax regulations. The tax character of distributions paid during the year and the tax components of net assets will be reported at the Funds fiscal year-end.
Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. Capital losses generated in years beginning after December 22, 2010 can be carried forward for an unlimited period, whereas previous losses expire in eight tax years. Capital losses with an expiration period may not be
13 Invesco Value Opportunities Fund
used to offset capital gains until all net capital losses without an expiration date have been utilized. Capital loss carryforwards with no expiration date will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss carryforwards in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.
The Fund had a capital loss carryforward as of April 30, 2014, which expires as follows:
Capital Loss Carryforward* | ||||||||||||
Expiration | Short-Term | Long-Term | Total | |||||||||
April 30, 2017 |
$ | 152,209,144 | $ | | $ | 152,209,144 |
* | Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code and may be further limited depending upon a variety of factors, including the realization of net unrealized gains or losses as of the date of any reorganization. |
NOTE 8Investment Securities
The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the six months ended October 31, 2014 was $78,575,124 and $120,269,840, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed federal income tax reporting period-end.
Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis | ||||
Aggregate unrealized appreciation of investment securities |
$ | 290,128,000 | ||
Aggregate unrealized (depreciation) of investment securities |
(48,985,459 | ) | ||
Net unrealized appreciation of investment securities |
$ | 241,142,541 |
Cost of investments for tax purposes is $739,047,533.
NOTE 9Share Information
Summary of Share Activity | ||||||||||||||||
Six months ended October 31, 2014(a) |
Year ended April 30, 2014 |
|||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||
Sold: |
||||||||||||||||
Class A |
1,188,099 | $ | 17,268,011 | 2,705,848 | $ | 35,646,362 | ||||||||||
Class B |
17,804 | 256,240 | 85,389 | 1,111,173 | ||||||||||||
Class C |
155,620 | 2,201,013 | 436,925 | 5,606,047 | ||||||||||||
Class R |
112,395 | 1,627,163 | 272,680 | 3,586,825 | ||||||||||||
Class Y |
546,030 | 8,038,307 | 326,914 | 4,349,047 | ||||||||||||
Class R5 |
204,575 | 2,953,580 | 23,475 | 306,850 | ||||||||||||
Issued as reinvestment of dividends: |
||||||||||||||||
Class A |
| | 574,936 | 7,704,141 | ||||||||||||
Class B |
| | 36,962 | 488,274 | ||||||||||||
Class C |
| | 34,092 | 446,279 | ||||||||||||
Class R |
| | 13,728 | 183,675 | ||||||||||||
Class Y |
| | 12,845 | 171,744 | ||||||||||||
Class R5 |
| | 2,677 | 35,869 | ||||||||||||
Automatic conversion of Class B shares to Class A shares: |
||||||||||||||||
Class A |
311,114 | 4,552,806 | 922,635 | 12,285,424 | ||||||||||||
Class B |
(315,599 | ) | (4,552,806 | ) | (936,026 | ) | (12,285,424 | ) | ||||||||
Reacquired: |
||||||||||||||||
Class A |
(4,529,797 | ) | (65,981,695 | ) | (10,024,823 | ) | (131,904,991 | ) | ||||||||
Class B |
(176,434 | ) | (2,543,763 | ) | (579,323 | ) | (7,557,706 | ) | ||||||||
Class C |
(464,400 | ) | (6,592,320 | ) | (1,421,906 | ) | (18,473,000 | ) | ||||||||
Class R |
(183,582 | ) | (2,646,333 | ) | (347,156 | ) | (4,536,752 | ) | ||||||||
Class Y |
(99,114 | ) | (1,441,227 | ) | (266,967 | ) | (3,535,823 | ) | ||||||||
Class R5 |
(52,069 | ) | (760,688 | ) | (39,299 | ) | (529,054 | ) | ||||||||
Net increase (decrease) in share activity |
(3,285,358 | ) | $ | (47,621,712 | ) | (8,166,394 | ) | $ | (106,901,040 | ) |
(a) | There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 23% of the outstanding shares of the Fund. IDI has an agreement with these entities to sell Fund shares. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as securities brokerage, distribution, third party record keeping and account servicing. The Fund has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially. |
14 Invesco Value Opportunities Fund
NOTE 10Financial Highlights
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
Net asset value, beginning of period |
Net investment (loss)(a) |
Net gains on securities (both |
Total from operations |
Dividends investment income |
Distributions from net gains |
Total distributions |
Net asset value, end of period |
Total return |
Net assets, (000s omitted) |
Ratio of to average net
assets and/or expenses absorbed |
Ratio
of assets without fee waivers |
Ratio of
net to average |
Portfolio turnover(b) |
|||||||||||||||||||||||||||||||||||||||||||
Class A |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 10/31/14 |
$ | 14.24 | $ | 0.07 | $ | 0.35 | $ | 0.42 | $ | | $ | | $ | | $ | 14.66 | 2.95 | %(c) | $ | 788,885 | 1.21 | %(d) | 1.22 | %(d) | 0.94 | %(d) | 8 | % | ||||||||||||||||||||||||||||
Year ended 04/30/14 |
11.97 | 0.23 | (e) | 2.18 | 2.41 | (0.14 | ) | | (0.14 | ) | 14.24 | 20.21 | (c) | 809,243 | 1.23 | 1.24 | 1.71 | (e) | 16 | |||||||||||||||||||||||||||||||||||||
Year ended 04/30/13 |
10.24 | 0.12 | 1.72 | 1.84 | (0.10 | ) | (0.01 | ) | (0.11 | ) | 11.97 | 18.15 | (c) | 749,819 | 1.26 | 1.27 | 1.14 | 15 | ||||||||||||||||||||||||||||||||||||||
Year ended 04/30/12 |
10.18 | 0.09 | (0.03 | ) | 0.06 | (0.00 | ) | | (0.00 | ) | 10.24 | 0.60 | (c) | 740,384 | 1.40 | 1.40 | 0.92 | 46 | ||||||||||||||||||||||||||||||||||||||
One month ended 04/30/11 |
9.98 | (0.00 | ) | 0.20 | 0.20 | | | | 10.18 | 2.00 | (c) | 44,328 | 1.40 | (f) | 1.98 | (f) | (0.51 | )(f) | 2 | |||||||||||||||||||||||||||||||||||||
Year ended 03/31/11 |
8.95 | 0.06 | 1.06 | 1.12 | (0.09 | ) | | (0.09 | ) | 9.98 | 12.61 | (c) | 43,855 | 1.42 | 1.47 | 0.68 | 80 | |||||||||||||||||||||||||||||||||||||||
Year ended 03/31/10 |
5.84 | 0.06 | 3.12 | 3.18 | (0.07 | ) | | (0.07 | ) | 8.95 | 54.55 | (g) | 53,983 | 1.44 | 1.44 | 0.72 | 13 | |||||||||||||||||||||||||||||||||||||||
Class B |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 10/31/14 |
14.03 | 0.07 | 0.35 | 0.42 | | | | 14.45 | 2.99 | (c)(h) | 35,453 | 1.21 | (d)(h) | 1.22 | (d)(h) | 0.94 | (d)(h) | 8 | ||||||||||||||||||||||||||||||||||||||
Year ended 04/30/14 |
11.80 | 0.22 | (e) | 2.15 | 2.37 | (0.14 | ) | | (0.14 | ) | 14.03 | 20.16 | (c)(h) | 41,084 | 1.23 | (h) | 1.24 | (h) | 1.71 | (e)(h) | 16 | |||||||||||||||||||||||||||||||||||
Year ended 04/30/13 |
10.09 | 0.12 | 1.70 | 1.82 | (0.10 | ) | (0.01 | ) | (0.11 | ) | 11.80 | 18.25 | (c)(h) | 50,968 | 1.26 | (h) | 1.27 | (h) | 1.14 | (h) | 15 | |||||||||||||||||||||||||||||||||||
Year ended 04/30/12 |
10.04 | 0.09 | (0.04 | ) | 0.05 | | | | 10.09 | 0.50 | (c)(h) | 67,547 | 1.38 | (h) | 1.38 | (h) | 0.94 | (h) | 46 | |||||||||||||||||||||||||||||||||||||
One month ended 04/30/11 |
9.84 | (0.00 | ) | 0.20 | 0.20 | | | | 10.04 | 2.03 | (c)(h) | 7,331 | 1.46 | (f)(h) | 2.04 | (f)(h) | (0.57 | )(f)(h) | 2 | |||||||||||||||||||||||||||||||||||||
Year ended 03/31/11 |
8.79 | 0.01 | 1.04 | 1.05 | | | | 9.84 | 11.95 | (c)(h) | 7,392 | 1.99 | (h) | 2.04 | (h) | 0.11 | (h) | 80 | ||||||||||||||||||||||||||||||||||||||
Year ended 03/31/10 |
5.73 | (0.00 | ) | 3.06 | 3.06 | | | | 8.79 | 53.40 | (g) | 8,629 | 2.19 | 2.19 | (0.03 | ) | 13 | |||||||||||||||||||||||||||||||||||||||
Class C |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 10/31/14 |
13.87 | 0.02 | 0.34 | 0.36 | | | | 14.23 | 2.60 | (c)(h) | 106,165 | 1.93 | (d)(h) | 1.94 | (d)(h) | 0.22 | (d)(h) | 8 | ||||||||||||||||||||||||||||||||||||||
Year ended 04/30/14 |
11.67 | 0.13 | (e) | 2.13 | 2.26 | (0.06 | ) | | (0.06 | ) | 13.87 | 19.38 | (c)(h) | 107,754 | 1.94 | (h) | 1.95 | (h) | 1.00 | (e)(h) | 16 | |||||||||||||||||||||||||||||||||||
Year ended 04/30/13 |
9.99 | 0.05 | 1.67 | 1.72 | (0.03 | ) | (0.01 | ) | (0.04 | ) | 11.67 | 17.26 | (c)(h) | 101,772 | 1.96 | (h) | 1.97 | (h) | 0.44 | (h) | 15 | |||||||||||||||||||||||||||||||||||
Year ended 04/30/12 |
10.00 | 0.02 | (0.03 | ) | (0.01 | ) | | | | 9.99 | (0.10 | )(c)(h) | 101,785 | 2.11 | (h) | 2.11 | (h) | 0.21 | (h) | 46 | ||||||||||||||||||||||||||||||||||||
One month ended 04/30/11 |
9.80 | (0.01 | ) | 0.21 | 0.20 | | | | 10.00 | 2.04 | (c)(h) | 8,021 | 2.07 | (f)(h) | 2.65 | (f)(h) | (1.18 | )(f)(h) | 2 | |||||||||||||||||||||||||||||||||||||
Year ended 03/31/11 |
8.77 | 0.01 | 1.03 | 1.04 | (0.01 | ) | | (0.01 | ) | 9.80 | 11.81 | (c)(h) | 8,033 | 2.06 | (h) | 2.11 | (h) | 0.04 | (h) | 80 | ||||||||||||||||||||||||||||||||||||
Year ended 03/31/10 |
5.73 | 0.00 | 3.06 | 3.06 | (0.02 | ) | | (0.02 | ) | 8.77 | 53.42 | (g)(h) | 9,337 | 2.18 | (h) | 2.18 | (h) | (0.02 | )(h) | 13 | ||||||||||||||||||||||||||||||||||||
Class R |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 10/31/14 |
14.20 | 0.05 | 0.36 | 0.41 | | | | 14.61 | 2.89 | (c) | 22,869 | 1.46 | (d) | 1.47 | (d) | 0.69 | (d) | 8 | ||||||||||||||||||||||||||||||||||||||
Year ended 04/30/14 |
11.94 | 0.19 | (e) | 2.18 | 2.37 | (0.11 | ) | | (0.11 | ) | 14.20 | 19.91 | (c) | 23,247 | 1.48 | 1.49 | 1.46 | (e) | 16 | |||||||||||||||||||||||||||||||||||||
Year ended 04/30/13 |
10.22 | 0.09 | 1.72 | 1.81 | (0.08 | ) | (0.01 | ) | (0.09 | ) | 11.94 | 17.80 | (c) | 20,272 | 1.51 | 1.52 | 0.89 | 15 | ||||||||||||||||||||||||||||||||||||||
Year ended 04/30/12(i) |
9.89 | 0.07 | 0.26 | 0.33 | (0.00 | ) | | (0.00 | ) | 10.22 | 3.35 | (c) | 19,599 | 1.65 | (f) | 1.65 | (f) | 0.67 | (f) | 46 | ||||||||||||||||||||||||||||||||||||
Class Y(j) |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 10/31/14 |
14.21 | 0.09 | 0.35 | 0.44 | | | | 14.65 | 3.10 | (c) | 23,320 | 0.96 | (d) | 0.97 | (d) | 1.19 | (d) | 8 | ||||||||||||||||||||||||||||||||||||||
Year ended 04/30/14 |
11.94 | 0.26 | (e) | 2.18 | 2.44 | (0.17 | ) | | (0.17 | ) | 14.21 | 20.53 | (c) | 16,266 | 0.98 | 0.99 | 1.96 | (e) | 16 | |||||||||||||||||||||||||||||||||||||
Year ended 04/30/13 |
10.22 | 0.15 | 1.71 | 1.86 | (0.13 | ) | (0.01 | ) | (0.14 | ) | 11.94 | 18.39 | (c) | 12,799 | 1.01 | 1.02 | 1.39 | 15 | ||||||||||||||||||||||||||||||||||||||
Year ended 04/30/12 |
10.14 | 0.11 | (0.03 | ) | 0.08 | (0.00 | ) | | (0.00 | ) | 10.22 | 0.80 | (c) | 11,424 | 1.15 | 1.15 | 1.17 | 46 | ||||||||||||||||||||||||||||||||||||||
One month ended 04/30/11 |
9.93 | (0.00 | ) | 0.21 | 0.21 | | | | 10.14 | 2.11 | (c) | 4,826 | 1.15 | (f) | 1.73 | (f) | (0.26 | )(f) | 2 | |||||||||||||||||||||||||||||||||||||
Year ended 03/31/11 |
8.94 | 0.08 | 1.05 | 1.13 | (0.14 | ) | | (0.14 | ) | 9.93 | 12.75 | (c) | 4,757 | 1.17 | 1.22 | 0.93 | 80 | |||||||||||||||||||||||||||||||||||||||
Year ended 03/31/10 |
5.83 | 0.07 | 3.13 | 3.20 | (0.09 | ) | | (0.09 | ) | 8.94 | 54.98 | (g) | 50,475 | 1.19 | 1.19 | 0.96 | 13 | |||||||||||||||||||||||||||||||||||||||
Class R5 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six months ended 10/31/14 |
14.25 | 0.10 | 0.36 | 0.46 | | | | 14.71 | 3.23 | (c) | 4,539 | 0.81 | (d) | 0.82 | (d) | 1.34 | (d) | 8 | ||||||||||||||||||||||||||||||||||||||
Year ended 04/30/14 |
11.99 | 0.28 | (e) | 2.18 | 2.46 | (0.20 | ) | | (0.20 | ) | 14.25 | 20.67 | (c) | 2,225 | 0.81 | 0.82 | 2.13 | (e) | 16 | |||||||||||||||||||||||||||||||||||||
Year ended 04/30/13 |
10.26 | 0.18 | 1.73 | 1.91 | (0.17 | ) | (0.01 | ) | (0.18 | ) | 11.99 | 18.82 | (c) | 2,029 | 0.73 | 0.74 | 1.67 | 15 | ||||||||||||||||||||||||||||||||||||||
Year ended 04/30/12(i) |
9.85 | 0.14 | 0.27 | 0.41 | (0.00 | ) | | (0.00 | ) | 10.26 | 4.18 | (c) | 4,040 | 0.81 | (f) | 0.81 | (f) | 1.51 | (f) | 46 |
(a) | Calculated using average shares outstanding. |
(b) | Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable. For the year ended April 30, 2012, the portfolio turnover calculation excludes the value of securities purchased of $846,280,438 and sold of $257,706,685 in the effort to realign the Funds portfolio holdings after the reorganization of Invesco Basic Value Fund into the Fund. |
(c) | Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable. |
(d) | Ratios are annualized and based on average daily net assets (000s omitted) of $807,088, $38,932, $107,554, $23,154, $19,044 and $3,555 for Class A, Class B, Class C, Class R, Class Y and Class R5 shares, respectively. |
(e) | Net investment income (loss) per share and the ratio of net investment income (loss) to average net assets include significant dividends received during the period. Net investment income (loss) per share and the ratio of net investment income (loss) to average net assets excluding the significant dividends are $0.15 and 1.07%, $0.14 and 1.07%, $0.05 and 0.36%, $0.11 and 0.82%, $0.18 and 1.32% and $0.20 and 1.49% for Class A, Class B, Class C, Class R, Class Y and Class R5 shares, respectively. |
(f) | Annualized. |
(g) | Assumes reinvestment of all distributions for the period for all classes. Does not include payment of the maximum sales charge of 5.75% or contingent deferred sales charge (CDSC) on Class A shares, maximum CDSC of 5% on Class B shares or maximum CDSC of 1% on Class C shares. On purchases of $1 million or more, a CDSC of 1% may be imposed on certain redemptions of Class A shares made within eighteen months of purchase. If the sales charges were included, total returns would be lower. These returns include combined Rule 12b-1 fees and service fees of up to 0.25% for Class A shares and up to 1% on Class B and Class C shares. Does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares for either class. |
(h) | The total return, ratio of expenses to average net assets and ratio of net investment income (loss) to average net assets reflect actual 12b-1 fees of 0.25% for Class B shares and 0.96% for Class C shares for the six months ended October 31, 2014, 0.25% for Class B shares and 0.96% for Class C shares for the year ended April 30, 2014, 0.25% for Class B shares and 0.95% for Class C shares for the year ended April 30, 2013, 0.23% for Class B shares and 0.96% for Class C shares for the year ended April 30, 2012, 0.31% for Class B shares and 0.92% for Class C shares for the period April 1, 2011 to April 30, 2011, 0.82% for Class B shares and 0.89% for Class C shares for the year ended March 31, 2011 and less than 1% for Class C shares for the year ended March 31, 2010. |
(i) | Commencement date of May 23, 2011. |
(j) | On June 1, 2010, the Funds former Class I shares were reorganized into Class Y shares. |
15 Invesco Value Opportunities Fund
Calculating your ongoing Fund expenses
Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, if any; and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period May 1, 2014 through October 31, 2014.
Actual expenses
The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled Actual Expenses Paid During Period to estimate the expenses you paid on your account during this period.
Hypothetical example for comparison purposes
The table below also provides information about hypothetical account values and hypothetical expenses based on the Funds actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Funds actual return.
The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, if any. Therefore, the hypothetical information is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.
Class | Beginning Account Value (05/01/14) |
ACTUAL | HYPOTHETICAL (5% annual return before |
Annualized Expense Ratio |
||||||||||||||||||||
Ending Account Value (10/31/14)1 |
Expenses Paid During Period2 |
Ending Account Value (10/31/14) |
Expenses Paid During Period2 |
|||||||||||||||||||||
A | $ | 1,000.00 | $ | 1,029.50 | $ | 6.19 | $ | 1,019.11 | $ | 6.16 | 1.21 | % | ||||||||||||
B | 1,000.00 | 1.029.90 | 6.19 | 1,019.11 | 6.16 | 1.21 | ||||||||||||||||||
C | 1,000.00 | 1,026.00 | 9.86 | 1,015.48 | 9.80 | 1.93 | ||||||||||||||||||
R | 1,000.00 | 1,028.10 | 7.46 | 1,017.85 | 7.43 | 1.46 | ||||||||||||||||||
Y | 1,000.00 | 1,031.00 | 4.91 | 1,020.37 | 4.89 | 0.96 | ||||||||||||||||||
R5 | 1,000.00 | 1,032.30 | 4.15 | 1,021.12 | 4.13 | 0.81 |
1 | The actual ending account value is based on the actual total return of the Fund for the period May 1, 2014 through October 31, 2014, after actual expenses and will differ from the hypothetical ending account value which is based on the Funds expense ratio and a hypothetical annual return of 5% before expenses. |
2 | Expenses are equal to the Funds annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 184/365 to reflect the most recent fiscal half year. |
16 Invesco Value Opportunities Fund
Approval of Investment Advisory and Sub-Advisory Contracts
17 Invesco Value Opportunities Fund
18 Invesco Value Opportunities Fund
Invesco mailing information
Send general correspondence to Invesco Investment Services, Inc., P.O. Box 219078, Kansas City, MO 64121-9078.
Important notice regarding delivery of security holder documents
To reduce Fund expenses, only one copy of most shareholder documents may be mailed to shareholders with multiple accounts at the same address (Householding). Mailing of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact Invesco Investment Services, Inc. at 800 959 4246 or contact your financial institution. We will begin sending you individual copies for each account within 30 days after receiving your request.
Fund holdings and proxy voting information
The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter ends. For the second and fourth quarters, the lists appear in the Funds semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The most recent list of portfolio holdings is available at invesco.com/completeqtrholdings. Shareholders can also look up the Funds Forms N-Q on the SEC website at sec.gov. Copies of the Funds Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are shown below.
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 959 4246 or at invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.
Information regarding how the Fund voted proxies related to its portfolio securities during the most recent 12-month period ended June 30 is available at invesco.com/proxysearch. The information is also available on the SEC website, sec.gov. Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the US distributor for Invesco Ltd.s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd. |
SEC file numbers: 811-03826 and 002-85905 | VK-VOPP-SAR-1 | Invesco Distributors, Inc. |
ITEM 2. | CODE OF ETHICS. |
There were no amendments to the Code of Ethics (the Code) that applies to the Registrants Principal Executive Officer (PEO) and Principal Financial Officer (PFO) during the period covered by the report. The Registrant did not grant any waivers, including implicit waivers, from any provisions of the Code to the PEO or PFO during the period covered by this report.
ITEM 3. | AUDIT COMMITTEE FINANCIAL EXPERT. |
Not applicable.
ITEM 4. | PRINCIPAL ACCOUNTANT FEES AND SERVICES. |
Not applicable.
ITEM 5. | AUDIT COMMITTEE OF LISTED REGISTRANTS. |
Not applicable.
ITEM 6. | SCHEDULE OF INVESTMENTS. |
Investments in securities of unaffiliated issuers is included as part of the reports to stockholders filed under Item 1 of this Form.
ITEM 7. | DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. |
Not applicable.
ITEM 8. | PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. |
Not applicable.
ITEM 9. | PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. |
Not applicable.
ITEM 10. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. |
None.
ITEM 11. | CONTROLS AND PROCEDURES. |
(a) | As of November 21, 2014 an evaluation was performed under the supervision and with the participation of the officers of the Registrant, including the Principal Executive Officer (PEO) and Principal Financial Officer (PFO), to assess the effectiveness of the Registrants disclosure controls and procedures, as that term is defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the Act), as amended. Based on that evaluation, the Registrants officers, including the PEO and PFO, concluded that, as of November 21, 2014, the Registrants disclosure controls and procedures were reasonably designed to ensure: (1) that information required to be disclosed by the Registrant on Form N-CSR is |
recorded, processed, summarized and reported within the time periods specified by the rules and forms of the Securities and Exchange Commission; and (2) that material information relating to the Registrant is made known to the PEO and PFO as appropriate to allow timely decisions regarding required disclosure. |
(b) | There have been no changes in the Registrants internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the second fiscal quarter of the period covered by the report that has materially affected, or is reasonably likely to materially affect, the Registrants internal control over financial reporting. |
ITEM 12. | EXHIBITS. |
12(a) (1) | Not applicable. | |
12(a) (2) | Certifications of principal executive officer and principal financial officer as required by Rule 30a-2(a) under the Investment Company Act of 1940. | |
12(a) (3) | Not applicable. | |
12(b) | Certifications of principal executive officer and principal financial officer as required by Rule 30a-2(b) under the Investment Company Act of 1940. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Registrant: AIM Sector Funds (Invesco Sector Funds)
By: | /s/ Philip A. Taylor | |
Philip A. Taylor | ||
Principal Executive Officer | ||
Date: | January 9, 2015 |
Pursuant to the requirements of the Securities and Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
By: | /s/ Philip A. Taylor | |
Philip A. Taylor | ||
Principal Executive Officer | ||
Date: | January 9, 2015 |
By: | /s/ Sheri Morris | |
Sheri Morris | ||
Principal Financial Officer | ||
Date: | January 9, 2015 |
EXHIBIT INDEX
12(a) (1) | Not applicable. | |
12(a) (2) | Certifications of principal executive officer and Principal financial officer as required by Rule 30a-2(a) under the Investment Company Act of 1940. | |
12(a) (3) | Not applicable. | |
12(b) | Certifications of principal executive officer and Principal financial officer as required by Rule 30a-2(b) under the Investment Company Act of 1940. |
I, Philip A. Taylor, Principal Executive Officer, certify that:
1. I have reviewed this report on Form N-CSR of AIM Sector Funds (Invesco Sector Funds);
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;
4. The registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidating subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and
(d) Disclosed in this report any change in this registrants internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting.
5. The registrants other certifying officer(s) and I have disclosed to the registrants auditors and the audit committee of the registrants board of directors (or persons performing equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting.
Date: January 9, 2015 | /s/ Philip A. Taylor | |||||
Philip A. Taylor, Principal Executive Officer |
I, Sheri Morris, Principal Financial Officer, certify that:
1. I have reviewed this report on Form N-CSR of AIM Sector Funds (Invesco Sector Funds);
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;
4. The registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940 for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidating subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and
(d) Disclosed in this report any change in this registrants internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting.
5. The registrants other certifying officer(s) and I have disclosed to the registrants auditors and the audit committee of the registrants board of directors (or persons performing equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting.
Date: January 9, 2015 | /s/ Sheri Morris | |||||
Sheri Morris, Principal Financial Officer |
CERTIFICATION OF SHAREHOLDER REPORT
In connection with the Certified Shareholder Report of AIM Sector Funds (Invesco Sector Funds) (the Company) on Form N-CSR for the period ended October 31, 2014, as filed with the Securities and Exchange Commission (the Report), I, Philip A. Taylor, Principal Executive Officer of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: January 9, 2015 | /s/ Philip A. Taylor | |||||
Philip A. Taylor, Principal Executive Officer |
A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided by the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
CERTIFICATION OF SHAREHOLDER REPORT
In connection with the Certified Shareholder Report of AIM Sector Funds (Invesco Sector Funds) (the Company) on Form N-CSR for the period ended October 31, 2014, as filed with the Securities and Exchange Commission (the Report), I, Sheri Morris, Principal Financial Officer of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: January 9, 2015 | /s/ Sheri Morris | |||||
Sheri Morris, Principal Financial Officer |
A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided by the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
'!A8VME="!B
M96=I;CTB[[N_(B!I9#TB5S5-,$UP0V5H:4AZ )VGGA28FNS#5.K)SR5,\E-34MV]
MU[JO?9_Q[W?NC)Y_,[ Z);N?^*U45
M2)`&AGP=0^1JY5$I/V[_`'J"0!@XJJ:,(!"WJ=V-QS?W[KW0=[4H6KLUB<0W
MWT=+/0)V9N:I^UDHWCUU2T6U=M0RU5YX9\UD:>7(/2F,RT\4"7(U#W[KW6;*
MNN%I=P[FFJ\[7+E,KD,92B2NE_B<^*Q34\,E(E9ICJ3'N7+RS5AIS80Q11J/
M3[]U[KAMW/5=>FZZBCJO[QYO'51RF:IZJMIVK*65Z05./HLLE,6EC2GHE3Q(
MR>>0Z3I)*W]U[H(NDMJ=G;H[CW'V]G]]Y[7+;(PNU.E.N$U8^BQ&]=^Y&I
MJ-RY>OP4E/1Y''U>*V=14].8J]I)*N>M9[1I$/?NO=$0^7WR,V)V1VDF\>C\
M!2_*;*_`;*ONI]C8O,5>1Z\KMYR*:7]^Z]U[W[KW7O?NO=>]^Z]U[W[KW7O?NO=>]^Z]U[W[KW7
MO?NO=>]^Z]U[W[KW7O?NO=>]^Z]U[W[KW7O?NO=>]^Z]U[W[KW7O?NO=>]^Z
M]U[W[KW7O?NO=>]^Z]U[W[KW7O?NO=>]^Z]U[W[KW7O?NO=>]^Z]U[W[KW7O
M?NO=>]^Z]U[W[KW7O?NO=>]^Z]U[W[KW7O?NO=>]^Z]U[W[KW7O?NO=>]^Z]
MU[W[KW7O?NO=>]^Z]U[W[KW7O?NO=>]^Z]U[W[KW7O?NO=>]^Z]U[W[KW7O?
MNO=>]^Z]U[W[KW7O?NO=>]^Z]U[W[KW7O?NO=>]^Z]U[W[KW7O?NO=>]^Z]U
M[W[KW7O?NO=>]^Z]U[W[KW7O?NO=>]^Z]U[W[KW7O?NO=>]^Z]U[W[KW7O?N
MO=>]^Z]U[W[KW7O?NO=>]^Z]U[W[KW7O?NO=>]^Z]U[W[KW7B0!<\`>_=>ZK
MI^:OS3I^EZ.JZTZQJJ/(=P92C`K:YECK<;UOCJR.\66RD'JBJ]QU,+:Z"@?C
MZ33CQ!5E]U[JAVAEJ:K<6.KZ^MK
X:[J[L/$'";?[*^4>T\VF"W5A=U".&7
M^[ZQT]74:I/,/=>Z+5C_`(V?(CI+?F3RN>V?NK>3=ST&5V1U_P!QY*?<#-VW
M\7,SN/-97N"NGW=N$U&XL5WM39"LH,?N#%!:2JI?%-4PI)%/%(WNO=7;?RJ\
M7\:<#T)A]T4>![RZHAZ)&+Z9WQMG#X*;:
$1T^Q^W^L1543T%<(\QA)\72Y7UQ58<^Z]U?91[/R
M&X^ZMOQ8Q,YM)]O=U[@[4AJ\.-NX.@KJSMKX_P"6Q(R6^<9/%)E,Q6[?KZ45
M<<%-+!]_4Z?/(4B96]U[IR^/L.Y=]X0TTN^:G([UQ==5X/=V4ADI(NP,!@:O
M#4=5@UML]B2YF.O3<%#E::/>_8^YZ?)97;.5IV
M^[DJI*6!@DI#LGNO='P^-6V^Q/B#OO<&.Z2VYV5OO9>"P>0R'^B7'RX>/