N-CSRS 1 d357892dncsrs.htm N-CSRS N-CSRS

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)
Glenn Brightman    11 Greenway Plaza, Suite 1000 Houston, Texas 77046
(Name and address of agent for service)

 

Registrant’s telephone number, including area code:          (713) 626-1919           

 

Date of fiscal year end:   4/30  
Date of reporting period:       10/31/2023  

ITEM 1.

REPORTS TO STOCKHOLDERS.

(a) The Registrant’s semi-annual report transmitted to shareholders pursuant to Rule 30e-1 under the Investment Company Act of 1940 is as follows:

LOGO

 

   
Semiannual Report to Shareholders    October 31, 2023

Invesco Comstock Fund

Nasdaq:

A: ACSTX ∎ C: ACSYX ∎ R: ACSRX ∎ Y: ACSDX ∎ R5: ACSHX ∎ R6: ICSFX

 

   
2   Fund Performance
4   Schedule of Investments
8   Financial Statements
11   Financial Highlights
12   Notes to Financial Statements
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 is 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, 4/30/23 to 10/31/23, 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

     -1.76 % 

Class C Shares

     -2.10  

Class R Shares

     -1.88  

Class Y Shares

     -1.64  

Class R5 Shares

     -1.62  

Class R6 Shares

     -1.59  

S&P 500 Index▼ (Broad Market Index)

     1.39  

Russell 1000 Value Index▼ (Style-Specific Index)

     -4.22  

Lipper Large-Cap Value Funds Index∎ (Peer Group Index)

     -1.73  

Source(s): ▼RIMES Technologies Corp.; ∎Lipper Inc.

  

The S&P 500® Index is an unmanaged index considered representative of the US stock market.

 

  The Russell 1000® Value Index is an unmanaged index considered representative of large-cap value stocks. The Russell 1000 Value Index is a trademark/service mark of the Frank Russell Co. Russell® is a trademark of the Frank Russell Co.

 

  The Lipper Large-Cap Value Funds Index is an unmanaged index considered representative of large-cap value funds tracked by Lipper.

 

  The Fund is not managed to track the performance of any particular index, including the indexes described here, and consequently, the performance of the Fund may deviate significantly from the performance of the indexes.

 

  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.

 

 

 

For more information about your Fund

Read the most recent quarterly commentary from your Fund’s portfolio managers by visiting invesco.com/us. Click on “Products” and select “Mutual Funds.” Use the “Product Finder” to locate your Fund; then click on its name to access its product detail page. There, you can learn more about your Fund’s investment strategies, holdings and performance.

  Also, visit blog.invesco.us.com, where many of Invesco’s investment professionals share their insights about market and economic news and trends.

    

 

 

2   Invesco Comstock Fund

    

    

    

 

 

Average Annual Total Returns

 

As of 10/31/23, including maximum applicable sales charges

 

Class A Shares

        

Inception (10/7/68)

     10.47 % 

10 Years

     7.63  

  5 Years

     7.35  

  1 Year

     -4.23  

Class C Shares

        

Inception (10/26/93)

     9.35 % 

10 Years

     7.61  

  5 Years

     7.78  

  1 Year

     -0.27  

Class R Shares

        

Inception (10/1/02)

     8.79 % 

10 Years

     7.97  

  5 Years

     8.29  

  1 Year

     1.09  

Class Y Shares

        

Inception (10/29/04)

     7.90 % 

10 Years

     8.52  

  5 Years

     8.84  

  1 Year

     1.61  

Class R5 Shares

        

Inception (6/1/10)

     11.08 % 

10 Years

     8.59  

  5 Years

     8.90  

  1 Year

     1.65  

Class R6 Shares

        

Inception (9/24/12)

     10.33 % 

10 Years

     8.68  

  5 Years

     8.98  

  1 Year

     1.68  

Effective June 1, 2010, Class A, Class C, Class I and Class R shares of the predecessor fund, Van Kampen Comstock Fund, advised by Van Kampen Asset Management were reorganized into Class A, Class C, Class Y and Class R shares, respectively, of Invesco Van Kampen Comstock Fund (renamed Invesco Comstock Fund). Returns shown above, prior to June 1, 2010, for Class A, Class C, Class R and Class Y shares are those of Class A, Class C, Class R and Class I shares of the predecessor fund. Share class returns will differ from the predecessor fund because of different expenses.

    The performance data quoted represent past performance and cannot guarantee future results; current performance may be lower or higher. Please visit invesco.com/performance for the most recent month-end performance. Performance figures reflect reinvested distributions, changes in net asset value and the effect of the maximum sales charge unless otherwise stated. Performance figures do not reflect deduction of taxes a shareholder would pay on Fund distributions or sale of Fund shares. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

    Class A share performance reflects the maximum 5.50% sales charge, and Class C share performance reflects the applicable contingent deferred sales charge (CDSC) for the period involved. The CDSC on Class C shares is 1% for the first year after purchase. Class R, Class Y, Class R5 and Class R6 shares do not have a front-end sales charge or a CDSC; therefore, performance is at net asset value.

    The performance of the Fund’s share classes will differ primarily due to different sales charge structures and class expenses.

    Fund performance reflects any applicable fee waivers and/or expense reimbursements. Had the adviser not waived fees and/or reimbursed expenses currently or in the past, returns would have been lower. See current prospectus for more information.

 

 

3   Invesco Comstock Fund

Schedule of Investments(a)

October 31, 2023

(Unaudited)

 

     Shares      Value  

 

  

Common Stocks & Other Equity Interests–97.36%

 

Aerospace & Defense–1.08%

 

Textron, Inc.

      1,350,267      $   102,620,292  

 

  

Air Freight & Logistics–1.87%

 

FedEx Corp.

      739,166        177,473,757  

 

  

Apparel, Accessories & Luxury Goods–0.59%

 

Ralph Lauren Corp.(b)

      502,233        56,516,280  

 

  

Asset Management & Custody Banks–1.79%

 

State Street Corp.

      2,629,623        169,952,535  

 

  

Automobile Manufacturers–1.24%

 

General Motors Co.

      4,186,274        118,052,927  

 

  

Biotechnology–0.29%

 

AbbVie, Inc.

      192,347        27,155,550  

 

  

Broadline Retail–0.76%

 

eBay, Inc.

      1,849,561        72,558,278  

 

  

Building Products–1.68%

 

Johnson Controls International PLC

      3,259,103        159,761,229  

 

  

Cable & Satellite–1.96%

 

Charter Communications, Inc., Class A(b)(c)

      187,443        75,502,040  

 

  

Comcast Corp., Class A

      2,679,630        110,641,923  

 

  
        186,143,963  

 

  

Casinos & Gaming–1.32%

 

Las Vegas Sands Corp.

      2,636,683        125,136,975  

 

  

Communications Equipment–3.36%

 

Cisco Systems, Inc.

      3,738,020        194,862,983  

 

  

F5, Inc.(c)

      818,838        124,127,652  

 

  
        318,990,635  

 

  

Construction Machinery & Heavy Transportation Equipment– 2.73%

 

Caterpillar, Inc.

      562,296        127,107,011  

 

  

Wabtec Corp.

      1,245,703        132,069,432  

 

  
        259,176,443  

 

  

Diversified Banks–8.13%

 

Bank of America Corp.

      7,807,423        205,647,522  

 

  

Citigroup, Inc.

      2,654,597        104,830,035  

 

  

Fifth Third Bancorp

      4,016,752        95,237,190  

 

  

JPMorgan Chase & Co.

      936,083        130,171,702  

 

  

Wells Fargo & Co.

      5,935,630        236,060,005  

 

  
        771,946,454  

 

  

Electrical Components & Equipment–3.03%

 

Eaton Corp. PLC

      676,285        140,606,414  

 

  

Emerson Electric Co.

      1,653,365        147,099,884  

 

  
        287,706,298  

 

  

Fertilizers & Agricultural Chemicals–1.11%

 

CF Industries Holdings, Inc.(b)

      1,320,196        105,325,237  

 

  
     Shares      Value  

 

  

Food Distributors–1.25%

 

Sysco Corp.

      1,785,625      $   118,726,206  

 

  

Health Care Distributors–1.02%

 

Henry Schein, Inc.(c)

      1,487,184        96,637,216  

 

  

Health Care Equipment–2.51%

 

Baxter International, Inc.

      1,589,698        51,553,906  

 

  

Becton, Dickinson and Co.

      371,529        93,915,101  

 

  

Medtronic PLC

      1,321,351        93,234,526  

 

  
        238,703,533  

 

  

Health Care Facilities–0.93%

 

Universal Health Services, Inc., Class B

      703,519        88,566,007  

 

  

Health Care Services–1.72%

 

CVS Health Corp.

      2,370,883        163,614,636  

 

  

Health Care Supplies–0.38%

 

DENTSPLY SIRONA, Inc.

      1,188,135        36,131,185  

 

  

Hotels, Resorts & Cruise Lines–0.36%

 

Booking Holdings, Inc.(c)

      12,232        34,121,898  

 

  

Household Products–1.34%

 

Kimberly-Clark Corp.

      1,060,585        126,888,389  

 

  

Industrial Conglomerates–1.22%

 

General Electric Co.

      1,065,478        115,742,875  

 

  

Integrated Oil & Gas–6.01%

 

Chevron Corp.

      1,519,592        221,450,142  

 

  

Exxon Mobil Corp.

      1,142,555        120,939,447  

 

  

Shell PLC, ADR (Netherlands)

      631,191        41,115,782  

 

  

Suncor Energy, Inc. (Canada)

      5,790,097        187,599,143  

 

  
        571,104,514  

 

  

Interactive Media & Services–4.24%

 

Alphabet, Inc., Class A(c)

      1,279,952        158,816,444  

 

  

Meta Platforms, Inc., Class A(c)

      810,098        244,058,225  

 

  
        402,874,669  

 

  

Investment Banking & Brokerage–1.62%

 

Goldman Sachs Group, Inc. (The)

      383,090        116,309,955  

 

  

Morgan Stanley

      527,923        37,387,507  

 

  
        153,697,462  

 

  

IT Consulting & Other Services–2.35%

 

Cognizant Technology Solutions Corp., Class A

      2,003,690        129,177,894  

 

  

DXC Technology Co.(b)(c)

      4,643,271        93,654,776  

 

  
        222,832,670  

 

  

Life & Health Insurance–0.95%

 

MetLife, Inc.

      1,506,782        90,421,988  

 

  

Managed Health Care–3.25%

 

Elevance Health, Inc.

      471,032        212,006,793  

 

  

Humana, Inc.

      184,231        96,479,932  

 

  
        308,486,725  

 

  
 

 

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

 

4   Invesco Comstock Fund

     Shares      Value  

 

  

Movies & Entertainment–1.31%

 

Walt Disney Co. (The)(b)(c)

      1,016,536      $ 82,939,172  

 

  

Warner Bros Discovery, Inc.(b)(c)

      4,132,521        41,077,259  

 

  
          124,016,431  

 

  

Multi-line Insurance–2.35%

 

American International Group, Inc.

      3,641,880        223,283,663  

 

  

Multi-Utilities–1.23%

 

Dominion Energy, Inc.

      2,892,292        116,617,213  

 

  

Oil & Gas Exploration & Production–4.64%

 

ConocoPhillips

      1,232,063        146,369,084  

 

  

Hess Corp.

      661,564        95,529,842  

 

  

Marathon Oil Corp.

      3,934,953        107,463,566  

 

  

Pioneer Natural Resources Co.

      380,645        90,974,155  

 

  
        440,336,647  

 

  

Oil & Gas Storage & Transportation–0.80%

 

Cheniere Energy, Inc.

      458,431        76,292,087  

 

  

Packaged Foods & Meats–1.39%

 

Kraft Heinz Co. (The)

      3,208,810        100,949,163  

 

  

Tyson Foods, Inc., Class A(b)

      677,878        31,419,645  

 

  
        132,368,808  

 

  

Paper & Plastic Packaging Products & Materials–1.43%

 

International Paper Co.(b)

      4,029,965        135,930,719  

 

  

Personal Care Products–0.86%

 

Haleon PLC (United Kingdom)

      20,294,102        81,226,284  

 

  

Pharmaceuticals–5.69%

 

Bristol-Myers Squibb Co.

      1,527,921        78,733,769  

 

  

Johnson & Johnson

      975,451        144,698,401  

 

  

Merck & Co., Inc.

      1,514,126        155,500,740  

 

  

Sanofi, ADR(b)

      3,577,355        161,875,314  

 

  
        540,808,224  

 

  

Property & Casualty Insurance–0.97%

 

Allstate Corp. (The)

      722,451        92,567,647  

 

  

Regional Banks–2.60%

 

Citizens Financial Group, Inc.

      3,174,249        74,372,654  

 

  

Huntington Bancshares, Inc.

      9,502,749        91,701,528  

 

  

M&T Bank Corp.

      715,998        80,728,774  

 

  
        246,802,956  

 

  

Restaurants–0.90%

 

Starbucks Corp.

      924,149        85,243,504  

 

  

Semiconductors–4.50%

 

Intel Corp.

      3,615,942        131,981,883  

 

  
     Shares      Value  

 

  

Semiconductors–(continued)

 

NXP Semiconductors N.V. (China)

      854,832      $ 147,398,682  

 

  

QUALCOMM, Inc.

      1,357,879        147,995,232  

 

  
        427,375,797  

 

  

Soft Drinks & Non-alcoholic Beverages–2.06%

 

Coca-Cola Co. (The)

      1,496,511        84,537,906  

 

  

Keurig Dr Pepper, Inc.

      3,660,503        111,023,056  

 

  
        195,560,962  

 

  

Systems Software–2.49%

      

Microsoft Corp.

      700,868        236,970,480  

 

  

Telecom Tower REITs–0.34%

      

SBA Communications Corp., Class A

      157,113        32,778,485  

 

  

Tobacco–2.63%

      

Philip Morris International, Inc.

      2,799,787        249,629,009  

 

  

Wireless Telecommunication Services–1.08%

 

T-Mobile US, Inc.(b)(c)

      713,895        102,700,935  

 

  

Total Common Stocks & Other Equity Interests (Cost $6,901,342,853)

 

      9,247,576,677  

 

  

Money Market Funds–2.68%

 

Invesco Government & Agency Portfolio, Institutional Class, 5.27%(d)(e)

      89,079,266        89,079,266  

 

  

Invesco Liquid Assets Portfolio, Institutional Class, 5.40%(d)(e)

      63,258,205        63,277,183  

 

  

Invesco Treasury Portfolio, Institutional Class, 5.27%(d)(e)

      101,804,876        101,804,876  

 

  

Total Money Market Funds
(Cost $254,136,267)

 

      254,161,325  

 

  

TOTAL INVESTMENTS IN SECURITIES (excluding investments purchased with cash collateral from securities on loan)-100.04%
(Cost $7,155,479,120)

 

      9,501,738,002  

 

  

Investments Purchased with Cash Collateral from Securities on Loan

 

Money Market Funds–0.84%

 

Invesco Private Government Fund, 5.32%(d)(e)(f)

      24,073,234        24,073,234  

 

  

Invesco Private Prime Fund, 5.53%(d)(e)(f)

      56,092,159        56,097,768  

 

  

Total Investments Purchased with Cash Collateral from Securities on Loan
(Cost $80,170,534)

 

      80,171,002  

 

  

TOTAL INVESTMENTS IN SECURITIES–100.88%
(Cost $7,235,649,654)

 

      9,581,909,004  

 

  

OTHER ASSETS LESS LIABILITIES–(0.88)%

 

      (83,171,117 ) 

 

  

NET ASSETS–100.00%

 

    $ 9,498,737,887  

 

  
 
Investment Abbreviations:

ADR  - American Depositary Receipt

REIT - Real Estate Investment Trust

 

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

 

5   Invesco Comstock 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 & Poor’s.

(b) 

All or a portion of this security was out on loan at October 31, 2023.

(c) 

Non-income producing security.

(d) 

Affiliated holding. Affiliated holdings are investments in entities which are under common ownership or control of Invesco Ltd. or are investments in entities in which the Fund owns 5% or more of the outstanding voting securities. The table below shows the Fund’s transactions in, and earnings from, its investments in affiliates for the six months ended October 31, 2023.

 

    

Value

April 30, 2023

    

Purchases

at Cost

    

Proceeds

from Sales

    

Change in

Unrealized

Appreciation

(Depreciation)

    

Realized

Gain

(Loss)

    

Value

October 31, 2023

     Dividend Income  
Investments in Affiliated Money Market Funds:                                                        

Invesco Government & Agency Portfolio, Institutional Class

   $ 140,569,059     $ 193,374,804     $ (244,864,597 )      $            -     $ -       $  89,079,266           $2,165,106      

Invesco Liquid Assets Portfolio, Institutional Class

     100,056,598       138,124,859       (174,903,283 )      (25,553)       24,562       63,277,183           1,569,873      

Invesco Treasury Portfolio, Institutional Class

     160,650,353       220,999,776       (279,845,253 )      -       -       101,804,876           2,470,372      
Investments Purchased with Cash Collateral from Securities on Loan:                                                        

Invesco Private Government Fund

     29,449,199       367,119,428       (372,495,393 )      -       -       24,073,234           688,761*      

Invesco Private Prime Fund

     68,502,855       768,221,486       (780,605,424 )      468       (21,617)       56,097,768           1,840,426*      

Total

   $ 499,228,064     $ 1,687,840,353     $ (1,852,713,950 )      $(25,085)     $ 2,945       $334,332,327           $8,734,538      

 

  *

Represents the income earned on the investment of cash collateral, which is included in securities lending income on the Statement of Operations. Does not include rebates and fees paid to lending agent or premiums received from borrowers, if any.

 

(e) 

The rate shown is the 7-day SEC standardized yield as of October 31, 2023.

(f) 

The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrower’s return of the securities loaned. See Note 1I.

 

Open Forward Foreign Currency Contracts  

 

  
                        Unrealized
Settlement         Contract to      Appreciation  
Date    Counterparty    Deliver      Receive      (Depreciation)  

 

  

Currency Risk

         

 

  

11/21/2023

    Barclays Bank PLC    USD 1,236,117      GBP 1,019,977      $ 3,748  

 

  

11/21/2023

    Royal Bank of Canada    CAD   134,213,944      USD 98,159,980        1,351,025  

 

  

11/21/2023

    Royal Bank of Canada    EUR 86,491,020      USD   92,375,369        789,833  

 

  

11/21/2023

    Royal Bank of Canada    GBP 51,384,094      USD 62,971,824        510,258  

 

  

        Subtotal–Appreciation

            2,654,864  

 

  

Currency Risk

         

 

  

11/21/2023

    Deutsche Bank AG    EUR 2,575,541      USD 2,720,219        (7,027 ) 

 

  

11/21/2023

    Goldman Sachs International    USD 18,403,535      EUR 17,323,550        (59,589 ) 

 

  

11/21/2023

    Royal Bank of Canada    EUR 4,195,164      USD 4,438,060        (4,209 ) 

 

  

11/21/2023

    State Street Bank & Trust Co.    USD 2,296,722      CAD 3,165,830        (13,199 ) 

 

  

        Subtotal–Depreciation

            (84,024 ) 

 

  

        Total Forward Foreign Currency Contracts

          $ 2,570,840  

 

  

Abbreviations:

CAD - Canadian Dollar

EUR - Euro

GBP - British Pound Sterling

USD - U.S. Dollar

 

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

 

6   Invesco Comstock Fund

Portfolio Composition

By sector, based on Net Assets

as of October 31, 2023

 

Financials

      18.41 % 

Health Care

      15.79  

Information Technology

      12.70  

Industrials

      11.61  

Energy

      11.45  

Consumer Staples

      9.52  

Communication Services

      8.59  

Consumer Discretionary

      5.18  

Materials

      2.54  

Other Sectors, Each Less than 2% of Net Assets

      1.57  

Money Market Funds Plus Other Assets Less Liabilities

      2.64  

 

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

 

7   Invesco Comstock Fund

Statement of Assets and Liabilities

October 31, 2023

(Unaudited)

 

Assets:

   

Investments in unaffiliated securities, at value (Cost $6,901,342,853)*

    $ 9,247,576,677  

 

  

Investments in affiliated money market funds, at value (Cost $334,306,801)

      334,332,327  

 

  

Other investments:

   

Unrealized appreciation on forward foreign currency contracts outstanding

      2,654,864  

 

  

Foreign currencies, at value (Cost $475,053)

      475,930  

 

  

Receivable for:

   

Investments sold

      4,411,687  

 

  

Fund shares sold

      5,600,234  

 

  

Dividends

      6,995,787  

 

  

Investment for trustee deferred compensation and retirement plans

      632,272  

 

  

Other assets

      168,056  

 

  

Total assets

      9,602,847,834  

 

  

Liabilities:

   

Other investments:

   

Unrealized depreciation on forward foreign currency contracts outstanding

      84,024  

 

  

Payable for:

   

Investments purchased

      5,740,250  

 

  

Dividends

      393  

 

  

Fund shares reacquired

      13,095,504  

 

  

Collateral upon return of securities loaned

      80,170,534  

 

  

Accrued fees to affiliates

      4,019,830  

 

  

Accrued trustees’ and officers’ fees and benefits

      7,528  

 

  

Accrued other operating expenses

      283,891  

 

  

Trustee deferred compensation and retirement plans

      707,993  

 

  

Total liabilities

      104,109,947  

 

  

Net assets applicable to shares outstanding

    $ 9,498,737,887  

 

  

Net assets consist of:

   

Shares of beneficial interest

    $ 6,533,689,899  

 

  

Distributable earnings

      2,965,047,988  

 

  
   $ 9,498,737,887  

 

  

Net Assets:

   

Class A

    $ 5,702,693,004  

 

  

Class C

    $ 87,306,680  

 

  

Class R

    $ 121,224,036  

 

  

Class Y

    $ 1,712,585,321  

 

  

Class R5

    $ 350,490,014  

 

  

Class R6

    $ 1,524,438,832  

 

  

Shares outstanding, no par value, with an unlimited number of shares authorized:

 

Class A

      219,249,682  

 

  

Class C

      3,353,316  

 

  

Class R

      4,658,825  

 

  

Class Y

      65,854,293  

 

  

Class R5

      13,492,746  

 

  

Class R6

      58,715,192  

 

  

Class A:

   

Net asset value per share

    $ 26.01  

 

  

Maximum offering price per share
(Net asset value of $26.01 ÷ 94.50%)

    $ 27.52  

 

  

Class C:

   

Net asset value and offering price per share

    $ 26.04  

 

  

Class R:

   

Net asset value and offering price per share

    $ 26.02  

 

  

Class Y:

   

Net asset value and offering price per share

    $ 26.01  

 

  

Class R5:

   

Net asset value and offering price per share

    $ 25.98  

 

  

Class R6:

   

Net asset value and offering price per share

    $ 25.96  

 

  

 

*

At October 31, 2023, securities with an aggregate value of $79,124,217 were on loan to brokers.

 

 

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

 

8   Invesco Comstock Fund

Statement of Operations

For the six months ended October 31, 2023

(Unaudited)

 

Investment income:

   

Dividends (net of foreign withholding taxes of $1,900,063)

    $ 122,753,359  

 

  

Dividends from affiliated money market funds (includes net securities lending income of $363,273)

      6,568,624  

 

  

Total investment income

      129,321,983  

 

  

Expenses:

   

Advisory fees

      19,046,138  

 

  

Administrative services fees

      708,601  

 

  

Custodian fees

      60,530  

 

  

Distribution fees:

   

Class A

      7,546,128  

 

  

Class C

      459,438  

 

  

Class R

      325,937  

 

  

Transfer agent fees – A, C, R and Y

      5,671,985  

 

  

Transfer agent fees – R5

      193,108  

 

  

Transfer agent fees – R6

      238,784  

 

  

Trustees’ and officers’ fees and benefits

      73,899  

 

  

Registration and filing fees

      195,136  

 

  

Reports to shareholders

      265,942  

 

  

Professional services fees

      61,905  

 

  

Other

      63,178  

 

  

Total expenses

      34,910,709  

 

  

Less: Fees waived and/or expense offset arrangement(s)

      (167,756 ) 

 

  

Net expenses

      34,742,953  

 

  

Net investment income

      94,579,030  

 

  

Realized and unrealized gain (loss) from:

   

Net realized gain from:

   

Unaffiliated investment securities

      362,140,030  

 

  

Affiliated investment securities

      2,945  

 

  

Foreign currencies

      360,829  

 

  

Forward foreign currency contracts

      8,229,726  

 

  
     370,733,530  

 

  

Change in net unrealized appreciation (depreciation) of:

   

Unaffiliated investment securities

      (632,498,183 ) 

 

  

Affiliated investment securities

      (25,085 ) 

 

  

Foreign currencies

      (40,541 ) 

 

  

Forward foreign currency contracts

      2,475,473  

 

  
     (630,088,336 ) 

 

  

Net realized and unrealized gain (loss)

      (259,354,806 ) 

 

  

Net increase (decrease) in net assets resulting from operations

    $ (164,775,776 ) 

 

  

 

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

 

9   Invesco Comstock Fund

Statement of Changes in Net Assets

For the six months ended October 31, 2023 and the year ended April 30, 2023

(Unaudited)

 

    

October 31,

2023

    

April 30,

2023

  

 

  

Operations:

     

Net investment income

    $ 94,579,030     $ 184,778,077  

 

  

Net realized gain

      370,733,530       714,979,975  

 

  

Change in net unrealized appreciation (depreciation)

      (630,088,336 )      (548,753,335 ) 

 

  

Net increase (decrease) in net assets resulting from operations

      (164,775,776 )      351,004,717  

 

  

Distributions to shareholders from distributable earnings:

     

Class A

      (52,531,902 )      (717,802,335 ) 

 

  

Class C

      (496,222 )      (11,193,908 ) 

 

  

Class R

      (973,823 )      (15,359,958 ) 

 

  

Class Y

      (17,363,852 )      (203,571,979 ) 

 

  

Class R5

      (3,894,747 )      (47,541,834 ) 

 

  

Class R6

      (16,691,066 )      (180,493,564 ) 

 

  

Total distributions from distributable earnings

      (91,951,612 )      (1,175,963,578 ) 

 

  

Share transactions–net:

     

Class A

      (168,462,572 )      453,340,136  

 

  

Class C

      (9,128,059 )      13,456,075  

 

  

Class R

      (9,225,764 )      11,182,732  

 

  

Class Y

      16,365,443       297,608,254  

 

  

Class R5

      (31,745,473 )      15,548,187  

 

  

Class R6

      2,646,476       247,465,077  

 

  

Net increase (decrease) in net assets resulting from share transactions

      (199,549,949 )      1,038,600,461  

 

  

Net increase (decrease) in net assets

      (456,277,337 )      213,641,600  

 

  

Net assets:

     

Beginning of period

      9,955,015,224       9,741,373,624  

 

  

End of period

    $ 9,498,737,887     $ 9,955,015,224  

 

  

 

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

 

10   Invesco Comstock Fund

Financial Highlights

(Unaudited)

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

  

Distributions

from net

realized

gains

  

Total

distributions

  

Net asset

value, end

of period

  

Total

return(b)

  

Net assets,

end of period

(000’s 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 10/31/23

     $26.71       $0.24       $(0.70 )      $(0.46 )      $(0.24 )      $      –       $(0.24 )      $26.01       (1.76 )%      $5,702,693       0.80 %(d)      0.80 %(d)      1.78 %(d)      10 % 

Year ended 04/30/23

     29.17       0.50       0.50       1.00       (0.52 )      (2.94 )      (3.46 )      26.71       3.54       6,023,409       0.81       0.81       1.79       21  

Year ended 04/30/22

     29.09       0.46       2.19       2.65       (0.42 )      (2.15 )      (2.57 )      29.17       9.29       6,077,682       0.80       0.80       1.52       20  

Year ended 04/30/21

     18.95       0.40       10.24       10.64       (0.50 )      –       (0.50 )      29.09       56.89       5,900,704       0.82       0.82       1.74       19  

Year ended 04/30/20

     25.18       0.51       (4.88 )      (4.37 )      (0.52 )      (1.34 )      (1.86 )      18.95       (18.76 )      4,512,553       0.82       0.83       2.16       30  

Year ended 04/30/19

     26.67       0.46       0.23       0.69       (0.41 )      (1.77 )      (2.18 )      25.18       3.51       6,350,025       0.80       0.81       1.79       23  

Class C

                            

Six months ended 10/31/23

     26.74       0.15       (0.71 )      (0.56 )      (0.14 )      –       (0.14 )      26.04       (2.10 )(e)      87,307       1.51 (d)(e)      1.51 (d)(e)      1.07 (d)(e)      10  

Year ended 04/30/23

     29.18       0.29       0.51       0.80       (0.30 )      (2.94 )      (3.24 )      26.74       2.78       98,735       1.56       1.56       1.04       21  

Year ended 04/30/22

     29.10       0.23       2.19       2.42       (0.19 )      (2.15 )      (2.34 )      29.18       8.46       93,877       1.55       1.55       0.77       20  

Year ended 04/30/21

     18.95       0.23       10.25       10.48       (0.33 )      –       (0.33 )      29.10       55.82 (e)      91,597       1.56 (e)      1.56 (e)      1.00 (e)      19  

Year ended 04/30/20

     25.16       0.35       (4.87 )      (4.52 )      (0.35 )      (1.34 )      (1.69 )      18.95       (19.32 )(e)      96,492       1.49 (e)      1.50 (e)      1.49 (e)      30  

Year ended 04/30/19

     26.66       0.27       0.21       0.48       (0.21 )      (1.77 )      (1.98 )      25.16       2.68 (e)      158,707       1.54 (e)      1.55 (e)      1.05 (e)      23  

Class R

                            

Six months ended 10/31/23

     26.72       0.21       (0.71 )      (0.50 )      (0.20 )      –       (0.20 )      26.02       (1.88 )      121,224       1.05 (d)      1.05 (d)      1.53 (d)      10  

Year ended 04/30/23

     29.17       0.43       0.51       0.94       (0.45 )      (2.94 )      (3.39 )      26.72       3.30       133,624       1.06       1.06       1.54       21  

Year ended 04/30/22

     29.09       0.39       2.18       2.57       (0.34 )      (2.15 )      (2.49 )      29.17       9.01       133,669       1.05       1.05       1.27       20  

Year ended 04/30/21

     18.95       0.34       10.24       10.58       (0.44 )      –       (0.44 )      29.09       56.50       139,451       1.07       1.07       1.49       19  

Year ended 04/30/20

     25.17       0.45       (4.87 )      (4.42 )      (0.46 )      (1.34 )      (1.80 )      18.95       (18.95 )      133,186       1.07       1.08       1.91       30  

Year ended 04/30/19

     26.67       0.40       0.21       0.61       (0.34 )      (1.77 )      (2.11 )      25.17       3.20       212,843       1.05       1.06       1.54       23  

Class Y

                            

Six months ended 10/31/23

     26.71       0.28       (0.71 )      (0.43 )      (0.27 )      –       (0.27 )      26.01       (1.64 )      1,712,585       0.55 (d)      0.55 (d)      2.03 (d)      10  

Year ended 04/30/23

     29.17       0.57       0.50       1.07       (0.59 )      (2.94 )      (3.53 )      26.71       3.81       1,744,439       0.56       0.56       2.04       21  

Year ended 04/30/22

     29.09       0.54       2.19       2.73       (0.50 )      (2.15 )      (2.65 )      29.17       9.57       1,589,325       0.55       0.55       1.77       20  

Year ended 04/30/21

     18.95       0.45       10.25       10.70       (0.56 )      –       (0.56 )      29.09       57.28       1,511,312       0.57       0.57       1.99       19  

Year ended 04/30/20

     25.18       0.57       (4.88 )      (4.31 )      (0.58 )      (1.34 )      (1.92 )      18.95       (18.54 )      1,179,055       0.57       0.58       2.41       30  

Year ended 04/30/19

     26.68       0.52       0.22       0.74       (0.47 )      (1.77 )      (2.24 )      25.18       3.73       1,765,456       0.55       0.56       2.04       23  

Class R5

                            

Six months ended 10/31/23

     26.68       0.28       (0.70 )      (0.42 )      (0.28 )      –       (0.28 )      25.98       (1.62 )      350,490       0.51 (d)      0.51 (d)      2.07 (d)      10  

Year ended 04/30/23

     29.14       0.58       0.50       1.08       (0.60 )      (2.94 )      (3.54 )      26.68       3.88       390,922       0.51       0.51       2.09       21  

Year ended 04/30/22

     29.06       0.55       2.19       2.74       (0.51 )      (2.15 )      (2.66 )      29.14       9.63       408,406       0.50       0.50       1.82       20  

Year ended 04/30/21

     18.93       0.47       10.23       10.70       (0.57 )      –       (0.57 )      29.06       57.39       529,916       0.50       0.50       2.06       19  

Year ended 04/30/20

     25.16       0.58       (4.87 )      (4.29 )      (0.60 )      (1.34 )      (1.94 )      18.93       (18.50 )      440,298       0.50       0.51       2.48       30  

Year ended 04/30/19

     26.66       0.54       0.22       0.76       (0.49 )      (1.77 )      (2.26 )      25.16       3.80       665,081       0.48       0.49       2.11       23  

Class R6

                            

Six months ended 10/31/23

     26.66       0.29       (0.70 )      (0.41 )      (0.29 )      –       (0.29 )      25.96       (1.59 )      1,524,439       0.44 (d)      0.44 (d)      2.14 (d)      10  

Year ended 04/30/23

     29.13       0.60       0.49       1.09       (0.62 )      (2.94 )      (3.56 )      26.66       3.91       1,563,887       0.44       0.44       2.16       21  

Year ended 04/30/22

     29.05       0.57       2.19       2.76       (0.53 )      (2.15 )      (2.68 )      29.13       9.72       1,438,415       0.43       0.43       1.89       20  

Year ended 04/30/21

     18.92       0.48       10.24       10.72       (0.59 )      –       (0.59 )      29.05       57.56       1,538,111       0.42       0.42       2.14       19  

Year ended 04/30/20

     25.16       0.60       (4.88 )      (4.28 )      (0.62 )      (1.34 )      (1.96 )      18.92       (18.46 )      2,268,887       0.41       0.42       2.57       30  

Year ended 04/30/19

     26.66       0.56       0.22       0.78       (0.51 )      (1.77 )      (2.28 )      25.16       3.90       2,962,672       0.39       0.40       2.20       23  

 

(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) 

Annualized.

(e) 

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%, 0.99%, 0.92% and 0.99% for the six months ended October 31, 2023 and the years ended April 30, 2021, 2020 and 2019, respectively.

 

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

 

11   Invesco Comstock Fund

Notes to Financial Statements

October 31, 2023

(Unaudited)

NOTE 1–Significant 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 authorized to issue an unlimited number of shares of beneficial interest. Information presented in these financial statements pertains only to the Fund. Matters affecting the Fund or each class will be voted on exclusively by the shareholders of the Fund or each class.

The Fund’s 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 C, Class R, Class Y, Class R5 and Class R6. Class Y shares are available only to certain investors. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met. 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. Class C shares held for eight years after purchase are eligible for automatic conversion into Class A shares of the same Fund (the “Conversion Feature”). The automatic conversion pursuant to the Conversion Feature will generally occur at the end of the month following the eighth anniversary after a purchase of Class C shares.

The Fund is an investment company and accordingly follows the investment company accounting and reporting guidance in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 946, Financial Services - Investment Companies.

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 is generally valued at its trade price or official closing price that day as of the close of the exchange where the security is principally traded, or lacking any trades or official closing price on a particular day, the security may be valued at the closing bid or ask 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 using prices provided by an independent pricing service they may be considered fair valued. Futures contracts are valued at the daily settlement price set by an exchange on which they are principally traded. Where a final settlement price exists, exchange-traded options are valued at the final settlement price from the exchange where the option principally trades. Where a final settlement price does not exist, exchange-traded options are valued at the mean between the last bid and ask price generally from the exchange where the option principally trades.

Securities of investment companies that are not exchange-traded (e.g., open-end mutual funds) are valued using such company’s end-of-business-day net asset value per share.

Deposits, other obligations of U.S. and non-U.S. banks and financial institutions are valued at their daily account value.

Fixed income securities (including convertible debt securities) generally are valued on the basis of prices provided by independent pricing services. Prices 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. Pricing services generally value debt obligations assuming orderly transactions of institutional round lot size, but a fund may hold or transact in the same securities in smaller, odd lot sizes. Odd lots often trade at lower prices than institutional round lots, and their value may be adjusted accordingly. 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 New York Stock Exchange (“NYSE”). If market quotations are available and reliable for foreign exchange-traded equity securities, the securities will be valued at the market quotations. Invesco Advisers, Inc. (the “Adviser” or “Invesco”) may use various pricing services to obtain market quotations as well as fair value prices. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become not representative of market value in the Adviser’s judgment (“unreliable”). If, between the time trading ends on a particular security and the close of the customary trading session on the NYSE, a significant event occurs that makes the closing price of the security unreliable, the Adviser 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 in accordance with Board- approved policies and related Adviser procedures (“Valuation Procedures”). 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 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.

Unlisted securities will be valued using prices provided by independent pricing services or by another method that the Adviser, in its judgment, believes better reflects the security’s fair value in accordance with the Valuation Procedures.

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 mean between the last bid and ask prices may be used to value debt obligations, including corporate loans.

Securities for which market quotations are not readily available are fair valued by the Adviser in accordance with the Valuation Procedures. If a fair value price provided by a pricing service is unreliable, the Adviser will fair value the security using the Valuation Procedures. 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 security’s 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 Fund investments.

Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general market conditions which are not specifically related to the particular issuer, such as real or perceived adverse economic conditions, changes in the general outlook for revenues or corporate earnings, changes in interest or currency rates, regional or global instability, natural or environmental disasters, widespread disease or other public health issues, war, acts of terrorism, significant governmental actions or adverse investor sentiment generally 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.

The price the Fund could receive upon the sale of any investment may differ from the Adviser’s valuation of the investment, particularly for securities that are valued using a fair valuation technique. When fair valuation techniques are applied, the Adviser uses available information, including both observable and unobservable inputs and assumptions, to determine a methodology that will result in a valuation that the Adviser believes approximates market value. Fund securities that are fair valued may be subject to greater fluctuation in their value from one day to the next than would be the case if market quotations were used.

 

12   Invesco Comstock Fund

Because of the inherent uncertainties of valuation, and the degree of subjectivity in such decisions, the Fund could realize a greater or lesser than expected gain or loss upon the sale of the investment.

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 an accrual basis from settlement date and includes coupon interest and amortization of premium and accretion of discount on debt securities as applicable. 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 Fund’s net asset value and, accordingly, they reduce the Fund’s 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 the Statement of Changes in Net Assets, or the net investment income per share and the 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, the country that has the primary market for the issuer’s securities and its “country of risk” as determined by a third party service provider, 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 Fund’s 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 Fund’s 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 based on relative net assets of Class R5 and Class R6. 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 Trust’s 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 Fund’s servicing agreements, that contain a variety of indemnification clauses. The Fund’s 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 Fund’s 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, unregistered investment companies that comply with Rule 2a-7 under the 1940 Act and money market funds (collectively, “affiliated money market funds”) and is shown as such on the Schedule of Investments. The Fund bears the risk of loss with respect to the investment of collateral. It is the Fund’s 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. When loaning securities, the Fund retains certain benefits of owning the securities, including the economic equivalent of dividends or interest generated by the security. 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. The securities loaned are subject to termination at the option of the borrower or the Fund. Upon termination, the borrower will return to the Fund the securities loaned and the Fund will return the collateral. 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 and the securities may lose value during the delay which could result in potential losses to the Fund. Some of these losses may be indemnified by the lending agent. 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, are included in Dividends from affiliated money market funds on the Statement of Operations. The aggregate value of securities out on loan, if any, is shown as a footnote on the Statement of Assets and Liabilities.

The Adviser serves as an affiliated securities lending agent for the Fund. The Bank of New York Mellon also serves as a securities lending agent. To the extent the Fund utilizes the Adviser as an affiliated securities lending agent, the Fund conducts its securities lending in accordance with, and in reliance upon, no-action letters issued by the SEC staff that provide guidance on how an affiliate may act as a direct agent lender and receive compensation for those services in a manner

 

13   Invesco Comstock Fund

consistent with the federal securities laws. For the six months ended October 31, 2023, the Fund paid the Adviser $10,924 in fees for securities lending agent services. Fees paid to the Adviser for securities lending agent services, if any, are included in Dividends from affiliated money market funds on the Statement of Operations.

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 the 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 Fund’s 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 exchange of the two currencies on the settlement date, 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).

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 for hedging 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 2–Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with the Adviser. Under the terms of the investment advisory agreement, the Fund accrues daily and pays monthly an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

 

Average Daily Net Assets    Rate  

 

  

First $1 billion

      0.500%  

 

  

Next $ 1 billion

      0.450%  

 

  

Next $ 1 billion

      0.400%  

 

  

Over $3 billion

      0.350%  

 

  

For the six months ended October 31, 2023, the effective advisory fee rate incurred by the Fund was 0.38%.

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 Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Canada Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, will 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 Affiliated Sub-Adviser(s).

Effective July 1, 2023, the Adviser has agreed, for an indefinite period, 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 C, Class R, Class Y, Class R5 and Class R6 shares to 2.00%, 2.75%, 2.25%, 1.75%, 1.75% and 1.75%, respectively, of the Fund’s average daily net assets (the “boundary limits”). Prior to July 1, 2023, the same boundary limits were in effect with an expiration date of June 30, 2023. In determining the Adviser’s 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. Invesco may amend and/or terminate these boundary limits at any time in its sole discretion and will inform the Board of Trustees of any such changes. The Adviser did not waive fees and/or reimburse expenses during the period under these boundary limits.

Further, the Adviser has contractually agreed, through at least June 30, 2025, 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, 2023, the Adviser waived advisory fees of $139,540.

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, 2023, expenses incurred under the agreement are shown in the Statement of Operations as Administrative services fees. Invesco has entered into a sub-administration agreement whereby State Street Bank and Trust Company (“SSB”) serves as fund accountant and provides certain administrative services to the Fund. Pursuant to a custody agreement with the Trust on behalf of the Fund, SSB also serves as the Fund’s custodian.

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 services are charged back to the Fund, subject to certain limitations approved by the Trust’s Board of Trustees. For the six months ended October 31, 2023, expenses incurred under the agreement are shown in the Statement of Operations as Transfer agent fees.

 

14   Invesco Comstock Fund

The Trust has entered into master distribution agreements with Invesco Distributors, Inc.(“IDI”) to serve as the distributor for the Class A, Class C, Class R, Class Y, 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 Fund’s Class A, Class C and Class R shares (collectively the “Plans”). The Fund, pursuant to the Plans, reimburses IDI for its allocated share of expenses incurred for the period, up to a maximum annual rate of 0.25% of the average daily net assets of Class A shares, up to 1.00% of the average daily net assets of Class C shares, and up to 0.50% of the average daily net assets of Class R shares. The fees are accrued daily and paid monthly. Of the Plans 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, 2023, 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, 2023, IDI advised the Fund that IDI retained $293,722 in front-end sales commissions from the sale of Class A shares and $8,304 and $2,916 from Class A and Class C shares, respectively, for CDSC imposed upon redemptions by shareholders.

For the six months ended October 31, 2023, the Fund incurred $30,873 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 3–Additional 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. 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 investment’s 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 Adviser’s 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, 2023. 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  

 

  

Investments in Securities

                

 

  

Common Stocks & Other Equity Interests

    $ 9,166,350,393        $ 81,226,284        $–        $ 9,247,576,677  

 

  

Money Market Funds

      254,161,325          80,171,002          –          334,332,327  

 

  

Total Investments in Securities

      9,420,511,718          161,397,286          –          9,581,909,004  

 

  

Other Investments - Assets*

                

 

  

Forward Foreign Currency Contracts

      –          2,654,864          –          2,654,864  

 

  

Other Investments - Liabilities*

                

 

  

Forward Foreign Currency Contracts

      –          (84,024 )         –          (84,024 ) 

 

  

Total Other Investments

      –          2,570,840          –          2,570,840  

 

  

Total Investments

    $ 9,420,511,718        $ 163,968,126        $–        $ 9,584,479,844  

 

  

 

*

Unrealized appreciation (depreciation).

NOTE 4–Derivative Investments

The Fund may enter into an International Swaps and Derivatives Association Master Agreement (“ISDA Master Agreement”) under which a fund may trade OTC derivatives. An OTC transaction entered into under an ISDA Master Agreement typically involves a collateral posting arrangement, payment netting provisions and close-out netting provisions. These netting provisions allow for reduction of credit risk through netting of contractual obligations. The enforceability of the netting provisions of the ISDA Master Agreement depends on the governing law of the ISDA Master Agreement, among other factors.

For financial reporting purposes, the Fund does not offset OTC derivative assets or liabilities that are subject to ISDA Master Agreements in the Statement of Assets and Liabilities.

Value of Derivative Investments at Period-End

The table below summarizes the value of the Fund’s derivative investments, detailed by primary risk exposure, held as of October 31, 2023:

 

     Value  
     Currency  
Derivative Assets    Risk  

 

  

Unrealized appreciation on forward foreign currency contracts outstanding

    $ 2,654,864  

 

  

Derivatives not subject to master netting agreements

      –  

 

  

Total Derivative Assets subject to master netting agreements

    $ 2,654,864  

 

  

 

15   Invesco Comstock Fund

     Value  
     Currency  
Derivative Liabilities    Risk  

 

  

Unrealized depreciation on forward foreign currency contracts outstanding

    $     (84,024 ) 

 

  

Derivatives not subject to master netting agreements

      –  

 

  

Total Derivative Liabilities subject to master netting agreements

    $ (84,024 ) 

 

  

Offsetting Assets and Liabilities

The table below reflects the Fund’s exposure to Counterparties subject to either an ISDA Master Agreement or other agreement for OTC derivative transactions as of October 31, 2023.

 

     Financial
Derivative
Assets 		     Financial
Derivative
Liabilities		         Collateral
(Received)/Pledged		       
Counterparty    Forward Foreign
Currency Contracts		      Forward Foreign
Currency Contracts		   Net Value of
Derivatives		     Non-Cash    Cash   

Net

Amount

  

 

  

Barclays Bank PLC

      $       3,748      $          –     $       3,748     $–    $–      $       3,748  

 

  

Deutsche Bank AG

      –                (7,027)     (7,027 )      –      –      (7,027 ) 

 

  

Goldman Sachs International

      –              (59,589)     (59,589 )      –      –      (59,589 ) 

 

  

Royal Bank of Canada

      2,651,116          (4,209)     2,646,907       –      –      2,646,907  

 

  

State Street Bank & Trust Co.

      –              (13,199)     (13,199 )      –      –      (13,199 ) 

 

  

Total

      $2,654,864      $(84,024)     $2,570,840     $–    $–      $2,570,840  

 

  

Effect of Derivative Investments for the six months ended October 31, 2023

The table below summarizes the gains (losses) on derivative investments, detailed by primary risk exposure, recognized in earnings during the period:

 

     Location of Gain on  
     Statement of Operations  
     Currency  
     Risk  

 

  

Realized Gain:

   

Forward foreign currency contracts

      $  8,229,726  

 

  

Change in Net Unrealized Appreciation:

   

Forward foreign currency contracts

          2,475,473  

 

  

Total

      $10,705,199  

 

  

The table below summarizes the average notional value of derivatives held during the period.

 

     Forward  
     Foreign Currency  
     Contracts  

 

  

Average notional value

      $330,334,791  

 

  

NOTE 5–Expense 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, 2023, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $28,216.

NOTE 6–Trustees’ 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 7–Cash Balances

The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with SSB, 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.

 

16   Invesco Comstock Fund

NOTE 8–Tax 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 Fund’s 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 Fund’s 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. The ability to utilize capital loss carryforward 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, 2023.

NOTE 9–Investment Transactions

The aggregate amount of investment securities (other than short-term securities, U.S. Government obligations and money market funds, if any) purchased and sold by the Fund during the six months ended October 31, 2023 was $959,154,614 and $1,017,425,622, respectively. Cost of investments, including any derivatives, 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 Investments on a Tax Basis

  

Aggregate unrealized appreciation of investments

      $2,679,594,570  

 

  

Aggregate unrealized (depreciation) of investments

      (416,477,048 ) 

 

  

Net unrealized appreciation of investments

      $2,263,117,522  

 

  

Cost of investments for tax purposes is $7,321,362,322.

NOTE 10–Share Information

 

     Summary of Share Activity  

 

  
     Six months ended     Year ended  
     October 31, 2023(a)     April 30, 2023  
     Shares     Amount     Shares     Amount  

 

  

Sold:

         

Class A

      6,032,530     $     163,423,999       17,238,616     $     481,081,312  

 

  

Class C

      214,097       5,809,376       1,196,491       33,599,312  

 

  

Class R

      439,527       11,945,380       1,189,118       33,169,894  

 

  

Class Y

      9,471,315       257,408,887       21,825,600       609,727,823  

 

  

Class R5

      719,111       19,438,162       1,906,241       53,163,516  

 

  

Class R6

      7,949,699       215,724,285       19,207,625       534,469,338  

 

  

Issued as reinvestment of dividends:

         

Class A

      1,748,494       47,190,036       24,529,238       657,005,818  

 

  

Class C

      16,996       459,480       390,349       10,482,679  

 

  

Class R

      36,053       973,567       572,851       15,357,697  

 

  

Class Y

      509,727       13,754,419       6,215,736       166,364,562  

 

  

Class R5

      143,863       3,876,538       1,775,373       47,451,853  

 

  

Class R6

      591,997       15,946,980       6,495,386       173,505,725  

 

  

Automatic conversion of Class C shares to Class A shares:

         

Class A

      149,437       4,012,389       418,692       11,548,349  

 

  

Class C

      (149,308 )      (4,012,389 )      (418,383 )      (11,548,349 ) 

 

  

Reacquired:

         

Class A

      (14,162,017 )      (383,088,996 )      (25,071,795 )      (696,295,343 ) 

 

  

Class C

      (420,513 )      (11,384,526 )      (693,550 )      (19,077,567 ) 

 

  

Class R

      (816,770 )      (22,144,711 )      (1,343,816 )      (37,344,859 ) 

 

  

Class Y

      (9,440,487 )      (254,797,863 )      (17,214,667 )      (478,484,131 ) 

 

  

Class R5

      (2,023,455 )      (55,060,173 )      (3,043,428 )      (85,067,182 ) 

 

  

Class R6

      (8,476,906 )      (229,024,789 )      (16,435,127 )      (460,509,986 ) 

 

  

Net increase (decrease) in share activity

      (7,466,610 )    $ (199,549,949 )      38,740,550     $ 1,038,600,461  

 

  

 

(a) 

There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 42% 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.

 

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, 2023 through October 31, 2023.

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 Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s 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.

 

          ACTUAL  

HYPOTHETICAL

(5% annual return before

expenses)

     
     Beginning
    Account Value    
(05/01/23)		   Ending
    Account Value    
(10/31/23)1		   Expenses
      Paid During      
Period2		   Ending
    Account Value    
(10/31/23)		   Expenses
      Paid During      
Period2		  

      Annualized      

Expense

Ratio

Class A

   $1,000.00   $982.40   $3.99   $1,021.11   $4.06   0.80%

Class C

     1,000.00     979.00     7.51     1,017.55     7.66   1.51    

Class R

     1,000.00     981.20     5.23     1,019.86     5.33   1.05    

Class Y

     1,000.00     983.60     2.74     1,022.37     2.80   0.55    

Class R5

     1,000.00     983.80     2.54     1,022.57     2.59   0.51    

Class R6

     1,000.00     984.10     2.19     1,022.92     2.24   0.44    

 

1 

The actual ending account value is based on the actual total return of the Fund for the period May 1, 2023 through October 31, 2023, after actual expenses and will differ from the hypothetical ending account value which is based on the Fund’s expense ratio and a hypothetical annual return of 5% before expenses.

2 

Expenses are equal to the Fund’s annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 184/366 to reflect the most recent fiscal half year.

 

18   Invesco Comstock Fund

Approval of Investment Advisory and Sub-Advisory Contracts

    

 

At meetings held on June 13, 2023, the Board of Trustees (the Board or the Trustees) of AIM Sector Funds (Invesco Sector Funds) as a whole, and the independent Trustees, who comprise over 75% of the Board, voting separately, approved the continuance of the Invesco Comstock Fund’s (the Fund) Master Investment Advisory Agreement with Invesco Advisers, Inc. (Invesco Advisers and the investment advisory agreement) and the Master Intergroup Sub-Advisory Contract for Mutual Funds with Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Canada Ltd. (collectively, the Affiliated Sub-Advisers and the sub-advisory contracts) for another year, effective July 1, 2023. After evaluating the factors discussed below, among others, the Board approved the renewal of the Fund’s investment advisory agreement and the sub-advisory contracts and determined that the compensation payable thereunder by the Fund to Invesco Advisers and by Invesco Advisers to the Affiliated Sub-Advisers is fair and reasonable.

The Board’s Evaluation Process

The Board has established an Investments Committee, which in turn has established Sub-Committees, that meet throughout the year to review the performance of funds advised by Invesco Advisers (the Invesco Funds). The Sub-Committees meet regularly with portfolio managers for their assigned Invesco Funds and other members of management to review information about investment performance and portfolio attributes of these funds. The Board has established additional standing and ad hoc committees that meet regularly throughout the year to review matters within their purview, including a working group focused on opportunities to make ongoing and continuous improvements to the annual review process for the Invesco Funds’ investment advisory and sub-advisory contracts. The Board took into account evaluations and reports that it received from its committees and sub-committees, as well as the information provided to the Board and its committees and sub-committees throughout the year, in considering whether to approve each Invesco Fund’s investment advisory agreement and sub-advisory contracts.

    As part of the contract renewal process, the Board reviews and considers information provided in response to requests for information submitted to management by the independent Trustees with assistance from legal counsel to the independent Trustees and the Senior Officer, an officer of the Invesco Funds who reports directly to the independent Trustees. The Board receives comparative investment performance and fee and expense data regarding the Invesco Funds prepared by Broadridge Financial Solutions, Inc. (Broadridge), an independent mutual fund data provider, as well as information on the composition of the peer groups provided by Broadridge and its methodology for determining peer groups. The Board also receives an independent written evaluation from the Senior Officer. The Senior Officer’s evaluation is prepared as part of his responsibility to manage the process by which the Invesco Funds’ proposed management fees

are negotiated during the annual contract renewal process to ensure they are negotiated in a manner that is at arms’ length and reasonable in accordance with certain negotiated regulatory requirements. In addition to meetings with Invesco Advisers and fund counsel throughout the year and as part of meetings convened on May 2, 2023 and June 13, 2023, the independent Trustees also discussed the continuance of the investment advisory agreement and sub-advisory contracts in separate sessions with the Senior Officer and with independent legal counsel. Also, as part of the contract renewal process, the independent Trustees reviewed and considered information provided in response to follow-up requests for information submitted by the independent Trustees to management. The independent Trustees met and discussed those follow-up responses with legal counsel to the independent Trustees and the Senior Officer.

    The discussion below is a summary of the Senior Officer’s independent written evaluation with respect to the Fund’s investment advisory agreement and sub-advisory contracts, as well as a discussion of the material factors and related conclusions that formed the basis for the Board’s approval of the Fund’s investment advisory agreement and sub-advisory contracts. The Trustees’ review and conclusions are based on the comprehensive consideration of all information presented to them during the course of the year and in prior years and are not the result of any single determinative factor. Moreover, one Trustee may have weighed a particular piece of information or factor differently than another Trustee. The information received and considered by the Board was current as of various dates prior to the Board’s approval on June 13, 2023.

Factors and Conclusions and Summary of Independent Written Fee Evaluation

A.

Nature, Extent and Quality of Services Provided by Invesco Advisers and the Affiliated Sub-Advisers

The Board reviewed the nature, extent and quality of the advisory services provided to the Fund by Invesco Advisers under the Fund’s investment advisory agreement, and the credentials and experience of the officers and employees of Invesco Advisers who provide these services, including the Fund’s portfolio manager(s). The Board considered recent senior management changes at Invesco and Invesco Advisers, including the appointment of new Co-Heads of Investments, that had been presented to and discussed with the Board. The Board’s review included consideration of Invesco Advisers’ investment process and oversight, credit analysis and research capabilities. The Board considered information regarding Invesco Advisers’ programs for and resources devoted to risk management, including management of investment, enterprise, operational, liquidity, derivatives, valuation and compliance risks, and technology used to manage such risks. The Board received information regarding Invesco’s methodology for compensating its investment professionals and the incentives and accountability it creates, as well as how it impacts Invesco’s ability to attract and retain talent. The Board received a description of, and reports related to, Invesco Advisers’ global security program and business continuity plans and of its approach to data privacy

and cybersecurity, including related testing. The Board also considered non-advisory services that Invesco Advisers and its affiliates provide to the Invesco Funds, such as various middle office and back office support functions, third party oversight, internal audit, valuation, portfolio trading and legal and compliance. The Board observed that Invesco Advisers’ systems preparedness and ongoing investment enabled Invesco Advisers to manage, operate and oversee the Invesco Funds with minimal impact or disruption through challenging environments. The Board reviewed and considered the benefits to shareholders of investing in a Fund that is part of the family of funds under the umbrella of Invesco Ltd., Invesco Advisers’ parent company, and noted Invesco Ltd.’s depth and experience in running an investment management business, as well as its commitment of financial and other resources to such business. The Board concluded that the nature, extent and quality of the services provided to the Fund by Invesco Advisers are appropriate and satisfactory.

    The Board reviewed the services that may be provided to the Fund by the Affiliated Sub-Advisers under the sub-advisory contracts and the credentials and experience of the officers and employees of the Affiliated Sub-Advisers who provide these services. The Board noted the Affiliated Sub-Advisers’ expertise with respect to certain asset classes and that the Affiliated Sub-Advisers have offices and personnel that are located in financial centers around the world. As a result, the Board noted that the Affiliated Sub-Advisers can provide research and investment analysis on the markets and economies of various countries and territories in which the Fund may invest, make recommendations regarding securities and assist with portfolio trading. The Board concluded that the sub-advisory contracts may benefit the Fund and its shareholders by permitting Invesco Advisers to use the resources and talents of the Affiliated Sub-Advisers in managing the Fund. The Board concluded that the nature, extent and quality of the services that may be provided to the Fund by the Affiliated Sub-Advisers are appropriate and satisfactory.

B.

Fund Investment Performance

The Board considered Fund investment performance as a relevant factor in considering whether to approve the investment advisory agreement. The Board did not view Fund investment performance as a relevant factor in considering whether to approve the sub-advisory contracts for the Fund, as no Affiliated Sub-Adviser currently manages assets of the Fund.

    The Board compared the Fund’s investment performance over multiple time periods ending December 31, 2022 to the performance of funds in the Broadridge performance universe and against the Russell 1000® Value Index (Index). The Board noted that performance of Class A shares of the Fund was in the first quintile of its performance universe for the one and three year periods and the second quintile for the five year period (the first quintile being the best performing funds and the fifth quintile being the worst performing funds). The Board noted that performance of Class A shares of the Fund was above the performance of the Index for the one, three and five year periods. The Board considered that the Fund underwent an investment process change in

 

 

19   Invesco Comstock Fund

September 2020. The Board recognized that the performance data reflects a snapshot in time as of a particular date and that selecting a different performance period could produce different results. The Board also reviewed more recent Fund performance as well as other performance metrics, which did not change its conclusions.

C.

Advisory and Sub-Advisory Fees and Fund Expenses

The Board compared the Fund’s contractual management fee rate to the contractual management fee rates of funds in the Fund’s Broadridge expense group. The Board noted that the contractual management fee rate for Class A shares of the Fund was below the median contractual management fee rate of funds in its expense group. The Board noted that the term “contractual management fee” for funds in the expense group may include both advisory and certain non-portfolio management administrative services fees, but that Broadridge is not able to provide information on a fund-by-fund basis as to what is included. The Board also reviewed the methodology used by Broadridge in calculating expense group information, which includes using each fund’s contractual management fee schedule (including any applicable breakpoints) as reported in the most recent prospectus or statement of additional information for each fund in the expense group. The Board requested and received additional information regarding the Fund’s actual management fees and the levels of the Fund’s breakpoints in light of current asset levels. The Board also considered comparative information regarding the Fund’s total expense ratio and its various components.

    The Board noted that Invesco Advisers has contractually agreed to waive fees and/or limit expenses of the Fund for the term disclosed in the Fund’s registration statement in an amount necessary to limit total annual operating expenses to a specified percentage of average daily net assets for each class of the Fund.

    The Board also considered the fees charged by Invesco Advisers and its affiliates to other client accounts that are similarly managed. Invesco Advisers reviewed with the Board differences in the scope of services it provides to the Invesco Funds relative to that provided by Invesco Advisers and its affiliates to certain other types of client accounts, including, among others: management of cash flows as a result of redemptions and purchases; necessary infrastructure such as officers, office space, technology, legal and distribution; oversight of service providers; costs and business risks associated with launching new funds and sponsoring and maintaining the product line; and compliance with federal and state laws and regulations. Invesco Advisers also advised the Board that many of the similarly managed client accounts have all-inclusive fee structures, which are not easily un-bundled.

    The Board also compared the Fund’s effective advisory fee rate (defined for this purpose as the advisory fee rate after advisory fee waivers and before other expense limitations/waivers) to the effective advisory fee rates of other similarly managed third-party mutual funds advised or sub-advised by Invesco Advisers and its affiliates, based on asset balances as of December 31, 2022.

    The Board also considered the services that may be provided by the Affiliated Sub-Advisers pursuant to the sub-advisory contracts, as well as the fees payable by Invesco Advisers to the Affiliated Sub-Advisers pursuant to the sub-advisory contracts.

D.

Economies of Scale and Breakpoints

The Board considered the extent to which there may be economies of scale in the provision of advisory services to the Fund and the Invesco Funds, and the extent to which such economies of scale are shared with the Fund and the Invesco Funds. The Board acknowledged the difficulty in calculating and measuring economies of scale at the individual fund level; noting that only indicative and estimated measures are available at the individual fund level and that such measures are subject to uncertainty. The Board considered that the Fund benefits from economies of scale through contractual breakpoints in the Fund’s advisory fee schedule, which generally operate to reduce the Fund’s expense ratio as it grows in size. The Board considered information from Invesco Advisers regarding the levels of the Fund’s breakpoints in light of current assets. The Board noted that the Fund also shares in economies of scale through Invesco Advisers’ ability to negotiate lower fee arrangements with third party service providers. The Board noted that the Fund may also benefit from economies of scale through initial fee setting, fee waivers and expense reimbursements, as well as Invesco Advisers’ investment in its business, including investments in business infrastructure, technology and cybersecurity.

E.

Profitability and Financial Resources

The Board reviewed information from Invesco Advisers concerning the costs of the advisory and other services that Invesco Advisers and its affiliates provide to the Fund and the Invesco Funds and the profitability of Invesco Advisers and its affiliates in providing these services in the aggregate and on an individual fund-by-fund basis. The Board considered the methodology used for calculating profitability and the periodic review and enhancement of such methodology. The Board noted that Invesco Advisers continues to operate at a net profit from services Invesco Advisers and its affiliates provide to the Invesco Funds in the aggregate and to most Invesco Funds individually. The Board considered that profits to Invesco Advisers can vary significantly depending on the particular Invesco Fund, with some Invesco Funds showing indicative losses to Invesco Advisers and others showing indicative profits at healthy levels, and that Invesco Advisers’ support for and commitment to an Invesco Fund are not, however, solely dependent on the profits realized as to that Fund. The Board did not deem the level of profits realized by Invesco Advisers and its affiliates from providing such services to be excessive, given the nature, extent and quality of the services provided. The Board noted that Invesco Advisers provided information demonstrating that Invesco Advisers is financially sound and has the resources necessary to perform its obligations under the investment advisory agreement, and provided representations indicating that the Affiliated Sub-Advisers are financially sound and have the resources necessary to perform their obligations under the sub-advisory contracts. The Board noted the cyclical and competitive nature of the global asset management industry.

F.

Collateral Benefits to Invesco Advisers and its Affiliates

The Board considered various other benefits received by Invesco Advisers and its affiliates from the relationship with the Fund, including the fees received for providing administrative, transfer agency and distribution services to the Fund. The Board received comparative information regarding fees charged for these services, including

information provided by Broadridge and other independent sources. The Board reviewed the performance of Invesco Advisers and its affiliates in providing these services and the organizational structure employed to provide these services. The Board noted that these services are provided to the Fund pursuant to written contracts that are reviewed and subject to approval on an annual basis by the Board based on its determination that the services are required for the operation of the Fund.

    The Board considered the benefits realized by Invesco Advisers and the Affiliated Sub-Advisers as a result of portfolio brokerage transactions executed through “soft dollar” arrangements. The Board noted that soft dollar arrangements may result in the Fund bearing costs to purchase research that may be used by Invesco Advisers or the Affiliated Sub-Advisers with other clients and may reduce Invesco Advisers’ or the Affiliated Sub-Advisers’ expenses. The Board also considered that it receives from Invesco Advisers periodic reports that include a representation to the effect that these arrangements are consistent with regulatory requirements. The Board did not deem the soft dollar arrangements to be inappropriate.

    The Board considered that the Fund’s uninvested cash and cash collateral from any securities lending arrangements may be invested in registered money market funds or, with regard to securities lending cash collateral, unregistered funds that comply with Rule 2a-7 (collectively referred to as “affiliated money market funds”) advised by Invesco Advisers. The Board considered information regarding the returns of the affiliated money market funds relative to comparable overnight investments, as well as the fees paid by the affiliated money market funds to Invesco Advisers and its affiliates. In this regard, the Board noted that Invesco Advisers receives advisory fees from these affiliated money market funds attributable to the Fund’s investments. The Board also noted that Invesco Advisers has contractually agreed to waive through varying periods an amount equal to 100% of the net advisory fee Invesco Advisers receives from the affiliated money market funds with respect to the Fund’s investment in the affiliated money market funds of uninvested cash, but not cash collateral. The Board concluded that the advisory fees payable to Invesco Advisers from the Fund’s investment of cash collateral from any securities lending arrangements in the affiliated money market funds are for services that are not duplicative of services provided by Invesco Advisers to the Fund.

    The Board considered that Invesco Advisers may serve as the Fund’s affiliated securities lending agent and evaluated the benefits realized by Invesco Advisers when serving in such role, including the compensation received. The Board considered Invesco Advisers’ securities lending platform and corporate governance structure for securities lending, including Invesco Advisers’ Securities Lending Governance Committee and its related responsibilities. The Board noted that to the extent the Fund utilizes Invesco Advisers as an affiliated securities lending agent, the Fund conducts its securities lending in accordance with, and in reliance upon, no-action letters issued by the SEC staff that provide guidance on how an affiliate may act as a direct agent lender and receive compensation for those services without obtaining exemptive relief. The Board considered information provided by Invesco Advisers related to the performance of Invesco Advisers as securities lending agent,

 

 

20   Invesco Comstock Fund

including a summary of the securities lending services provided to the Fund by Invesco Advisers and the compensation paid to Invesco Advisers for such services, as well as any revenues generated for the Fund in connection with such securities lending activity and the allocation of such revenue between the Fund and Invesco Advisers.

    The Board also received information about commissions that an affiliated broker may receive for executing certain trades for the Fund. Invesco Advisers and the Affiliated Sub-Advisers advised the Board of the benefits to the Fund of executing trades through the affiliated broker and that such trades were executed in compliance with rules under the federal securities laws and consistent with best execution obligations.

 

 

21   Invesco Comstock Fund

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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 portfolio holdings four times each year, at the end of each fiscal quarter. For the second and fourth quarters, the list appears, respectively, in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the list with the Securities and Exchange Commission (SEC) as an exhibit to its reports on Form N-PORT. The most recent list of portfolio holdings is available at invesco.com/completeqtrholdings. Shareholders can also look up the Fund’s Form N-PORT filings on the SEC website, 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/corporate/about-us/esg. 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. This 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.

 

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SEC file number(s): 811-03826 and 002-85905                    Invesco Distributors, Inc.    VK-COM-SAR-1                                         

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Semiannual Report to Shareholders   October 31, 2023

Invesco Comstock Select Fund

Nasdaq:

A: CGRWX ∎ C: CGRCX ∎ R: CGRNX ∎ Y: CGRYX ∎ R5: IOVVX ∎ R6: OGRIX

 

    

   
2   Fund Performance
4   Schedule of Investments
6   Financial Statements
9   Financial Highlights
10   Notes to Financial Statements
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 is 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, 4/30/23 to 10/31/23, 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

     -3.59 % 

Class C Shares

     -3.93  

Class R Shares

     -3.70  

Class Y Shares

     -3.45  

Class R5 Shares

     -3.38  

Class R6 Shares

     -3.42  

S&P 500 Index▼*

     1.39  

Russell 1000 Value Index▼*

     -4.22  

Source(s): ▼RIMES Technologies Corp.

  

*Effective August 28, 2023, the Fund changed its broad-based securities market benchmark from the Russell 1000 Value Index to the S&P 500 Index. The Fund believes the S&P 500 Index is an appropriate benchmark for evaluating the Fund’s performance against the overall applicable market.

 

The S&P 500® Index is an unmanaged index considered representative of the US stock market.

 

    The Russell 1000® Value Index is an unmanaged index considered representative of large-cap value stocks. The Russell 1000 Value Index is a trademark/service mark of the Frank Russell Co. Russell® is a trademark of the Frank Russell Co.

 

    The Fund is not managed to track the performance of any particular index, including the indexes described here, and consequently, the performance of the Fund may deviate significantly from the performance of the indexes.

 

    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.

 

 

For more information about your Fund

Read the most recent quarterly commentary from your Fund’s portfolio managers by visiting invesco.com/us. Click on “Products” and select “Mutual Funds.” Use the “Product Finder” to locate your Fund; then click on its name to access its product detail page. There, you can learn more about your Fund’s investment strategies, holdings and performance.

    Also, visit blog.invesco.us.com, where many of Invesco’s investment professionals share their insights about market and economic news and trends.

 

 

2   Invesco Comstock Select Fund

    

    

    

 

 

Average Annual Total Returns

 

As of 10/31/23, including maximum applicable sales charges

 

Class A Shares

        

Inception (9/16/85)

     9.29 % 

10 Years

     7.62  

  5 Years

     8.33  

  1 Year

     -2.04  

Class C Shares

        

Inception (5/1/96)

     6.94 % 

10 Years

     7.58  

  5 Years

     8.75  

  1 Year

     1.99  

Class R Shares

        

Inception (3/1/01)

     6.58 % 

10 Years

     7.96  

  5 Years

     9.29  

  1 Year

     3.39  

Class Y Shares

        

Inception (12/16/96)

     7.33 % 

10 Years

     8.49  

  5 Years

     9.83  

  1 Year

     3.89  

Class R5 Shares

        

10 Years

     8.40 % 

  5 Years

     9.91  

  1 Year

     4.03  

Class R6 Shares

        

Inception (2/28/12)

     9.95 % 

10 Years

     8.66  

  5 Years

     9.97  

  1 Year

     3.99  

Effective May 24, 2019, Class A, Class C, Class R, Class Y and Class I shares of the Oppenheimer Value Fund, (the predecessor fund), were reorganized into Class A, Class C, Class R, Class Y and Class R6 shares, respectively, of the Invesco Oppenheimer Value Fund. Note: The Fund was subsequently renamed the Invesco Comstock Select Fund (the Fund). Returns shown above, for periods ending on or prior to May 24, 2019, for Class A, Class C, Class R, Class Y and Class R6 shares are those for Class A, Class C, Class R, Class Y and Class I shares of the predecessor fund. Share class returns will differ from the predecessor fund because of different expenses.

    Class R5 shares incepted on May 24, 2019. Performance shown on and prior to that date is that of the predecessor fund’s Class A shares at net asset value and includes the 12b-1 fees applicable to Class A shares.

    The performance data quoted represent past performance and cannot guarantee future results; current performance may be lower or higher. Please visit invesco.com/performance for the most recent month-end performance. Performance figures reflect reinvested distributions, changes in net asset value and the effect of the maximum sales charge unless otherwise stated.

Performance figures do not reflect deduction of taxes a shareholder would pay on Fund distributions or sale of Fund shares. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

    Class A share performance reflects the maximum 5.50% sales charge, and Class C share performance reflects the applicable contingent deferred sales charge (CDSC) for the period involved. The CDSC on Class C shares is 1% for the first year after purchase. Class R, Class Y, Class R5 and Class R6 shares do not have a front-end sales charge or a CDSC; therefore, performance is at net asset value.

    The performance of the Fund’s share classes will differ primarily due to different sales charge structures and class expenses.

    Fund performance reflects any applicable fee waivers and/or expense reimbursements. Had the adviser not waived fees and/or reimbursed expenses currently or in the past, returns would have been lower. See current prospectus for more information.

 

 

3   Invesco Comstock Select Fund

Schedule of Investments(a)

October 31, 2023

(Unaudited)

 

     Shares      Value  

 

  

Common Stocks & Other Equity Interests–91.39%

 

Air Freight & Logistics–3.37%

 

FedEx Corp.

      96,761      $   23,232,316  

 

  

Broadline Retail–3.04%

 

eBay, Inc.

      535,062        20,990,482  

 

  

Building Products–3.21%

 

Johnson Controls International PLC(b)

      452,446        22,178,903  

 

  

Casinos & Gaming–3.39%

 

Las Vegas Sands Corp.

      492,458        23,372,057  

 

  

Communications Equipment–6.63%

 

Cisco Systems, Inc.

      442,110        23,047,195  

 

  

F5, Inc.(c)

      149,992        22,737,287  

 

  
        45,784,482  

 

  

Diversified Banks–7.98%

 

Bank of America Corp.

      823,951        21,702,869  

 

  

Wells Fargo & Co.

      839,296        33,378,802  

 

  
        55,081,671  

 

  

Electrical Components & Equipment–2.53%

 

Emerson Electric Co.

      196,016        17,439,543  

 

  

Food Distributors–3.46%

 

Sysco Corp.

      358,890        23,862,596  

 

  

Health Care Equipment–5.34%

 

Becton, Dickinson and Co.

      61,884        15,643,038  

 

  

Medtronic PLC

      300,722        21,218,944  

 

  
        36,861,982  

 

  

Integrated Oil & Gas–11.14%

 

Chevron Corp.

      149,426        21,775,851  

 

  

Exxon Mobil Corp.

      125,517        13,285,974  

 

  

Shell PLC, ADR (Netherlands)

      167,890        10,936,355  

 

  

Suncor Energy, Inc. (Canada)

      953,387        30,889,739  

 

  
        76,887,919  

 

  

Interactive Media & Services–4.09%

 

Alphabet, Inc., Class A(c)

      109,243        13,554,871  

 

  

Meta Platforms, Inc., Class A(c)

      48,754        14,688,118  

 

  
        28,242,989  

 

  

IT Consulting & Other Services–2.65%

 

Cognizant Technology Solutions Corp., Class A

      283,133        18,253,584  

 

  

Managed Health Care–5.27%

 

Elevance Health, Inc.

      80,809        36,371,323  

 

  

Multi-line Insurance–3.60%

 

American International Group, Inc.

      405,485        24,860,285  

 

  

Investment Abbreviations:

ADR – American Depositary Receipt

     Shares      Value  

 

  

Personal Care Products–2.25%

 

Haleon PLC (United Kingdom)

      3,885,754      $ 15,552,566  

 

  

Pharmaceuticals–6.82%

 

Merck & Co., Inc.

      152,821        15,694,716  

 

  

Sanofi, ADR

      693,059        31,360,920  

 

  
        47,055,636  

 

  

Regional Banks–4.88%

 

Citizens Financial Group, Inc.

      832,858        19,513,863  

 

  

M&T Bank Corp.

      125,773        14,180,906  

 

  
        33,694,769  

 

  

Semiconductors–2.98%

 

Intel Corp.

      563,102        20,553,223  

 

  

Soft Drinks & Non-alcoholic Beverages–5.97%

 

Coca-Cola Co. (The)

      280,994        15,873,351  

 

  

Keurig Dr Pepper, Inc.

      834,244        25,302,621  

 

  
        41,175,972  

 

  

Systems Software–2.79%

 

Microsoft Corp.

      56,934        19,249,955  

 

  

Total Common Stocks & Other Equity Interests
(Cost $581,356,993)

 

      630,702,253  

 

  

Money Market Funds–8.39%

 

Invesco Government & Agency Portfolio, Institutional Class,
5.27%(d)(e)

      20,259,946        20,259,946  

 

  

Invesco Liquid Assets Portfolio, Institutional Class, 5.40%(d)(e)

      14,482,342        14,486,687  

 

  

Invesco Treasury Portfolio, Institutional Class, 5.27%(d)(e)

      23,154,224        23,154,224  

 

  

Total Money Market Funds
(Cost $57,897,412)

 

      57,900,857  

 

  

TOTAL INVESTMENTS IN SECURITIES
(excluding investments purchased with cash collateral from securities on loan)–99.78%
(Cost $639,254,405)

         688,603,110  

 

  

Investments Purchased with Cash Collateral from Securities on Loan

 

Money Market Funds–0.08%

 

Invesco Private Government Fund, 5.32%(d)(e)(f)

      158,720        158,720  

 

  

Invesco Private Prime Fund,
5.53%(d)(e)(f)

      408,439        408,480  

 

  

Total Investments Purchased with Cash Collateral from Securities on Loan
(Cost $567,200)

 

      567,200  

 

  

TOTAL INVESTMENTS IN SECURITIES–99.86%
(Cost $639,821,605)

 

      689,170,310  

 

  

OTHER ASSETS LESS LIABILITIES–0.14%

 

      992,226  

 

  

NET ASSETS–100.00%

       $ 690,162,536  

 

  
 

 

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

 

4   Invesco Comstock Select 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 & Poor’s.

(b) 

All or a portion of this security was out on loan at October 31, 2023.

(c) 

Non-income producing security.

(d) 

Affiliated holding. Affiliated holdings are investments in entities which are under common ownership or control of Invesco Ltd. or are investments in entities in which the Fund owns 5% or more of the outstanding voting securities. The table below shows the Fund’s transactions in, and earnings from, its investments in affiliates for the six months ended October 31, 2023.

 

      Value
April 30, 2023		     

Purchases

at Cost

      Proceeds
from Sales		     Change in
Unrealized
Appreciation		     

Realized
Gain

(Loss)

      Value
October 31, 2023		      Dividend Income  
Investments in Affiliated Money Market Funds:                                                              

Invesco Government & Agency Portfolio, Institutional Class

      $ 9,164,368        $ 37,516,433      $ (26,420,855 )          $    -                $         -            $ 20,259,946            $ 383,344       

Invesco Liquid Assets Portfolio, Institutional Class

      6,560,689          26,797,450        (18,872,039 )      907            (320)            14,486,687          275,865       

Invesco Treasury Portfolio, Institutional Class

      10,473,564          42,875,923        (30,195,263 )      -            -            23,154,224          429,286       
Investments Purchased with Cash Collateral from Securities on Loan:                                                              

Invesco Private Government Fund

      -          8,340,882        (8,182,162 )      -            -            158,720          5,328*      

Invesco Private Prime Fund

      -          20,331,052        (19,921,492 )      -            (1,080)            408,480          15,958*      

Total

      $ 26,198,621        $ 135,861,740      $ (103,591,811 )          $907                $(1,400)            $ 58,468,057            $ 1,109,781       

 

  *

Represents the income earned on the investment of cash collateral, which is included in securities lending income on the Statement of Operations. Does not include rebates and fees paid to lending agent or premiums received from borrowers, if any.

 

(e) 

The rate shown is the 7-day SEC standardized yield as of October 31, 2023.

(f) 

The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrower’s return of the securities loaned. See Note 1I.

Portfolio Composition

By sector, based on Net Assets

as of October 31, 2023

 

Health Care

      17.43 % 

Financials

      16.46  

Information Technology

      15.05  

Consumer Staples

      11.68  

Energy

      11.14  

Industrials

      9.11  

Consumer Discretionary

      6.43  

Communication Services

      4.09  

Money Market Funds Plus Other Assets Less Liabilities

      8.61  

 

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

 

5   Invesco Comstock Select Fund

Statement of Assets and Liabilities

October 31, 2023

(Unaudited)

 

Assets:

   

Investments in unaffiliated securities, at value (Cost $581,356,993)*

    $ 630,702,253  

 

  

Investments in affiliated money market funds, at value (Cost $58,464,612)

      58,468,057  

 

  

Cash

      1,000,000  

 

  

Foreign currencies, at value (Cost $85,090)

      85,108  

 

  

Receivable for:

   

Fund shares sold

      607,431  

 

  

Dividends

      768,877  

 

  

Investment for trustee deferred compensation and retirement plans

      106,069  

 

  

Other assets

      70,865  

 

  

Total assets

      691,808,660  

 

  

Liabilities:

   

Payable for:

   

Fund shares reacquired

      553,329  

 

  

Collateral upon return of securities loaned

      567,200  

 

  

Accrued fees to affiliates

      300,697  

 

  

Accrued trustees’ and officers’ fees and benefits

      64,903  

 

  

Accrued other operating expenses

      53,926  

 

  

Trustee deferred compensation and retirement plans

      106,069  

 

  

Total liabilities

      1,646,124  

 

  

Net assets applicable to shares outstanding

    $ 690,162,536  

 

  

Net assets consist of:

   

Shares of beneficial interest

    $ 608,674,281  

 

  

Distributable earnings

      81,488,255  

 

  
   $ 690,162,536  

 

  

Net Assets:

   

Class A

    $ 516,788,033  

 

  

Class C

    $ 27,338,560  

 

  

Class R

    $ 40,347,513  

 

  

Class Y

    $ 80,617,700  

 

  

Class R5

    $ 9,475  

 

  

Class R6

    $ 25,061,255  

 

  

Shares outstanding, no par value, with an unlimited number of shares authorized:

 

Class A

      17,047,398  

 

  

Class C

      979,038  

 

  

Class R

      1,377,880  

 

  

Class Y

      2,560,754  

 

  

Class R5

      313  

 

  

Class R6

      798,769  

 

  

Class A:

   

Net asset value per share

    $ 30.31  

 

  

Maximum offering price per share
(Net asset value of $30.31 ÷ 94.50%)

    $ 32.07  

 

  

Class C:

   

Net asset value and offering price per share

    $ 27.92  

 

  

Class R:

   

Net asset value and offering price per share

    $ 29.28  

 

  

Class Y:

   

Net asset value and offering price per share

    $ 31.48  

 

  

Class R5:

   

Net asset value and offering price per share

    $ 30.27  

 

  

Class R6:

   

Net asset value and offering price per share

    $ 31.37  

 

  

 

*

At October 31, 2023, security with a value of $558,828 was on loan to brokers.

 

 

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

 

6   Invesco Comstock Select Fund

Statement of Operations

For the six months ended October 31, 2023

(Unaudited)

 

Investment income:

   

Dividends (net of foreign withholding taxes of $228,302)

    $ 8,691,232  

 

  

Dividends from affiliated money market funds (includes net securities lending income of $7,763)

      1,096,258  

 

  

Total investment income

      9,787,490  

 

  

Expenses:

   

Advisory fees

      1,864,832  

 

  

Administrative services fees

      51,374  

 

  

Custodian fees

      2,809  

 

  

Distribution fees:

   

Class A

      664,894  

 

  

Class C

      150,364  

 

  

Class R

      108,093  

 

  

Transfer agent fees – A, C, R and Y

      443,021  

 

  

Transfer agent fees – R5

      2  

 

  

Transfer agent fees – R6

      3,488  

 

  

Trustees’ and officers’ fees and benefits

      14,196  

 

  

Registration and filing fees

      56,732  

 

  

Reports to shareholders

      1,993  

 

  

Professional services fees

      8,914  

 

  

Other

      9,742  

 

  

Total expenses

      3,380,454  

 

  

Less: Fees waived and/or expense offset arrangement(s)

      (38,342 ) 

 

  

Net expenses

      3,342,112  

 

  

Net investment income

      6,445,378  

 

  

Realized and unrealized gain (loss) from:

   

Net realized gain (loss) from:

   

Unaffiliated investment securities

      7,602,464  

 

  

Affiliated investment securities

      (1,400 ) 

 

  

Foreign currencies

      4,046  

 

  
     7,605,110  

 

  

Change in net unrealized appreciation (depreciation) of:

   

Unaffiliated investment securities

      (40,018,200 ) 

 

  

Affiliated investment securities

      907  

 

  

Foreign currencies

      17  

 

  
     (40,017,276 ) 

 

  

Net realized and unrealized gain (loss)

      (32,412,166 ) 

 

  

Net increase (decrease) in net assets resulting from operations

    $ (25,966,788 ) 

 

  

 

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

 

7   Invesco Comstock Select Fund

Statement of Changes in Net Assets

For the six months ended October 31, 2023 and the year ended April 30, 2023

(Unaudited)

 

    

October 31,

2023

    

April 30,

2023

  

 

  

Operations:

     

Net investment income

    $ 6,445,378     $ 8,965,899  

 

  

Net realized gain

      7,605,110       70,908,163  

 

  

Change in net unrealized appreciation (depreciation)

      (40,017,276 )      (25,260,343 ) 

 

  

Net increase (decrease) in net assets resulting from operations

      (25,966,788 )      54,613,719  

 

  

Distributions to shareholders from distributable earnings:

     

Class A

      (3,102,692 )      (78,352,475 ) 

 

  

Class C

      (57,285 )      (4,667,309 ) 

 

  

Class R

      (188,536 )      (6,002,660 ) 

 

  

Class Y

      (528,415 )      (8,560,097 ) 

 

  

Class R5

      (73 )      (1,643 ) 

 

  

Class R6

      (165,098 )      (2,122,214 ) 

 

  

Total distributions from distributable earnings

      (4,042,099 )      (99,706,398 ) 

 

  

Share transactions–net:

     

Class A

      (9,529,620 )      54,311,924  

 

  

Class C

      (2,110,781 )      2,016,797  

 

  

Class R

      (366,255 )      5,796,323  

 

  

Class Y

      16,851,172       19,704,735  

 

  

Class R6

      5,783,322       11,427,606  

 

  

Net increase in net assets resulting from share transactions

      10,627,838       93,257,385  

 

  

Net increase (decrease) in net assets

      (19,381,049 )      48,164,706  

 

  

Net assets:

     

Beginning of period

      709,543,585       661,378,879  

 

  

End of period

    $ 690,162,536     $ 709,543,585  

 

  

 

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

 

8   Invesco Comstock Select Fund

Financial Highlights

(Unaudited)

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

  

Distributions

from net

realized

gains

  

Total

distributions

  

Net asset

value, end

of period

  

Total

return(b)

  

Net assets,

end of period

(000’s 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(c)

  

Ratio of net

investment

income

to average

net assets

  

Portfolio

turnover (d)

Class A

                            

Six months ended 10/31/23

     $31.62       $0.29       $ (1.42 )      $ (1.13 )      $(0.18 )      $      –       $(0.18 )      $30.31       (3.59 )%(e)      $   516,788       0.92 %(e)(f)      0.93 %(e)(f)      1.79 %(e)(f)      82 % 

Year ended 04/30/23

     34.11       0.45       2.19       2.64       (0.45 )      (4.68 )      (5.13 )      31.62       8.36 (e)      548,500       1.01 (e)      1.02 (e)      1.37 (e)      57  

Year ended 04/30/22

     33.66       0.40       1.87       2.27       (0.38 )      (1.44 )      (1.82 )      34.11       6.88 (e)      530,151       0.91 (e)      0.92 (e)      1.15 (e)      54  

Year ended 04/30/21

     21.50       0.46       12.39       12.85       (0.69 )      –       (0.69 )      33.66       60.66 (e)      546,503       0.93 (e)      1.04 (e)      1.75 (e)      46  

Six months ended 04/30/20

     33.81       0.29       (5.00 )      (4.71 )      (0.29 )      (7.31 )      (7.60 )      21.50       (19.00 )      388,558       0.93 (f)      0.97 (f)      2.17 (f)      11  

Year ended 10/31/19

     35.63       0.58       2.00       2.58       (0.56 )      (3.84 )      (4.40 )      33.81       8.66       524,705       0.93       0.95       1.79       129  

Year ended 10/31/18

     37.62       0.51       (0.32 )      0.19       (0.52 )      (1.66 )      (2.18 )      35.63       0.35       500,866       0.93       0.93       1.37       45  

Class C

                            

Six months ended 10/31/23

     29.12       0.15       (1.29 )      (1.14 )      (0.06 )      –       (0.06 )      27.92       (3.93 )      27,339       1.68 (f)      1.69 (f)      1.03 (f)      82  

Year ended 04/30/23

     31.76       0.18       2.04       2.22       (0.18 )      (4.68 )      (4.86 )      29.12       7.51       30,601       1.77       1.78       0.61       57  

Year ended 04/30/22

     31.44       0.13       1.74       1.87       (0.11 )      (1.44 )      (1.55 )      31.76       6.05       31,095       1.67       1.68       0.39       54  

Year ended 04/30/21

     20.08       0.24       11.58       11.82       (0.46 )      –       (0.46 )      31.44       59.49       30,455       1.68       1.80       1.00       46  

Six months ended 04/30/20

     32.01       0.18       (4.64 )      (4.46 )      (0.16 )      (7.31 )      (7.47 )      20.08       (19.29 )      27,325       1.68 (f)      1.73 (f)      1.41 (f)      11  

Year ended 10/31/19

     33.95       0.32       1.89       2.21       (0.31 )      (3.84 )      (4.15 )      32.01       7.86       40,759       1.68       1.69       1.03       129  

Year ended 10/31/18

     35.96       0.22       (0.31 )      (0.09 )      (0.26 )      (1.66 )      (1.92 )      33.95       (0.44 )      96,108       1.69       1.69       0.62       45  

Class R

                            

Six months ended 10/31/23

     30.54       0.24       (1.36 )      (1.12 )      (0.14 )      –       (0.14 )      29.28       (3.70 )      40,348       1.18 (f)      1.19 (f)      1.53 (f)      82  

Year ended 04/30/23

     33.10       0.35       2.12       2.47       (0.35 )      (4.68 )      (5.03 )      30.54       8.05       42,402       1.27       1.28       1.11       57  

Year ended 04/30/22

     32.70       0.30       1.82       2.12       (0.28 )      (1.44 )      (1.72 )      33.10       6.62       39,500       1.17       1.18       0.89       54  

Year ended 04/30/21

     20.89       0.38       12.04       12.42       (0.61 )      –       (0.61 )      32.70       60.24       39,590       1.18       1.30       1.50       46  

Six months ended 04/30/20

     33.04       0.25       (4.85 )      (4.60 )      (0.24 )      (7.31 )      (7.55 )      20.89       (19.11 )      27,340       1.18 (f)      1.23 (f)      1.92 (f)      11  

Year ended 10/31/19

     34.91       0.49       1.96       2.45       (0.48 )      (3.84 )      (4.32 )      33.04       8.41       36,469       1.18       1.20       1.54       129  

Year ended 10/31/18

     36.91       0.41       (0.32 )      0.09       (0.43 )      (1.66 )      (2.09 )      34.91       0.08       38,411       1.18       1.18       1.12       45  

Class Y

                            

Six months ended 10/31/23

     32.83       0.34       (1.46 )      (1.12 )      (0.23 )      –       (0.23 )      31.48       (3.45 )      80,618       0.68 (f)      0.69 (f)      2.03 (f)      82  

Year ended 04/30/23

     35.26       0.54       2.26       2.80       (0.55 )      (4.68 )      (5.23 )      32.83       8.58       67,601       0.77       0.78       1.61       57  

Year ended 04/30/22

     34.75       0.50       1.93       2.43       (0.48 )      (1.44 )      (1.92 )      35.26       7.13       50,894       0.67       0.68       1.39       54  

Year ended 04/30/21

     22.19       0.54       12.80       13.34       (0.78 )      –       (0.78 )      34.75       61.10       45,879       0.68       0.80       2.00       46  

Six months ended 04/30/20

     34.70       0.34       (5.21 )      (4.87 )      (0.33 )      (7.31 )      (7.64 )      22.19       (18.95 )      29,843       0.68 (f)      0.73 (f)      2.41 (f)      11  

Year ended 10/31/19

     36.44       0.68       2.07       2.75       (0.65 )      (3.84 )      (4.49 )      34.70       8.97       70,677       0.68       0.71       2.03       129  

Year ended 10/31/18

     38.43       0.62       (0.34 )      0.28       (0.61 )      (1.66 )      (2.27 )      36.44       0.55       72,317       0.68       0.68       1.61       45  

Class R5

                            

Six months ended 10/31/23

     31.56       0.34       (1.40 )      (1.06 )      (0.23 )      –       (0.23 )      30.27       (3.38 )      9       0.58 (f)      0.59 (f)      2.13 (f)      82  

Year ended 04/30/23

     34.07       0.56       2.18       2.74       (0.57 )      (4.68 )      (5.25 )      31.56       8.71       10       0.66       0.67       1.72       57  

Year ended 04/30/22

     33.62       0.52       1.87       2.39       (0.50 )      (1.44 )      (1.94 )      34.07       7.24       11       0.57       0.58       1.49       54  

Year ended 04/30/21

     21.47       0.55       12.38       12.93       (0.78 )      –       (0.78 )      33.62       61.27       11       0.57       0.60       2.11       46  

Six months ended 04/30/20

     33.80       0.34       (5.02 )      (4.68 )      (0.34 )      (7.31 )      (7.65 )      21.47       (18.88 )      7       0.57 (f)      0.57 (f)      2.52 (f)      11  

Period ended 10/31/19(g)

     31.94       0.31       1.93       2.24       (0.38 )      –       (0.38 )      33.80       7.03       11       0.57 (f)      0.57 (f)      2.15 (f)      129  

Class R6

                            

Six months ended 10/31/23

     32.72       0.35       (1.46 )      (1.11 )      (0.24 )      –       (0.24 )      31.37       (3.42 )      25,061       0.58 (f)      0.59 (f)      2.13 (f)      82  

Year ended 04/30/23

     35.16       0.57       2.25       2.82       (0.58 )      (4.68 )      (5.26 )      32.72       8.70       20,430       0.66       0.67       1.72       57  

Year ended 04/30/22

     34.65       0.54       1.93       2.47       (0.52 )      (1.44 )      (1.96 )      35.16       7.26       9,729       0.55       0.58       1.51       54  

Year ended 04/30/21

     22.13       0.51       12.83       13.34       (0.82 )      –       (0.82 )      34.65       61.33       6,606       0.52       0.58       2.16       46  

Six months ended 04/30/20

     34.63       0.36       (5.19 )      (4.83 )      (0.36 )      (7.31 )      (7.67 )      22.13       (18.88 )      444,138       0.52 (f)      0.54 (f)      2.58 (f)      11  

Year ended 10/31/19

     36.38       0.73       2.06       2.79       (0.70 )      (3.84 )      (4.54 )      34.63       9.13       656,678       0.52       0.52       2.20       129  

Year ended 10/31/18

     38.37       0.68       (0.33 )      0.35       (0.68 )      (1.66 )      (2.34 )      36.38       0.75       1,039,697       0.52       0.52       1.78       45  

 

(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) 

Does not include indirect expenses from affiliated fund fees and expenses of 0.00% for the six months ended April 30, 2020 and for the years ended October 31, 2019 and 2018, respectively.

(d) 

Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.

(e) 

The total return, ratio of expenses to average net assets and ratio of net investment income to average net assets reflect actual 12b-1 fees of 0.24% for the six months ended October 31, 2023 and the years ended April 30, 2023, 2022 and 2021.

(f) 

Annualized.

(g) 

Commencement date after the close of business on May 24, 2019.

 

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

 

9   Invesco Comstock Select Fund

Notes to Financial Statements

October 31, 2023

(Unaudited)

NOTE 1–Significant Accounting Policies

Invesco Comstock Select 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 authorized to issue an unlimited number of shares of beneficial interest. Information presented in these financial statements pertains only to the Fund. Matters affecting the Fund or each class will be voted on exclusively by the shareholders of the Fund or each class.

The Fund’s investment objective is to seek capital appreciation.

The Fund currently consists of six different classes of shares: Class A, Class C, Class R, Class Y, Class R5 and Class R6. Class Y shares are available only to certain investors. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met. 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. Class C shares held for eight years after purchase are eligible for automatic conversion into Class A shares of the same Fund (the “Conversion Feature”). The automatic conversion pursuant to the Conversion Feature will generally occur at the end of the month following the eighth anniversary after a purchase of Class C shares.

The Fund is an investment company and accordingly follows the investment company accounting and reporting guidance in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 946, Financial Services – Investment Companies.

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 is generally valued at its trade price or official closing price that day as of the close of the exchange where the security is principally traded, or lacking any trades or official closing price on a particular day, the security may be valued at the closing bid or ask 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 using prices provided by an independent pricing service they may be considered fair valued. Futures contracts are valued at the daily settlement price set by an exchange on which they are principally traded. Where a final settlement price exists, exchange-traded options are valued at the final settlement price from the exchange where the option principally trades. Where a final settlement price does not exist, exchange-traded options are valued at the mean between the last bid and ask price generally from the exchange where the option principally trades.

Securities of investment companies that are not exchange-traded (e.g., open-end mutual funds) are valued using such company’s end-of-business-day net asset value per share.

Deposits, other obligations of U.S. and non-U.S. banks and financial institutions are valued at their daily account value.

Fixed income securities (including convertible debt securities) generally are valued on the basis of prices provided by independent pricing services. Prices 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. Pricing services generally value debt obligations assuming orderly transactions of institutional round lot size, but a fund may hold or transact in the same securities in smaller, odd lot sizes. Odd lots often trade at lower prices than institutional round lots, and their value may be adjusted accordingly. 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 New York Stock Exchange (“NYSE”). If market quotations are available and reliable for foreign exchange-traded equity securities, the securities will be valued at the market quotations. Invesco Advisers, Inc. (the “Adviser” or “Invesco”) may use various pricing services to obtain market quotations as well as fair value prices. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become not representative of market value in the Adviser’s judgment (“unreliable”). If, between the time trading ends on a particular security and the close of the customary trading session on the NYSE, a significant event occurs that makes the closing price of the security unreliable, the Adviser 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 in accordance with Board- approved policies and related Adviser procedures (“Valuation Procedures”). 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 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.

Unlisted securities will be valued using prices provided by independent pricing services or by another method that the Adviser, in its judgment, believes better reflects the security’s fair value in accordance with the Valuation Procedures.

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 mean between the last bid and ask prices may be used to value debt obligations, including corporate loans.

Securities for which market quotations are not readily available are fair valued by the Adviser in accordance with the Valuation Procedures. If a fair value price provided by a pricing service is unreliable, the Adviser will fair value the security using the Valuation Procedures. 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 security’s 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 Fund investments.

Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general market conditions which are not specifically related to the particular issuer, such as real or perceived adverse economic conditions, changes in the general outlook for revenues or corporate earnings, changes in interest or currency rates, regional or global instability, natural or environmental disasters, widespread disease or other public health issues, war, acts of terrorism, significant governmental actions or adverse investor sentiment generally 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.

The price the Fund could receive upon the sale of any investment may differ from the Adviser’s valuation of the investment, particularly for securities that are valued using a fair valuation technique. When fair valuation techniques are applied, the Adviser uses available information, including both observable and unobservable inputs and assumptions, to determine a methodology that will result in a valuation that the Adviser believes approximates market value. Fund securities that are fair valued may be subject to greater fluctuation in their value from one day to the next than would be the case if market quotations were used.

 

10   Invesco Comstock Select Fund

Because of the inherent uncertainties of valuation, and the degree of subjectivity in such decisions, the Fund could realize a greater or lesser than expected gain or loss upon the sale of the investment.

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 an accrual basis from settlement date and includes coupon interest and amortization of premium and accretion of discount on debt securities as applicable. 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 Fund’s net asset value and, accordingly, they reduce the Fund’s 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 the Statement of Changes in Net Assets, or the net investment income per share and the 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, the country that has the primary market for the issuer’s securities and its “country of risk” as determined by a third party service provider, 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 Fund’s 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 Fund’s 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 based on relative net assets of Class R5 and Class R6. 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 Trust’s 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 Fund’s servicing agreements, that contain a variety of indemnification clauses. The Fund’s 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 Fund’s 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, unregistered investment companies that comply with Rule 2a-7 under the 1940 Act and money market funds (collectively, “affiliated money market funds”) and is shown as such on the Schedule of Investments. The Fund bears the risk of loss with respect to the investment of collateral. It is the Fund’s 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. When loaning securities, the Fund retains certain benefits of owning the securities, including the economic equivalent of dividends or interest generated by the security. 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. The securities loaned are subject to termination at the option of the borrower or the Fund. Upon termination, the borrower will return to the Fund the securities loaned and the Fund will return the collateral. 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 and the securities may lose value during the delay which could result in potential losses to the Fund. Some of these losses may be indemnified by the lending agent. 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, are included in Dividends from affiliated money market funds on the Statement of Operations. The aggregate value of securities out on loan, if any, is shown as a footnote on the Statement of Assets and Liabilities.

The Adviser serves as an affiliated securities lending agent for the Fund. The Bank of New York Mellon also serves as a securities lending agent. To the extent the Fund utilizes the Adviser as an affiliated securities lending agent, the Fund conducts its securities lending in accordance with, and in reliance upon, no-action letters issued by the SEC staff that provide guidance on how an affiliate may act as a direct agent lender and receive compensation for those services in a manner

 

11   Invesco Comstock Select Fund

consistent with the federal securities laws. For the six months ended October 31, 2023, the Fund paid the Adviser $855 in fees for securities lending agent services. Fees paid to the Adviser for securities lending agent services, if any, are included in Dividends from affiliated money market funds on the Statement of Operations.

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 the 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 Fund’s 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 exchange of the two currencies on the settlement date, 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).

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 for hedging 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 Fund is non-diversified and may invest in securities of fewer issuers than if it were diversified. Thus, the value of the Fund’s shares may vary more widely and the Fund may be subject to greater market and credit risk than if the Fund invested more broadly.

NOTE 2–Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with the Adviser. Under the terms of the investment advisory agreement, the Fund accrues daily and pays monthly an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

 

Average Daily Net Assets    Rate*  

 

  

First $300 million

      0.625%  

 

  

Next $100 million

      0.500%  

 

  

Next $4.6 billion

      0.450%  

 

  

Over $5 billion

      0.430%  

 

  

 

*

The advisory fee paid by the Fund shall be reduced by any amounts paid by the Fund under the administrative services agreement with the Adviser.

For the six months ended October 31, 2023, the effective advisory fee rate incurred by the Fund was 0.52%.

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 Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Canada Ltd. and separate sub-advisory agreements with Invesco Capital Management LLC and Invesco Asset Management (India) Private Limited (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, will 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 Affiliated Sub-Adviser(s). Invesco has also entered into a sub-advisory agreement with OppenheimerFunds, Inc. to provide discretionary management services to the Fund.

Effective July 1, 2023, the Adviser has agreed, for an indefinite period, 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 C, Class R, Class Y, Class R5 and Class R6 shares to 2.00%, 2.75%, 2.25%, 1.75%, 1.75% and 1.75%, respectively, of the Fund’s average daily net assets (the “boundary limits”). Prior to July 1, 2023, the same boundary limits were in effect with an expiration date of June 30, 2023. In determining the Adviser’s 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. Invesco may amend and/or terminate these boundary limits at any time in its sole discretion and will inform the Board of Trustees of any such changes. The Adviser did not waive fees and/or reimburse expenses during the period under these boundary limits.

Further, the Adviser has contractually agreed, through at least June 30, 2025, 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, 2023, the Adviser waived advisory fees of $22,910.

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, 2023, expenses incurred under the agreement are shown in the Statement of Operations as Administrative services fees. Invesco has entered into a sub-administration agreement whereby State Street Bank and Trust Company (“SSB”) serves as fund accountant and provides certain administrative services to the Fund. Pursuant to a custody agreement with the Trust on behalf of the Fund, SSB also serves as the Fund’s custodian.

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.

 

12   Invesco Comstock Select Fund

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 services are charged back to the Fund, subject to certain limitations approved by the Trust’s Board of Trustees. For the six months ended October 31, 2023, 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 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% of Class C average daily net assets and up to 0.50% of Class R average daily net assets. The fees are accrued daily and paid monthly.

With respect to 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 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, 2023, 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, 2023, IDI advised the Fund that IDI retained $31,633 in front-end sales commissions from the sale of Class A shares and $339 and $253 from Class A and Class C shares, respectively, for CDSC imposed upon redemptions by shareholders.

For the six months ended October 31, 2023, the Fund incurred $67,188 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 3–Additional 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. 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 investment’s 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 Adviser’s 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, 2023. 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  

 

  

Investments in Securities

                  

 

  

Common Stocks & Other Equity Interests

    $ 615,149,687        $ 15,552,566          $–        $ 630,702,253  

 

  

Money Market Funds

      57,900,857          567,200            –          58,468,057  

 

  

Total Investments

    $ 673,050,544        $ 16,119,766          $–        $ 689,170,310  

 

  

NOTE 4–Expense 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, 2023, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $15,432.

NOTE 5–Trustees’ 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 6–Cash Balances

The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with SSB, 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.

 

13   Invesco Comstock Select Fund

NOTE 7–Tax 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 Fund’s 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 Fund’s 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. The ability to utilize capital loss carryforward 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, 2023.

NOTE 8–Investment Transactions

The aggregate amount of investment securities (other than short-term securities, U.S. Government obligations and money market funds, if any) purchased and sold by the Fund during the six months ended October 31, 2023 was $555,605,147 and $575,143,392, respectively. Cost of investments, including any derivatives, 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 Investments on a Tax Basis

  

Aggregate unrealized appreciation of investments

      $ 65,346,996  

 

  

Aggregate unrealized (depreciation) of investments

      (16,523,864 ) 

 

  

Net unrealized appreciation of investments

      $ 48,823,132  

 

  

Cost of investments for tax purposes is $640,347,178.

NOTE 9–Share Information

 

     Summary of Share Activity  

 

  
     Six months ended     Year ended  
     October 31, 2023(a)     April 30, 2023  
     Shares     Amount     Shares     Amount  

 

  

Sold:

         

Class A

      937,223     $   29,884,711       1,586,678     $   51,386,921  

 

  

Class C

      131,909       3,882,160       219,346       6,676,668  

 

  

Class R

      145,656       4,455,896       229,855       7,224,026  

 

  

Class Y

      1,129,680       37,667,626       1,159,693       38,046,106  

 

  

Class R6

      323,113       10,694,902       469,934       15,551,913  

 

  

Issued as reinvestment of dividends:

         

Class A

      92,273       2,932,471       2,444,925       75,045,448  

 

  

Class C

      1,925       56,399       163,203       4,617,392  

 

  

Class R

      6,128       188,154       201,700       5,981,536  

 

  

Class Y

      13,513       445,790       169,752       5,405,107  

 

  

Class R6

      4,792       157,521       63,109       2,002,369  

 

  

Automatic conversion of Class C shares to Class A shares:

         

Class A

      43,469       1,379,293       89,090       2,866,421  

 

  

Class C

      (47,201 )      (1,379,293 )      (96,230 )      (2,866,421 ) 

 

  

Reacquired:

         

Class A

      (1,374,460 )      (43,726,095 )      (2,312,576 )      (74,986,866 ) 

 

  

Class C

      (158,313 )      (4,670,047 )      (214,580 )      (6,410,842 ) 

 

  

Class R

      (162,268 )      (5,010,305 )      (236,518 )      (7,409,239 ) 

 

  

Class Y

      (641,451 )      (21,262,244 )      (713,888 )      (23,746,478 ) 

 

  

Class R6

      (153,527 )      (5,069,101 )      (185,393 )      (6,126,676 ) 

 

  

Net increase in share activity

      292,461     $ 10,627,838       3,038,100     $ 93,257,385  

 

  

 

(a) 

There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 6% 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 Comstock Select 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, 2023 through October 31, 2023.

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 Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s 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.

 

          ACTUAL  

HYPOTHETICAL

(5% annual return before

expenses)

     
    

Beginning

    Account Value    

(05/01/23)

  

Ending

    Account Value    

(10/31/23)1

  

Expenses

    Paid During    

Period2

  

Ending

      Account Value      

(10/31/23)

  

Expenses

      Paid During      

Period2

  

      Annualized      

Expense

Ratio

Class A

   $1,000.00   $964.10   $4.54   $1,020.51   $4.67   0.92%

Class C

     1,000.00     960.70     8.28     1,016.69     8.52   1.68    

Class R

     1,000.00     963.00     5.82     1,019.20     5.99   1.18    

Class Y

     1,000.00     965.50     3.36     1,021.72     3.46   0.68    

Class R5

     1,000.00     966.20     2.87     1,022.22     2.95   0.58    

Class R6

     1,000.00     965.80     2.87     1,022.22     2.95   0.58    

 

1 

The actual ending account value is based on the actual total return of the Fund for the period May 1, 2023 through October 31, 2023, after actual expenses and will differ from the hypothetical ending account value which is based on the Fund’s expense ratio and a hypothetical annual return of 5% before expenses.

2 

Expenses are equal to the Fund’s annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 184/366 to reflect the most recent fiscal half year.

 

15   Invesco Comstock Select Fund

Approval of Investment Advisory and Sub-Advisory Contracts

    

 

At meetings held on June 13, 2023, the Board of Trustees (the Board or the Trustees) of AIM Sector Funds (Invesco Sector Funds) as a whole, and the independent Trustees, who comprise over 75% of the Board, voting separately, approved the continuance of the Invesco Comstock Select Fund’s (the Fund) Master Investment Advisory Agreement with Invesco Advisers, Inc. (Invesco Advisers and the investment advisory agreement) and the Master Intergroup Sub-Advisory Contract for Mutual Funds with Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Canada Ltd. and separate sub-advisory contracts with Invesco Capital Management LLC and Invesco Asset Management (India) Private Limited and OppenheimerFunds, Inc. (collectively, the Affiliated Sub-Advisers and the sub-advisory contracts) for another year, effective July 1, 2023. After evaluating the factors discussed below, among others, the Board approved the renewal of the Fund’s investment advisory agreement and the sub-advisory contracts and determined that the compensation payable thereunder by the Fund to Invesco Advisers and by Invesco Advisers to the Affiliated Sub-Advisers is fair and reasonable.

The Board’s Evaluation Process

The Board has established an Investments Committee, which in turn has established Sub-Committees, that meet throughout the year to review the performance of funds advised by Invesco Advisers (the Invesco Funds). The Sub-Committees meet regularly with portfolio managers for their assigned Invesco Funds and other members of management to review information about investment performance and portfolio attributes of these funds. The Board has established additional standing and ad hoc committees that meet regularly throughout the year to review matters within their purview, including a working group focused on opportunities to make ongoing and continuous improvements to the annual review process for the Invesco Funds’ investment advisory and sub-advisory contracts. The Board took into account evaluations and reports that it received from its committees and sub-committees, as well as the information provided to the Board and its committees and sub-committees throughout the year, in considering whether to approve each Invesco Fund’s investment advisory agreement and sub-advisory contracts.

    As part of the contract renewal process, the Board reviews and considers information provided in response to requests for information submitted to management by the independent Trustees with assistance from legal counsel to the independent Trustees and the Senior Officer, an officer of the Invesco Funds who reports directly to the independent Trustees. The Board receives comparative investment performance and fee and expense data regarding the Invesco Funds prepared by Broadridge Financial Solutions, Inc. (Broadridge), an independent mutual fund data provider, as well as information on the composition of the peer groups provided by Broadridge and its methodology for determining peer groups. The Board also receives an independent written evaluation from the Senior

Officer. The Senior Officer’s evaluation is prepared as part of his responsibility to manage the process by which the Invesco Funds’ proposed management fees are negotiated during the annual contract renewal process to ensure they are negotiated in a manner that is at arms’ length and reasonable in accordance with certain negotiated regulatory requirements. In addition to meetings with Invesco Advisers and fund counsel throughout the year and as part of meetings convened on May 2, 2023 and June 13, 2023, the independent Trustees also discussed the continuance of the investment advisory agreement and sub-advisory contracts in separate sessions with the Senior Officer and with independent legal counsel. Also, as part of the contract renewal process, the independent Trustees reviewed and considered information provided in response to follow-up requests for information submitted by the independent Trustees to management. The independent Trustees met and discussed those follow-up responses with legal counsel to the independent Trustees and the Senior Officer.

    The discussion below is a summary of the Senior Officer’s independent written evaluation with respect to the Fund’s investment advisory agreement and sub-advisory contracts, as well as a discussion of the material factors and related conclusions that formed the basis for the Board’s approval of the Fund’s investment advisory agreement and sub-advisory contracts. The Trustees’ review and conclusions are based on the comprehensive consideration of all information presented to them during the course of the year and in prior years and are not the result of any single determinative factor. Moreover, one Trustee may have weighed a particular piece of information or factor differently than another Trustee. The information received and considered by the Board was current as of various dates prior to the Board’s approval on June 13, 2023.

Factors and Conclusions and Summary of Independent Written Fee Evaluation

A.

Nature, Extent and Quality of Services Provided by Invesco Advisers and the Affiliated Sub-Advisers

The Board reviewed the nature, extent and quality of the advisory services provided to the Fund by Invesco Advisers under the Fund’s investment advisory agreement, and the credentials and experience of the officers and employees of Invesco Advisers who provide these services, including the Fund’s portfolio manager(s). The Board considered recent senior management changes at Invesco and Invesco Advisers, including the appointment of new Co-Heads of Investments, that had been presented to and discussed with the Board. The Board’s review included consideration of Invesco Advisers’ investment process and oversight, credit analysis, and research capabilities. The Board considered information regarding Invesco Advisers’ programs for and resources devoted to risk management, including management of investment, enterprise, operational, liquidity, derivatives, valuation and compliance risks, and technology used to manage such risks. The Board received information regarding Invesco’s methodology for compensating its investment professionals and the incentives and accountability it creates, as well as how it impacts Invesco’s ability to attract and retain talent. The Board received a

description of, and reports related to, Invesco Advisers’ global security program and business continuity plans and of its approach to data privacy and cybersecurity, including related testing. The Board also considered non-advisory services that Invesco Advisers and its affiliates provide to the Invesco Funds, such as various middle office and back office support functions, third party oversight, internal audit, valuation, portfolio trading and legal and compliance. The Board observed that Invesco Advisers’ systems preparedness and ongoing investment enabled Invesco Advisers to manage, operate and oversee the Invesco Funds with minimal impact or disruption through challenging environments. The Board reviewed and considered the benefits to shareholders of investing in a Fund that is part of the family of funds under the umbrella of Invesco Ltd., Invesco Advisers’ parent company, and noted Invesco Ltd.’s depth and experience in running an investment management business, as well as its commitment of financial and other resources to such business. The Board concluded that the nature, extent and quality of the services provided to the Fund by Invesco Advisers are appropriate and satisfactory.

    The Board reviewed the services that may be provided to the Fund by the Affiliated Sub-Advisers under the sub-advisory contracts and the credentials and experience of the officers and employees of the Affiliated Sub-Advisers who provide these services. The Board noted the Affiliated Sub-Advisers’ expertise with respect to certain asset classes and that the Affiliated Sub-Advisers have offices and personnel that are located in financial centers around the world. As a result, the Board noted that the Affiliated Sub-Advisers can provide research and investment analysis on the markets and economies of various countries and territories in which the Fund may invest, make recommendations regarding securities and assist with portfolio trading. The Board concluded that the sub-advisory contracts may benefit the Fund and its shareholders by permitting Invesco Advisers to use the resources and talents of the Affiliated Sub-Advisers in managing the Fund. The Board concluded that the nature, extent and quality of the services that may be provided to the Fund by the Affiliated Sub-Advisers are appropriate and satisfactory.

B.

Fund Investment Performance

The Board considered Fund investment performance as a relevant factor in considering whether to approve the investment advisory agreement. The Board did not view Fund investment performance as a relevant factor in considering whether to approve the sub-advisory contracts for the Fund, as no Affiliated Sub-Adviser currently manages assets of the Fund.

    The Board compared the Fund’s investment performance over multiple time periods ending December 31, 2022 to the performance of funds in the Broadridge performance universe and against the Russell 1000® Value Index (Index). The Board noted that performance of Class A shares of the Fund was in the first quintile of its performance universe for the one and three year periods and the second quintile for the five year period (the first quintile being the best performing funds and the fifth quintile being the worst performing funds). The Board noted that performance of Class A shares of the Fund was above

 

 

16   Invesco Comstock Select Fund

the performance of the Index for the one, three and five year periods. The Board considered that the Fund was created in connection with Invesco Ltd.’s acquisition of OppenheimerFunds, Inc. and its subsidiaries (the “Transaction”) and that the Fund’s performance prior to the closing of the Transaction on May 24, 2019 is that of its predecessor fund. The Board further considered that the Fund underwent an investment process change in February 2020. The Board also considered that, in July 2022, it had approved a change in the Fund’s classification from “diversified” to “non-diversified” for purposes of the 1940 Act and that such change was subsequently approved by the Fund’s shareholders and went into effect in November 2022. The Board considered that as a non-diversified fund, the Fund can invest a greater percentage of its assets in a smaller number of issuers or any one issuer than a diversified fund and that it had discussed with management the potential benefits of such change on the Fund’s performance. The Board recognized that the performance data reflects a snapshot in time as of a particular date and that selecting a different performance period could produce different results. The Board also reviewed more recent Fund performance as well as other performance metrics, which did not change its conclusions.

C.

Advisory and Sub-Advisory Fees and Fund Expenses

The Board compared the Fund’s contractual management fee rate to the contractual management fee rates of funds in the Fund’s Broadridge expense group. The Board noted that the contractual management fee rate for Class A shares of the Fund was below the median contractual management fee rate of funds in its expense group. The Board noted that the term “contractual management fee” for funds in the expense group may include both advisory and certain non-portfolio management administrative services fees, but that Broadridge is not able to provide information on a fund-by-fund basis as to what is included. The Board also reviewed the methodology used by Broadridge in calculating expense group information, which includes using each fund’s contractual management fee schedule (including any applicable breakpoints) as reported in the most recent prospectus or statement of additional information for each fund in the expense group. The Board also considered comparative information regarding the Fund’s total expense ratio and its various components.

    The Board noted that Invesco Advisers has contractually agreed to waive fees and/or limit expenses of the Fund for the term disclosed in the Fund’s registration statement in an amount necessary to limit total annual operating expenses to a specified percentage of average daily net assets for each class of the Fund.

    The Board also considered the fees charged by Invesco Advisers and its affiliates to other client accounts that are similarly managed. Invesco Advisers reviewed with the Board differences in the scope of services it provides to the Invesco Funds relative to that provided by Invesco Advisers and its affiliates to certain other types of client accounts, including, among others: management of cash flows as a result of redemptions and purchases; necessary infrastructure such as officers, office space, technology, legal and distribution; oversight of service providers; costs and business risks associated with launching new funds and sponsoring and maintaining the product line; and compliance with

federal and state laws and regulations. Invesco Advisers also advised the Board that many of the similarly managed client accounts have all-inclusive fee structures, which are not easily un-bundled.

    The Board also compared the Fund’s effective advisory fee rate (defined for this purpose as the advisory fee rate after advisory fee waivers and before other expense limitations/waivers) to the effective advisory fee rates of other similarly managed third-party mutual funds advised or sub-advised by Invesco Advisers and its affiliates, based on asset balances as of December 31, 2022.

    The Board also considered the services that may be provided by the Affiliated Sub-Advisers pursuant to the sub-advisory contracts, as well as the fees payable by Invesco Advisers to the Affiliated Sub-Advisers pursuant to the sub-advisory contracts.

D.

Economies of Scale and Breakpoints

The Board considered the extent to which there may be economies of scale in the provision of advisory services to the Fund and the Invesco Funds, and the extent to which such economies of scale are shared with the Fund and the Invesco Funds. The Board acknowledged the difficulty in calculating and measuring economies of scale at the individual fund level; noting that only indicative and estimated measures are available at the individual fund level and that such measures are subject to uncertainty. The Board considered that the Fund benefits from economies of scale through contractual breakpoints in the Fund’s advisory fee schedule, which generally operate to reduce the Fund’s expense ratio as it grows in size. The Board noted that the Fund also shares in economies of scale through Invesco Advisers’ ability to negotiate lower fee arrangements with third party service providers. The Board noted that the Fund may also benefit from economies of scale through initial fee setting, fee waivers and expense reimbursements, as well as Invesco Advisers’ investment in its business, including investments in business infrastructure, technology and cybersecurity.

E.

Profitability and Financial Resources

The Board reviewed information from Invesco Advisers concerning the costs of the advisory and other services that Invesco Advisers and its affiliates provide to the Fund and the Invesco Funds and the profitability of Invesco Advisers and its affiliates in providing these services in the aggregate and on an individual fund-by-fund basis. The Board considered the methodology used for calculating profitability and the periodic review and enhancement of such methodology. The Board noted that Invesco Advisers continues to operate at a net profit from services Invesco Advisers and its affiliates provide to the Invesco Funds in the aggregate and to most Invesco Funds individually. The Board considered that profits to Invesco Advisers can vary significantly depending on the particular Invesco Fund, with some Invesco Funds showing indicative losses to Invesco Advisers and others showing indicative profits at healthy levels, and that Invesco Advisers’ support for and commitment to an Invesco Fund are not, however, solely dependent on the profits realized as to that Fund. The Board did not deem the level of profits realized by Invesco Advisers and its affiliates from providing such services to be excessive, given the nature, extent and quality of the services provided. The Board noted that Invesco Advisers provided information demonstrating that Invesco Advisers is financially sound and has the resources necessary to perform its obligations under the investment advisory

agreement, and provided representations indicating that the Affiliated Sub-Advisers are financially sound and have the resources necessary to perform their obligations under the sub-advisory contracts. The Board noted the cyclical and competitive nature of the global asset management industry.

F.

Collateral Benefits to Invesco Advisers and its Affiliates

The Board considered various other benefits received by Invesco Advisers and its affiliates from the relationship with the Fund, including the fees received for providing administrative, transfer agency and distribution services to the Fund. The Board received comparative information regarding fees charged for these services, including information provided by Broadridge and other independent sources. The Board reviewed the performance of Invesco Advisers and its affiliates in providing these services and the organizational structure employed to provide these services. The Board noted that these services are provided to the Fund pursuant to written contracts that are reviewed and subject to approval on an annual basis by the Board based on its determination that the services are required for the operation of the Fund.

    The Board considered the benefits realized by Invesco Advisers and the Affiliated Sub-Advisers as a result of portfolio brokerage transactions executed through “soft dollar” arrangements. The Board noted that soft dollar arrangements may result in the Fund bearing costs to purchase research that may be used by Invesco Advisers or the Affiliated Sub-Advisers with other clients and may reduce Invesco Advisers’ or the Affiliated Sub-Advisers’ expenses. The Board also considered that it receives from Invesco Advisers periodic reports that include a representation to the effect that these arrangements are consistent with regulatory requirements. The Board did not deem the soft dollar arrangements to be inappropriate.

    The Board considered that the Fund’s uninvested cash and cash collateral from any securities lending arrangements may be invested in registered money market funds or, with regard to securities lending cash collateral, unregistered funds that comply with Rule 2a-7 (collectively referred to as “affiliated money market funds”) advised by Invesco Advisers. The Board considered information regarding the returns of the affiliated money market funds relative to comparable overnight investments, as well as the fees paid by the affiliated money market funds to Invesco Advisers and its affiliates. In this regard, the Board noted that Invesco Advisers receives advisory fees from these affiliated money market funds attributable to the Fund’s investments. The Board also noted that Invesco Advisers has contractually agreed to waive through varying periods an amount equal to 100% of the net advisory fee Invesco Advisers receives from the affiliated money market funds with respect to the Fund’s investment in the affiliated money market funds of uninvested cash, but not cash collateral. The Board concluded that the advisory fees payable to Invesco Advisers from the Fund’s investment of cash collateral from any securities lending arrangements in the affiliated money market funds are for services that are not duplicative of services provided by Invesco Advisers to the Fund.

    The Board considered that Invesco Advisers may serve as the Fund’s affiliated securities lending agent and evaluated the benefits realized by Invesco Advisers when serving in such role, including the compensation received. The Board considered

 

 

17   Invesco Comstock Select Fund

Invesco Advisers’ securities lending platform and corporate governance structure for securities lending, including Invesco Advisers’ Securities Lending Governance Committee and its related responsibilities. The Board noted that to the extent the Fund utilizes Invesco Advisers as an affiliated securities lending agent, the Fund conducts its securities lending in accordance with, and in reliance upon, no-action letters issued by the SEC staff that provide guidance on how an affiliate may act as a direct agent lender and receive compensation for those services without obtaining exemptive relief. The Board considered information provided by Invesco Advisers related to the performance of Invesco Advisers as securities lending agent, including a summary of the securities lending services provided to the Fund by Invesco Advisers and the compensation paid to Invesco Advisers for such services, as well as any revenues generated for the Fund in connection with such securities lending activity and the allocation of such revenue between the Fund and Invesco Advisers.

    The Board also received information about commissions that an affiliated broker may receive for executing certain trades for the Fund. Invesco Advisers and the Affiliated Sub-Advisers advised the Board of the benefits to the Fund of executing trades through the affiliated broker and that such trades were executed in compliance with rules under the federal securities laws and consistent with best execution obligations.

    

    

 

 

18   Invesco Comstock Select Fund

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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 portfolio holdings four times each year, at the end of each fiscal quarter. For the second and fourth quarters, the list appears, respectively, in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the list with the Securities and Exchange Commission (SEC) as an exhibit to its reports on Form N-PORT. The most recent list of portfolio holdings is available at invesco.com/completeqtrholdings. Shareholders can also look up the Fund’s Form N-PORT filings on the SEC website, 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/corporate/about-us/esg. 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. This 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.

 

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SEC file number(s): 811-03826 and 002-85905                     Invesco Distributors, Inc.    O-VAL-SAR-1                                         

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Semiannual Report to Shareholders   October 31, 2023

Invesco Dividend Income Fund

Nasdaq:

A: IAUTX ∎ C: IUTCX ∎ R: IRTCX ∎ Y: IAUYX ∎ Investor: FSTUX ∎ R5: FSIUX ∎ R6: IFUTX

 

 

    
   
2   Fund Performance
4   Schedule of Investments
7   Financial Statements
10   Financial Highlights
11   Notes to Financial Statements
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 is 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, 4/30/23 to 10/31/23, 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

     -5.73 % 

Class C Shares

     -6.11  

Class R Shares

     -5.89  

Class Y Shares

     -5.62  

Investor Class Shares

     -5.73  

Class R5 Shares

     -5.60  

Class R6 Shares

     -5.56  

S&P 500 Index▼ (Broad Market Index)

     1.39  

Russell 1000 Value Index▼ (Style-Specific Index)

     -4.22  

Lipper Equity Income Funds Index∎ (Peer Group Index)

     -3.74  

Source(s): ▼RIMES Technologies Corp.; ∎Lipper Inc.

        

The S&P 500® Index is an unmanaged index considered representative of the US stock market.

  

    The Russell 1000® Value Index is an unmanaged index considered representative of large-cap value stocks. The Russell 1000 Value Index is a trademark/service mark of the Frank Russell Co. Russell® is a trademark of the Frank Russell Co.

  

    The Lipper Equity Income Funds Index is an unmanaged index considered representative of equity income 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.

 

 

 

 

 

For more information about your Fund

 

Read the most recent quarterly commentary from your Fund’s portfolio managers by visiting invesco.com/us. Click on “Products” and select “Mutual Funds.” Use the “Product Finder” to locate your Fund; then click on its name to access its product detail page. There, you can learn more about your Fund’s investment strategies, holdings and performance.

    Also, visit blog.invesco.us.com, where many of Invesco’s investment professionals share their insights about market and economic news and trends.

 

 

 

2   Invesco Dividend Income Fund

    

    

    

 

 

Average Annual Total Returns

 

As of 10/31/23, including maximum applicable sales charges

  

Class A Shares

        

Inception (3/28/02)

     7.28 % 

10 Years

     6.31  

  5 Years

     4.17  

  1 Year

     -8.16  

Class C Shares

        

Inception (2/14/00)

     4.16 % 

10 Years

     6.27  

  5 Years

     4.55  

  1 Year

     -4.53  

Class R Shares

        

10 Years

     6.64 % 

  5 Years

     5.08  

  1 Year

     -3.12  

Class Y Shares

        

Inception (10/3/08)

     7.98 % 

10 Years

     7.18  

  5 Years

     5.60  

  1 Year

     -2.62  

Investor Class Shares

        

Inception (6/2/86)

     7.98 % 

10 Years

     6.91  

  5 Years

     5.35  

  1 Year

     -2.86  

Class R5 Shares

        

Inception (10/25/05)

     7.52 % 

10 Years

     7.22  

  5 Years

     5.65  

  1 Year

     -2.56  

Class R6 Shares

        

Inception (9/24/12)

     8.03 % 

10 Years

     7.30  

  5 Years

     5.74  

  1 Year

     -2.49  

Class R shares incepted on April 17, 2020. Performance shown prior to that date is that of Investor Class shares restated to reflect the higher 12b-1 fees applicable to Class R shares.

    The performance data quoted represent past performance and cannot guarantee future results; current performance may be lower or higher. Please visit invesco.com/performance for the most recent month-end performance. Performance figures reflect reinvested distributions, changes in net asset value and the effect of the maximum sales charge unless otherwise stated. Performance figures do not reflect deduction of taxes a shareholder would pay on Fund distributions or sale of Fund shares. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

    Class A share performance reflects the maximum 5.50% sales charge, and Class C share performance reflects the applicable contingent deferred sales charge (CDSC) for the period involved. The CDSC on Class C shares is 1% for the first year after purchase. Class R, Class Y, Investor Class,

Class R5 and Class R6 shares do not have a front-end sales charge or a CDSC; therefore, performance is at net asset value.

    The performance of the Fund’s share classes will differ primarily due to different sales charge structures and class expenses.

    Fund performance reflects any applicable fee waivers and/or expense reimbursements. Had the adviser not waived fees and/or reimbursed expenses currently or in the past, returns would have been lower. See current prospectus for more information.

    

 

 

3   Invesco Dividend Income Fund

Schedule of Investments(a)

October 31, 2023

(Unaudited)

 

     Shares      Value  

 

  

Common Stocks & Other Equity Interests–99.60%

 

Aerospace & Defense–2.14%

 

Lockheed Martin Corp.

      86,188      $ 39,184,512  

 

  

Northrop Grumman Corp.

      66,404        31,304,838  

 

  
        70,489,350  

 

  

Air Freight & Logistics–0.72%

 

United Parcel Service, Inc., Class B

      167,491        23,658,104  

 

  

Asset Management & Custody Banks–2.10%

 

BlackRock, Inc.

      52,643        32,232,256  

 

  

State Street Corp.

      575,815        37,214,923  

 

  
        69,447,179  

 

  

Automobile Manufacturers–0.47%

 

Bayerische Motoren Werke AG (Germany)

      168,116        15,587,923  

 

  

Building Products–1.33%

 

Trane Technologies PLC

      230,697        43,903,946  

 

  

Cable & Satellite–2.29%

 

Comcast Corp., Class A

      1,827,528        75,458,631  

 

  

Construction Machinery & Heavy Transportation Equipment– 1.31%

 

Caterpillar, Inc.

      190,831        43,137,348  

 

  

Construction Materials–0.83%

 

CRH PLC

      511,555        27,404,001  

 

  

Consumer Staples Merchandise Retail–4.07%

 

Target Corp.

      318,000        35,231,220  

 

  

Walmart, Inc.

      606,101        99,042,964  

 

  
        134,274,184  

 

  

Diversified Banks–6.02%

 

Bank of America Corp.

      2,938,066        77,388,658  

 

  

Fifth Third Bancorp

      1,456,349        34,530,035  

 

  

JPMorgan Chase & Co.

      623,229        86,666,225  

 

  
        198,584,918  

 

  

Electric Utilities–1.73%

 

Entergy Corp.

      335,914        32,110,019  

 

  

PPL Corp.

      1,017,442        24,998,550  

 

  
        57,108,569  

 

  

Electrical Components & Equipment–2.12%

 

ABB Ltd. (Switzerland)

      989,488        33,269,330  

 

  

Emerson Electric Co.

      413,137        36,756,799  

 

  
        70,026,129  

 

  

Electronic Manufacturing Services–0.87%

 

TE Connectivity Ltd.

      242,367        28,562,951  

 

  

Financial Exchanges & Data–2.10%

 

CME Group, Inc., Class A

      324,508        69,269,478  

 

  

Food Distributors–1.22%

 

Sysco Corp.

      604,125        40,168,271  

 

  
     Shares      Value  

 

  

Gas Utilities–1.01%

      

National Fuel Gas Co.(b)

     656,904      $ 33,469,259  

 

  

Gold–0.62%

 

Newmont Corp.(b)

     541,643        20,295,363  

 

  

Health Care Equipment–5.53%

 

Baxter International, Inc.

      483,247        15,671,700  

 

  

Becton, Dickinson and Co.

      297,888        75,300,129  

 

  

Medtronic PLC

      733,238        51,737,273  

 

  

Zimmer Biomet Holdings, Inc.

      381,131        39,793,888  

 

  
        182,502,990  

 

  

Health Care Services–1.71%

 

CVS Health Corp.

      817,818        56,437,620  

 

  

Heavy Electrical Equipment–0.00%

 

Accelleron Industries AG (Switzerland)

      1        25  

 

  

Home Improvement Retail–1.08%

 

Lowe’s Cos., Inc.

      187,610        35,752,838  

 

  

Household Products–1.44%

 

Colgate-Palmolive Co.

      634,360        47,653,123  

 

  

Human Resource & Employment Services–0.77%

 

Automatic Data Processing, Inc.

      115,980        25,309,156  

 

  

Industrial Machinery & Supplies & Components–1.58%

 

Parker-Hannifin Corp.

      141,660        52,259,791  

 

  

Industrial REITs–1.39%

 

Prologis, Inc.

      456,574        45,999,830  

 

  

Integrated Oil & Gas–4.91%

 

Chevron Corp.

      582,420        84,876,066  

 

  

Exxon Mobil Corp.

      727,515        77,007,463  

 

  
        161,883,529  

 

  

Integrated Telecommunication Services–1.67%

 

Deutsche Telekom AG (Germany)

      2,539,844        55,036,981  

 

  

Investment Banking & Brokerage–1.31%

 

Charles Schwab Corp. (The)

      831,625        43,277,765  

 

  

IT Consulting & Other Services–2.80%

 

Accenture PLC, Class A

      165,907        49,289,310  

 

  

International Business Machines Corp.

      297,984        43,100,406  

 

  
        92,389,716  

 

  

Multi-line Insurance–1.06%

 

American International Group, Inc.

      571,746        35,053,747  

 

  

Multi-Utilities–3.83%

 

Ameren Corp.

      317,301        24,022,859  

 

  

Public Service Enterprise Group, Inc.

      1,236,724        76,244,034  

 

  

WEC Energy Group, Inc.

      321,387        26,157,688  

 

  
        126,424,581  

 

  

Oil & Gas Exploration & Production–3.25%

 

ConocoPhillips

      581,594        69,093,367  

 

  
 

 

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

 

4   Invesco Dividend Income Fund

     Shares      Value  

 

  

Oil & Gas Exploration & Production–(continued)

 

Marathon Oil Corp.

      1,401,441      $ 38,273,354  

 

  
        107,366,721  

 

  

Oil & Gas Storage & Transportation–0.62%

 

Enbridge, Inc. (Canada)

      635,355        20,360,682  

 

  

Packaged Foods & Meats–2.44%

      

Kraft Heinz Co. (The)

      933,781        29,376,750  

 

  

Nestle S.A. (Switzerland)

      474,158        51,154,012  

 

  
        80,530,762  

 

  

Paper & Plastic Packaging Products & Materials–0.64%

 

Sonoco Products Co.

      410,222        21,253,602  

 

  

Pharmaceuticals–7.63%

      

AstraZeneca PLC (United Kingdom)

      404,080        50,508,254  

 

  

Johnson & Johnson

      660,176        97,930,508  

 

  

Merck & Co., Inc.

      1,005,718        103,287,238  

 

  
        251,726,000  

 

  

Property & Casualty Insurance–5.84%

 

   

Chubb Ltd.

      374,968        80,475,633  

 

  

Hartford Financial Services Group, Inc. (The)

      916,372        67,307,524  

 

  

Travelers Cos., Inc. (The)

      267,975        44,869,734  

 

  
        192,652,891  

 

  

Rail Transportation–1.66%

      

Union Pacific Corp.

      263,614        54,728,903  

 

  

Regional Banks–1.25%

      

M&T Bank Corp.

      367,308        41,413,977  

 

  

Restaurants–3.22%

      

McDonald’s Corp.

      274,625        71,998,436  

 

  

Starbucks Corp.

      372,097        34,322,228  

 

  
        106,320,664  

 

  

Semiconductor Materials & Equipment–0.99%

 

   

Lam Research Corp.

      55,356        32,561,506  

 

  

Semiconductors–1.95%

      

Analog Devices, Inc.

      297,218        46,761,308  

 

  

Broadcom, Inc.

      20,934        17,613,239  

 

  
        64,374,547  

 

  

Investment Abbreviations:

REIT – Real Estate Investment Trust

     Shares      Value  

 

  

Soft Drinks & Non-alcoholic Beverages–2.04%

 

Coca-Cola Co. (The)

      1,193,569      $ 67,424,713  

 

  

Specialty Chemicals–2.24%

 

DuPont de Nemours, Inc.(b)

     498,745        36,348,536  

 

  

PPG Industries, Inc.

      304,791        37,419,191  

 

  
        73,767,727  

 

  

Systems Software–2.40%

      

Microsoft Corp.

      234,410        79,256,365  

 

  

Timber REITs–1.07%

      

Weyerhaeuser Co.(b)

     1,233,317        35,383,865  

 

  

Tobacco–2.33%

      

Philip Morris International, Inc.

      862,383        76,890,068  

 

  

Total Common Stocks & Other Equity Interests
(Cost $2,806,914,314)

 

      3,286,840,289  

 

  

Money Market Funds–0.75%

 

Invesco Government & Agency Portfolio, Institutional Class, 5.27%(c)(d)

     8,599,326        8,599,326  

 

  

Invesco Liquid Assets Portfolio, Institutional Class, 5.40%(c)(d)

     6,134,271        6,136,112  

 

  

Invesco Treasury Portfolio, Institutional Class, 5.27%(c)(d)

     9,827,801        9,827,801  

 

  

Total Money Market Funds (Cost $24,562,012)

 

      24,563,239  

 

  

TOTAL INVESTMENTS IN SECURITIES (excluding investments purchased with cash collateral from securities on loan)-100.35%
(Cost $2,831,476,326)

         3,311,403,528  

 

  

Investments Purchased with Cash Collateral from Securities on Loan

 

Money Market Funds–1.36%

 

Invesco Private Government Fund, 5.32%(c)(d)(e)

     12,596,840        12,596,840  

 

  

Invesco Private Prime Fund, 5.53%(c)(d)(e) 32,397,927

         32,401,167  

 

  

Total Investments Purchased with Cash Collateral from Securities on Loan
(Cost $45,000,082)

 

      44,998,007  

 

  

TOTAL INVESTMENTS IN SECURITIES–101.71%
(Cost $2,876,476,408)

 

      3,356,401,535  

 

  

OTHER ASSETS LESS LIABILITIES–(1.71)%

 

      (56,348,297 ) 

 

  

NET ASSETS–100.00%

 

    $ 3,300,053,238  

 

  
 

 

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

 

5   Invesco Dividend Income 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 & Poor’s.

(b) 

All or a portion of this security was out on loan at October 31, 2023.

(c) 

Affiliated holding. Affiliated holdings are investments in entities which are under common ownership or control of Invesco Ltd. or are investments in entities in which the Fund owns 5% or more of the outstanding voting securities. The table below shows the Fund’s transactions in, and earnings from, its investments in affiliates for the six months ended October 31, 2023.

 

     

Value

April 30, 2023

   

Purchases

at Cost

   

Proceeds

from Sales

     Change in
Unrealized
Appreciation
(Depreciation)		    Realized
Gain
(Loss)		    Value
October 31, 2023		    Dividend Income
Investments in Affiliated Money Market Funds:                                      

Invesco Government & Agency Portfolio, Institutional Class

    $ 39,324,600    $ 142,037,062    $ (172,762,336 )    $          -        $          -    $  8,599,326        $   881,505  

Invesco Liquid Assets Portfolio, Institutional Class

    28,085,718    101,455,045      (123,401,669 )    866        (3,848)    6,136,112        641,862  

Invesco Treasury Portfolio, Institutional Class

    44,942,400    162,328,071      (197,442,670 )    -        -    9,827,801        1,004,952  
Investments Purchased with Cash Collateral from Securities on Loan:                                      

Invesco Private Government Fund

    26,609,123    170,216,076      (184,228,359 )    -        -    12,596,840        245,927*  

Invesco Private Prime Fund

    68,423,459    440,104,725      (476,123,401 )    (2,075)        (1,541)    32,401,167        672,130*  

Total

    $207,385,300    $1,016,140,979    $ (1,153,958,435 )    $(1,209)        $(5,389)    $69,561,246        $3,446,376  

 

  *

Represents the income earned on the investment of cash collateral, which is included in securities lending income on the Statement of Operations. Does not include rebates and fees paid to lending agent or premiums received from borrowers, if any.

 

(d) 

The rate shown is the 7-day SEC standardized yield as of October 31, 2023.

(e) 

The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrower’s return of the securities loaned. See Note 1J.

Portfolio Composition

By sector, based on Net Assets

as of October 31, 2023

 

Financials

      19.69%  

 

  

Health Care

      14.87     

 

  

Consumer Staples

      13.54     

 

  

Industrials

      11.62     

 

  

Information Technology

      9.00     

 

  

Energy

      8.78     

 

  

Utilities

      6.58     

 

  

Consumer Discretionary

      4.78     

 

  

Materials

      4.32     

 

  

Communication Services

      3.95     

 

  

Real Estate

      2.47     

 

  

Money Market Funds Plus Other Assets Less Liabilities

      0.40     

 

  

 

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, 2023

(Unaudited)

 

Assets:

   

Investments in unaffiliated securities, at value
(Cost $2,806,914,314)*

    $ 3,286,840,289  

 

  

Investments in affiliated money market funds, at value (Cost $69,562,094)

      69,561,246  

 

  

Cash

      7,096  

 

  

Foreign currencies, at value (Cost $2,289)

      1,811  

 

  

Receivable for:

   

Fund shares sold

      562,103  

 

  

Dividends

      4,463,948  

 

  

Foreign withholding tax claims

      386,872  

 

  

Investment for trustee deferred compensation and retirement plans

      244,909  

 

  

Other assets

      94,105  

 

  

Total assets

      3,362,162,379  

 

  

Liabilities:

   

Payable for:

   

Investments purchased

      13,366,470  

 

  

Dividends

      30  

 

  

Fund shares reacquired

      1,820,404  

 

  

Collateral upon return of securities loaned

      45,000,082  

 

  

Accrued fees to affiliates

      1,457,336  

 

  

Accrued trustees’ and officers’ fees and benefits

      52,139  

 

  

Accrued other operating expenses

      103,071  

 

  

Trustee deferred compensation and retirement plans

      309,609  

 

  

Total liabilities

      62,109,141  

 

  

Net assets applicable to shares outstanding

    $ 3,300,053,238  

 

  

Net assets consist of:

   

Shares of beneficial interest

    $ 2,700,794,594  

 

  

Distributable earnings

      599,258,644  

 

  
   $ 3,300,053,238  

 

  

Net Assets:

   

Class A

    $ 2,507,084,448  

 

  

Class C

    $ 147,968,962  

 

  

Class R

    $ 95,170,799  

 

  

Class Y

    $ 302,642,240  

 

  

Investor Class

    $ 61,996,832  

 

  

Class R5

    $ 1,672,073  

 

  

Class R6

    $ 183,517,884  

 

  

Shares outstanding, no par value, with an unlimited number of shares authorized:

 

Class A

      109,735,788  

 

  

Class C

      6,382,109  

 

  

Class R

      4,165,916  

 

  

Class Y

      13,093,946  

 

  

Investor Class

      2,681,607  

 

  

Class R5

      73,156  

 

  

Class R6

      8,022,087  

 

  

Class A:

   

Net asset value per share

    $ 22.85  

 

  

Maximum offering price per share
(Net asset value of $22.85 ÷ 94.50%)

    $ 24.18  

 

  

Class C:

   

Net asset value and offering price per share

    $ 23.18  

 

  

Class R:

   

Net asset value and offering price per share

    $ 22.85  

 

  

Class Y:

   

Net asset value and offering price per share

    $ 23.11  

 

  

Investor Class:

   

Net asset value and offering price per share

    $ 23.12  

 

  

Class R5:

   

Net asset value and offering price per share

    $ 22.86  

 

  

Class R6:

   

Net asset value and offering price per share

    $ 22.88  

 

  

 

*

At October 31, 2023, securities with an aggregate value of $44,018,560 were on loan to brokers.

 

 

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, 2023

(Unaudited)

 

Investment income:

   

Interest

    $ 79,512  

 

  

Dividends (net of foreign withholding taxes of $573,219)

      48,912,185  

 

  

Dividends from affiliated money market funds (includes net securities lending income of $241,720)

      2,770,039  

 

  

Foreign withholding tax claims

      613,638  

 

  

Total investment income

      52,375,374  

 

  

Expenses:

   

Advisory fees

      9,575,073  

 

  

Administrative services fees

      259,999  

 

  

Custodian fees

      18,168  

 

  

Distribution fees:

   

Class A

      3,263,899  

 

  

Class C

      855,387  

 

  

Class R

      258,361  

 

  

Investor Class

      83,545  

 

  

Transfer agent fees – A, C, R, Y and Investor Class

      2,046,974  

 

  

Transfer agent fees – R5

      871  

 

  

Transfer agent fees – R6

      30,330  

 

  

Trustees’ and officers’ fees and benefits

      33,236  

 

  

Registration and filing fees

      86,171  

 

  

Reports to shareholders

      109,214  

 

  

Professional services fees

      45,556  

 

  

Other

      36,867  

 

  

Total expenses

      16,703,651  

 

  

Less: Fees waived and/or expense offset arrangement(s)

      (113,146 ) 

 

  

Net expenses

      16,590,505  

 

  

Net investment income

      35,784,869  

 

  

Realized and unrealized gain (loss) from:

   

Net realized gain (loss) from:

   

Unaffiliated investment securities

      45,821,045  

 

  

Affiliated investment securities

      (5,389 ) 

 

  

Foreign currencies

      4,402  

 

  
     45,820,058  

 

  

Change in net unrealized appreciation (depreciation) of:

   

Unaffiliated investment securities

      (284,620,140 ) 

 

  

Affiliated investment securities

      (1,209 ) 

 

  

Foreign currencies

      (63,641 ) 

 

  
     (284,684,990 ) 

 

  

Net realized and unrealized gain (loss)

      (238,864,932 ) 

 

  

Net increase (decrease) in net assets resulting from operations

    $ (203,080,063 ) 

 

  

 

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, 2023 and the year ended April 30, 2023

(Unaudited)

 

    

October 31,

2023

    

April 30,

2023

  

 

  

Operations:

     

Net investment income

    $ 35,784,869     $ 68,728,985  

 

  

Net realized gain

      45,820,058       120,710,304  

 

  

Change in net unrealized appreciation (depreciation)

      (284,684,990 )      (119,631,776 ) 

 

  

Net increase (decrease) in net assets resulting from operations

      (203,080,063 )      69,807,513  

 

  

Distributions to shareholders from distributable earnings:

     

Class A

      (28,957,253 )      (158,822,155 ) 

 

  

Class C

      (1,167,401 )      (9,749,575 ) 

 

  

Class R

      (964,479 )      (5,849,789 ) 

 

  

Class Y

      (3,905,848 )      (19,369,867 ) 

 

  

Investor Class

      (708,418 )      (3,888,879 ) 

 

  

Class R5

      (20,899 )      (92,826 ) 

 

  

Class R6

      (2,481,136 )      (13,170,241 ) 

 

  

Total distributions from distributable earnings

      (38,205,434 )      (210,943,332 ) 

 

  

Share transactions–net:

     

Class A

      (116,430,610 )      23,874,589  

 

  

Class C

      (24,932,952 )      (36,937,633 ) 

 

  

Class R

      (5,919,992 )      393,670  

 

  

Class Y

      (7,217,583 )      8,563,525  

 

  

Investor Class

      (1,996,942 )      (1,130,168 ) 

 

  

Class R5

      84,665       334,978  

 

  

Class R6

      (15,764,635 )      (1,503,594 ) 

 

  

Net increase (decrease) in net assets resulting from share transactions

      (172,178,049 )      (6,404,633 ) 

 

  

Net increase (decrease) in net assets

      (413,463,546 )      (147,540,452 ) 

 

  

Net assets:

     

Beginning of period

      3,713,516,784       3,861,057,236  

 

  

End of period

    $ 3,300,053,238     $ 3,713,516,784  

 

  

 

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

 

9   Invesco Dividend Income Fund

Financial Highlights

(Unaudited)

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

Distributions

from net

realized

gains

Total

distributions

Net asset

value, end

of period

Total

return(b)

Net assets,

end of period

(000’s 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 10/31/23

   $24.50   $0.24   $(1.63 )    $(1.39 )    $(0.26 )    $        -   $(0.26 )    $22.85   (5.73 )%(d)   $2,507,084   0.93 %(d)(e)   0.93 %(d)(e)   1.98 %(d)(e)   18 %

Year ended 04/30/23

   25.42   0.46   0.03   0.49   (0.44 )   (0.97 )   (1.41 )   24.50   2.01 (d)    2,806,537   0.92 (d)    0.92 (d)    1.85 (d)    17

Year ended 04/30/22

   25.62   0.48   1.00   1.48   (0.47 )   (1.21 )   (1.68 )   25.42   5.95 (d)    2,887,737   0.93 (d)    0.93 (d)    1.84 (d)    38

Year ended 04/30/21

   20.11   0.47   5.53   6.00   (0.49 )   -   (0.49 )   25.62   30.23 (d)    2,921,798   0.97 (d)    0.97 (d)    2.10 (d)    4

Year ended 04/30/20

   22.70   0.51   (2.33 )   (1.82 )   (0.52 )   (0.25 )   (0.77 )   20.11   (8.30 )   2,506,397   1.05   1.06   2.31   47

Year ended 04/30/19

   22.98   0.58   1.45   2.03   (0.60 )   (1.71 )   (2.31 )   22.70   9.51   764,037   1.06   1.06   2.54   4

Class C

Six months ended 10/31/23

   24.86   0.15   (1.66 )   (1.51 )   (0.17 )   -   (0.17 )   23.18   (6.11 )   147,969   1.69 (e)    1.69 (e)    1.22 (e)    18

Year ended 04/30/23

   25.78   0.27   0.04   0.31   (0.26 )   (0.97 )   (1.23 )   24.86   1.23   184,187   1.68   1.68   1.09   17

Year ended 04/30/22

   25.97   0.29   1.01   1.30   (0.28 )   (1.21 )   (1.49 )   25.78   5.13   229,596   1.69   1.69   1.08   38

Year ended 04/30/21

   20.38   0.30   5.61   5.91   (0.32 )   -   (0.32 )   25.97   29.29   285,321   1.73   1.73   1.34   4

Year ended 04/30/20

   23.01   0.35   (2.37 )   (2.02 )   (0.36 )   (0.25 )   (0.61 )   20.38   (9.02 )   385,968   1.80   1.81   1.56   47

Year ended 04/30/19

   23.28   0.42   1.46   1.88   (0.44 )   (1.71 )   (2.15 )   23.01   8.65   152,988   1.81   1.81   1.79   4

Class R

Six months ended 10/31/23

   24.50   0.21   (1.63 )   (1.42 )   (0.23 )   -   (0.23 )   22.85   (5.85 )   95,171   1.19 (e)    1.19 (e)    1.72 (e)    18

Year ended 04/30/23

   25.42   0.39   0.04   0.43   (0.38 )   (0.97 )   (1.35 )   24.50   1.74   108,030   1.18   1.18   1.59   17

Year ended 04/30/22

   25.62   0.42   1.00   1.42   (0.41 )   (1.21 )   (1.62 )   25.42   5.68   111,671   1.19   1.19   1.58   38

Year ended 04/30/21

   20.11   0.41   5.53   5.94   (0.43 )   -   (0.43 )   25.62   29.89   110,667   1.23   1.23   1.84   4

Period ended 04/30/20(f)

  20.18   0.01   (0.08 )   (0.07 )   -   -   -   20.11   (0.35 )   97,560   1.20 (e)    1.21 (e)    2.16 (e)    47

Class Y

Six months ended 10/31/23

   24.78   0.27   (1.65 )   (1.38 )   (0.29 )   -   (0.29 )   23.11   (5.62 )   302,642   0.69 (e)    0.69 (e)    2.22 (e)    18

Year ended 04/30/23

   25.71   0.52   0.03   0.55   (0.51 )   (0.97 )   (1.48 )   24.78   2.22   331,823   0.68   0.68   2.09   17

Year ended 04/30/22

   25.89   0.55   1.02   1.57   (0.54 )   (1.21 )   (1.75 )   25.71   6.24   335,608   0.69   0.69   2.08   38

Year ended 04/30/21

   20.32   0.52   5.59   6.11   (0.54 )   -   (0.54 )   25.89   30.55   344,755   0.73   0.73   2.34   4

Year ended 04/30/20

   22.94   0.57   (2.36 )   (1.79 )   (0.58 )   (0.25 )   (0.83 )   20.32   (8.09 )   330,421   0.81   0.82   2.55   47

Year ended 04/30/19

   23.21   0.65   1.46   2.11   (0.67 )   (1.71 )   (2.38 )   22.94   9.76   248,641   0.81   0.81   2.79   4

Investor Class

Six months ended 10/31/23

   24.79   0.24   (1.65 )   (1.41 )   (0.26 )   -   (0.26 )   23.12   (5.73 )   61,997   0.94 (e)    0.94 (e)    1.97 (e)    18

Year ended 04/30/23

   25.71   0.46   0.03   0.49   (0.44 )   (0.97 )   (1.41 )   24.79   1.99   68,495   0.93   0.93   1.84   17

Year ended 04/30/22

   25.89   0.48   1.02   1.50   (0.47 )   (1.21 )   (1.68 )   25.71   5.96   72,230   0.94   0.94   1.83   38

Year ended 04/30/21

   20.31   0.47   5.59   6.06   (0.48 )   -   (0.48 )   25.89   30.25   73,628   0.98   0.98   2.09   4

Year ended 04/30/20

   22.93   0.52   (2.37 )   (1.85 )   (0.52 )   (0.25 )   (0.77 )   20.31   (8.32 )   62,298   1.06   1.07   2.30   47

Year ended 04/30/19

   23.20   0.59   1.46   2.05   (0.61 )   (1.71 )   (2.32 )   22.93   9.49   76,436   1.06   1.06   2.54   4

Class R5

Six months ended 10/31/23

   24.51   0.27   (1.63 )   (1.36 )   (0.29 )   -   (0.29 )   22.86   (5.60 )   1,672   0.67 (e)    0.67 (e)    2.24 (e)    18

Year ended 04/30/23

   25.43   0.52   0.04   0.56   (0.51 )   (0.97 )   (1.48 )   24.51   2.30   1,709   0.65   0.65   2.12   17

Year ended 04/30/22

   25.63   0.55   1.00   1.55   (0.54 )   (1.21 )   (1.75 )   25.43   6.24   1,425   0.66   0.66   2.11   38

Year ended 04/30/21

   20.11   0.53   5.54   6.07   (0.55 )   -   (0.55 )   25.63   30.66   2,337   0.66   0.66   2.41   4

Year ended 04/30/20

   22.71   0.58   (2.34 )   (1.76 )   (0.59 )   (0.25 )   (0.84 )   20.11   (8.05 )   2,159   0.75   0.76   2.61   47

Year ended 04/30/19

   22.99   0.65   1.45   2.10   (0.67 )   (1.71 )   (2.38 )   22.71   9.82   1,863   0.77   0.77   2.83   4

Class R6

Six months ended 10/31/23

   24.53   0.28   (1.63 )   (1.35 )   (0.30 )   -   (0.30 )   22.88   (5.56 )   183,518   0.60 (e)    0.60 (e)    2.31 (e)    18

Year ended 04/30/23

   25.45   0.54   0.04   0.58   (0.53 )   (0.97 )   (1.50 )   24.53   2.36   212,736   0.58   0.58   2.19   17

Year ended 04/30/22

   25.65   0.57   1.00   1.57   (0.56 )   (1.21 )   (1.77 )   25.45   6.31   222,790   0.59   0.59   2.18   38

Year ended 04/30/21

   20.13   0.55   5.54   6.09   (0.57 )   -   (0.57 )   25.65   30.75   241,970   0.58   0.58   2.49   4

Year ended 04/30/20

   22.73   0.60   (2.34 )   (1.74 )   (0.61 )   (0.25 )   (0.86 )   20.13   (7.97 )   245,526   0.66   0.67   2.70   47

Year ended 04/30/19

   23.00   0.67   1.46   2.13   (0.69 )   (1.71 )   (2.40 )   22.73   9.96   252,176   0.69   0.69   2.91   4

 

(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, 2020, the portfolio turnover calculation excludes the value of securities purchased of $2,372,954,426 in connection with the acquisitions of Invesco Oppenheimer Dividend Opportunity Fund and Invesco Oppenheimer Equity Income Fund into the Fund.

(d) 

The total return, ratio of expenses to average net assets and ratio of net investment income to average net assets reflect actual 12b-1 fees of 0.24% for the six months ended October 31, 2023 and the years ended April 30, 2023, 2022 and 2021.

(e) 

Annualized.

(f) 

Commencement date of April 17, 2020.

 

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

 

10   Invesco Dividend Income Fund

Notes to Financial Statements

October 31, 2023

(Unaudited)

NOTE 1–Significant 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 authorized to issue an unlimited number of shares of beneficial interest. Information presented in these financial statements pertains only to the Fund. Matters affecting the Fund or each class will be voted on exclusively by the shareholders of the Fund or each class.

The Fund’s investment objective is current income and long-term growth of capital.

The Fund currently consists of seven different classes of shares: Class A, Class C, Class R, Class Y, Investor Class, Class R5 and Class R6. Class Y and Investor Class shares are available only to certain investors. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met. 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, Investor Class, Class R5 and Class R6 shares are sold at net asset value. Class C shares held for eight years after purchase are eligible for automatic conversion into Class A shares of the same Fund (the “Conversion Feature”). The automatic conversion pursuant to the Conversion Feature will generally occur at the end of the month following the eighth anniversary after a purchase of Class C shares.

The Fund is an investment company and accordingly follows the investment company accounting and reporting guidance in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 946, Financial Services – Investment Companies.

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 is generally valued at its trade price or official closing price that day as of the close of the exchange where the security is principally traded, or lacking any trades or official closing price on a particular day, the security may be valued at the closing bid or ask 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 using prices provided by an independent pricing service they may be considered fair valued. Futures contracts are valued at the daily settlement price set by an exchange on which they are principally traded. Where a final settlement price exists, exchange-traded options are valued at the final settlement price from the exchange where the option principally trades. Where a final settlement price does not exist, exchange-traded options are valued at the mean between the last bid and ask price generally from the exchange where the option principally trades.

Securities of investment companies that are not exchange-traded (e.g., open-end mutual funds) are valued using such company’s end-of-business-day net asset value per share.

Deposits, other obligations of U.S. and non-U.S. banks and financial institutions are valued at their daily account value.

Fixed income securities (including convertible debt securities) generally are valued on the basis of prices provided by independent pricing services. Prices 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. Pricing services generally value debt obligations assuming orderly transactions of institutional round lot size, but a fund may hold or transact in the same securities in smaller, odd lot sizes. Odd lots often trade at lower prices than institutional round lots, and their value may be adjusted accordingly. 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 New York Stock Exchange (“NYSE”). If market quotations are available and reliable for foreign exchange-traded equity securities, the securities will be valued at the market quotations. Invesco Advisers, Inc. (the “Adviser” or “Invesco”) may use various pricing services to obtain market quotations as well as fair value prices. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become not representative of market value in the Adviser’s judgment (“unreliable”). If, between the time trading ends on a particular security and the close of the customary trading session on the NYSE, a significant event occurs that makes the closing price of the security unreliable, the Adviser 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 in accordance with Board- approved policies and related Adviser procedures (“Valuation Procedures”). 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 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.

Unlisted securities will be valued using prices provided by independent pricing services or by another method that the Adviser, in its judgment, believes better reflects the security’s fair value in accordance with the Valuation Procedures.

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 mean between the last bid and ask prices may be used to value debt obligations, including corporate loans.

Securities for which market quotations are not readily available are fair valued by the Adviser in accordance with the Valuation Procedures. If a fair value price provided by a pricing service is unreliable, the Adviser will fair value the security using the Valuation Procedures. 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 security’s 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 Fund investments.

Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general market conditions which are not specifically related to the particular issuer, such as real or perceived adverse economic conditions, changes in the general outlook for revenues or corporate earnings, changes in interest or currency rates, regional or global instability, natural or environmental disasters, widespread disease or other public health issues, war, acts of terrorism, significant governmental actions or adverse investor sentiment generally 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.

The price the Fund could receive upon the sale of any investment may differ from the Adviser’s valuation of the investment, particularly for securities that are valued using a fair valuation technique. When fair valuation techniques are applied, the Adviser uses available information, including both observable and unobservable inputs and assumptions, to determine a methodology that will result in a valuation that the Adviser believes approximates market value. Fund securities that are fair valued may be subject to greater fluctuation in their value from one day to the next than would be the case if market quotations were used.

 

11   Invesco Dividend Income Fund

Because of the inherent uncertainties of valuation, and the degree of subjectivity in such decisions, the Fund could realize a greater or lesser than expected gain or loss upon the sale of the investment.

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 an accrual basis from settlement date and includes coupon interest and amortization of premium and accretion of discount on debt securities as applicable. 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 Fund’s net asset value and, accordingly, they reduce the Fund’s 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 the Statement of Changes in Net Assets, or the net investment income per share and the 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, the country that has the primary market for the issuer’s securities and its “country of risk” as determined by a third party service provider, 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 Fund’s 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 Fund’s 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.

Foreign Withholding Taxes – The Fund is subject to foreign withholding tax imposed by certain foreign countries in which the Fund may invest. Withholding taxes are incurred on certain foreign dividends and are accrued at the time the dividend is recognized based on applicable foreign tax laws. The Fund may file withholding tax refunds in certain jurisdictions to seek to recover a portion of amounts previously withheld. The Fund will record a receivable for such tax refunds based on several factors including; an assessment of a jurisdiction’s legal obligation to pay reclaims, administrative practices and payment history. Any receivables recorded will be shown under receivables for Foreign withholding tax claims on the Statement of Assets and Liabilities. There is no guarantee that the Fund will receive refunds applied for in a timely manner or at all.

As a result of recent court rulings in certain countries across the European Union, tax refunds for previously withheld taxes on dividends earned in those countries have been received by investment companies. Any tax refund payments are reflected as Foreign withholding tax claims in the Statement of Operations, and any related interest is included in Interest income. The Fund may incur fees paid to third party providers that assist in the recovery of the tax reclaims. These fees are reflected on the Statement of Operations as Professional services fees, if any. In the event tax refunds received by the Fund during the fiscal year exceed the foreign withholding taxes paid by the Fund for the year, and the Fund previously passed foreign tax credits on to its shareholders, the Fund intends to enter into a closing agreement with the Internal Revenue Service in order to pay the associated liability on behalf of the Funds’ shareholders. For the six months ended October 31, 2023, the Fund did not enter into any closing agreements.

G.

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 based on relative net assets of Class R5 and Class R6. 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.

H.

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.

I.

Indemnifications – Under the Trust’s 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 Fund’s servicing agreements, that contain a variety of indemnification clauses. The Fund’s 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.

J.

Securities Lending – The Fund may lend portfolio securities having a market value up to one-third of the Fund’s 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, unregistered investment companies that comply with Rule 2a-7 under the 1940 Act and money market funds (collectively, “affiliated money market funds”) and is shown as such on the Schedule of Investments. The Fund bears the risk of loss with respect to the investment of collateral. It is the Fund’s 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. When loaning securities, the Fund retains certain benefits of owning the securities, including the economic equivalent of dividends or interest generated by the security.

 

12   Invesco Dividend Income Fund

  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. The securities loaned are subject to termination at the option of the borrower or the Fund. Upon termination, the borrower will return to the Fund the securities loaned and the Fund will return the collateral. 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 and the securities may lose value during the delay which could result in potential losses to the Fund. Some of these losses may be indemnified by the lending agent. 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, are included in Dividends from affiliated money market funds on the Statement of Operations. The aggregate value of securities out on loan, if any, is shown as a footnote on the Statement of Assets and Liabilities.

The Adviser serves as an affiliated securities lending agent for the Fund. The Bank of New York Mellon also serves as a securities lending agent. To the extent the Fund utilizes the Adviser as an affiliated securities lending agent, the Fund conducts its securities lending in accordance with, and in reliance upon, no-action letters issued by the SEC staff that provide guidance on how an affiliate may act as a direct agent lender and receive compensation for those services in a manner consistent with the federal securities laws. For the six months ended October 31, 2023, the Fund paid the Adviser $9,194 in fees for securities lending agent services. Fees paid to the Adviser for securities lending agent services, if any, are included in Dividends from affiliated money market funds on the Statement of Operations.

K.

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 the 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 Fund’s 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.

L.

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 exchange of the two currencies on the settlement date, 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).

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 for hedging 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 2–Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with the Adviser. Under the terms of the investment advisory agreement, the Fund accrues daily and pays monthly an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

 

Average Daily Net Assets    Rate  

 

  

First $500 million

      0.6325%  

 

  

Next $500 million

      0.6125%  

 

  

Next $600 million

      0.6000%  

 

  

Next $400 million

      0.5325%  

 

  

Next $2 billion

      0.4500%  

 

  

Next $2 billion

      0.4000%  

 

  

Next $2 billion

      0.3750%  

 

  

Over $8 billion

      0.3500%  

 

  

For the six months ended October 31, 2023, the effective advisory fee rate incurred by the Fund was 0.53%.

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 Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Canada Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, will 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 Affiliated Sub-Adviser(s).

Effective July 1, 2023, the Adviser has agreed, for an indefinite period, 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 C, Class R, Class Y, Investor Class, Class R5 and Class R6 shares to 2.00%, 2.75%, 2.25%, 1.75%, 2.00%, 1.75% and 1.75%, respectively, of the Fund’s average daily net assets (the “boundary limits”). Prior to July 1, 2023, the same boundary limits were in effect with an expiration date of June 30, 2023. In determining the Adviser’s 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. Invesco may amend and/or terminate these boundary limits at any time in its sole discretion and will inform the Board of Trustees of any such changes. The Adviser did not waive fees and/or reimburse expenses during the period under these boundary limits.

 

13   Invesco Dividend Income Fund

Further, the Adviser has contractually agreed, through at least June 30, 2025, 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, 2023, the Adviser waived advisory fees of $56,115.

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, 2023, expenses incurred under the agreement are shown in the Statement of Operations as Administrative services fees. Invesco has entered into a sub-administration agreement whereby State Street Bank and Trust Company (“SSB”) serves as fund accountant and provides certain administrative services to the Fund. Pursuant to a custody agreement with the Trust on behalf of the Fund, SSB also serves as the Fund’s custodian.

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 services are charged back to the Fund, subject to certain limitations approved by the Trust’s Board of Trustees. For the six months ended October 31, 2023, 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 C, Class R, 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 Fund’s Class A, Class C, Class R and Investor Class shares (collectively, the “Plans”). The Fund, pursuant to the Class A Plan, reimburses IDI for its allocated share of expenses incurred for the period, up to a maximum annual rate of 0.25% of the average daily net assets of Class A shares. The Fund pursuant to the Class C Plan, the Class R Plan and the Investor Class Plan, pays IDI compensation at the annual rate of 1.00% of the average daily net assets of Class C shares, at the annual rate of 0.50% of the average daily net assets of Class R shares and at the annual rate of 0.25% of the average daily net assets of the Investor Class shares, respectively. The fees are accrued daily and paid monthly. Of the Plans 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, 2023, 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, 2023, IDI advised the Fund that IDI retained $108,296 in front-end sales commissions from the sale of Class A shares and $2,294 and $1,959 from Class A and Class C shares, respectively, for CDSC imposed upon redemptions by shareholders.

For the six months ended October 31, 2023, the Fund incurred $12,375 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 3–Additional 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. 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 investment’s 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 Adviser’s 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, 2023. 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  

 

  

Investments in Securities

                  

 

  

Common Stocks & Other Equity Interests

    $ 3,081,283,764        $ 205,556,525          $-        $ 3,286,840,289  

 

  

Money Market Funds

      24,563,239          44,998,007            -          69,561,246  

 

  

Total Investments

    $ 3,105,847,003        $ 250,554,532          $-        $ 3,356,401,535  

 

  

NOTE 4–Expense 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, 2023, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $57,031.

NOTE 5–Trustees’ 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

 

14   Invesco Dividend Income Fund

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 6–Cash Balances

The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with SSB, 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 7–Tax 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 Fund’s 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 Fund’s 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. The ability to utilize capital loss carryforward 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, 2023.

NOTE 8–Investment Transactions

The aggregate amount of investment securities (other than short-term securities, U.S. Government obligations and money market funds, if any) purchased and sold by the Fund during the six months ended October 31, 2023 was $624,518,685 and $642,951,068, respectively. Cost of investments, including any derivatives, 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 Investments on a Tax Basis

  

Aggregate unrealized appreciation of investments

      $ 611,429,644  

 

  

Aggregate unrealized (depreciation) of investments

      (144,440,988 ) 

 

  

Net unrealized appreciation of investments

      $ 466,988,656  

 

  

Cost of investments for tax purposes is $2,889,412,879.

NOTE 9–Share Information

 

     Summary of Share Activity  

 

  
     Six months ended     Year ended  
     October 31, 2023(a)     April 30, 2023  
     Shares     Amount     Shares     Amount  

 

  

Sold:

         

Class A

      1,975,081     $ 47,569,896       8,181,316     $ 200,683,459  

 

  

Class C

      255,488       6,234,780       972,600       24,236,210  

 

  

Class R

      212,114       5,118,218       656,699       16,075,677  

 

  

Class Y

      1,321,904       32,344,723       2,635,776       65,539,290  

 

  

Investor Class

      20,400       498,334       58,743       1,461,846  

 

  

Class R5

      4,202       102,342       45,834       1,124,670  

 

  

Class R6

      469,907       11,351,749       1,930,894       47,461,479  

 

  

Issued as reinvestment of dividends:

         

Class A

      1,077,580       25,922,788       5,915,820       145,153,119  

 

  

Class C

      44,385       1,083,899       368,543       9,190,731  

 

  

Class R

      39,855       958,606       237,176       5,821,671  

 

  

Class Y

      120,460       2,931,494       615,182       15,267,997  

 

  

Investor Class

      25,919       630,760       140,333       3,483,582  

 

  

Class R5

      863       20,770       3,758       92,172  

 

  

Class R6

      95,441       2,299,270       507,581       12,463,250  

 

  

Automatic conversion of Class C shares to Class A shares:

         

Class A

      638,442       15,213,631       1,413,759       34,438,742  

 

  

Class C

      (629,147 )      (15,213,631 )      (1,393,440 )      (34,438,742 ) 

 

  

 

15   Invesco Dividend Income Fund

     Summary of Share Activity  

 

  
     Six months ended     Year ended  
     October 31, 2023(a)     April 30, 2023  
     Shares     Amount     Shares     Amount  

 

  

Reacquired:

         

Class A

      (8,511,055 )    $ (205,136,925 )      (14,553,365 )    $ (356,400,731 ) 

 

  

Class C

      (696,840 )      (17,038,000 )      (1,444,857 )      (35,925,832 ) 

 

  

Class R

      (495,937 )      (11,996,816 )      (877,380 )      (21,503,678 ) 

 

  

Class Y

      (1,736,480 )      (42,493,800 )      (2,918,473 )      (72,243,762 ) 

 

  

Investor Class

      (127,509 )      (3,126,036 )      (245,831 )      (6,075,596 ) 

 

  

Class R5

      (1,643 )      (38,447 )      (35,884 )      (881,864 ) 

 

  

Class R6

      (1,215,070 )      (29,415,654 )      (2,519,174 )      (61,428,323 ) 

 

  

Net increase (decrease) in share activity

      (7,111,640 )    $ (172,178,049 )      (304,390 )    $ (6,404,633 ) 

 

  

 

(a) 

There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 22% 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 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, 2023 through October 31, 2023.

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 Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s 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.

 

         
          ACTUAL  

HYPOTHETICAL

(5% annual return before

expenses)

  

Annualized

Expense

Ratio

 

Beginning

Account Value

(05/01/23)

  

Ending

Account Value

(10/31/23)1

 

Expenses

Paid During

Period2

 

Ending

Account Value

(10/31/23)

  

Expenses

Paid During

Period2

             

Class A

   $1,000.00   $942.70   $4.54   $1,020.46   $4.72   0.93%
             

Class C

     1,000.00     938.90     8.24     1,016.64     8.57   1.69   
             

Class R

     1,000.00     941.10     5.81     1,019.15     6.04   1.19   
             

Class Y

     1,000.00     943.80     3.37     1,021.67     3.51   0.69   
             

Investor Class   

     1,000.00     942.70     4.59     1,020.41     4.77   0.94   
             

Class R5

     1,000.00     944.00     3.27     1,021.77     3.40   0.67   
             

Class R6

     1,000.00     944.40     2.93     1,022.12     3.05   0.60   

 

1 

The actual ending account value is based on the actual total return of the Fund for the period May 1, 2023 through October 31, 2023, after actual expenses and will differ from the hypothetical ending account value which is based on the Fund’s expense ratio and a hypothetical annual return of 5% before expenses.

2 

Expenses are equal to the Fund’s annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 184/366 to reflect the most recent fiscal half year.

 

17   Invesco Dividend Income Fund

Approval of Investment Advisory and Sub-Advisory Contracts

    

 

At meetings held on June 13, 2023, the Board of Trustees (the Board or the Trustees) of AIM Sector Funds (Invesco Sector Funds) as a whole, and the independent Trustees, who comprise over 75% of the Board, voting separately, approved the continuance of the Invesco Dividend Income Fund’s (the Fund) Master Investment Advisory Agreement with Invesco Advisers, Inc. (Invesco Advisers and the investment advisory agreement) and the Master Intergroup Sub-Advisory Contract for Mutual Funds with Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Canada Ltd. (collectively, the Affiliated Sub-Advisers and the sub-advisory contracts) for another year, effective July 1, 2023. After evaluating the factors discussed below, among others, the Board approved the renewal of the Fund’s investment advisory agreement and the sub-advisory contracts and determined that the compensation payable thereunder by the Fund to Invesco Advisers and by Invesco Advisers to the Affiliated Sub-Advisers is fair and reasonable.

The Board’s Evaluation Process

    The Board has established an Investments Committee, which in turn has established Sub-Committees, that meet throughout the year to review the performance of funds advised by Invesco Advisers (the Invesco Funds). The Sub-Committees meet regularly with portfolio managers for their assigned Invesco Funds and other members of management to review information about investment performance and portfolio attributes of these funds. The Board has established additional standing and ad hoc committees that meet regularly throughout the year to review matters within their purview, including a working group focused on opportunities to make ongoing and continuous improvements to the annual review process for the Invesco Funds’ investment advisory and sub-advisory contracts. The Board took into account evaluations and reports that it received from its committees and sub-committees, as well as the information provided to the Board and its committees and sub-committees throughout the year, in considering whether to approve each Invesco Fund’s investment advisory agreement and sub-advisory contracts.

    As part of the contract renewal process, the Board reviews and considers information provided in response to requests for information submitted to management by the independent Trustees with assistance from legal counsel to the independent Trustees and the Senior Officer, an officer of the Invesco Funds who reports directly to the independent Trustees. The Board receives comparative investment performance and fee and expense data regarding the Invesco Funds prepared by Broadridge Financial Solutions, Inc. (Broadridge), an independent mutual fund data provider, as well as information on the composition of the peer groups provided by Broadridge and its methodology for determining peer groups. The Board also receives an independent written evaluation from the Senior Officer. The Senior Officer’s evaluation is prepared as part of his responsibility to manage the process by which the Invesco Funds’ proposed management fees

are negotiated during the annual contract renewal process to ensure they are negotiated in a manner that is at arms’ length and reasonable in accordance with certain negotiated regulatory requirements. In addition to meetings with Invesco Advisers and fund counsel throughout the year and as part of meetings convened on May 2, 2023 and June 13, 2023, the independent Trustees also discussed the continuance of the investment advisory agreement and sub-advisory contracts in separate sessions with the Senior Officer and with independent legal counsel. Also, as part of the contract renewal process, the independent Trustees reviewed and considered information provided in response to follow-up requests for information submitted by the independent Trustees to management. The independent Trustees met and discussed those follow-up responses with legal counsel to the independent Trustees and the Senior Officer.

    The discussion below is a summary of the Senior Officer’s independent written evaluation with respect to the Fund’s investment advisory agreement and sub-advisory contracts, as well as a discussion of the material factors and related conclusions that formed the basis for the Board’s approval of the Fund’s investment advisory agreement and sub-advisory contracts. The Trustees’ review and conclusions are based on the comprehensive consideration of all information presented to them during the course of the year and in prior years and are not the result of any single determinative factor. Moreover, one Trustee may have weighed a particular piece of information or factor differently than another Trustee. The information received and considered by the Board was current as of various dates prior to the Board’s approval on June 13, 2023.

Factors and Conclusions and Summary of Independent Written Fee Evaluation

A.

Nature, Extent and Quality of Services Provided by Invesco Advisers and the Affiliated Sub-Advisers

The Board reviewed the nature, extent and quality of the advisory services provided to the Fund by Invesco Advisers under the Fund’s investment advisory agreement, and the credentials and experience of the officers and employees of Invesco Advisers who provide these services, including the Fund’s portfolio manager(s). The Board considered recent senior management changes at Invesco and Invesco Advisers, including the appointment of new Co-Heads of Investments, that had been presented to and discussed with the Board. The Board’s review included consideration of Invesco Advisers’ investment process and oversight, credit analysis and research capabilities. The Board considered information regarding Invesco Advisers’ programs for and resources devoted to risk management, including management of investment, enterprise, operational, liquidity, derivatives, valuation and compliance risks, and technology used to manage such risks. The Board received information regarding Invesco’s methodology for compensating its investment professionals and the incentives and accountability it creates, as well as how it impacts Invesco’s ability to attract and retain talent. The Board received a description of, and reports related to, Invesco Advisers’ global security program and business continuity plans and of its approach to data privacy

and cybersecurity, including related testing. The Board also considered non-advisory services that Invesco Advisers and its affiliates provide to the Invesco Funds, such as various middle office and back office support functions, third party oversight, internal audit, valuation, portfolio trading and legal and compliance. The Board observed that Invesco Advisers’ systems preparedness and ongoing investment enabled Invesco Advisers to manage, operate and oversee the Invesco Funds with minimal impact or disruption through challenging environments. The Board reviewed and considered the benefits to shareholders of investing in a Fund that is part of the family of funds under the umbrella of Invesco Ltd., Invesco Advisers’ parent company, and noted Invesco Ltd.’s depth and experience in running an investment management business, as well as its commitment of financial and other resources to such business. The Board concluded that the nature, extent and quality of the services provided to the Fund by Invesco Advisers are appropriate and satisfactory.

    The Board reviewed the services that may be provided to the Fund by the Affiliated Sub-Advisers under the sub-advisory contracts and the credentials and experience of the officers and employees of the Affiliated Sub-Advisers who provide these services. The Board noted the Affiliated Sub-Advisers’ expertise with respect to certain asset classes and that the Affiliated Sub-Advisers have offices and personnel that are located in financial centers around the world. As a result, the Board noted that the Affiliated Sub-Advisers can provide research and investment analysis on the markets and economies of various countries and territories in which the Fund may invest, make recommendations regarding securities and assist with portfolio trading. The Board concluded that the sub-advisory contracts may benefit the Fund and its shareholders by permitting Invesco Advisers to use the resources and talents of the Affiliated Sub-Advisers in managing the Fund. The Board concluded that the nature, extent and quality of the services that may be provided to the Fund by the Affiliated Sub-Advisers are appropriate and satisfactory.

B.

Fund Investment Performance

The Board considered Fund investment performance as a relevant factor in considering whether to approve the investment advisory agreement. The Board did not view Fund investment performance as a relevant factor in considering whether to approve the sub-advisory contracts for the Fund, as no Affiliated Sub-Adviser currently manages assets of the Fund.

    The Board compared the Fund’s investment performance over multiple time periods ending December 31, 2022 to the performance of funds in the Broadridge performance universe and against the Dow Jones U.S. Select Dividend Index (Index). The Board noted that performance of Class A shares of the Fund was in the first quintile of its performance universe for the one year period and the fourth quintile for the three and five year periods (the first quintile being the best performing funds and the fifth quintile being the worst performing funds). The Board noted that performance of Class A shares of the Fund was below the performance of the Index for the one, three and five year periods. The Board considered that the Fund underwent a portfolio

 

 

18   Invesco Dividend Income Fund

management team change and investment process change in March 2021, and that performance results prior to such date were those of the prior portfolio management team. The Board recognized that the performance data reflects a snapshot in time as of a particular date and that selecting a different performance period could produce different results. The Board also reviewed more recent Fund performance as well as other performance metrics, which did not change its conclusions.

C.

Advisory and Sub-Advisory Fees and Fund Expenses

The Board compared the Fund’s contractual management fee rate to the contractual management fee rates of funds in the Fund’s Broadridge expense group. The Board noted that the contractual management fee rate for Class A shares of the Fund was below the median contractual management fee rate of funds in its expense group. The Board noted that the Fund’s contractual management fee schedule was reduced at certain breakpoint levels effective April 2020. The Board noted that the term “contractual management fee” for funds in the expense group may include both advisory and certain non-portfolio management administrative services fees, but that Broadridge is not able to provide information on a fund-by-fund basis as to what is included. The Board also reviewed the methodology used by Broadridge in calculating expense group information, which includes using each fund’s contractual management fee schedule (including any applicable breakpoints) as reported in the most recent prospectus or statement of additional information for each fund in the expense group. The Board also considered comparative information regarding the Fund’s total expense ratio and its various components.

    The Board noted that Invesco Advisers has contractually agreed to waive fees and/or limit expenses of the Fund for the term disclosed in the Fund’s registration statement in an amount necessary to limit total annual operating expenses to a specified percentage of average daily net assets for each class of the Fund.

    The Board also considered the fees charged by Invesco Advisers and its affiliates to other client accounts that are similarly managed. Invesco Advisers reviewed with the Board differences in the scope of services it provides to the Invesco Funds relative to that provided by Invesco Advisers and its affiliates to certain other types of client accounts, including, among others: management of cash flows as a result of redemptions and purchases; necessary infrastructure such as officers, office space, technology, legal and distribution; oversight of service providers; costs and business risks associated with launching new funds and sponsoring and maintaining the product line; and compliance with federal and state laws and regulations. Invesco Advisers also advised the Board that many of the similarly managed client accounts have all-inclusive fee structures, which are not easily un-bundled.

    The Board also compared the Fund’s effective advisory fee rate (defined for this purpose as the advisory fee rate after advisory fee waivers and before other expense limitations/waivers) to the effective advisory fee rates of other similarly managed third-party mutual funds advised or sub-advised by Invesco Advisers and its affiliates, based on asset balances as of December 31, 2022.

    The Board also considered the services that may be provided by the Affiliated Sub-Advisers pursuant to

the sub-advisory contracts, as well as the fees payable by Invesco Advisers to the Affiliated Sub-Advisers pursuant to the sub-advisory contracts.

D.

Economies of Scale and Breakpoints

The Board considered the extent to which there may be economies of scale in the provision of advisory services to the Fund and the Invesco Funds, and the extent to which such economies of scale are shared with the Fund and the Invesco Funds. The Board acknowledged the difficulty in calculating and measuring economies of scale at the individual fund level; noting that only indicative and estimated measures are available at the individual fund level and that such measures are subject to uncertainty. The Board considered that the Fund benefits from economies of scale through contractual breakpoints in the Fund’s advisory fee schedule, which generally operate to reduce the Fund’s expense ratio as it grows in size. The Board noted that the Fund also shares in economies of scale through Invesco Advisers’ ability to negotiate lower fee arrangements with third party service providers. The Board noted that the Fund may also benefit from economies of scale through initial fee setting, fee waivers and expense reimbursements, as well as Invesco Advisers’ investment in its business, including investments in business infrastructure, technology and cybersecurity.

E.

Profitability and Financial Resources

The Board reviewed information from Invesco Advisers concerning the costs of the advisory and other services that Invesco Advisers and its affiliates provide to the Fund and the Invesco Funds and the profitability of Invesco Advisers and its affiliates in providing these services in the aggregate and on an individual fund-by-fund basis. The Board considered the methodology used for calculating profitability and the periodic review and enhancement of such methodology. The Board noted that Invesco Advisers continues to operate at a net profit from services Invesco Advisers and its affiliates provide to the Invesco Funds in the aggregate and to most Invesco Funds individually. The Board considered that profits to Invesco Advisers can vary significantly depending on the particular Invesco Fund, with some Invesco Funds showing indicative losses to Invesco Advisers and others showing indicative profits at healthy levels, and that Invesco Advisers’ support for and commitment to an Invesco Fund are not, however, solely dependent on the profits realized as to that Fund. The Board did not deem the level of profits realized by Invesco Advisers and its affiliates from providing such services to be excessive, given the nature, extent and quality of the services provided. The Board noted that Invesco Advisers provided information demonstrating that Invesco Advisers is financially sound and has the resources necessary to perform its obligations under the investment advisory agreement, and provided representations indicating that the Affiliated Sub-Advisers are financially sound and have the resources necessary to perform their obligations under the sub-advisory contracts. The Board noted the cyclical and competitive nature of the global asset management industry.

F.

Collateral Benefits to Invesco Advisers and its Affiliates

The Board considered various other benefits received by Invesco Advisers and its affiliates from the relationship with the Fund, including the fees received for providing administrative, transfer agency and distribution services to the Fund. The Board received comparative information regarding

fees charged for these services, including information provided by Broadridge and other independent sources. The Board reviewed the performance of Invesco Advisers and its affiliates in providing these services and the organizational structure employed to provide these services. The Board noted that these services are provided to the Fund pursuant to written contracts that are reviewed and subject to approval on an annual basis by the Board based on its determination that the services are required for the operation of the Fund.

    The Board considered the benefits realized by Invesco Advisers and the Affiliated Sub-Advisers as a result of portfolio brokerage transactions executed through “soft dollar” arrangements. The Board noted that soft dollar arrangements may result in the Fund bearing costs to purchase research that may be used by Invesco Advisers or the Affiliated Sub-Advisers with other clients and may reduce Invesco Advisers’ or the Affiliated Sub-Advisers’ expenses. The Board also considered that it receives from Invesco Advisers periodic reports that include a representation to the effect that these arrangements are consistent with regulatory requirements. The Board did not deem the soft dollar arrangements to be inappropriate.

    The Board considered that the Fund’s uninvested cash and cash collateral from any securities lending arrangements may be invested in registered money market funds or, with regard to securities lending cash collateral, unregistered funds that comply with Rule 2a-7 (collectively referred to as “affiliated money market funds”) advised by Invesco Advisers. The Board considered information regarding the returns of the affiliated money market funds relative to comparable overnight investments, as well as the fees paid by the affiliated money market funds to Invesco Advisers and its affiliates. In this regard, the Board noted that Invesco Advisers receives advisory fees from these affiliated money market funds attributable to the Fund’s investments. The Board also noted that Invesco Advisers has contractually agreed to waive through varying periods an amount equal to 100% of the net advisory fee Invesco Advisers receives from the affiliated money market funds with respect to the Fund’s investment in the affiliated money market funds of uninvested cash, but not cash collateral. The Board concluded that the advisory fees payable to Invesco Advisers from the Fund’s investment of cash collateral from any securities lending arrangements in the affiliated money market funds are for services that are not duplicative of services provided by Invesco Advisers to the Fund.

    The Board considered that Invesco Advisers may serve as the Fund’s affiliated securities lending agent and evaluated the benefits realized by Invesco Advisers when serving in such role, including the compensation received. The Board considered Invesco Advisers’ securities lending platform and corporate governance structure for securities lending, including Invesco Advisers’ Securities Lending Governance Committee and its related responsibilities. The Board noted that to the extent the Fund utilizes Invesco Advisers as an affiliated securities lending agent, the Fund conducts its securities lending in accordance with, and in reliance upon, no-action letters issued by the SEC staff that provide guidance on how an affiliate may act as a direct agent lender and receive compensation for those services without obtaining exemptive relief. The Board considered information provided by Invesco Advisers related to the performance of

 

 

19   Invesco Dividend Income Fund

Invesco Advisers as securities lending agent, including a summary of the securities lending services provided to the Fund by Invesco Advisers and the compensation paid to Invesco Advisers for such services, as well as any revenues generated for the Fund in connection with such securities lending activity and the allocation of such revenue between the Fund and Invesco Advisers.

    The Board also received information about commissions that an affiliated broker may receive for executing certain trades for the Fund. Invesco Advisers and the Affiliated Sub-Advisers advised the Board of the benefits to the Fund of executing trades through the affiliated broker and that such trades were executed in compliance with rules under the federal securities laws and consistent with best execution obligations.

    

    

 

 

20   Invesco Dividend Income Fund

 

 

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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 portfolio holdings four times each year, at the end of each fiscal quarter. For the second and fourth quarters, the list appears, respectively, in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the list with the Securities and Exchange Commission (SEC) as an exhibit to its reports on Form N-PORT. The most recent list of portfolio holdings is available at invesco.com/completeqtrholdings. Shareholders can also look up the Fund’s Form N-PORT filings on the SEC website, 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/corporate/about-us/esg. 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. This 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.

 

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SEC file number(s): 811-03826 and 002-85905    Invesco Distributors, Inc.    I-DIVI-SAR-1

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Semiannual Report to Shareholders   October 31, 2023

Invesco Energy Fund

Nasdaq:

A: IENAX ∎ C: IEFCX ∎ Y: IENYX ∎ Investor: FSTEX ∎ R5: IENIX ∎ R6: IENSX

 

   
2   Fund Performance
4   Schedule of Investments
6   Financial Statements
9   Financial Highlights
10   Notes to Financial Statements
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 is 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, 4/30/23 to 10/31/23, 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

     2.75 % 

Class C Shares

     2.39  

Class Y Shares

     2.85  

Investor Class Shares

     2.76  

Class R5 Shares

     2.94  

Class R6 Shares

     2.97  

S&P 500 Index▼ (Broad Market Index)

     1.39  

MSCI World Energy Index▼ (Style-Specific Index)

     1.95  

Lipper Natural Resource Funds Index∎ (Peer Group Index)

     5.50  

Source(s): ▼RIMES Technologies Corp.; ∎Lipper Inc.

  

The S&P 500® Index is an unmanaged index considered representative of the US stock market.

 

  The MSCI World Energy Index is designed to capture the performance of energy stocks across developed market countries. The index is computed using the net return, which withholds applicable taxes for non-resident investors.

 

  The Lipper Natural Resource Funds Index is an unmanaged index considered representative of natural resource 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.

 

 

For more information about your Fund

Read the most recent quarterly commentary from your Fund’s portfolio managers by visiting invesco.com/us. Click on “Products” and select “Mutual Funds.” Use the “Product Finder” to locate your Fund; then click on its name to access its product detail page. There, you can learn more about your Fund’s investment strategies, holdings and performance.

  Also, visit blog.invesco.us.com, where many of Invesco’s investment professionals share their insights about market and economic news and trends.

 

 

2   Invesco Energy Fund

    

    

    

 

 

Average Annual Total Returns

 

As of 10/31/23, including maximum applicable sales charges

 

Class A Shares

        

Inception (3/28/02)

     5.10 % 

10 Years

     -2.25  

  5 Years

     5.59  

  1 Year

     -6.28  

Class C Shares

        

Inception (2/14/00)

     6.30 % 

10 Years

     -2.28  

  5 Years

     6.01  

  1 Year

     -2.53  

Class Y Shares

        

Inception (10/3/08)

     1.74 % 

10 Years

     -1.45  

  5 Years

     7.06  

  1 Year

     -0.61  

Investor Class Shares

        

Inception (1/19/84)

     6.83 % 

10 Years

     -1.69  

  5 Years

     6.80  

  1 Year

     -0.84  

Class R5 Shares

        

Inception (1/31/06)

     1.52 % 

10 Years

     -1.27  

  5 Years

     7.28  

  1 Year

     -0.49  

Class R6 Shares

        

10 Years

     -1.38 % 

  5 Years

     7.33  

  1 Year

     -0.45  

Class R6 shares incepted on April 4, 2017. Performance shown prior to that date is that of Class A shares at net asset value and includes the 12b-1 fees applicable to Class A shares.

    The performance data quoted represent past performance and cannot guarantee future results; current performance may be lower or higher. Please visit invesco.com/performance for the most recent month-end performance. Performance figures reflect reinvested distributions, changes in net asset value and the effect of the maximum sales charge unless otherwise stated. Performance figures do not reflect deduction of taxes a shareholder would pay on Fund distributions or sale of Fund shares. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

    Class A share performance reflects the maximum 5.50% sales charge, and Class C share performance reflects the applicable contingent deferred sales charge (CDSC) for the period involved. The CDSC on Class C shares is 1% for the first year after purchase. Class Y, Investor Class, Class R5 and Class R6 shares do not have a front-end sales charge or a CDSC; therefore, performance is at net asset value.

    The performance of the Fund’s share classes will differ primarily due to different sales charge structures and class expenses.

    Fund performance reflects any applicable fee waivers and/or expense reimbursements. Had the adviser not waived fees and/or reimbursed expenses currently or in the past, returns would have been lower. See current prospectus for more information.

 

 

3   Invesco Energy Fund

Schedule of Investments(a)

October 31, 2023

(Unaudited)

 

     Shares      Value  

 

  

Common Stocks & Other Equity Interests–99.19%

 

Fertilizers & Agricultural Chemicals–4.04%

 

CF Industries Holdings, Inc.

      253,843      $ 20,251,595  

 

  

Integrated Oil & Gas–47.29%

 

BP PLC, ADR (United Kingdom)

      427,981        15,655,545  

 

  

Chevron Corp.

      355,656        51,829,749  

 

  

Equinor ASA (Norway)

      154,163        5,156,854  

 

  

Exxon Mobil Corp.

      681,270        72,112,429  

 

  

Shell PLC, ADR (Netherlands)

      586,133        38,180,704  

 

  

Suncor Energy, Inc. (Canada)

      929,714        30,108,856  

 

  

TotalEnergies SE (France)

      356,323        23,864,180  

 

  
        236,908,317  

 

  

Multi-Utilities–1.56%

 

Dominion Energy, Inc.

      193,423        7,798,815  

 

  

Oil & Gas Drilling–2.07%

 

Helmerich & Payne, Inc.(b)

      261,976        10,366,390  

 

  

Oil & Gas Equipment & Services–5.20%

 

Baker Hughes Co., Class A

      429,942        14,798,604  

 

  

Halliburton Co.(b)

      286,444        11,268,707  

 

  
        26,067,311  

 

  

Oil & Gas Exploration & Production–28.45%

 

APA Corp.

      230,039        9,137,149  

 

  

Canadian Natural Resources Ltd. (Canada)

      165,019        10,478,870  

 

  

ConocoPhillips

      406,961        48,346,967  

 

  

Diamondback Energy, Inc.

      94,032        15,075,210  

 

  

EOG Resources, Inc.

      97,432        12,300,790  

 

  

Hess Corp.

      71,267        10,290,955  

 

  

Marathon Oil Corp.

      896,967        24,496,169  

 

  

Pioneer Natural Resources Co.

      51,762        12,371,118  

 

  
        142,497,228  

 

  
     Shares      Value  

 

  

Oil & Gas Refining & Marketing–6.94%

 

Marathon Petroleum Corp.

      133,047      $ 20,123,359  

 

  

Phillips 66

      128,407        14,647,386  

 

  
        34,770,745  

 

  

Oil & Gas Storage & Transportation–3.64%

 

Cheniere Energy, Inc.

      109,663        18,250,116  

 

  

Total Common Stocks & Other Equity Interests (Cost $441,604,046)

 

      496,910,517  

 

  

Money Market Funds–0.88%

 

Invesco Government & Agency Portfolio, Institutional Class,
5.27%(c)(d)

      1,541,675        1,541,675  

 

  

Invesco Liquid Assets Portfolio, Institutional Class, 5.40%(c)(d)

      1,101,022        1,101,353  

 

  

Invesco Treasury Portfolio, Institutional Class, 5.27%(c)(d)

      1,761,914        1,761,914  

 

  

Total Money Market Funds
(Cost $4,404,832)

 

      4,404,942  

 

  

TOTAL INVESTMENTS IN SECURITIES
(excluding investments purchased with cash collateral from securities on loan)–100.07%
(Cost $446,008,878)

 

      501,315,459  

 

  

Investments Purchased with Cash Collateral from Securities on Loan

 

Money Market Funds–1.80%

 

Invesco Private Government Fund, 5.32%(c)(d)(e)

      2,535,006        2,535,006  

 

  

Invesco Private Prime Fund,
5.53%(c)(d)(e)

      6,519,907        6,520,559  

 

  

Total Investments Purchased with Cash Collateral from Securities on Loan
(Cost $9,055,901)

 

      9,055,565  

 

  

TOTAL INVESTMENTS IN SECURITIES–101.87%
(Cost $455,064,779)

 

      510,371,024  

 

  

OTHER ASSETS LESS LIABILITIES–(1.87)%

 

      (9,391,994 ) 

 

  

NET ASSETS–100.00%

 

    $ 500,979,030  

 

  
 

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 & Poor’s.

(b) 

All or a portion of this security was out on loan at October 31, 2023.

(c) 

Affiliated holding. Affiliated holdings are investments in entities which are under common ownership or control of Invesco Ltd. or are investments in entities in which the Fund owns 5% or more of the outstanding voting securities. The table below shows the Fund’s transactions in, and earnings from, its investments in affiliates for the six months ended October 31, 2023.

 

    

Value

April 30, 2023

    

Purchases

at Cost

    

Proceeds

from Sales

    

Change in

Unrealized

Appreciation

(Depreciation)

    

Realized

Gain

(Loss)

    

Value

October 31, 2023

     Dividend Income  
Investments in Affiliated Money Market Funds:                                                        

Invesco Government & Agency Portfolio, Institutional Class

     $ 1,233,295       $    20,663,620     $   (20,355,240 )            $ -             $ -         $   1,541,675             $   46,415      

Invesco Liquid Assets Portfolio, Institutional Class

     880,190         14,759,728       (14,538,687 )         97                     25       1,101,353           32,995      

Invesco Treasury Portfolio, Institutional Class

     1,409,480         23,615,566       (23,263,132 )      -               -       1,761,914           51,866      

 

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

 

4   Invesco Energy Fund

    

Value

April 30, 2023

    

Purchases

at Cost

    

Proceeds

from Sales

    

Change in

Unrealized

Appreciation

(Depreciation)

    

Realized

Gain

(Loss)

    

Value

October 31, 2023

     Dividend Income  
Investments Purchased with Cash Collateral from Securities on Loan:                                                        

Invesco Private Government Fund

     $ 425,430       $ 77,759,760     $ (75,650,184)             $ -             $ -         $ 2,535,006             $ 54,518*      

Invesco Private Prime Fund

     1,093,963         207,320,213       (201,890,974)       (336)               (2,307)       6,520,559           145,630*      

Total

     $ 5,042,358       $ 344,118,887     $ (335,698,217)             $ (239)             $ (2,282)         $ 13,460,507             $ 331,424      

 

  *

Represents the income earned on the investment of cash collateral, which is included in securities lending income on the Statement of Operations. Does not include rebates and fees paid to lending agent or premiums received from borrowers, if any.

 

(d) 

The rate shown is the 7-day SEC standardized yield as of October 31, 2023.

(e) 

The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrower’s return of the securities loaned. See Note 1J.

Portfolio Composition

By industry, based on Net Assets

as of October 31, 2023

 

Integrated Oil & Gas

      47.29 % 

Oil & Gas Exploration & Production

      28.45  

Oil & Gas Refining & Marketing

      6.94  

Oil & Gas Equipment & Services

      5.20  

Fertilizers & Agricultural Chemicals

      4.04  

Oil & Gas Storage & Transportation

      3.64  

Oil & Gas Drilling

      2.07  

Multi-Utilities

      1.56  

Money Market Funds Plus Other Assets Less Liabilities

      0.81  

 

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, 2023

(Unaudited)

 

Assets:

   

Investments in unaffiliated securities, at value (Cost $441,604,046)*

    $ 496,910,517  

 

  

Investments in affiliated money market funds, at value (Cost $13,460,733)

      13,460,507  

 

  

Foreign currencies, at value (Cost $294,535)

      290,364  

 

  

Receivable for:

   

Fund shares sold

      199,538  

 

  

Dividends

      94,609  

 

  

Investment for trustee deferred compensation and retirement plans

      159,109  

 

  

Other assets

      61,043  

 

  

Total assets

      511,175,687  

 

  

Liabilities:

   

Payable for:

   

Fund shares reacquired

      542,586  

 

  

Collateral upon return of securities loaned

      9,055,901  

 

  

Accrued fees to affiliates

      347,352  

 

  

Accrued trustees’ and officers’ fees and benefits

      1,594  

 

  

Accrued other operating expenses

      80,984  

 

  

Trustee deferred compensation and retirement plans

      168,240  

 

  

Total liabilities

      10,196,657  

 

  

Net assets applicable to shares outstanding

    $ 500,979,030  

 

  

Net assets consist of:

   

Shares of beneficial interest

    $ 712,906,908  

 

  

Distributable earnings (loss)

      (211,927,878 ) 

 

  
   $ 500,979,030  

 

  

Net Assets:

   

Class A

    $  315,713,742  

 

  

Class C

    $ 26,248,776  

 

  

Class Y

    $ 56,156,122  

 

  

Investor Class

    $ 88,920,356  

 

  

Class R5

    $ 6,435,908  

 

  

Class R6

    $ 7,504,126  

 

  

Shares outstanding, no par value, with an unlimited number of shares authorized:

 

Class A

      10,971,425  

 

  

Class C

      1,095,632  

 

  

Class Y

      1,942,851  

 

  

Investor Class

      3,103,915  

 

  

Class R5

      216,286  

 

  

Class R6

      252,004  

 

  

Class A:

   

Net asset value per share

    $ 28.78  

 

  

Maximum offering price per share
(Net asset value of $28.78 ÷ 94.50%)

    $ 30.46  

 

  

Class C:

   

Net asset value and offering price per share

    $ 23.96  

 

  

Class Y:

   

Net asset value and offering price per share

    $ 28.90  

 

  

Investor Class:

   

Net asset value and offering price per share

    $ 28.65  

 

  

Class R5:

   

Net asset value and offering price per share

    $ 29.76  

 

  

Class R6:

   

Net asset value and offering price per share

    $ 29.78  

 

  

 

*

At October 31, 2023, securities with an aggregate value of $8,923,090 were on loan to brokers.

 

 

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, 2023

(Unaudited)

 

Investment income:

   

Interest

    $ 9,235  

 

  

Dividends (net of foreign withholding taxes of $320,214)

      9,520,792  

 

  

Dividends from affiliated money market funds (includes net securities lending income of $15,996)

      147,272  

 

  

Foreign withholding tax claims

      164,871  

 

  

Total investment income

      9,842,170  

 

  

Expenses:

   

Advisory fees

      1,845,032  

 

  

Administrative services fees

      36,946  

 

  

Custodian fees

      6,518  

 

  

Distribution fees:

   

Class A

      405,294  

 

  

Class C

      137,983  

 

  

Investor Class

      113,086  

 

  

Transfer agent fees – A, C, Y and Investor Class

      554,453  

 

  

Transfer agent fees – R5

      3,531  

 

  

Transfer agent fees – R6

      1,153  

 

  

Trustees’ and officers’ fees and benefits

      13,421  

 

  

Registration and filing fees

      60,008  

 

  

Reports to shareholders

      93,281  

 

  

Professional services fees

      48,987  

 

  

Other

      8,709  

 

  

Total expenses

      3,328,402  

 

  

Less: Fees waived and/or expense offset arrangement(s)

      (13,218 ) 

 

  

Net expenses

      3,315,184  

 

  

Net investment income

      6,526,986  

 

  

Realized and unrealized gain (loss) from:

   

Net realized gain (loss) from:

   

Unaffiliated investment securities

      22,007,632  

 

  

Affiliated investment securities

      (2,282 ) 

 

  

Foreign currencies

      (14,685 ) 

 

  
     21,990,665  

 

  

Change in net unrealized appreciation (depreciation) of:

   

Unaffiliated investment securities

      (17,848,517 ) 

 

  

Affiliated investment securities

      (239 ) 

 

  

Foreign currencies

      4,085  

 

  
     (17,844,671 ) 

 

  

Net realized and unrealized gain

      4,145,994  

 

  

Net increase in net assets resulting from operations

    $ 10,672,980  

 

  

 

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, 2023 and the year ended April 30, 2023

(Unaudited)

 

    

October 31,

2023

    

April 30,

2023

  

 

  

Operations:

     

Net investment income

    $ 6,526,986     $ 14,672,377  

 

  

Net realized gain

      21,990,665       97,722,330  

 

  

Change in net unrealized appreciation (depreciation)

      (17,844,671 )      (54,921,241 ) 

 

  

Net increase in net assets resulting from operations

      10,672,980       57,473,466  

 

  

Distributions to shareholders from distributable earnings:

     

Class A

      –       (3,341,210 ) 

 

  

Class C

      –       (264,688 ) 

 

  

Class Y

      –       (833,212 ) 

 

  

Investor Class

      –       (917,828 ) 

 

  

Class R5

      –       (98,706 ) 

 

  

Class R6

      –       (104,548 ) 

 

  

Total distributions from distributable earnings

      –       (5,560,192 ) 

 

  

Share transactions-net:

     

Class A

      (44,348,957 )      19,371,103  

 

  

Class C

      (5,956,473 )      3,098,926  

 

  

Class Y

      (8,909,259 )      (26,668,416 ) 

 

  

Investor Class

      (8,830,594 )      (11,218,126 ) 

 

  

Class R5

      (2,074,359 )      1,100,040  

 

  

Class R6

      (1,654,673 )      925,000  

 

  

Net increase (decrease) in net assets resulting from share transactions

      (71,774,315 )      (13,391,473 ) 

 

  

Net increase (decrease) in net assets

      (61,101,335 )      38,521,801  

 

  

Net assets:

     

Beginning of period

      562,080,365       523,558,564  

 

  

End of period

    $ 500,979,030     $ 562,080,365  

 

  

 

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

 

8   Invesco Energy Fund

Financial Highlights

(Unaudited)

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(b)

  

Net assets,

end of period

(000’s 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 10/31/23

     $28.01        $0.36         $ 0.41       $ 0.77       $       -       $28.78        2.75 %      $315,714         1.29 %(d)      1.29 %(d)      2.54 %(d)      11 % 

Year ended 04/30/23

     25.05       0.69       2.52       3.21       (0.25 )      28.01       12.85       353,050       1.29       1.29       2.52       52  

Year ended 04/30/22

     15.57       0.43       9.39       9.82       (0.34 )      25.05       63.83       301,546       1.36       1.36       2.22       18  

Year ended 04/30/21

     11.54       0.25       4.05       4.30       (0.27 )      15.57       37.77       166,204       1.56       1.56       2.00       68  

Year ended 04/30/20

     21.05       0.41       (9.64 )      (9.23 )       (0.28 )       11.54       (44.30 )      121,102       1.45       1.45       2.42       16  

Year ended 04/30/19

     25.91       0.29       (4.61 )       (4.32 )      (0.54 )      21.05       (16.48 )      248,396       1.32       1.32       1.25       17  

Class C

                        

Six months ended 10/31/23

     23.40       0.21       0.35       0.56       -       23.96       2.39       26,249       2.04 (d)      2.04 (d)      1.79 (d)      11  

Year ended 04/30/23

     21.06       0.41       2.11       2.52       (0.18 )      23.40       11.99       31,807       2.04       2.04       1.77       52  

Year ended 04/30/22

     13.18       0.24       7.91       8.15       (0.27 )      21.06       62.54       26,493       2.11       2.11       1.47       18  

Year ended 04/30/21

     9.82       0.13       3.44       3.57       (0.21 )      13.18       36.87       12,763       2.31       2.31       1.25       68  

Year ended 04/30/20

     17.99       0.24       (8.22 )      (7.98 )      (0.19 )      9.82       (44.72 )      13,868       2.20       2.20       1.67       16  

Year ended 04/30/19

     22.17       0.10       (3.93 )      (3.83 )      (0.35 )      17.99       (17.14 )      33,036       2.07       2.07       0.50       17  

Class Y

                        

Six months ended 10/31/23

     28.10       0.40       0.40       0.80       -       28.90       2.85       56,156       1.04 (d)      1.04 (d)      2.79 (d)      11  

Year ended 04/30/23

     25.10       0.76       2.54       3.30       (0.30 )      28.10       13.16       64,238       1.04       1.04       2.77       52  

Year ended 04/30/22

     15.59       0.49       9.39       9.88       (0.37 )      25.10       64.20       85,631       1.11       1.11       2.47       18  

Year ended 04/30/21

     11.54       0.28       4.06       4.34       (0.29 )      15.59       38.14       29,497       1.31       1.31       2.25       68  

Year ended 04/30/20

     21.04       0.45       (9.64 )      (9.19 )      (0.31 )      11.54       (44.17 )      14,398       1.20       1.20       2.67       16  

Year ended 04/30/19

     25.93       0.35       (4.63 )      (4.28 )      (0.61 )      21.04       (16.29 )      38,550       1.07       1.07       1.50       17  

Investor Class

                        

Six months ended 10/31/23

     27.88       0.36       0.41       0.77       -       28.65       2.76       88,920       1.29 (d)      1.29 (d)      2.54 (d)      11  

Year ended 04/30/23

     24.94       0.69       2.50       3.19       (0.25 )      27.88       12.82       95,589       1.29       1.29       2.52       52  

Year ended 04/30/22

     15.51       0.43       9.34       9.77       (0.34 )      24.94       63.76       96,027       1.36       1.36       2.22       18  

Year ended 04/30/21

     11.49       0.25       4.04       4.29       (0.27 )      15.51       37.85       61,754       1.56       1.56       2.00       68  

Year ended 04/30/20

     20.96       0.40       (9.59 )      (9.19 )      (0.28 )      11.49       (44.30 )      47,046       1.45       1.45       2.42       16  

Year ended 04/30/19

     25.80       0.29       (4.59 )      (4.30 )      (0.54 )      20.96       (16.47 )      97,716       1.32       1.32       1.25       17  

Class R5

                        

Six months ended 10/31/23

     28.91       0.42       0.43       0.85       -       29.76       2.94       6,436       0.92 (d)      0.92 (d)      2.91 (d)      11  

Year ended 04/30/23

     25.81       0.81       2.60       3.41       (0.31 )      28.91       13.26       8,359       0.95       0.95       2.86       52  

Year ended 04/30/22

     16.02       0.53       9.65       10.18       (0.39 )      25.81       64.39       6,352       0.97       0.97       2.61       18  

Year ended 04/30/21

     11.83       0.32       4.19       4.51       (0.32 )      16.02       38.69       2,488       0.99       0.99       2.57       68  

Year ended 04/30/20

     21.54       0.50       (9.87 )      (9.37 )      (0.34 )      11.83       (44.03 )      2,371       0.96       0.96       2.91       16  

Year ended 04/30/19

     26.53       0.40       (4.73 )      (4.33 )      (0.66 )      21.54       (16.12 )      6,052       0.90       0.90       1.67       17  

Class R6

                        

Six months ended 10/31/23

     28.92       0.43       0.43       0.86       -       29.78       2.97       7,504       0.85 (d)      0.85 (d)      2.98 (d)      11  

Year ended 04/30/23

     25.82       0.83       2.60       3.43       (0.33 )      28.92       13.30       9,037       0.88       0.88       2.93       52  

Year ended 04/30/22

     16.02       0.56       9.63       10.19       (0.39 )      25.82       64.51       7,509       0.91       0.91       2.67       18  

Year ended 04/30/21

     11.83       0.34       4.17       4.51       (0.32 )      16.02       38.69       1,050       0.99       0.99       2.57       68  

Year ended 04/30/20

     21.53       0.49       (9.85 )      (9.36 )      (0.34 )      11.83       (44.00 )      357       0.96       0.96       2.91       16  

Year ended 04/30/19

     26.52       0.39       (4.72 )      (4.33 )      (0.66 )      21.53       (16.11 )      473       0.89       0.89       1.68       17  

 

(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) 

Annualized.

 

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

 

9   Invesco Energy Fund

Notes to Financial Statements

October 31, 2023

(Unaudited)

NOTE 1–Significant 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 authorized to issue an unlimited number of shares of beneficial interest. Information presented in these financial statements pertains only to the Fund. Matters affecting the Fund or each class will be voted on exclusively by the shareholders of the Fund or each class.

    The Fund’s investment objective is long-term growth of capital.

    The Fund currently consists of six different classes of shares: Class A, Class C, Class Y, Investor Class, Class R5 and Class R6. Class Y and Investor Class shares are available only to certain 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. Class C shares held for eight years after purchase are eligible for automatic conversion into Class A shares of the same Fund (the “Conversion Feature”). The automatic conversion pursuant to the Conversion Feature will generally occur at the end of the month following the eighth anniversary after a purchase of Class C shares.

    The Fund is an investment company and accordingly follows the investment company accounting and reporting guidance in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 946, Financial Services - Investment Companies.

    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 is generally valued at its trade price or official closing price that day as of the close of the exchange where the security is principally traded, or lacking any trades or official closing price on a particular day, the security may be valued at the closing bid or ask 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 using prices provided by an independent pricing service they may be considered fair valued. Futures contracts are valued at the daily settlement price set by an exchange on which they are principally traded. Where a final settlement price exists, exchange-traded options are valued at the final settlement price from the exchange where the option principally trades. Where a final settlement price does not exist, exchange-traded options are valued at the mean between the last bid and ask price generally from the exchange where the option principally trades.

Securities of investment companies that are not exchange-traded (e.g., open-end mutual funds) are valued using such company’s end-of-business-day net asset value per share.

Deposits, other obligations of U.S. and non-U.S. banks and financial institutions are valued at their daily account value.

Fixed income securities (including convertible debt securities) generally are valued on the basis of prices provided by independent pricing services. Prices 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. Pricing services generally value debt obligations assuming orderly transactions of institutional round lot size, but a fund may hold or transact in the same securities in smaller, odd lot sizes. Odd lots often trade at lower prices than institutional round lots, and their value may be adjusted accordingly. 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 New York Stock Exchange (“NYSE”). If market quotations are available and reliable for foreign exchange-traded equity securities, the securities will be valued at the market quotations. Invesco Advisers, Inc. (the “Adviser” or “Invesco”) may use various pricing services to obtain market quotations as well as fair value prices. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become not representative of market value in the Adviser’s judgment (“unreliable”). If, between the time trading ends on a particular security and the close of the customary trading session on the NYSE, a significant event occurs that makes the closing price of the security unreliable, the Adviser 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 in accordance with Board- approved policies and related Adviser procedures (“Valuation Procedures”). 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 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.

Unlisted securities will be valued using prices provided by independent pricing services or by another method that the Adviser, in its judgment, believes better reflects the security’s fair value in accordance with the Valuation Procedures.

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 mean between the last bid and ask prices may be used to value debt obligations, including corporate loans.

Securities for which market quotations are not readily available are fair valued by the Adviser in accordance with the Valuation Procedures. If a fair value price provided by a pricing service is unreliable, the Adviser will fair value the security using the Valuation Procedures. 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 security’s 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 Fund investments.

Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general market conditions which are not specifically related to the particular issuer, such as real or perceived adverse economic conditions, changes in the general outlook for revenues or corporate earnings, changes in interest or currency rates, regional or global instability, natural or environmental disasters, widespread disease or other public health issues, war, acts of terrorism, significant governmental actions or adverse investor sentiment generally 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.

The price the Fund could receive upon the sale of any investment may differ from the Adviser’s valuation of the investment, particularly for securities that are valued using a fair valuation technique. When fair valuation techniques are applied, the Adviser uses available information, including both observable and unobservable inputs and assumptions, to determine a methodology that will result in a valuation that the Adviser believes approximates market value. Fund securities that are fair valued may be subject to greater fluctuation in their value from one day to the next than would be the case if market quotations were used.

 

10   Invesco Energy Fund

Because of the inherent uncertainties of valuation, and the degree of subjectivity in such decisions, the Fund could realize a greater or lesser than expected gain or loss upon the sale of the investment.

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 an accrual basis from settlement date and includes coupon interest and amortization of premium and accretion of discount on debt securities as applicable. 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 Fund’s net asset value and, accordingly, they reduce the Fund’s 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 the Statement of Changes in Net Assets, or the net investment income per share and the 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, the country that has the primary market for the issuer’s securities and its “country of risk” as determined by a third party service provider, 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 Fund’s 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 Fund’s 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.

Foreign Withholding Taxes – The Fund is subject to foreign withholding tax imposed by certain foreign countries in which the Fund may invest. Withholding taxes are incurred on certain foreign dividends and are accrued at the time the dividend is recognized based on applicable foreign tax laws. The Fund may file withholding tax refunds in certain jurisdictions to seek to recover a portion of amounts previously withheld. The Fund will record a receivable for such tax refunds based on several factors including; an assessment of a jurisdiction’s legal obligation to pay reclaims, administrative practices and payment history. Any receivables recorded will be shown under receivables for Foreign withholding tax claims on the Statement of Assets and Liabilities. There is no guarantee that the Fund will receive refunds applied for in a timely manner or at all.

As a result of recent court rulings in certain countries across the European Union, tax refunds for previously withheld taxes on dividends earned in those countries have been received by investment companies. Any tax refund payments are reflected as Foreign withholding tax claims in the Statement of Operations, and any related interest is included in Interest income. The Fund may incur fees paid to third party providers that assist in the recovery of the tax reclaims. These fees are reflected on the Statement of Operations as Professional services fees, if any. In the event tax refunds received by the Fund during the fiscal year exceed the foreign withholding taxes paid by the Fund for the year, and the Fund previously passed foreign tax credits on to its shareholders, the Fund intends to enter into a closing agreement with the Internal Revenue Service in order to pay the associated liability on behalf of the Funds’ shareholders. For the six months ended October 31, 2023, the Fund did not enter into any closing agreements.

G.

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 based on relative net assets of Class R5 and Class R6. 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.

H.

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.

I.

Indemnifications – Under the Trust’s 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 Fund’s servicing agreements, that contain a variety of indemnification clauses. The Fund’s 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.

J.

Securities Lending – The Fund may lend portfolio securities having a market value up to one-third of the Fund’s 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, unregistered investment companies that comply with Rule 2a-7 under the 1940 Act and money market funds (collectively, “affiliated money market funds”) and is shown as such on the Schedule of Investments. The Fund bears the risk of loss with respect to the investment of collateral. It is the Fund’s 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. When loaning securities, the Fund retains certain benefits of owning the securities, including the economic equivalent of dividends or interest generated by the security. 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

 

11   Invesco Energy Fund

  increase the collateral accordingly, and the borrower failed to return the securities. The securities loaned are subject to termination at the option of the borrower or the Fund. Upon termination, the borrower will return to the Fund the securities loaned and the Fund will return the collateral. 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 and the securities may lose value during the delay which could result in potential losses to the Fund. Some of these losses may be indemnified by the lending agent. 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, are included in Dividends from affiliated money market funds on the Statement of Operations. The aggregate value of securities out on loan, if any, is shown as a footnote on the Statement of Assets and Liabilities.

The Adviser serves as an affiliated securities lending agent for the Fund. The Bank of New York Mellon also serves as a securities lending agent. To the extent the Fund utilizes the Adviser as an affiliated securities lending agent, the Fund conducts its securities lending in accordance with, and in reliance upon, no-action letters issued by the SEC staff that provide guidance on how an affiliate may act as a direct agent lender and receive compensation for those services in a manner consistent with the federal securities laws. For the six months ended October 31, 2023, fees paid to the Adviser were less than $500. Fees paid to the Adviser for securities lending agent services, if any, are included in Dividends from affiliated money market funds on the Statement of Operations.

K.

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 the 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 Fund’s 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.

L.

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 exchange of the two currencies on the settlement date, 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).

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 for hedging 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.

M.

Other Risks – Emerging markets (also referred to as developing markets) are generally subject to greater market volatility, political, social and economic instability, uncertain trading markets and more governmental limitations on foreign investment than more developed markets. In addition, companies operating in emerging markets may be subject to lower trading volume and greater price fluctuations than companies in more developed markets. Such countries’ economies may be more dependent on relatively few industries or investors that may be highly vulnerable to local and global changes. Companies in emerging market countries generally may be subject to less stringent regulatory, disclosure, financial reporting, accounting, auditing and recordkeeping standards than companies in more developed countries. As a result, information, including financial information, about such companies may be less available and reliable, which can impede the Fund’s ability to evaluate such companies. Securities law and the enforcement of systems of taxation in many emerging market countries may change quickly and unpredictably, and the ability to bring and enforce actions (including bankruptcy, confiscatory taxation, expropriation, nationalization of a company’s assets, restrictions on foreign ownership of local companies, restrictions on withdrawing assets from the country, protectionist measures and practices such as share blocking), or to obtain information needed to pursue or enforce such actions, may be limited. In addition, the ability of foreign entities to participate in privatization programs of certain developing or emerging market countries may be limited by local law. Investments in emerging market securities may be subject to additional transaction costs, delays in settlement procedures, unexpected market closures, and lack of timely information.

Changes in worldwide energy prices, exploration and production spending, government regulation, war, world events, local and international politics, economic conditions, exchange rates, transportation and storage costs and labor relations can affect companies in the energy sector. In addition, these companies are at an increased risk of civil liability and environmental damage claims, and are also subject to the risk of loss from terrorism and natural disasters. Commodity price volatility, imposition of import controls, increased competition, depletion of resources, development of alternative energy sources, and technological developments may also impact the energy sector. Investments in the energy sector may be cyclical and/or highly volatile and subject to swift price fluctuations. Energy markets are subject to both short- and long-term trends that impact demand for and supply of energy commodities. A decrease in the production of energy commodities or a decrease in the volume of such commodities available may adversely impact the financial performance of companies operating in the energy sector. In addition, significant declines in the price of oil may contribute to significant market volatility, which may adversely affect the Fund’s performance.

The Fund is non-diversified and may invest in securities of fewer issuers than if it were diversified. Thus, the value of the Fund’s shares may vary more widely and the Fund may be subject to greater market and credit risk than if the Fund invested more broadly.

 

12   Invesco Energy Fund

NOTE 2–Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with the Adviser. Under the terms of the investment advisory agreement, the Fund accrues daily and pays monthly an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

 

Average Daily Net Assets    Rate  

 

  

First $350 million

      0.750%  

 

  

Next $350 million

      0.650%  

 

  

Next $1.3 billion

      0.550%  

 

  

Next $2 billion

      0.450%  

 

  

Next $2 billion

      0.400%  

 

  

Next $2 billion

      0.375%  

 

  

Over $8 billion

      0.350%  

 

  

    For the six months ended October 31, 2023, the effective advisory fee rate incurred by the Fund was 0.72%.

    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 Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Canada Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, will 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 Affiliated Sub-Adviser(s).

    Effective July 1, 2023, the Adviser has agreed, for an indefinite period, 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 C, Class Y, Investor Class, Class R5 and Class R6 shares to 2.00%, 2.75%, 1.75%, 2.00%, 1.75% and 1.75%, respectively, of the Fund’s average daily net assets (the “boundary limits”). Prior to July 1, 2023, the same boundary limits were in effect with an expiration date of June 30, 2023. In determining the Adviser’s 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. Invesco may amend and/or terminate these boundary limits at any time in its sole discretion and will inform the Board of Trustees of any such changes. The Adviser did not waive fees and/or reimburse expenses during the period under these boundary limits.

    Further, the Adviser has contractually agreed, through at least June 30, 2025, 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, 2023, the Adviser waived advisory fees of $2,553.

    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, 2023, expenses incurred under the agreement are shown in the Statement of Operations as Administrative services fees. Invesco has entered into a sub-administration agreement whereby State Street Bank and Trust Company (“SSB”) serves as fund accountant and provides certain administrative services to the Fund. Pursuant to a custody agreement with the Trust on behalf of the Fund, SSB also serves as the Fund’s custodian.

    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 services are charged back to the Fund, subject to certain limitations approved by the Trust’s Board of Trustees. For the six months ended October 31, 2023, 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 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 Fund’s Class A, 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 Fund’s average daily net assets of Class A shares, 1.00% of the average daily net assets of Class C shares and 0.25% of the average daily net assets of Investor Class shares. The fees are accrued daily and paid monthly. Of the Plans 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, 2023, 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, 2023, IDI advised the Fund that IDI retained $24,929 in front-end sales commissions from the sale of Class A shares and $1,941 and $3,007 from Class A and Class C shares, respectively, for CDSC imposed upon redemptions by shareholders.

    For the six months ended October 31, 2023, the Fund incurred $2,623 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 3–Additional 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. 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 investment’s 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.

 

13   Invesco Energy Fund

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 Adviser’s 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, 2023. 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  

 

  

Investments in Securities

                  

 

  

Common Stocks & Other Equity Interests

    $ 467,889,483        $ 29,021,034          $–        $ 496,910,517  

 

  

Money Market Funds

      4,404,942          9,055,565            –          13,460,507  

 

  

Total Investments

    $ 472,294,425        $ 38,076,599          $–        $ 510,371,024  

 

  

NOTE 4–Expense 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, 2023, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $10,665.

NOTE 5–Trustees’ 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 6–Cash Balances

The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with SSB, 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 7–Tax 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 Fund’s 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 Fund’s 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. The ability to utilize capital loss carryforward 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, 2023, as follows:

 

Capital Loss Carryforward*

Expiration    Short-Term         Long-Term         Total

 

Not subject to expiration

    $862,110                $304,226,909                $305,089,019

 

 

*

Capital loss carryforward 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 8–Investment Transactions

The aggregate amount of investment securities (other than short-term securities, U.S. Government obligations and money market funds, if any) purchased and sold by the Fund during the six months ended October 31, 2023 was $56,248,694 and $122,608,575, respectively. Cost of investments, including any derivatives, 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 Investments on a Tax Basis

  

Aggregate unrealized appreciation of investments

      $76,315,146  

 

  

Aggregate unrealized (depreciation) of investments

      (21,325,358 ) 

 

  

Net unrealized appreciation of investments

      $54,989,788  

 

  

    Cost of investments for tax purposes is $455,381,236.

 

14   Invesco Energy Fund

NOTE 9–Share Information

 

     Summary of Share Activity  

 

  
     Six months ended     Year ended  
     October 31, 2023(a)     April 30, 2023  
     Shares     Amount     Shares     Amount  

 

  

Sold:

         

Class A

      730,944     $ 20,711,016       5,202,207     $ 143,039,733  

 

  

Class C

      52,326       1,246,901       762,031       17,633,468  

 

  

Class Y

      302,035       8,676,219       2,338,989       64,185,403  

 

  

Investor Class

      199,503       5,601,990       1,570,683       42,120,094  

 

  

Class R5

      20,586       605,770       196,129       5,385,830  

 

  

Class R6

      57,253       1,652,370       224,880       6,366,684  

 

  

Issued as reinvestment of dividends:

         

Class A

      -       -       113,992       3,118,777  

 

  

Class C

      -       -       10,704       245,326  

 

  

Class Y

      -       -       24,611       674,832  

 

  

Investor Class

      -       -       31,416       855,764  

 

  

Class R5

      -       -       3,496       98,628  

 

  

Class R6

      -       -       3,382       95,413  

 

  

Automatic conversion of Class C shares to Class A shares:

         

Class A

      37,144       1,048,914       118,325       3,278,354  

 

  

Class C

      (44,547 )        (1,048,914 )        (141,333 )        (3,278,354 ) 

 

  

Reacquired:

         

Class A

      (2,402,822 )      (66,108,887 )      (4,867,160 )      (130,065,761 ) 

 

  

Class C

      (271,270 )      (6,154,460 )      (530,214 )      (11,501,514 ) 

 

  

Class Y

      (645,577 )      (17,585,478 )      (3,488,118 )      (91,528,651 ) 

 

  

Investor Class

      (523,998 )      (14,432,584 )      (2,024,491 )      (54,193,984 ) 

 

  

Class R5

      (93,458 )      (2,680,129 )      (156,519 )      (4,384,418 ) 

 

  

Class R6

      (117,771 )      (3,307,043 )      (206,573 )      (5,537,097 ) 

 

  

Net increase (decrease) in share activity

      (2,699,652 )    $ (71,774,315 )      (813,563 )    $ (13,391,473 ) 

 

  

 

(a) 

There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 24% 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.

 

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, 2023 through October 31, 2023.

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 Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s 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.

 

          ACTUAL  

HYPOTHETICAL

(5% annual return before

expenses)

     
    

Beginning

    Account Value    

(05/01/23)

  

Ending

    Account Value    

(10/31/23)1

  

Expenses

      Paid During      

Period2

 

Ending

    Account Value    

(10/31/23)

  

Expenses

      Paid During      

Period2

 

      Annualized      

Expense

Ratio

Class A

   $1,000.00   $1,027.50   $ 6.57   $1,018.65   $ 6.55   1.29%

Class C

     1,000.00     1,023.90     10.38     1,014.88     10.33   2.04   

Class Y

     1,000.00     1,028.50       5.30     1,019.91       5.28   1.04   

Investor Class

     1,000.00     1,027.60       6.57     1,018.65       6.55   1.29   

Class R5

     1,000.00     1,029.40       4.69     1,020.51       4.67   0.92   

Class R6

     1,000.00     1,029.70       4.34     1,020.86       4.32   0.85   

 

1 

The actual ending account value is based on the actual total return of the Fund for the period May 1, 2023 through October 31, 2023, after actual expenses and will differ from the hypothetical ending account value which is based on the Fund’s expense ratio and a hypothetical annual return of 5% before expenses.

2 

Expenses are equal to the Fund’s annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 184/366 to reflect the most recent fiscal half year.

 

16   Invesco Energy Fund

Approval of Investment Advisory and Sub-Advisory Contracts

    

 

At meetings held on June 13, 2023, the Board of Trustees (the Board or the Trustees) of AIM Sector Funds (Invesco Sector Funds) as a whole, and the independent Trustees, who comprise over 75% of the Board, voting separately, approved the continuance of the Invesco Energy Fund’s (the Fund) Master Investment Advisory Agreement with Invesco Advisers, Inc. (Invesco Advisers and the investment advisory agreement) and the Master Intergroup Sub-Advisory Contract for Mutual Funds with Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Canada Ltd. (collectively, the Affiliated Sub-Advisers and the sub-advisory contracts) for another year, effective July 1, 2023. After evaluating the factors discussed below, among others, the Board approved the renewal of the Fund’s investment advisory agreement and the sub-advisory contracts and determined that the compensation payable thereunder by the Fund to Invesco Advisers and by Invesco Advisers to the Affiliated Sub-Advisers is fair and reasonable.

The Board’s Evaluation Process

The Board has established an Investments Committee, which in turn has established Sub-Committees, that meet throughout the year to review the performance of funds advised by Invesco Advisers (the Invesco Funds). The Sub-Committees meet regularly with portfolio managers for their assigned Invesco Funds and other members of management to review information about investment performance and portfolio attributes of these funds. The Board has established additional standing and ad hoc committees that meet regularly throughout the year to review matters within their purview, including a working group focused on opportunities to make ongoing and continuous improvements to the annual review process for the Invesco Funds’ investment advisory and sub-advisory contracts. The Board took into account evaluations and reports that it received from its committees and sub-committees, as well as the information provided to the Board and its committees and sub-committees throughout the year, in considering whether to approve each Invesco Fund’s investment advisory agreement and sub-advisory contracts.

    As part of the contract renewal process, the Board reviews and considers information provided in response to requests for information submitted to management by the independent Trustees with assistance from legal counsel to the independent Trustees and the Senior Officer, an officer of the Invesco Funds who reports directly to the independent Trustees. The Board receives comparative investment performance and fee and expense data regarding the Invesco Funds prepared by Broadridge Financial Solutions, Inc. (Broadridge), an independent mutual fund data provider, as well as information on the composition of the peer groups provided by Broadridge and its methodology for determining peer groups. The Board also receives an independent written evaluation from the Senior Officer. The Senior Officer’s evaluation is prepared as part of his responsibility to manage the process by which the Invesco Funds’ proposed management fees are negotiated during the annual contract renewal

process to ensure they are negotiated in a manner that is at arms’ length and reasonable in accordance with certain negotiated regulatory requirements. In addition to meetings with Invesco Advisers and fund counsel throughout the year and as part of meetings convened on May 2, 2023 and June 13, 2023, the independent Trustees also discussed the continuance of the investment advisory agreement and sub-advisory contracts in separate sessions with the Senior Officer and with independent legal counsel. Also, as part of the contract renewal process, the independent Trustees reviewed and considered information provided in response to follow-up requests for information submitted by the independent Trustees to management. The independent Trustees met and discussed those follow-up responses with legal counsel to the independent Trustees and the Senior Officer.

    The discussion below is a summary of the Senior Officer’s independent written evaluation with respect to the Fund’s investment advisory agreement and sub-advisory contracts, as well as a discussion of the material factors and related conclusions that formed the basis for the Board’s approval of the Fund’s investment advisory agreement and sub-advisory contracts. The Trustees’ review and conclusions are based on the comprehensive consideration of all information presented to them during the course of the year and in prior years and are not the result of any single determinative factor. Moreover, one Trustee may have weighed a particular piece of information or factor differently than another Trustee. The information received and considered by the Board was current as of various dates prior to the Board’s approval on June 13, 2023.

Factors and Conclusions and Summary of Independent Written Fee Evaluation

A.

Nature, Extent and Quality of Services Provided by Invesco Advisers and the Affiliated Sub-Advisers

The Board reviewed the nature, extent and quality of the advisory services provided to the Fund by Invesco Advisers under the Fund’s investment advisory agreement, and the credentials and experience of the officers and employees of Invesco Advisers who provide these services, including the Fund’s portfolio manager(s). The Board considered recent senior management changes at Invesco and Invesco Advisers, including the appointment of new Co-Heads of Investments, that had been presented to and discussed with the Board. The Board’s review included consideration of Invesco Advisers’ investment process and oversight, credit analysis and research capabilities. The Board considered information regarding Invesco Advisers’ programs for and resources devoted to risk management, including management of investment, enterprise, operational, liquidity, derivatives, valuation and compliance risks, and technology used to manage such risks. The Board received information regarding Invesco’s methodology for compensating its investment professionals and the incentives and accountability it creates, as well as how it impacts Invesco’s ability to attract and retain talent. The Board received a description of, and reports related to, Invesco Advisers’ global security program and business continuity plans and of its approach to data privacy and cybersecurity, including related testing. The

Board also considered non-advisory services that Invesco Advisers and its affiliates provide to the Invesco Funds, such as various middle office and back office support functions, third party oversight, internal audit, valuation, portfolio trading and legal and compliance. The Board observed that Invesco Advisers’ systems preparedness and ongoing investment enabled Invesco Advisers to manage, operate and oversee the Invesco Funds with minimal impact or disruption through challenging environments. The Board reviewed and considered the benefits to shareholders of investing in a Fund that is part of the family of funds under the umbrella of Invesco Ltd., Invesco Advisers’ parent company, and noted Invesco Ltd.’s depth and experience in running an investment management business, as well as its commitment of financial and other resources to such business. The Board concluded that the nature, extent and quality of the services provided to the Fund by Invesco Advisers are appropriate and satisfactory.

    The Board reviewed the services that may be provided to the Fund by the Affiliated Sub-Advisers under the sub-advisory contracts and the credentials and experience of the officers and employees of the Affiliated Sub-Advisers who provide these services. The Board noted the Affiliated Sub-Advisers’ expertise with respect to certain asset classes and that the Affiliated Sub-Advisers have offices and personnel that are located in financial centers around the world. As a result, the Board noted that the Affiliated Sub-Advisers can provide research and investment analysis on the markets and economies of various countries and territories in which the Fund may invest, make recommendations regarding securities and assist with portfolio trading. The Board concluded that the sub-advisory contracts may benefit the Fund and its shareholders by permitting Invesco Advisers to use the resources and talents of the Affiliated Sub-Advisers in managing the Fund. The Board concluded that the nature, extent and quality of the services that may be provided to the Fund by the Affiliated Sub-Advisers are appropriate and satisfactory.

B.

Fund Investment Performance

The Board considered Fund investment performance as a relevant factor in considering whether to approve the investment advisory agreement. The Board did not view Fund investment performance as a relevant factor in considering whether to approve the sub-advisory contracts for the Fund, as no Affiliated Sub-Adviser currently manages assets of the Fund.

    The Board compared the Fund’s investment performance over multiple time periods ending December 31, 2022 to the performance of funds in the Broadridge performance universe and against the MSCI World Energy Index (Index). The Board noted that performance of Class A shares of the Fund was in the second quintile of its performance universe for the one year period and the third quintile for the three and five year periods (the first quintile being the best performing funds and the fifth quintile being the worst performing funds). The Board noted that performance of Class A shares of the Fund was above the performance of the Index for the one and three year periods and below the performance of the Index for the five year period. The Board considered that, in July 2022, it had approved a change in the Fund’s

 

 

17   Invesco Energy Fund

classification from “diversified” to “non-diversified” for purposes of the 1940 Act and that such change was subsequently approved by the Fund’s shareholders and went into effect in December 2022. The Board considered that as a non-diversified fund, the Fund can invest a greater percentage of its assets in a smaller number of issuers or any one issuer than a diversified fund and that it had discussed with management the potential benefits of such change on the Fund’s performance. The Board recognized that the performance data reflects a snapshot in time as of a particular date and that selecting a different performance period could produce different results. The Board also reviewed more recent Fund performance as well as other performance metrics, which did not change its conclusions.

C.

Advisory and Sub-Advisory Fees and Fund Expenses

The Board compared the Fund’s contractual management fee rate to the contractual management fee rates of funds in the Fund’s Broadridge expense group. The Board noted that the contractual management fee rate for Class A shares of the Fund was the same as the median contractual management fee rate of funds in its expense group. The Board noted that the term “contractual management fee” for funds in the expense group may include both advisory and certain non-portfolio management administrative services fees, but that Broadridge is not able to provide information on a fund-by-fund basis as to what is included. The Board also reviewed the methodology used by Broadridge in calculating expense group information, which includes using each fund’s contractual management fee schedule (including any applicable breakpoints) as reported in the most recent prospectus or statement of additional information for each fund in the expense group. The Board also considered comparative information regarding the Fund’s total expense ratio and its various components. The Board noted that there are only five funds (including the Fund) in its expense group.

    The Board noted that Invesco Advisers has contractually agreed to waive fees and/or limit expenses of the Fund for the term disclosed in the Fund’s registration statement in an amount necessary to limit total annual operating expenses to a specified percentage of average daily net assets for each class of the Fund.

    The Board also considered the fees charged by Invesco Advisers and its affiliates to other client accounts that are similarly managed. Invesco Advisers reviewed with the Board differences in the scope of services it provides to the Invesco Funds relative to that provided by Invesco Advisers and its affiliates to certain other types of client accounts, including, among others: management of cash flows as a result of redemptions and purchases; necessary infrastructure such as officers, office space, technology, legal and distribution; oversight of service providers; costs and business risks associated with launching new funds and sponsoring and maintaining the product line; and compliance with federal and state laws and regulations. Invesco Advisers also advised the Board that many of the similarly managed client accounts have all-inclusive fee structures, which are not easily un-bundled.

    The Board also considered the services that may be provided by the Affiliated Sub-Advisers pursuant to the sub-advisory contracts, as well as the fees payable by Invesco Advisers to the Affiliated Sub-Advisers pursuant to the sub-advisory contracts.

D.

Economies of Scale and Breakpoints

The Board considered the extent to which there may be economies of scale in the provision of advisory services to the Fund and the Invesco Funds, and the extent to which such economies of scale are shared with the Fund and the Invesco Funds. The Board acknowledged the difficulty in calculating and measuring economies of scale at the individual fund level; noting that only indicative and estimated measures are available at the individual fund level and that such measures are subject to uncertainty. The Board considered that the Fund benefits from economies of scale through contractual breakpoints in the Fund’s advisory fee schedule, which generally operate to reduce the Fund’s expense ratio as it grows in size. The Board noted that the Fund also shares in economies of scale through Invesco Advisers’ ability to negotiate lower fee arrangements with third party service providers. The Board noted that the Fund may also benefit from economies of scale through initial fee setting, fee waivers and expense reimbursements, as well as Invesco Advisers’ investment in its business, including investments in business infrastructure, technology and cybersecurity.

E.

Profitability and Financial Resources

The Board reviewed information from Invesco Advisers concerning the costs of the advisory and other services that Invesco Advisers and its affiliates provide to the Fund and the Invesco Funds and the profitability of Invesco Advisers and its affiliates in providing these services in the aggregate and on an individual fund-by-fund basis. The Board considered the methodology used for calculating profitability and the periodic review and enhancement of such methodology. The Board noted that Invesco Advisers continues to operate at a net profit from services Invesco Advisers and its affiliates provide to the Invesco Funds in the aggregate and to most Invesco Funds individually. The Board considered that profits to Invesco Advisers can vary significantly depending on the particular Invesco Fund, with some Invesco Funds showing indicative losses to Invesco Advisers and others showing indicative profits at healthy levels, and that Invesco Advisers’ support for and commitment to an Invesco Fund are not, however, solely dependent on the profits realized as to that Fund. The Board did not deem the level of profits realized by Invesco Advisers and its affiliates from providing such services to be excessive, given the nature, extent and quality of the services provided. The Board noted that Invesco Advisers provided information demonstrating that Invesco Advisers is financially sound and has the resources necessary to perform its obligations under the investment advisory agreement, and provided representations indicating that the Affiliated Sub-Advisers are financially sound and have the resources necessary to perform their obligations under the sub-advisory contracts. The Board noted the cyclical and competitive nature of the global asset management industry.

F.

Collateral Benefits to Invesco Advisers and its Affiliates

The Board considered various other benefits received by Invesco Advisers and its affiliates from the relationship with the Fund, including the fees received for providing administrative, transfer agency and distribution services to the Fund. The Board received comparative information regarding fees charged for these services, including information provided by Broadridge and other independent sources. The Board reviewed the

performance of Invesco Advisers and its affiliates in providing these services and the organizational structure employed to provide these services. The Board noted that these services are provided to the Fund pursuant to written contracts that are reviewed and subject to approval on an annual basis by the Board based on its determination that the services are required for the operation of the Fund.

    The Board considered the benefits realized by Invesco Advisers and the Affiliated Sub-Advisers as a result of portfolio brokerage transactions executed through “soft dollar” arrangements. The Board noted that soft dollar arrangements may result in the Fund bearing costs to purchase research that may be used by Invesco Advisers or the Affiliated Sub-Advisers with other clients and may reduce Invesco Advisers’ or the Affiliated Sub-Advisers’ expenses. The Board also considered that it receives from Invesco Advisers periodic reports that include a representation to the effect that these arrangements are consistent with regulatory requirements. The Board did not deem the soft dollar arrangements to be inappropriate.

    The Board considered that the Fund’s uninvested cash and cash collateral from any securities lending arrangements may be invested in registered money market funds or, with regard to securities lending cash collateral, unregistered funds that comply with Rule 2a-7 (collectively referred to as “affiliated money market funds”) advised by Invesco Advisers. The Board considered information regarding the returns of the affiliated money market funds relative to comparable overnight investments, as well as the fees paid by the affiliated money market funds to Invesco Advisers and its affiliates. In this regard, the Board noted that Invesco Advisers receives advisory fees from these affiliated money market funds attributable to the Fund’s investments. The Board also noted that Invesco Advisers has contractually agreed to waive through varying periods an amount equal to 100% of the net advisory fee Invesco Advisers receives from the affiliated money market funds with respect to the Fund’s investment in the affiliated money market funds of uninvested cash, but not cash collateral. The Board concluded that the advisory fees payable to Invesco Advisers from the Fund’s investment of cash collateral from any securities lending arrangements in the affiliated money market funds are for services that are not duplicative of services provided by Invesco Advisers to the Fund.

    The Board considered that Invesco Advisers may serve as the Fund’s affiliated securities lending agent and evaluated the benefits realized by Invesco Advisers when serving in such role, including the compensation received. The Board considered Invesco Advisers’ securities lending platform and corporate governance structure for securities lending, including Invesco Advisers’ Securities Lending Governance Committee and its related responsibilities. The Board noted that to the extent the Fund utilizes Invesco Advisers as an affiliated securities lending agent, the Fund conducts its securities lending in accordance with, and in reliance upon, no-action letters issued by the SEC staff that provide guidance on how an affiliate may act as a direct agent lender and receive compensation for those services without obtaining exemptive relief. The Board considered information provided by Invesco Advisers related to the performance of Invesco Advisers as securities lending agent, including a summary of the securities lending services provided to the Fund by Invesco Advisers and

 

 

18   Invesco Energy Fund

the compensation paid to Invesco Advisers for such services, as well as any revenues generated for the Fund in connection with such securities lending activity and the allocation of such revenue between the Fund and Invesco Advisers.

    The Board also received information about commissions that an affiliated broker may receive for executing certain trades for the Fund. Invesco Advisers and the Affiliated Sub-Advisers advised the Board of the benefits to the Fund of executing trades through the affiliated broker and that such trades were executed in compliance with rules under the federal securities laws and consistent with best execution obligations.

 

 

19   Invesco Energy Fund

 

 

 

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Fund holdings and proxy voting information

The Fund provides a complete list of its portfolio holdings four times each year, at the end of each fiscal quarter. For the second and fourth quarters, the list appears, respectively, in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the list with the Securities and Exchange Commission (SEC) as an exhibit to its reports on Form N-PORT. The most recent list of portfolio holdings is available at invesco.com/completeqtrholdings. Shareholders can also look up the Fund’s Form N-PORT filings on the SEC website, 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/corporate/about-us/esg. 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. This 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.

 

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SEC file number(s): 811-03826 and 002-85905                    Invesco Distributors, Inc.    I-ENE-SAR-1                                         

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Semiannual Report to Shareholders   October 31, 2023

Invesco Gold & Special Minerals Fund

Nasdaq:

A: OPGSX ∎ C: OGMCX ∎ R: OGMNX ∎ Y: OGMYX ∎ R5: IOGYX ∎ R6: OGMIX

 

    

   
2   Fund Performance
4   Consolidated Schedule of Investments
8   Consolidated Financial Statements
11   Consolidated Financial Highlights
12   Notes to Consolidated Financial Statements
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 is 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, 4/30/23 to 10/31/23, 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

     -17.74 % 

Class C Shares

     -18.04  

Class R Shares

     -17.84  

Class Y Shares

     -17.63  

Class R5 Shares

     -17.58  

Class R6 Shares

     -17.57  

MSCI World Index▼

    -1.59  

Source(s): ▼RIMES Technologies Corp.

  

The MSCI World Index is an unmanaged index considered representative of stocks of developed countries. The index is computed using the net return, which withholds applicable taxes for non-resident investors.

    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.

 

 

 

 

 

For more information about your Fund

 

Read the most recent quarterly commentary from your Fund’s portfolio managers by visiting invesco.com/us. Click on “Products” and select “Mutual Funds.” Use the “Product Finder” to locate your Fund; then click on its name to access its product detail page. There, you can learn more about your Fund’s investment strategies, holdings and performance.

    Also, visit blog.invesco.us.com, where many of Invesco’s investment professionals share their insights about market and economic news and trends.

 

 

 

2   Invesco Gold & Special Minerals Fund

    

    

    

 

 

Average Annual Total Returns

 

As of 10/31/23, including maximum applicable sales charges

 

Class A Shares

        

Inception (7/19/83)

     5.35 % 

10 Years

     2.05  

  5 Years

     8.54  

  1 Year

     7.14  

Class C Shares

        

Inception (11/1/95)

     5.02 % 

10 Years

     2.00  

  5 Years

     8.93  

  1 Year

     11.51  

Class R Shares

        

Inception (3/1/01)

     7.37 % 

10 Years

     2.37  

  5 Years

     9.47  

  1 Year

     13.05  

Class Y Shares

        

Inception (9/7/10)

     -3.18 % 

10 Years

     2.88  

  5 Years

     10.01  

  1 Year

     13.60  

Class R5 Shares

        

10 Years

     2.79 % 

  5 Years

     10.11  

  1 Year

     13.77  

Class R6 Shares

        

Inception (10/26/12)

     -2.91 % 

10 Years

     3.05  

  5 Years

     10.20  

  1 Year

     13.78  

Effective May 24, 2019, Class A, Class C, Class R, Class Y and Class I shares of the Oppenheimer Gold & Special Minerals Fund, (the predecessor fund), were reorganized into Class A, Class C, Class R, Class Y and Class R6 shares, respectively, of the Invesco Oppenheimer Gold & Special Minerals Fund. The Fund was subsequently renamed the Invesco Gold & Special Minerals Fund (the Fund). Returns shown above, for periods ending on or prior to May 24, 2019, for Class A, Class C, Class R, Class Y and Class R6 shares are those for Class A, Class C, Class R, Class Y and Class I shares of the predecessor fund. Share class returns will differ from the predecessor fund because of different expenses.

    Class R5 shares incepted on May 24, 2019. Performance shown on and prior to that date is that of the predecessor fund’s Class A shares at net asset value and includes the 12b-1 fees applicable to Class A shares.

    The performance data quoted represent past performance and cannot guarantee future results; current performance may be lower or higher. Please visit invesco.com/performance for the most recent month-end performance. Performance figures reflect reinvested distributions, changes in net asset value and the effect of the maximum sales charge unless otherwise stated.

Performance figures do not reflect deduction of taxes a shareholder would pay on Fund distributions or sale of Fund shares. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

    Class A share performance reflects the maximum 5.50% sales charge, and Class C share performance reflects the applicable contingent deferred sales charge (CDSC) for the period involved. The CDSC on Class C shares is 1% for the first year after purchase. Class R, Class Y, Class R5 and Class R6 shares do not have a front-end sales charge or a CDSC; therefore, performance is at net asset value.

    The performance of the Fund’s share classes will differ primarily due to different sales charge structures and class expenses.

    Fund performance reflects any applicable fee waivers and/or expense reimbursements. Had the adviser not waived fees and/or reimbursed expenses currently or in the past, returns would have been lower. See current prospectus for more information.

 

 

3   Invesco Gold & Special Minerals Fund

Consolidated Schedule of Investments

October 31, 2023

(Unaudited)

 

     Shares      Value  

 

  

Common Stocks & Other Equity Interests–100.27%

 

Australia–23.58%

      

Allkem Ltd.(a)

     4,884,765      $ 29,965,606  

 

  

Bellevue Gold Ltd.(a)

     48,333,252        44,169,598  

 

  

De Grey Mining Ltd.(a)

     62,177,193        47,129,599  

 

  

Emerald Resources NL(a)

     1,960,000        3,225,581  

 

  

Evolution Mining Ltd.

      17,878,806        40,339,216  

 

  

Firefinch Ltd.(a)

     12,910,104        737,057  

 

  

Genesis Minerals Ltd.(a)

     4,410,000        4,081,743  

 

  

Gold Road Resources Ltd.

      28,033,275        33,682,726  

 

  

Mineral Resources Ltd.

      547,195        20,303,237  

 

  

Northern Star Resources Ltd.

      11,288,895        83,571,560  

 

  

OceanaGold Corp.

      15,760,300        26,366,610  

 

  

Perseus Mining Ltd.

      5,270,000        5,693,327  

 

  

Ramelius Resources Ltd.

      26,868,612        28,190,859  

 

  

Silver Lake Resources Ltd.(a)

     32,281,900        21,287,763  

 

  
           388,744,482  

 

  

Bosnia Hercegovina–0.07%

      

Adriatic Metals PLC, CDI(a)

     540,000        1,168,357  

 

  

Brazil–2.35%

      

Wheaton Precious Metals Corp.

      918,035        38,786,979  

 

  

Burkina Faso–2.22%

      

Endeavour Mining PLC

      1,792,966        36,680,328  

 

  

Canada–48.93%

      

Agnico Eagle Mines Ltd.(b)(c)

     1,561,395        73,245,039  

 

  

Agnico Eagle Mines Ltd.(b)(c)

     411,574        19,303,244  

 

  

Alamos Gold, Inc., Class A

      3,551,108        43,962,717  

 

  

Arizona Metals Corp.(a)

     3,795,300        7,197,865  

 

  

Artemis Gold, Inc.(a)

     4,994,241        18,331,124  

 

  

Aya Gold & Silver, Inc.(a)

     3,125,082        16,924,006  

 

  

B2Gold Corp.

      10,012,000        32,338,760  

 

  

Barrick Gold Corp.(b)

     5,401,499        86,315,955  

 

  

Calibre Mining Corp., Class C(a)

     19,183,168        19,919,785  

 

  

Cameco Corp.

      20,000        818,200  

 

  

Capstone Copper Corp.(a)

     2,310,000        7,862,412  

 

  

Centerra Gold, Inc.

      880,000        4,473,770  

 

  

Coppernico Metals, Inc.(d)

     3,028,200        359,599  

 

  

Dundee Precious Metals, Inc.

      1,040,000        6,817,090  

 

  

Filo Corp.(a)

     235,000        3,060,465  

 

  

Foran Mining Corp.(a)

     730,000        2,279,358  

 

  

Franco-Nevada Corp.

      304,302        36,987,908  

 

  

Hudbay Minerals, Inc.

      230,000        1,002,800  

 

  

i-80 Gold Corp.(a)

     2,640,000        3,636,128  

 

  

IAMGOLD Corp.(a)

     1,110,000        2,819,400  

 

  

Ivanhoe Mines Ltd., Class A(a)

     7,655,365        56,418,122  

 

  

K92 Mining, Inc.(a)

     8,102,630        29,214,458  

 

  

Karora Resources, Inc.(a)(e)

     11,613,332        34,586,668  

 

  

Kinross Gold Corp.

      5,415,925        28,216,969  

 

  

Lithium Americas Corp.(a)

     872,000        5,842,400  

 

  

Lithium Americas Corp.(a)

     932,000        5,153,960  

 

  

Lundin Gold, Inc.

      3,153,815        38,025,446  

 

  

MAG Silver Corp.(a)

     1,454,322        14,557,763  

 

  

NexGen Energy Ltd.(a)

     370,000        2,233,207  

 

  
     Shares      Value  

 

  

Canada–(continued)

      

Novagold Resources, Inc.(a)

     900,000      $ 3,168,000  

 

  

Orla Mining Ltd.(a)

     5,511,621        16,891,573  

 

  

Osisko Gold Royalties Ltd.

      2,305,339        28,171,243  

 

  

Pan American Silver Corp.

      1,266,682        18,506,224  

 

  

Pan American Silver Corp., Rts., expiring 02/22/2029(a)

     2,300,100        1,152,350  

 

  

Rupert Resources Ltd.(a)

     3,110,412        7,065,295  

 

  

Sandstorm Gold Ltd.

      4,159,055        18,965,291  

 

  

SilverCrest Metals, Inc.(a)

     4,546,667        22,524,321  

 

  

Skeena Resources Ltd.(a)

     2,094,336        7,551,238  

 

  

Solaris Resources, Inc.(a)

     1,202,071        4,750,207  

 

  

SSR Mining, Inc.

      2,693,133        37,380,686  

 

  

Torex Gold Resources, Inc.(a)

     281,000        2,709,191  

 

  

Triple Flag Precious Metals Corp.

      1,551,682        19,726,810  

 

  

Wesdome Gold Mines Ltd.(a)

     3,060,000        16,372,958  

 

  
        806,840,005  

 

  

China–2.57%

      

Zijin Mining Group Co. Ltd., H Shares

      27,280,000        42,376,542  

 

  

Colombia–0.45%

      

Aris Mining Corp.(a)

     2,968,423        7,384,936  

 

  

South Africa–2.87%

      

Gold Fields Ltd., ADR

      2,077,241        27,045,678  

 

  

Sibanye Stillwater Ltd., ADR

      3,982,587        20,231,542  

 

  
        47,277,220  

 

  

Turkey–1.70%

      

Eldorado Gold Corp.(a)

     2,591,502        28,014,137  

 

  

United Kingdom–1.28%

      

AngloGold Ashanti Ltd.

      1,186,100        21,160,024  

 

  

United States–13.51%

      

Albemarle Corp.

      18,000        2,282,040  

 

  

Alcoa Corp.

      431,000        11,050,840  

 

  

A-Mark Precious Metals, Inc.

      170,000        4,603,600  

 

  

Aura Minerals, Inc.

      2,067,825        13,897,335  

 

  

Freeport-McMoRan, Inc.

      2,146,000        72,491,880  

 

  

Hecla Mining Co.

      1,735,304        7,062,687  

 

  

Ivanhoe Electric, Inc.(a)

     1,434,082        14,685,000  

 

  

Newmont Corp.(b)

     1,659,914        62,196,977  

 

  

Ormat Technologies, Inc.

      191,500        11,784,910  

 

  

Piedmont Lithium, Inc.(a)

     390,585        10,729,370  

 

  

Royal Gold, Inc.

      114,300        11,924,919  

 

  
        222,709,558  

 

  

Zambia–0.74%

      

First Quantum Minerals Ltd.

      1,047,000        12,132,893  

 

  

Total Common Stocks & Other Equity Interests (Cost $1,431,139,851)

 

      1,653,275,461  

 

  

Exchange-Traded Funds–0.01%

 

   

United States–0.01%

      

SPDR® Gold Trust-ETF(a)
(Cost $155,058)

      1,000        184,090  

 

  
 

 

See accompanying Notes to Consolidated Financial Statements which are an integral part of the financial statements.

 

4   Invesco Gold & Special Minerals Fund

     Shares      Value  

 

  

Money Market Funds–0.78%

      

Invesco Government & Agency Portfolio, Institutional Class, 5.27%(e)(f)

     4,508,476      $ 4,508,476  

 

  

Invesco Liquid Assets Portfolio, Institutional Class, 5.40%(e)(f)

     3,219,506        3,220,472  

 

  

Invesco Treasury Portfolio, Institutional Class, 5.27%(e)(f)

     5,152,544        5,152,544  

 

  

Total Money Market Funds (Cost $12,880,856)

 

      12,881,492  

 

  

TOTAL INVESTMENTS IN SECURITIES–101.06% (Cost $1,444,175,765)

 

      1,666,341,043  

 

  

OTHER ASSETS LESS LIABILITIES–(1.06)%

 

      (17,418,650 ) 

 

  

NET ASSETS–100.00%

 

    $ 1,648,922,393  

 

  
 
Investment Abbreviations:

ADR  - American Depositary Receipt

CDI  - CREST Depository Interest

Rts.  - Rights

Notes to Consolidated Schedule of Investments:

 

(a) 

Non-income producing security.

(b) 

All or a portion of the value pledged and/or designated as collateral to cover margin requirements for open options contracts. See Note 1K and Note 1L.

(c) 

The Fund holds securities which have been issued by the same entity and that trade on separate exchanges.

(d) 

Security valued using significant unobservable inputs (Level 3). See Note 3.

(e) 

Affiliated holding. Affiliated holdings are investments in entities which are under common ownership or control of Invesco Ltd. or are investments in entities in which the Fund owns 5% or more of the outstanding voting securities. The table below shows the Fund’s transactions in, and earnings from, its investments in affiliates for the six months ended October 31, 2023.

 

    

Value

April 30, 2023

    

Purchases

at Cost

    

Proceeds

from Sales

    

Change in

Unrealized

Appreciation

(Depreciation)

    

Realized

Gain

    

Value

October 31, 2023

     Dividend Income  
Investments in Affiliated Money Market Funds:                                                        

Invesco Government & Agency Portfolio, Institutional Class

   $ 15,954,071     $ 38,847,551     $ (50,293,146)     $ -     $ -       $  4,508,476           $191,008      

Invesco Liquid Assets Portfolio, Institutional Class

     11,395,882       27,748,252       (35,923,676)       (706)       720       3,220,472           138,066      

Invesco Treasury Portfolio, Institutional Class

     18,233,224       44,397,202       (57,477,882)       -       -       5,152,544           217,944      
Investments in Other Affiliates:                                                        

Karora Resources, Inc.

     41,429,428       125,100       -       (6,967,860)       -       34,586,668           -      

Total

   $ 87,012,605     $ 111,118,105     $ (143,694,704)     $ (6,968,566)     $ 720     $ 47,468,160           $547,018      

(f) The rate shown is the 7-day SEC standardized yield as of October 31, 2023.

 

Open Exchange-Traded Equity Options Written(a)  

 

  
Description    Type of
Contract		    Expiration
Date		    Number of
Contracts		     

Exercise

Price

     

Notional

Value*

      Value  

 

  

Equity Risk

                      

 

  

Agnico Eagle Mines Ltd.

    Call    11/17/2023      4,000        USD       70.00        USD       28,000,000      $ (10,000 ) 

 

  

Agnico Eagle Mines Ltd.

    Call    03/15/2024      4,000        CAD       76.00        CAD       30,400,000        (500,451 ) 

 

  

Alamos Gold, Inc.

    Call    01/19/2024      3,000        USD       15.00        USD       4,500,000        (60,000 ) 

 

  

Alcoa Corp.

    Call    01/19/2024      3,000        USD       35.00        USD       10,500,000        (135,000 ) 

 

  

AngloGold Ashanti Ltd.

    Call    01/19/2024      2,000        USD       28.00        USD       5,600,000        (20,000 ) 

 

  

Barrick Gold Corp.

    Call    03/15/2024      2,000        USD       17.00        USD       3,400,000        (189,000 ) 

 

  

Endeavour Mining PLC

    Call    03/15/2024      3,000        CAD       32.00        CAD       9,600,000        (208,762 ) 

 

  

Filo Corp.

    Call    01/19/2024      1,900        CAD       25.00        CAD       4,750,000        (34,938 ) 

 

  

First Quantum Minerals Ltd.

    Call    03/15/2024      3,000        CAD       36.00        CAD       10,800,000        (162,250 ) 

 

  

Franco-Nevada Corp.

    Call    01/19/2024      2,000        USD       185.00        USD       37,000,000        (260,000 ) 

 

  

Gold Fields Ltd.

    Call    04/19/2024      3,000        USD       16.00        USD       4,800,000        (217,500 ) 

 

  

Ivanhoe Mines Ltd.

    Call    12/15/2023      6,000        CAD       15.00        CAD       9,000,000        (17,307 ) 

 

  

Lithium Americas Corp.

    Call    11/17/2023      1,000        USD       27.50        USD       2,750,000        (2,500 ) 

 

  

Lundin Gold, Inc.

    Call    11/17/2023      2,000        CAD       18.00        CAD       3,600,000        (28,844 ) 

 

  

Lundin Gold, Inc.

    Call    03/15/2024      4,000        CAD       18.00        CAD       7,200,000        (245,178 ) 

 

  

 

See accompanying Notes to Consolidated Financial Statements which are an integral part of the financial statements.

 

5   Invesco Gold & Special Minerals Fund

Open Exchange-Traded Equity Options Written(a)–(continued)  

 

  
Description    Type of
Contract		    Expiration
Date		    Number of
Contracts		     

Exercise

Price

     

Notional

Value*

      Value  

 

  

MAG Silver Corp.

    Call    11/17/2023      3,000        USD       15.00        USD       4,500,000      $ (7,500 ) 

 

  

Mineral Resources Ltd.

    Call    12/21/2023      4,000        AUD       67.00        AUD       26,800,000        (218,216 ) 

 

  

Northern Star Resources Ltd.

    Call    01/18/2024      5,000        AUD       13.50        AUD       6,750,000        (82,465 ) 

 

  

Ormat Technologies, Inc.

    Call    12/15/2023      1,800        USD       90.00        USD       16,200,000        (13,500 ) 

 

  

Pan American Silver Corp.

    Call    01/19/2024      4,000        USD       18.00        USD       7,200,000        (140,000 ) 

 

  

Piedmont Lithium, Inc.

    Call    11/17/2023      2,900        USD       85.00        USD       24,650,000        (7,250 ) 

 

  

Royal Gold, Inc.

    Call    01/19/2024      1,000        USD       130.00        USD       13,000,000        (72,500 ) 

 

  

Wheaton Precious Metals Corp.

    Call    12/15/2023      2,000        USD       50.00        USD       10,000,000        (50,000 ) 

 

  

Wheaton Precious Metals Corp.

    Call    01/19/2024      3,000        USD       50.00        USD       15,000,000        (180,000 ) 

 

  

Zijin Mining Group Co. Ltd.

    Call    03/27/2024      10,000          HKD       14.00        HKD       280,000,000        (1,354,589 ) 

 

  

Subtotal - Equity Call Options Written

                         (4,217,750 ) 

 

  

Equity Risk

                      

 

  

Agnico Eagle Mines Ltd.

    Put    11/17/2023      2,000        USD       45.00        USD       9,000,000        (110,000 ) 

 

  

Agnico Eagle Mines Ltd.

    Put    03/15/2024      2,000        CAD       55.00        CAD       11,000,000        (204,074 ) 

 

  

Albemarle Corp.

    Put    12/15/2023      1,200        USD       145.00        USD       17,400,000        (2,526,000 ) 

 

  

Alcoa Corp.

    Put    01/19/2024      1,000        USD       28.00        USD       2,800,000        (375,000 ) 

 

  

A-Mark Precious Metals, Inc.

    Put    03/15/2024      1,000        USD       25.00        USD       2,500,000        (125,000 ) 

 

  

AngloGold Ashanti Ltd.

    Put    01/19/2024      2,000        USD       20.00        USD       4,000,000        (550,000 ) 

 

  

B2Gold Corp.

    Put    04/19/2024      5,000        USD       3.00        USD       1,500,000        (125,000 ) 

 

  

Barrick Gold Corp.

    Put    03/15/2024      2,000        USD       16.00        USD       3,200,000        (240,000 ) 

 

  

Cameco Corp.

    Put    03/15/2024      2,000        USD       31.00        USD       6,200,000        (161,000 ) 

 

  

Endeavour Mining PLC

    Put    03/15/2024      1,000        CAD       26.00        CAD       2,600,000        (96,989 ) 

 

  

Filo Corp.

    Put    01/19/2024      1,000        CAD       19.00        CAD       1,900,000        (155,039 ) 

 

  

First Quantum Minerals Ltd.

    Put    03/15/2024      2,000        CAD       24.00        CAD       4,800,000        (1,384,532 ) 

 

  

Freeport-McMoRan, Inc.

    Put    01/19/2024      1,000        USD       32.00        USD       3,200,000        (145,500 ) 

 

  

Gold Fields Ltd.

    Put    04/19/2024      3,000        USD       11.00        USD       3,300,000        (195,000 ) 

 

  

Hudbay Minerals, Inc.

    Put    01/19/2024      3,000        USD       5.00        USD       1,500,000        (225,000 ) 

 

  

Ivanhoe Electric, Inc.

    Put    04/19/2024      1,000        USD       10.00        USD       1,000,000        (95,000 ) 

 

  

Ivanhoe Mines Ltd.

    Put    12/15/2023      3,000        CAD       12.00        CAD       3,600,000        (405,625 ) 

 

  

Kinross Gold Corp.

    Put    02/16/2024      3,000        USD       5.00        USD       1,500,000        (99,000 ) 

 

  

Lithium Americas Corp.

    Put    11/17/2023      2,000        USD       17.50        USD       3,500,000        (2,160,000 ) 

 

  

MAG Silver Corp.

    Put    11/17/2023      1,542        USD       12.50        USD       1,927,500        (397,065 ) 

 

  

Mineral Resources Ltd.

    Put    12/21/2023      1,000        AUD       57.00        AUD       5,700,000        (195,380 ) 

 

  

MP Materials Corp.

    Put    12/15/2023      1,000        USD       17.50        USD       1,750,000        (190,000 ) 

 

  

Newmont Corp.

    Put    01/19/2024      1,500        USD       37.50        USD       5,625,000        (324,750 ) 

 

  

Novagold Resources, Inc.

    Put    03/15/2024      3,000        USD       4.00        USD       1,200,000        (202,500 ) 

 

  

Ormat Technologies, Inc.

    Put    12/15/2023      1,000        USD       75.00        USD       7,500,000        (1,435,000 ) 

 

  

Pan American Silver Corp.

    Put    01/19/2024      1,000        USD       14.00        USD       1,400,000        (85,000 ) 

 

  

Piedmont Lithium, Inc.

    Put    11/17/2023      1,000        USD       35.00        USD       3,500,000        (805,000 ) 

 

  

Royal Gold, Inc.

    Put    01/19/2024      1,000        USD       95.00        USD       9,500,000        (220,000 ) 

 

  

Sibanye Stillwater Ltd.

    Put    04/19/2024      2,000        USD       7.50        USD       1,500,000        (500,000 ) 

 

  

SSR Mining, Inc.

    Put    01/19/2024      1,000        USD       14.00        USD       1,400,000        (95,000 ) 

 

  

Torex Gold Resources, Inc.

    Put    01/19/2024      2,000        CAD       14.00        CAD       2,800,000        (223,544 ) 

 

  

Wheaton Precious Metals Corp.

    Put    12/15/2023      1,500        USD       40.00        USD       6,000,000        (150,000 ) 

 

  

Subtotal - Equity Put Options Written

                         (14,200,998 ) 

 

  

Total Open Exchange-Traded Equity Options Written

                 $ (18,418,748 ) 

 

  

 

(a) 

Open Exchange-Traded Options Written collateralized by $79,714 cash held with Morgan Stanley.

*

Notional Value is calculated by multiplying the Number of Contracts by the Exercise Price by the multiplier.

 

See accompanying Notes to Consolidated Financial Statements which are an integral part of the financial statements.

 

6   Invesco Gold & Special Minerals Fund

Abbreviations:

AUD  –Australian Dollar

CAD  –Canadian Dollar

HKD  –Hong Kong Dollar

USD  –U.S. Dollar

Portfolio Composition

By industry, based on Net Assets

as of October 31, 2023

 

Gold

      76.34 % 

Diversified Metals & Mining

      9.62  

Copper

      5.55  

Silver

      3.49  

Precious Metals & Minerals

      2.57  

Industry Type Each Less Than 1% of Net Assets

      1.59  

Money Market Funds Plus Other Assets Less Liabilities

      0.84  

 

See accompanying Notes to Consolidated Financial Statements which are an integral part of the financial statements.

 

7   Invesco Gold & Special Minerals Fund

Consolidated Statement of Assets and Liabilities

October 31, 2023

(Unaudited)

 

Assets:

   

Investments in unaffiliated securities, at value
(Cost $1,401,116,809)

    $ 1,618,872,883  

 

  

Investments in affiliates, at value
(Cost $43,058,956)

      47,468,160  

 

  

Cash collateral – exchange-traded options contracts

      79,714  

 

  

Cash

      1,071,106  

 

  

Foreign currencies, at value (Cost $1,615,642)

      1,592,585  

 

  

Receivable for:

   

Investments sold

      3,206,452  

 

  

Fund shares sold

      1,052,965  

 

  

Dividends

      1,224,160  

 

  

Investment for trustee deferred compensation and retirement plans

      125,855  

 

  

Other assets

      70,953  

 

  

Total assets

      1,674,764,833  

 

  

Liabilities:

   

Other investments:

   

Options written, at value (premiums received $15,204,212)

      18,418,748  

 

  

Payable for:

   

Investments purchased

      2,245,748  

 

  

Fund shares reacquired

      3,609,489  

 

  

Due to broker

      429,333  

 

  

Accrued fees to affiliates

      865,756  

 

  

Accrued trustees’ and officers’ fees and benefits

      38,409  

 

  

Accrued other operating expenses

      98,859  

 

  

Trustee deferred compensation and retirement plans

      136,098  

 

  

Total liabilities

      25,842,440  

 

  

Net assets applicable to shares outstanding

    $ 1,648,922,393  

 

  

Net assets consist of:

   

Shares of beneficial interest

    $ 3,079,422,290  

 

  

Distributable earnings (loss)

      (1,430,499,897 ) 

 

  
   $ 1,648,922,393  

 

  

Net Assets:

   

Class A

    $   726,432,999  

 

  

Class C

    $ 69,221,029  

 

  

Class R

    $ 107,993,038  

 

  

Class Y

    $ 447,240,436  

 

  

Class R5

    $ 1,373,797  

 

  

Class R6

    $ 296,661,094  

 

  

Shares outstanding, no par value, with an unlimited number of shares authorized:

 

Class A

      35,910,007  

 

  

Class C

      3,866,264  

 

  

Class R

      5,649,275  

 

  

Class Y

      22,049,980  

 

  

Class R5

      67,663  

 

  

Class R6

      14,462,685  

 

  

Class A:

   

Net asset value per share

    $ 20.23  

 

  

Maximum offering price per share
(Net asset value of $20.23 ÷ 94.50%)

    $ 21.41  

 

  

Class C:

   

Net asset value and offering price per share

    $ 17.90  

 

  

Class R:

   

Net asset value and offering price per share

    $ 19.12  

 

  

Class Y:

   

Net asset value and offering price per share

    $ 20.28  

 

  

Class R5:

   

Net asset value and offering price per share

    $ 20.30  

 

  

Class R6:

   

Net asset value and offering price per share

    $ 20.51  

 

  
 

 

See accompanying Notes to Consolidated Financial Statements which are an integral part of the financial statements.

 

8   Invesco Gold & Special Minerals Fund

Consolidated Statement of Operations

For the six months ended October 31, 2023

(Unaudited)

 

Investment income:

   

Dividends (net of foreign withholding taxes of $1,430,217)

    $ 12,904,697  

 

  

Dividends from affiliates

      547,018  

 

  

Total investment income

      13,451,715  

 

  

Expenses:

   

Advisory fees

      5,657,110  

 

  

Administrative services fees

      133,512  

 

  

Custodian fees

      65,322  

 

  

Distribution fees:

   

Class A

      1,006,521  

 

  

Class C

      413,623  

 

  

Class R

      309,735  

 

  

Transfer agent fees – A, C, R and Y

      1,529,693  

 

  

Transfer agent fees – R5

      614  

 

  

Transfer agent fees – R6

      49,971  

 

  

Trustees’ and officers’ fees and benefits

      22,616  

 

  

Registration and filing fees

      63,712  

 

  

Reports to shareholders

      90,936  

 

  

Professional services fees

      39,007  

 

  

Other

      18,520  

 

  

Total expenses

      9,400,892  

 

  

Less: Fees waived and/or expense offset arrangement(s)

      (12,412 ) 

 

  

Net expenses

      9,388,480  

 

  

Net investment income

      4,063,235  

 

  

Realized and unrealized gain (loss) from:

   

Net realized gain (loss) from:

   

Unaffiliated investment securities

      (18,481,235 ) 

 

  

Affiliated investment securities

      720  

 

  

Foreign currencies

      (28,177 ) 

 

  

Option contracts written

      25,222,377  

 

  
     6,713,685  

 

  

Change in net unrealized appreciation (depreciation) of:

   

Unaffiliated investment securities

      (353,060,522 ) 

 

  

Affiliated investment securities

      (6,968,566 ) 

 

  

Foreign currencies

      (12,572 ) 

 

  

Option contracts written

      (9,356,990 ) 

 

  
     (369,398,650 ) 

 

  

Net realized and unrealized gain (loss)

      (362,684,965 ) 

 

  

Net increase (decrease) in net assets resulting from operations

    $ (358,621,730 ) 

 

  

 

See accompanying Notes to Consolidated Financial Statements which are an integral part of the financial statements.

 

9   Invesco Gold & Special Minerals Fund

Consolidated Statement of Changes in Net Assets

For the six months ended October 31, 2023 and the year ended April 30, 2023

(Unaudited)

 

    

October 31,

2023

    

April 30,

2023

  

 

  

Operations:

     

Net investment income

    $ 4,063,235     $ 9,438,773  

 

  

Net realized gain (loss)

      6,713,685       (256,121,886 ) 

 

  

Change in net unrealized appreciation (depreciation)

      (369,398,650 )      34,155,590  

 

  

Net increase (decrease) in net assets resulting from operations

      (358,621,730 )      (212,527,523 ) 

 

  

Distributions to shareholders from distributable earnings:

     

Class A

      –       (3,777,806 ) 

 

  

Class R

      –       (185,799 ) 

 

  

Class Y

      –       (3,820,437 ) 

 

  

Class R5

      –       (4,070 ) 

 

  

Class R6

      –       (2,622,908 ) 

 

  

Total distributions from distributable earnings

      –       (10,411,020 ) 

 

  

Share transactions–net:

     

Class A

      (38,484,183 )      (49,378,469 ) 

 

  

Class C

      (7,753,686 )      (10,841,252 ) 

 

  

Class R

      (5,102,160 )      (5,748,846 ) 

 

  

Class Y

      (23,440,156 )      (38,913,355 ) 

 

  

Class R5

      453,971       (701,763 ) 

 

  

Class R6

      17,476,573       15,804,056  

 

  

Net increase (decrease) in net assets resulting from share transactions

      (56,849,641 )      (89,779,629 ) 

 

  

Net increase (decrease) in net assets

      (415,471,371 )      (312,718,172 ) 

 

  

Net assets:

     

Beginning of period

      2,064,393,764       2,377,111,936  

 

  

End of period

    $ 1,648,922,393     $ 2,064,393,764  

 

  

 

See accompanying Notes to Consolidated Financial Statements which are an integral part of the financial statements.

 

10   Invesco Gold & Special Minerals Fund

Consolidated Financial Highlights

(Unaudited)

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

  

Net asset

value, end

of period

   Total return(b)  

Net assets,

end of period

(000’s 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 10/31/23

     $24.58         $ 0.04         $(4.39 )        $(4.35 )        $     –         $20.23             (17.70 )%(d)      $   726,433                 1.09 %(d)(e)              1.09 %(d)(e)              0.34 %(d)(e)      11 % 

Year ended 04/30/23

     26.81       0.09       (2.22 )      (2.13 )      (0.10 )      24.58       (7.90 )(d)      924,057       1.06 (d)      1.06 (d)      0.43 (d)      30  

Year ended 04/30/22

     27.70       0.05       (0.01 )      0.04       (0.93 )      26.81       0.43 (d)      1,070,962       1.05 (d)      1.05 (d)      0.19 (d)      32  

Year ended 04/30/21

     21.77       0.06       6.30       6.36       (0.43 )      27.70       29.28 (d)      1,098,007       1.05 (d)      1.05 (d)      0.21 (d)      43  

Ten months ended 04/30/20

     17.87       0.02       3.94       3.96       (0.06 )      21.77       22.21       705,341       1.17 (e)      1.20 (e)      0.13 (e)      44  

Year ended 06/30/19

     15.51       0.00       2.36       2.36       –       17.87       15.22       532,925       1.17       1.18       0.00       35  

Year ended 06/30/18

     16.28       (0.06 )      (0.25 )      (0.31 )      (0.46 )      15.51       (1.88 )      490,065       1.16       1.17       (0.39 )      44  

Class C

                        

Six months ended 10/31/23

     21.84       (0.04 )      (3.90 )      (3.94 )      –       17.90       (18.04 )      69,221       1.85 (e)      1.85 (e)      (0.42 )(e)      11  

Year ended 04/30/23

     23.89       (0.06 )      (1.99 )      (2.05 )      –       21.84       (8.58 )      93,031       1.82       1.82       (0.33 )      30  

Year ended 04/30/22

     24.98       (0.14 )      (0.02 )      (0.16 )      (0.93 )      23.89       (0.34 )      116,380       1.81       1.81       (0.57 )      32  

Year ended 04/30/21

     19.68       (0.14 )      5.70       5.56       (0.26 )      24.98       28.27       128,089       1.81       1.81       (0.55 )      43  

Ten months ended 04/30/20

     16.20       (0.09 )      3.57       3.48       –       19.68       21.48       99,528       1.92 (e)      1.96 (e)      (0.62 )(e)      44  

Year ended 06/30/19

     14.17       (0.10 )      2.13       2.03       –       16.20       14.33       88,904       1.92       1.93       (0.76 )      35  

Year ended 06/30/18

     14.91       (0.17 )      (0.22 )      (0.39 )      (0.35 )      14.17       (2.62 )      121,350       1.92       1.93       (1.15 )      44  

Class R

                        

Six months ended 10/31/23

     23.26       0.01       (4.15 )      (4.14 )      –       19.12       (17.80 )      107,993       1.35 (e)      1.35 (e)      0.08 (e)      11  

Year ended 04/30/23

     25.35       0.04       (2.10 )      (2.06 )      (0.03 )      23.26       (8.10 )      136,937       1.32       1.32       0.17       30  

Year ended 04/30/22

     26.32       (0.02 )      (0.02 )      (0.04 )      (0.93 )      25.35       0.14       157,476       1.31       1.31       (0.07 )      32  

Year ended 04/30/21

     20.69       (0.01 )      5.98       5.97       (0.34 )      26.32       28.90       153,232       1.31       1.31       (0.05 )      43  

Ten months ended 04/30/20

     16.98       (0.02 )      3.75       3.73       (0.02 )      20.69       21.99       125,316       1.42 (e)      1.46 (e)      (0.12 )(e)      44  

Year ended 06/30/19

     14.77       (0.04 )      2.25       2.21       –       16.98       14.96       113,589       1.42       1.43       (0.25 )      35  

Year ended 06/30/18

     15.54       (0.10 )      (0.25 )      (0.35 )      (0.42 )      14.77       (2.23 )      114,608       1.42       1.43       (0.65 )      44  

Class Y

                        

Six months ended 10/31/23

     24.61       0.07       (4.40 )      (4.33 )      –       20.28       (17.59 )      447,240       0.85 (e)      0.85 (e)      0.58 (e)      11  

Year ended 04/30/23

     26.86       0.15       (2.24 )      (2.09 )      (0.16 )      24.61       (7.68 )      568,856       0.82       0.82       0.67       30  

Year ended 04/30/22

     27.69       0.12       (0.02 )      0.10       (0.93 )      26.86       0.64       675,653       0.81       0.81       0.43       32  

Year ended 04/30/21

     21.78       0.12       6.31       6.43       (0.52 )      27.69       29.57       600,958       0.81       0.81       0.45       43  

Ten months ended 04/30/20

     17.88       0.06       3.93       3.99       (0.09 )      21.78       22.41       349,290       0.92 (e)      0.96 (e)      0.38 (e)      44  

Year ended 06/30/19

     15.48       0.04       2.36       2.40       –       17.88       15.50       229,569       0.92       0.93       0.24       35  

Year ended 06/30/18

     16.26       (0.02 )      (0.25 )      (0.27 )      (0.51 )      15.48       (1.65 )      147,282       0.92       0.93       (0.15 )      44  

Class R5

                        

Six months ended 10/31/23

     24.63       0.08       (4.41 )      (4.33 )      –       20.30       (17.58 )      1,374       0.75 (e)      0.75 (e)      0.68 (e)      11  

Year ended 04/30/23

     26.89       0.17       (2.24 )      (2.07 )      (0.19 )      24.63       (7.60 )      1,144       0.73       0.73       0.76       30  

Year ended 04/30/22

     27.69       0.14       (0.01 )      0.13       (0.93 )      26.89       0.75       2,164       0.72       0.72       0.52       32  

Year ended 04/30/21

     21.79       0.16       6.31       6.47       (0.57 )      27.69       29.75       141       0.69       0.69       0.57       43  

Ten months ended 04/30/20

     17.87       0.08       3.95       4.03       (0.11 )      21.79       22.65       30       0.77 (e)      0.77 (e)      0.53 (e)      44  

Period ended 06/30/19(f)

    14.75       0.01       3.11       3.12       –       17.87       21.15       12       0.80 (e)      0.80 (e)      0.35 (e)      35  

Class R6

                        

Six months ended 10/31/23

     24.87       0.09       (4.45 )      (4.36 )      –       20.51       (17.53 )      296,661       0.68 (e)      0.68 (e)      0.75 (e)      11  

Year ended 04/30/23

     27.15       0.18       (2.25 )      (2.07 )      (0.21 )      24.87       (7.52 )      340,370       0.66       0.66       0.83       30  

Year ended 04/30/22

     27.94       0.16       (0.02 )      0.14       (0.93 )      27.15       0.78       354,476       0.65       0.65       0.59       32  

Year ended 04/30/21

     21.98       0.16       6.37       6.53       (0.57 )      27.94       29.79       293,817       0.66       0.66       0.60       43  

Ten months ended 04/30/20

     18.03       0.09       3.98       4.07       (0.12 )      21.98       22.65       197,933       0.74 (e)      0.74 (e)      0.56 (e)      44  

Year ended 06/30/19

     15.58       0.06       2.39       2.45       –       18.03       15.73       133,853       0.75       0.76       0.41       35  

Year ended 06/30/18

     16.37       0.00       (0.26 )      (0.26 )      (0.53 )      15.58       (1.53 )      104,921       0.75       0.75       0.02       44  

 

(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, 2021, the portfolio turnover calculation excludes the value of securities purchased of $210,653,892 and sold of $9,084,044 in the effort to realign the Fund’s portfolio holdings after the reorganization of Invesco Gold & Precious Metals Fund into the Fund.

(d) 

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 0.24% for the six months ended October 31, 2023 and the years ended April 30, 2023, 2022 and 2021, respectively.

(e) 

Annualized.

(f) 

Commencement date after the close of business on May 24, 2019.

 

See accompanying Notes to Consolidated Financial Statements which are an integral part of the financial statements.

 

11   Invesco Gold & Special Minerals Fund

Notes to Consolidated Financial Statements

October 31, 2023

(Unaudited)

NOTE 1–Significant Accounting Policies

Invesco Gold & Special Minerals 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 authorized to issue an unlimited number of shares of beneficial interest. Information presented in these consolidated financial statements pertains only to the Fund and the Invesco Gold & Special Minerals Fund (Cayman) Ltd. (the “Subsidiary”), a wholly-owned and controlled subsidiary by the Fund organized under the laws of the Cayman Islands. Matters affecting the Fund or each class will be voted on exclusively by the shareholders of the Fund or each class.

The Fund will seek to gain exposure to the commodity market through investments in the Subsidiary. The Subsidiary was organized by the Fund to invest in gold bullion and other precious metals, shares of exchange-traded funds that invest in gold bullion (Gold ETFs), commodity linked derivatives related to gold or other special mineral (including commodity futures, financial futures, options and swap contracts, and certain fixed-income securities and other investments that may serve as margin or collateral for its derivatives positions). The Fund may invest up to 25% of its total assets in the Subsidiary.

The Fund’s investment objective is to seek capital appreciation.

The Fund currently consists of six different classes of shares: Class A, Class C, Class R, Class Y, Class R5 and Class R6. Class Y shares are available only to certain investors. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met. 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. Class C shares held for eight years after purchase are eligible for automatic conversion into Class A shares of the same Fund (the “Conversion Feature”). The automatic conversion pursuant to the Conversion Feature will generally occur at the end of the month following the eighth anniversary after a purchase of Class C shares.

The Fund is an investment company and accordingly follows the investment company accounting and reporting guidance in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 946, Financial Services – Investment Companies.

The following is a summary of the significant accounting policies followed by the Fund in the preparation of its consolidated financial statements.

A.

Security Valuations – Securities, including restricted securities, are valued according to the following policy.

A security listed or traded on an exchange is generally valued at its trade price or official closing price that day as of the close of the exchange where the security is principally traded, or lacking any trades or official closing price on a particular day, the security may be valued at the closing bid or ask 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 using prices provided by an independent pricing service they may be considered fair valued. Futures contracts are valued at the daily settlement price set by an exchange on which they are principally traded. Where a final settlement price exists, exchange-traded options are valued at the final settlement price from the exchange where the option principally trades. Where a final settlement price does not exist, exchange-traded options are valued at the mean between the last bid and ask price generally from the exchange where the option principally trades.

Securities of investment companies that are not exchange-traded (e.g., open-end mutual funds) are valued using such company’s end-of-business-day net asset value per share.

Deposits, other obligations of U.S. and non-U.S. banks and financial institutions are valued at their daily account value.

Swap agreements are fair valued using an evaluated quote, if available, provided by an independent pricing service. Evaluated quotes provided by the pricing service are valued based on a model which may include end-of-day net present values, spreads, ratings, industry, company performance and returns of referenced assets. Centrally cleared swap agreements are valued at the daily settlement price determined by the relevant exchange or clearinghouse.

Fixed income securities (including convertible debt securities) generally are valued on the basis of prices provided by independent pricing services. Prices 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. Pricing services generally value debt obligations assuming orderly transactions of institutional round lot size, but a fund may hold or transact in the same securities in smaller, odd lot sizes. Odd lots often trade at lower prices than institutional round lots, and their value may be adjusted accordingly. 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 New York Stock Exchange (“NYSE”). If market quotations are available and reliable for foreign exchange-traded equity securities, the securities will be valued at the market quotations. Invesco Advisers, Inc. (the “Adviser” or “Invesco”) may use various pricing services to obtain market quotations as well as fair value prices. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become not representative of market value in the Adviser’s judgment (“unreliable”). If, between the time trading ends on a particular security and the close of the customary trading session on the NYSE, a significant event occurs that makes the closing price of the security unreliable, the Adviser 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 in accordance with Board-approved policies and related Adviser procedures (“Valuation Procedures”). 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 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.

Unlisted securities will be valued using prices provided by independent pricing services or by another method that the Adviser, in its judgment, believes better reflects the security’s fair value in accordance with the Valuation Procedures.

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 mean between the last bid and ask prices may be used to value debt obligations, including corporate loans.

Securities for which market quotations are not readily available are fair valued by the Adviser in accordance with the Valuation Procedures. If a fair value price provided by a pricing service is unreliable, the Adviser will fair value the security using the Valuation Procedures. 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 security’s 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 Fund investments.

Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general market conditions which are not specifically related to the particular issuer, such as real or perceived adverse economic conditions, changes in the general outlook for revenues or corporate earnings, changes in interest or currency rates, regional or global instability, natural or environmental disasters, widespread disease or

 

12   Invesco Gold & Special Minerals Fund

other public health issues, war, acts of terrorism, significant governmental actions or adverse investor sentiment generally and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the consolidated financial statements may materially differ from the value received upon actual sale of those investments.

The price the Fund could receive upon the sale of any investment may differ from the Adviser’s valuation of the investment, particularly for securities that are valued using a fair valuation technique. When fair valuation techniques are applied, the Adviser uses available information, including both observable and unobservable inputs and assumptions, to determine a methodology that will result in a valuation that the Adviser believes approximates market value. Fund securities that are fair valued may be subject to greater fluctuation in their value from one day to the next than would be the case if market quotations were used. Because of the inherent uncertainties of valuation, and the degree of subjectivity in such decisions, the Fund could realize a greater or lesser than expected gain or loss upon the sale of the investment.

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 an accrual basis from settlement date and includes coupon interest and amortization of premium and accretion of discount on debt securities as applicable. 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 Consolidated 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 Consolidated Statement of Operations and the Consolidated Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Consolidated Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Consolidated Statement of Operations and the Consolidated Statement of Changes in Net Assets, or the net investment income per share and the ratios of expenses and net investment income reported in the Consolidated 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 Consolidated 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, the country that has the primary market for the issuer’s securities and its “country of risk” as determined by a third party service provider, 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 Fund’s 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 consolidated 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 Fund’s 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 Subsidiary is classified as a controlled foreign corporation under Subchapter N of the Internal Revenue Code. Therefore, the Fund is required to increase its taxable income by its share of the Subsidiary’s income. Net investment losses of the Subsidiary cannot be deducted by the Fund in the current period nor carried forward to offset taxable income in future periods.

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 based on relative net assets of Class R5 and Class R6. 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 financial statements are prepared on a consolidated basis in conformity with accounting principles generally accepted in the United States of America (“GAAP”), which 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. The accompanying financial statements reflect the financial position of the Fund and its Subsidiary and the results of operations on a consolidated basis. All inter-company accounts and transactions have been eliminated in consolidation.

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 consolidated financial statements are released to print.

H.

Indemnifications – Under the Trust’s 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 Fund’s servicing agreements, that contain a variety of indemnification clauses. The Fund’s 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 the 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 Consolidated 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 Fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net

 

13   Invesco Gold & Special Minerals Fund

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 Consolidated 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 exchange of the two currencies on the settlement date, 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).

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 for hedging 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 Consolidated 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 Consolidated Statement of Assets and Liabilities.

K.

Call Options Purchased and Written – The Fund may write covered call options and/or buy call options. A covered call option gives the purchaser of such option the right to buy, and the writer the obligation to sell, the underlying security or foreign currency at the stated exercise price during the option period. Options written by the Fund normally will have expiration dates between three and nine months from the date written. The exercise price of a call option may be below, equal to, or above the current market value of the underlying security at the time the option is written.

Additionally, the Fund may enter into an option on a swap agreement, also called a “swaption”. A swaption is an option that gives the buyer the right, but not the obligation, to enter into a swap on a future date in exchange for paying a market-based premium. A receiver swaption gives the owner the right to receive the total return of a specified asset, reference rate or index. Swaptions also include options that allow an existing swap to be terminated or extended by one of the Counterparties.

When the Fund writes a covered call option, an amount equal to the premium received by the Fund is recorded as an asset and an equivalent liability in the Consolidated Statement of Assets and Liabilities. The amount of the liability is subsequently “marked-to-market” to reflect the current market value of the option written. If a written covered call option expires on the stipulated expiration date, or if the Fund enters into a closing purchase transaction, the Fund realizes a gain (or a loss if the closing purchase transaction exceeds the premium received when the option was written) without regard to any unrealized gain or loss on the underlying security, and the liability related to such option is extinguished. If a written covered call option is exercised, the Fund realizes a gain or a loss from the sale of the underlying security and the proceeds of the sale are increased by the premium originally received. Realized and unrealized gains and losses on call options written are included in the Consolidated Statement of Operations as Net realized gain (loss) from and Change in net unrealized appreciation (depreciation) of Option contracts written. A risk in writing a covered call option is that the Fund gives up the opportunity for profit if the market price of the security increases and the option is exercised.

When the Fund buys a call option, an amount equal to the premium paid by the Fund is recorded as an investment on the Consolidated Statement of Assets and Liabilities. The amount of the investment is subsequently “marked-to-market” to reflect the current value of the option purchased. Realized and unrealized gains and losses on call options purchased are included in the Consolidated Statement of Operations as Net realized gain (loss) from and Change in net unrealized appreciation (depreciation) of Investment securities. A risk in buying an option is that the Fund pays a premium whether or not the option is exercised. In addition, there can be no assurance that a liquid secondary market will exist for any option purchased.

L.

Put Options Purchased and Written – The Fund may purchase and write put options including options on securities indexes, or foreign currency and/or futures contracts. By purchasing a put option, the Fund obtains the right (but not the obligation) to sell the option’s underlying instrument at a fixed strike price. In return for this right, the Fund pays an option premium. The option’s underlying instrument may be a security, securities index, or a futures contract. Put options may be used by the Fund to hedge securities it owns by locking in a minimum price at which the Fund can sell. If security prices fall, the put option could be exercised to offset all or a portion of the Fund’s resulting losses. At the same time, because the maximum the Fund has at risk is the cost of the option, purchasing put options does not eliminate the potential for the Fund to profit from an increase in the value of the underlying portfolio securities. The Fund may write put options to earn additional income in the form of option premiums if it expects the price of the underlying instrument to remain stable or rise during the option period so that the option will not be exercised. The risk in this strategy is that the price of the underlying securities may decline by an amount greater than the premium received. Put options written are reported as a liability in the Consolidated Statement of Assets and Liabilities. Realized and unrealized gains and losses on put options purchased and put options written are included in the Consolidated Statement of Operations as Net realized gain (loss) from and Change in net unrealized appreciation (depreciation) of Investment securities and Option contracts written, respectively. A risk in buying an option is that the Fund pays a premium whether or not the option is exercised. In addition, there can be no assurance that a liquid secondary market will exist for any option purchased.

M.

Other Risks – The Subsidiary will seek to gain exposure to gold bullion and other precious metals, Gold ETFs, commodity-linked derivatives related to gold or other special minerals (including commodity futures, financial futures, options and swap contracts), and certain fixed income securities and other investments that may serve as margin or collateral for its derivatives positions. The Fund is indirectly exposed to the risks associated with the Subsidiary’s investments.

The Fund is classified as a “non-diversified” fund under the Investment Company Act of 1940. Accordingly, the Fund may invest a greater portion of its assets in the securities of a single issuer or limited number of issuers than a “diversified” fund. To the extent that the Fund invests a higher percentage of its assets in the securities of a single issuer or limited number of issuers, the Fund is more subject to the risks associated with and developments affecting that issuer or limited number of issuers than a fund that invests more widely.

 

14   Invesco Gold & Special Minerals Fund

NOTE 2–Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with the Adviser. Under the terms of the investment advisory agreement, the Fund accrues daily and pays monthly an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

 

Average Daily Net Assets    Rate*  

 

  

Up to $200 million

      0.750%  

 

  

Next $150 million

      0.720%  

 

  

Next $350 million

      0.680%  

 

  

Next $1.3 billion

      0.560%  

 

  

Next $2 billion

      0.460%  

 

  

Next $2 billion

      0.410%  

 

  

Next $2 billion

      0.385%  

 

  

Next $8 billion

      0.360%  

 

  

 

*

The advisory fee paid by the Fund shall be reduced by any amounts paid by the Fund under the administrative services agreement with the Adviser.

For the six months ended October 31, 2023, the effective advisory fee rate incurred by the Fund was 0.60%.

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 Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Canada Ltd. and separate sub-advisory agreements with Invesco Capital Management LLC and Invesco Asset Management (India) Private Limited (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, will 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 Affiliated Sub-Adviser(s). Invesco has also entered into a sub-advisory agreement with OppenheimerFunds, Inc. to provide discretionary management services to the Fund.

Effective July 1, 2023, the Adviser has agreed, for an indefinite period, 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 C, Class R, Class Y, Class R5 and Class R6 shares to 2.00%, 2.75%, 2.25%, 1.75%, 1.75% and 1.75%, respectively, of the Fund’s average daily net assets (the “boundary limits”). Prior to July 1, 2023, the same boundary limits were in effect with an expiration date of June 30, 2023. In determining the Adviser’s 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. Invesco may amend and/or terminate these boundary limits at any time in its sole discretion and will inform the Board of Trustees of any such changes. The Adviser did not waive fees and/or reimburse expenses during the period under these boundary limits.

Further, the Adviser has contractually agreed, through at least June 30, 2025, 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, 2023, the Adviser waived advisory fees of $11,860.

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, 2023, expenses incurred under the agreement are shown in the Consolidated Statement of Operations as Administrative services fees. Invesco has entered into a sub-administration agreement whereby State Street Bank and Trust Company (“SSB”) serves as fund accountant and provides certain administrative services to the Fund. Pursuant to a custody agreement with the Trust on behalf of the Fund, SSB also serves as the Fund’s custodian.

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 services are charged back to the Fund, subject to certain limitations approved by the Trust’s Board of Trustees. For the six months ended October 31, 2023, expenses incurred under the agreement are shown in the Consolidated 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 C, Class R, Class Y, 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 Fund’s Class A, Class C and Class R shares (collectively, the “Plans”). The Fund, pursuant to the Class A Plan, reimburses IDI for its allocated share of expenses incurred for the period, up to a maximum annual rate of 0.25% of the average daily net assets of Class A shares. The Fund, pursuant to the Class C and Class R Plans, pays IDI compensation at the annual rate of 1.00% of the average daily net assets of Class C shares and 0.50% of the average daily net assets of Class R shares. The fees are accrued daily and paid monthly. Of the Plans 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, 2023, expenses incurred under the Plans are shown in the Consolidated 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, 2023, IDI advised the Fund that IDI retained $49,335 in front-end sales commissions from the sale of Class A shares and $975 and $3,651 from Class A and Class C shares, respectively, for CDSC imposed upon redemptions by shareholders.

For the six months ended October 31, 2023, the Fund incurred $31,512 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 3–Additional 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

 

15   Invesco Gold & Special Minerals Fund

market prices are not readily available. 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 investment’s 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 Adviser’s 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, 2023. 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 consolidated financial statements may materially differ from the value received upon actual sale of those investments.

 

     Level 1            Level 2             Level 3             Total  

 

  

Investments in Securities

                    

 

  

Australia

    $ 26,366,610        $ 362,377,872          $ –         $ 388,744,482  

 

  

Bosnia Hercegovina

      –          1,168,357           –           1,168,357  

 

  

Brazil

      38,786,979          –           –           38,786,979  

 

  

Burkina Faso

      36,680,328          –           –           36,680,328  

 

  

Canada

      806,480,406          –           359,599           806,840,005  

 

  

China

      –          42,376,542           –           42,376,542  

 

  

Colombia

      7,384,936          –           –           7,384,936  

 

  

South Africa

      47,277,220          –           –           47,277,220  

 

  

Turkey

      28,014,137          –           –           28,014,137  

 

  

United Kingdom

      21,160,024          –           –           21,160,024  

 

  

United States

      222,893,648          –           –           222,893,648  

 

  

Zambia

      12,132,893          –           –           12,132,893  

 

  

Money Market Funds

      12,881,492          –           –           12,881,492  

 

  

Total Investments in Securities

      1,260,058,673          405,922,771           359,599           1,666,341,043  

 

  

Other Investments - Liabilities*

                    

 

  

Options Written

      (18,418,748 )         –           –           (18,418,748 ) 

 

  

Total Investments

    $ 1,241,639,925        $ 405,922,771           $359,599         $ 1,647,922,295  

 

  

 

*

Options written are shown at value.

NOTE 4–Derivative Investments

The Fund may enter into an ISDA Master Agreement under which a fund may trade OTC derivatives. An OTC transaction entered into under an ISDA Master Agreement typically involves a collateral posting arrangement, payment netting provisions and close-out netting provisions. These netting provisions allow for reduction of credit risk through netting of contractual obligations. The enforceability of the netting provisions of the ISDA Master Agreement depends on the governing law of the ISDA Master Agreement, among other factors.

For financial reporting purposes, the Fund does not offset OTC derivative assets or liabilities that are subject to ISDA Master Agreements in the Consolidated Statement of Assets and Liabilities.

Value of Derivative Investments at Period-End

The table below summarizes the value of the Fund’s derivative investments, detailed by primary risk exposure, held as of October 31, 2023:

 

     Value  
     Equity  
Derivative Liabilities    Risk  

 

  

Options written, at value – Exchange-Traded

    $ (18,418,748 ) 

 

  

Derivatives not subject to master netting agreements

      18,418,748  

 

  

Total Derivative Liabilities subject to master netting agreements

    $ –  

 

  

Effect of Derivative Investments for the six months ended October 31, 2023

The table below summarizes the gains (losses) on derivative investments, detailed by primary risk exposure, recognized in earnings during the period:

 

     Location of Gain (Loss) on  
     Consolidated Statement of Operations  
     Equity  
     Risk  

 

  

Realized Gain:

   

Options written

      $25,222,377  

 

  

 

16   Invesco Gold & Special Minerals Fund

     Location of Gain (Loss) on  
     Consolidated Statement of Operations  
     Equity  
     Risk  

 

  

Change in Net Unrealized Appreciation (Depreciation):

   

Options written

      $(9,356,990)  

 

  

Total

      $15,865,387  

 

  

The table below summarizes the average notional value of derivatives held during the period.

 

       Equity  
       Options  
       Written  

 

  

Average notional value

      $ 457,622,094  

 

  

Average contracts

        152,906  

 

  

NOTE 5–Expense 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, 2023, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $552.

NOTE 6–Trustees’ 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 7–Cash Balances

The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with SSB, the custodian bank. Such balances, if any at period-end, are shown in the Consolidated 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 8–Tax 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 Fund’s 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 Fund’s 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. The ability to utilize capital loss carryforward 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, 2023, as follows:

 

Capital Loss Carryforward*  

 

  
Expiration    Short-Term        Long-Term        Total  

 

  

Not subject to expiration

    $ 244,108,519        $ 1,344,540,853        $ 1,588,649,372  

 

  

 

*

Capital loss carryforward 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 9–Investment Transactions

The aggregate amount of investment securities (other than short-term securities, U.S. Government obligations and money market funds, if any) purchased and sold by the Fund during the six months ended October 31, 2023 was $202,368,422 and $215,853,321, respectively. Cost of investments, including any derivatives, 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 Investments on a Tax Basis

  

Aggregate unrealized appreciation of investments

      $ 334,842,956  

 

  

Aggregate unrealized (depreciation) of investments

      (203,842,491 ) 

 

  

Net unrealized appreciation of investments

      $ 131,000,465  

 

  

Cost of investments for tax purposes is $1,516,921,830.

 

17   Invesco Gold & Special Minerals Fund

NOTE 10–Share Information

 

     Summary of Share Activity  

 

  
     Six months ended            Year ended  
     October 31, 2023(a)            April 30, 2023  
     Shares            Amount            Shares            Amount  

 

  

Sold:

                  

Class A

      2,741,576        $ 61,995,876          7,174,707        $ 156,993,090  

 

  

Class C

      237,666          4,815,185          752,893          14,825,588  

 

  

Class R

      693,026          14,847,775          1,679,267          34,709,397  

 

  

Class Y

      2,250,869          51,048,943          9,661,675          210,274,225  

 

  

Class R5

      44,453          947,489          32,221          775,134  

 

  

Class R6

      3,069,609          69,968,439          6,728,378          148,650,412  

 

  

Issued as reinvestment of dividends:

                  

Class A

      -          -          160,276          3,421,902  

 

  

Class R

      -          -          9,168          185,372  

 

  

Class Y

      -          -          139,194          2,973,187  

 

  

Class R5

      -          -          187          4,000  

 

  

Class R6

      -          -          119,172          2,570,535  

 

  

Automatic conversion of Class C shares to Class A shares:

                  

Class A

      173,468          3,826,458          327,581          7,079,647  

 

  

Class C

      (195,717 )         (3,826,458 )         (368,386 )         (7,079,647 ) 

 

  

Reacquired:

                  

Class A

      (4,602,548 )         (104,306,517 )         (10,015,837 )         (216,873,108 ) 

 

  

Class C

      (436,182 )         (8,742,413 )         (996,151 )         (18,587,193 ) 

 

  

Class R

      (932,063 )         (19,949,935 )         (2,011,492 )         (40,643,615 ) 

 

  

Class Y

      (3,312,907 )         (74,489,099 )         (11,841,667 )         (252,160,767 ) 

 

  

Class R5

      (23,221 )         (493,518 )         (66,464 )         (1,480,897 ) 

 

  

Class R6

      (2,292,820 )         (52,491,866 )         (6,217,403 )         (135,416,891 ) 

 

  

Net increase (decrease) in share activity

      (2,584,791 )       $ (56,849,641 )         (4,732,681 )       $ (89,779,629 ) 

 

  

 

(a) 

There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 27% 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.

 

18   Invesco Gold & Special Minerals 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, 2023 through October 31, 2023.

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 Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s 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.

 

          ACTUAL  

HYPOTHETICAL

(5% annual return before

expenses)

     
     Beginning
    Account Value    
(05/01/23)		   Ending
    Account Value    
(10/31/23)1		   Expenses
    Paid During    
Period		   Ending
    Account Value    
(10/31/23)2 		  Expenses
    Paid During    
Period2 		 

    Annualized    
Expense

Ratio

Class A

   $1,000.00   $822.60   $4.99   $1,019.66   $5.53   1.09%

Class C

     1,000.00     819.60     8.46     1,015.84     9.37   1.85   

Class R

     1,000.00     821.60     6.18     1,018.35     6.85   1.35   

Class Y

     1,000.00     823.70     3.90     1,020.86     4.32   0.85   

Class R5

     1,000.00     824.20     3.44     1,021.37     3.81   0.75   

Class R6

     1,000.00     824.30     3.12     1,021.72     3.46   0.68   

 

1 

The actual ending account value is based on the actual total return of the Fund for the period May 1, 2023 through October 31, 2023, after actual expenses and will differ from the hypothetical ending account value which is based on the Fund’s expense ratio and a hypothetical annual return of 5% before expenses.

2 

Expenses are equal to the Fund’s annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 184/366 to reflect the most recent fiscal half year.

 

19   Invesco Gold & Special Minerals Fund

Approval of Investment Advisory and Sub-Advisory Contracts

    

 

At meetings held on June 13, 2023, the Board of Trustees (the Board or the Trustees) of AIM Sector Funds (Invesco Sector Funds) as a whole, and the independent Trustees, who comprise over 75% of the Board, voting separately, approved the continuance of the Invesco Gold & Special Minerals Fund’s (the Fund) Master Investment Advisory Agreement with Invesco Advisers, Inc. (Invesco Advisers and the investment advisory agreement) and the Master Intergroup Sub-Advisory Contract for Mutual Funds with Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Canada Ltd. and separate sub-advisory contracts with Invesco Capital Management LLC, Invesco Asset Management (India) Private Limited and OppenheimerFunds, Inc. (collectively, the Affiliated Sub-Advisers and the sub-advisory contracts) for another year, effective July 1, 2023. After evaluating the factors discussed below, among others, the Board approved the renewal of the Fund’s investment advisory agreement and the sub-advisory contracts and determined that the compensation payable thereunder by the Fund to Invesco Advisers and by Invesco Advisers to the Affiliated Sub-Advisers is fair and reasonable.

The Board’s Evaluation Process

The Board has established an Investments Committee, which in turn has established Sub-Committees, that meet throughout the year to review the performance of funds advised by Invesco Advisers (the Invesco Funds). The Sub-Committees meet regularly with portfolio managers for their assigned Invesco Funds and other members of management to review information about investment performance and portfolio attributes of these funds. The Board has established additional standing and ad hoc committees that meet regularly throughout the year to review matters within their purview, including a working group focused on opportunities to make ongoing and continuous improvements to the annual review process for the Invesco Funds’ investment advisory and sub-advisory contracts. The Board took into account evaluations and reports that it received from its committees and sub-committees, as well as the information provided to the Board and its committees and sub-committees throughout the year, in considering whether to approve each Invesco Fund’s investment advisory agreement and sub-advisory contracts.

    As part of the contract renewal process, the Board reviews and considers information provided in response to requests for information submitted to management by the independent Trustees with assistance from legal counsel to the independent Trustees and the Senior Officer, an officer of the Invesco Funds who reports directly to the independent Trustees. The Board receives comparative investment performance and fee and expense data regarding the Invesco Funds prepared by Broadridge Financial Solutions, Inc. (Broadridge), an independent mutual fund data provider, as well as information on the composition of the peer groups provided by Broadridge and its methodology for determining peer groups. The Board also receives an independent written evaluation from the Senior

Officer. The Senior Officer’s evaluation is prepared as part of his responsibility to manage the process by which the Invesco Funds’ proposed management fees are negotiated during the annual contract renewal process to ensure they are negotiated in a manner that is at arms’ length and reasonable in accordance with certain negotiated regulatory requirements. In addition to meetings with Invesco Advisers and fund counsel throughout the year and as part of meetings convened on May 2, 2023 and June 13, 2023, the independent Trustees also discussed the continuance of the investment advisory agreement and sub-advisory contracts in separate sessions with the Senior Officer and with independent legal counsel. Also, as part of the contract renewal process, the independent Trustees reviewed and considered information provided in response to follow-up requests for information submitted by the independent Trustees to management. The independent Trustees met and discussed those follow-up responses with legal counsel to the independent Trustees and the Senior Officer.

    The discussion below is a summary of the Senior Officer’s independent written evaluation with respect to the Fund’s investment advisory agreement and sub-advisory contracts, as well as a discussion of the material factors and related conclusions that formed the basis for the Board’s approval of the Fund’s investment advisory agreement and sub-advisory contracts. The Trustees’ review and conclusions are based on the comprehensive consideration of all information presented to them during the course of the year and in prior years and are not the result of any single determinative factor. Moreover, one Trustee may have weighed a particular piece of information or factor differently than another Trustee. The information received and considered by the Board was current as of various dates prior to the Board’s approval on June 13, 2023.

Factors and Conclusions and Summary of Independent Written Fee Evaluation

A.

Nature, Extent and Quality of Services Provided by Invesco Advisers and the Affiliated Sub-Advisers

The Board reviewed the nature, extent and quality of the advisory services provided to the Fund by Invesco Advisers under the Fund’s investment advisory agreement, and the credentials and experience of the officers and employees of Invesco Advisers who provide these services, including the Fund’s portfolio manager(s). The Board considered recent senior management changes at Invesco and Invesco Advisers, including the appointment of new Co-Heads of Investments, that had been presented to and discussed with the Board. The Board’s review included consideration of Invesco Advisers’ investment process and oversight, credit analysis and research capabilities. The Board considered information regarding Invesco Advisers’ programs for and resources devoted to risk management, including management of investment, enterprise, operational, liquidity, derivatives, valuation and compliance risks, and technology used to manage such risks. The Board received information regarding Invesco’s methodology for compensating its investment professionals and the incentives and accountability it creates, as well as how it impacts Invesco’s ability to attract and retain talent. The Board received a

description of, and reports related to, Invesco Advisers’ global security program and business continuity plans and of its approach to data privacy and cybersecurity, including related testing. The Board also considered non-advisory services that Invesco Advisers and its affiliates provide to the Invesco Funds, such as various middle office and back office support functions, third party oversight, internal audit, valuation, portfolio trading and legal and compliance. The Board observed that Invesco Advisers’ systems preparedness and ongoing investment enabled Invesco Advisers to manage, operate and oversee the Invesco Funds with minimal impact or disruption through challenging environments. The Board reviewed and considered the benefits to shareholders of investing in a Fund that is part of the family of funds under the umbrella of Invesco Ltd., Invesco Advisers’ parent company, and noted Invesco Ltd.’s depth and experience in running an investment management business, as well as its commitment of financial and other resources to such business. The Board concluded that the nature, extent and quality of the services provided to the Fund by Invesco Advisers are appropriate and satisfactory.

    The Board reviewed the services that may be provided to the Fund by the Affiliated Sub-Advisers under the sub-advisory contracts and the credentials and experience of the officers and employees of the Affiliated Sub-Advisers who provide these services. The Board noted the Affiliated Sub-Advisers’ expertise with respect to certain asset classes and that the Affiliated Sub-Advisers have offices and personnel that are located in financial centers around the world. As a result, the Board noted that the Affiliated Sub-Advisers can provide research and investment analysis on the markets and economies of various countries and territories in which the Fund may invest, make recommendations regarding securities and assist with portfolio trading. The Board concluded that the sub-advisory contracts may benefit the Fund and its shareholders by permitting Invesco Advisers to use the resources and talents of the Affiliated Sub-Advisers in managing the Fund. The Board concluded that the nature, extent and quality of the services that may be provided to the Fund by the Affiliated Sub-Advisers are appropriate and satisfactory.

B.

Fund Investment Performance

The Board considered Fund investment performance as a relevant factor in considering whether to approve the investment advisory agreement. The Board did not view Fund investment performance as a relevant factor in considering whether to approve the sub-advisory contracts for the Fund, as no Affiliated Sub-Adviser currently manages assets of the Fund.

    The Board compared the Fund’s investment performance over multiple time periods ending December 31, 2022 to the performance of funds in the Broadridge performance universe and against the Philadelphia Gold & Silver Index (Index). The Board noted that performance of Class A shares of the Fund was in the fifth quintile of its performance universe for the one year period and the first quintile for the three and five year periods (the first quintile being the best performing funds and the fifth quintile being the worst performing funds). The Board noted that performance of Class A shares of the Fund was below

 

 

20   Invesco Gold & Special Minerals Fund

    

 

the performance of the Index for the one, three and five year periods. The Board considered that the Fund was created in connection with Invesco Ltd.’s acquisition of OppenheimerFunds, Inc. and its subsidiaries (the “Transaction”) and that the Fund’s performance prior to the closing of the Transaction on May 24, 2019 is that of its predecessor fund. The Board considered that the Fund’s positioning in certain names in gold sub-industries detracted from the Fund’s performance. The Board recognized that the performance data reflects a snapshot in time as of a particular date and that selecting a different performance period could produce different results. The Board also reviewed more recent Fund performance as well as other performance metrics, which did not change its conclusions.

C.

Advisory and Sub-Advisory Fees and Fund Expenses

The Board compared the Fund’s contractual management fee rate to the contractual management fee rates of funds in the Fund’s Broadridge expense group. The Board noted that the contractual management fee rate for Class A shares of the Fund was below the median contractual management fee rate of funds in its expense group. The Board noted that the Fund’s contractual management fee schedule was reduced at certain breakpoint levels effective in 2020. The Board noted that the term “contractual management fee” for funds in the expense group may include both advisory and certain non-portfolio management administrative services fees, but that Broadridge is not able to provide information on a fund-by-fund basis as to what is included. The Board also reviewed the methodology used by Broadridge in calculating expense group information, which includes using each fund’s contractual management fee schedule (including any applicable breakpoints) as reported in the most recent prospectus or statement of additional information for each fund in the expense group. The Board also considered comparative information regarding the Fund’s total expense ratio and its various components.

    The Board noted that Invesco Advisers has contractually agreed to waive fees and/or limit expenses of the Fund for the term disclosed in the Fund’s registration statement in an amount necessary to limit total annual operating expenses to a specified percentage of average daily net assets for each class of the Fund.

    The Board also considered the fees charged by Invesco Advisers and its affiliates to other client accounts that are similarly managed. Invesco Advisers reviewed with the Board differences in the scope of services it provides to the Invesco Funds relative to that provided by Invesco Advisers and its affiliates to certain other types of client accounts, including, among others: management of cash flows as a result of redemptions and purchases; necessary infrastructure such as officers, office space, technology, legal and distribution; oversight of service providers; costs and business risks associated with launching new funds and sponsoring and maintaining the product line; and compliance with federal and state laws and regulations. Invesco Advisers also advised the Board that many of the similarly managed client accounts have all-inclusive fee structures, which are not easily un-bundled.

    The Board also considered the services that may be provided by the Affiliated Sub-Advisers pursuant to the sub-advisory contracts, as well as the fees payable by Invesco Advisers to the Affiliated Sub-Advisers pursuant to the sub-advisory contracts.

D.

Economies of Scale and Breakpoints

The Board considered the extent to which there may be economies of scale in the provision of advisory services to the Fund and the Invesco Funds, and the extent to which such economies of scale are shared with the Fund and the Invesco Funds. The Board acknowledged the difficulty in calculating and measuring economies of scale at the individual fund level; noting that only indicative and estimated measures are available at the individual fund level and that such measures are subject to uncertainty. The Board considered that the Fund benefits from economies of scale through contractual breakpoints in the Fund’s advisory fee schedule, which generally operate to reduce the Fund’s expense ratio as it grows in size. The Board noted that the Fund also shares in economies of scale through Invesco Advisers’ ability to negotiate lower fee arrangements with third party service providers. The Board noted that the Fund may also benefit from economies of scale through initial fee setting, fee waivers and expense reimbursements, as well as Invesco Advisers’ investment in its business, including investments in business infrastructure, technology and cybersecurity.

E.

Profitability and Financial Resources

The Board reviewed information from Invesco Advisers concerning the costs of the advisory and other services that Invesco Advisers and its affiliates provide to the Fund and the Invesco Funds and the profitability of Invesco Advisers and its affiliates in providing these services in the aggregate and on an individual fund-by-fund basis. The Board considered the methodology used for calculating profitability and the periodic review and enhancement of such methodology. The Board noted that Invesco Advisers continues to operate at a net profit from services Invesco Advisers and its affiliates provide to the Invesco Funds in the aggregate and to most Invesco Funds individually. The Board considered that profits to Invesco Advisers can vary significantly depending on the particular Invesco Fund, with some Invesco Funds showing indicative losses to Invesco Advisers and others showing indicative profits at healthy levels, and that Invesco Advisers’ support for and commitment to an Invesco Fund are not, however, solely dependent on the profits realized as to that Fund. The Board did not deem the level of profits realized by Invesco Advisers and its affiliates from providing such services to be excessive, given the nature, extent and quality of the services provided. The Board noted that Invesco Advisers provided information demonstrating that Invesco Advisers is financially sound and has the resources necessary to perform its obligations under the investment advisory agreement, and provided representations indicating that the Affiliated Sub-Advisers are financially sound and have the resources necessary to perform their obligations under the sub-advisory contracts. The Board noted the cyclical and competitive nature of the global asset management industry.

F.

Collateral Benefits to Invesco Advisers and its Affiliates

The Board considered various other benefits received by Invesco Advisers and its affiliates from the relationship with the Fund, including the fees received for providing administrative, transfer agency and distribution services to the Fund. The Board received comparative information regarding fees charged for these services, including information provided by Broadridge and other independent sources. The Board reviewed the

performance of Invesco Advisers and its affiliates in providing these services and the organizational structure employed to provide these services. The Board noted that these services are provided to the Fund pursuant to written contracts that are reviewed and subject to approval on an annual basis by the Board based on its determination that the services are required for the operation of the Fund.

    The Board considered the benefits realized by Invesco Advisers and the Affiliated Sub-Advisers as a result of portfolio brokerage transactions executed through “soft dollar” arrangements. The Board noted that soft dollar arrangements may result in the Fund bearing costs to purchase research that may be used by Invesco Advisers or the Affiliated Sub-Advisers with other clients and may reduce Invesco Advisers’ or the Affiliated Sub-Advisers’ expenses. The Board also considered that it receives from Invesco Advisers periodic reports that include a representation to the effect that these arrangements are consistent with regulatory requirements. The Board did not deem the soft dollar arrangements to be inappropriate.

    The Board considered that the Fund’s uninvested cash and cash collateral from any securities lending arrangements may be invested in registered money market funds or, with regard to securities lending cash collateral, unregistered funds that comply with Rule 2a-7 (collectively referred to as “affiliated money market funds”) advised by Invesco Advisers. The Board considered information regarding the returns of the affiliated money market funds relative to comparable overnight investments, as well as the fees paid by the affiliated money market funds to Invesco Advisers and its affiliates. In this regard, the Board noted that Invesco Advisers receives advisory fees from these affiliated money market funds attributable to the Fund’s investments. The Board also noted that Invesco Advisers has contractually agreed to waive through varying periods an amount equal to 100% of the net advisory fee Invesco Advisers receives from the affiliated money market funds with respect to the Fund’s investment in the affiliated money market funds of uninvested cash, but not cash collateral. The Board concluded that the advisory fees payable to Invesco Advisers from the Fund’s investment of cash collateral from any securities lending arrangements in the affiliated money market funds are for services that are not duplicative of services provided by Invesco Advisers to the Fund.

    The Board considered that Invesco Advisers may serve as the Fund’s affiliated securities lending agent and evaluated the benefits realized by Invesco Advisers when serving in such role, including the compensation received. The Board considered Invesco Advisers’ securities lending platform and corporate governance structure for securities lending, including Invesco Advisers’ Securities Lending Governance Committee and its related responsibilities. The Board noted that to the extent the Fund utilizes Invesco Advisers as an affiliated securities lending agent, the Fund conducts its securities lending in accordance with, and in reliance upon, no-action letters issued by the SEC staff that provide guidance on how an affiliate may act as a direct agent lender and receive compensation for those services without obtaining exemptive relief. The Board considered information provided by Invesco Advisers related to the performance of Invesco Advisers as securities lending agent, including a summary of the securities lending services provided to the Fund by Invesco Advisers and the

 

 

21   Invesco Gold & Special Minerals Fund

compensation paid to Invesco Advisers for such services, as well as any revenues generated for the Fund in connection with such securities lending activity and the allocation of such revenue between the Fund and Invesco Advisers.

    The Board also received information about commissions that an affiliated broker may receive for executing certain trades for the Fund. Invesco Advisers and the Affiliated Sub-Advisers advised the Board of the benefits to the Fund of executing trades through the affiliated broker and that such trades were executed in compliance with rules under the federal securities laws and consistent with best execution obligations.

 

 

22   Invesco Gold & Special Minerals Fund

 

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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 portfolio holdings four times each year, at the end of each fiscal quarter. For the second and fourth quarters, the list appears, respectively, in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the list with the Securities and Exchange Commission (SEC) as an exhibit to its reports on Form N-PORT. The most recent list of portfolio holdings is available at invesco.com/completeqtrholdings. Shareholders can also look up the Fund’s Form N-PORT filings on the SEC website, 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/corporate/about-us/esg. 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. This 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.

 

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SEC file number(s): 811-03826 and 002-85905   Invesco Distributors, Inc.   O-GSM-SAR-1

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Semiannual Report to Shareholders    October 31, 2023

Invesco Small Cap Value Fund

Nasdaq:

A: VSCAX ∎ C: VSMCX ∎ R: VSRAX ∎ Y: VSMIX ∎ R6: SMVSX

 

   
2   Fund Performance
4   Schedule of Investments
8   Financial Statements
11   Financial Highlights
12   Notes to Financial Statements
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 is 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, 4/30/23 to 10/31/23, 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

 

     3.58 % 

Class C Shares

 

     3.25  

Class R Shares

 

     3.48  

Class Y Shares

 

     3.71  

Class R6 Shares

 

     3.78  

S&P 500 Index▼ (Broad Market Index)

 

     1.39  

Russell 2000 Value Index▼ (Style-Specific Index)

 

     -3.44  

Lipper Small-Cap Value Funds Index∎ (Peer Group Index)

 

     -0.41  

Source(s): ▼RIMES Technologies Corp.; ∎Lipper 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.

 

 

 

 

 

For more information about your Fund

 

Read the most recent quarterly commentary from your Fund’s portfolio managers by visiting invesco.com/us. Click on “Products” and select “Mutual Funds.” Use the “Product Finder” to locate your Fund; then click on its name to access its product detail page. There, you can learn more about your Fund’s investment strategies, holdings and performance.

  Also, visit blog.invesco.us.com, where many of Invesco’s investment professionals share their insights about market and economic news and trends.

 

    

 

 

2   Invesco Small Cap Value Fund

 

    

    

 

Average Annual Total Returns

 

As of 10/31/23, including maximum applicable sales charges

 

Class A Shares

         

Inception (6/21/99)

      10.23 % 

10 Years

      8.41  

  5 Years

      11.88  

  1 Year

      0.63  

Class C Shares

         

Inception (6/21/99)

      10.22 % 

10 Years

      8.38  

  5 Years

      12.37  

  1 Year

      4.89  

Class R Shares

         

10 Years

      8.75 % 

  5 Years

      12.87  

  1 Year

      6.28  

Class Y Shares

         

Inception (8/12/05)

      10.11 % 

10 Years

      9.30  

  5 Years

      13.44  

  1 Year

      6.78  

Class R6 Shares

         

10 Years

      9.32 % 

  5 Years

      13.62  

  1 Year

      6.95  

Effective June 1, 2010, Class A, Class C and Class I shares of the predecessor fund, Van Kampen Small Cap Value Fund, advised by Van Kampen Asset Management were reorganized into Class A, Class C and Class Y shares, respectively, of Invesco Van Kampen Small Cap Value Fund (renamed Invesco Small Cap Value Fund). Returns shown above, prior to June 1, 2010, for Class A, Class C and Class Y shares are those for Class A, Class C and Class I shares of the predecessor fund. Share class returns will differ from the predecessor fund because of different expenses.

Class R shares incepted on April 17, 2020. Performance shown prior to that date is that of the Fund’s Class A shares at net asset value restated to reflect the higher 12b-1 fees applicable to Class R shares.

Class R6 shares incepted on February 7, 2017. Performance shown prior to that date is that of the Fund’s Class A shares at net asset value and includes the 12b-1 fees applicable to Class A shares.

The performance data quoted represent past performance and cannot guarantee future results; current performance may be lower or higher. Please visit invesco.com/performance for the most recent month-end performance. Performance figures reflect reinvested distributions, changes in net asset value and the effect of the maximum sales charge unless otherwise stated. Performance figures do not reflect deduction of taxes a shareholder would pay on Fund distributions or sale of Fund shares. Investment return and principal value will

fluctuate so that you may have a gain or loss when you sell shares.

Class A share performance reflects the maximum 5.50% sales charge, and Class C share performance reflects the applicable contingent deferred sales charge (CDSC) for the period involved. The CDSC on Class C shares is 1% for the first year after purchase. Class Y and Class R6 shares do not have a front-end sales charge or a CDSC; therefore, performance is at net asset value.

The performance of the Fund’s share classes will differ primarily due to different sales charge structures and class expenses.

Fund performance reflects any applicable fee waivers and/or expense reimbursements. Had the adviser not waived fees and/or reimbursed expenses currently or in the past, returns would have been lower. See current prospectus for more information.

    

 

 

3   Invesco Small Cap Value Fund

Schedule of Investments(a)

October 31, 2023

(Unaudited)

 

     Shares      Value  

 

  

Common Stocks & Other Equity Interests–95.33%

 

Aerospace & Defense–5.55%

      

Hensoldt AG (Germany)

      979,808      $ 28,988,313  

 

  

Huntington Ingalls Industries, Inc.

      118,300        26,004,706  

 

  

Leonardo DRS, Inc.(b)(c)

      1,868,736        35,636,795  

 

  

Leonardo S.p.A. (Italy)

      4,608,200        69,521,691  

 

  
           160,151,505  

 

  

Application Software–0.12%

 

   

Cerence, Inc.(b)(c)

      230,700        3,532,017  

 

  

Automotive Parts & Equipment–0.62%

 

Dana, Inc.

      1,558,196        17,888,090  

 

  

Coal & Consumable Fuels–1.64%

 

Cameco Corp. (Canada)

      717,600        29,357,016  

 

  

NexGen Energy Ltd. (Canada)(b)

      1,783,500        10,764,662  

 

  

NexGen Energy Ltd. (Canada)(b)(c)

      1,217,500        7,365,875  

 

  
        47,487,553  

 

  

Commodity Chemicals–1.41%

 

   

Cabot Corp.(c)

      300,100        19,950,648  

 

  

Orion S.A. (Germany)

      1,026,900        20,846,070  

 

  
        40,796,718  

 

  

Communications Equipment–2.88%

 

   

Harmonic, Inc.(b)(c)

      2,165,800        23,368,982  

 

  

Lumentum Holdings, Inc.(b)(c)

      1,524,972        59,794,152  

 

  
        83,163,134  

 

  

Construction & Engineering–5.46%

 

   

AECOM

      610,918        46,765,773  

 

  

Concrete Pumping Holdings, Inc.(b)

      563,800        3,963,514  

 

  

HOCHTIEF AG (Germany)

      191,800        19,810,369  

 

  

MasTec, Inc.(b)

      733,100        43,575,464  

 

  

Orion Group Holdings, Inc.(b)

      679,800        3,263,040  

 

  

Primoris Services Corp.

      1,334,734        40,122,104  

 

  
        157,500,264  

 

  

Construction Machinery & Heavy Transportation Equipment–2.26%

 

Astec Industries, Inc.

      214,978        8,607,719  

 

  

Manitowoc Co., Inc. (The)(b)

      937,700        12,002,560  

 

  

Oshkosh Corp.

      269,500        23,643,235  

 

  

REV Group, Inc.

      712,900        10,151,696  

 

  

Terex Corp.

      237,100        10,859,180  

 

  
        65,264,390  

 

  

Copper–1.05%

 

   

Capstone Copper Corp. (Canada)(b)

      6,560,500        22,329,591  

 

  

ERO Copper Corp. (Brazil)(b)(c)

      584,900        7,937,853  

 

  
        30,267,444  

 

  

Diversified Chemicals–1.45%

 

   

Huntsman Corp.

      1,793,763        41,848,491  

 

  

Diversified Metals & Mining–2.59%

 

Hudbay Minerals, Inc. (Canada)

      6,788,700        29,598,732  

 

  
     Shares      Value  

 

  

Diversified Metals & Mining–(continued)

 

Teck Resources Ltd., Class B (Canada)

      1,279,200      $ 45,206,928  

 

  
        74,805,660  

 

  

Education Services–2.43%

 

   

Adtalem Global Education, Inc.(b)(c)

      1,107,900        57,389,220  

 

  

Grand Canyon Education, Inc.(b)(c)

      108,700        12,862,471  

 

  
             70,251,691  

 

  

Electric Utilities–2.24%

 

   

NRG Energy, Inc.

      1,527,200        64,722,736  

 

  

Electrical Components & Equipment–3.57%

 

EnerSys

      458,800        39,264,104  

 

  

Vertiv Holdings Co.

      1,623,400        63,750,918  

 

  
        103,015,022  

 

  

Electronic Components–1.71%

 

   

Coherent Corp.(b)(c)

      1,666,100        49,316,560  

 

  

Electronic Manufacturing Services–1.81%

 

Benchmark Electronics, Inc.

      492,000        11,911,320  

 

  

Flex Ltd.(b)

      1,568,500        40,341,820  

 

  
        52,253,140  

 

  

Environmental & Facilities Services–0.02%

 

   

Li-Cycle Holdings Corp.
(Canada)(b)(c)

      349,715        468,618  

 

  

Food Distributors–2.64%

 

Performance Food Group Co.(b)

      679,800        39,265,248  

 

  

US Foods Holding Corp.(b)

      948,571        36,937,355  

 

  
        76,202,603  

 

  

Gold–0.26%

 

   

Kinross Gold Corp. (Canada)(c)

      1,427,900        7,439,359  

 

  

Health Care Distributors–1.30%

 

Henry Schein, Inc.(b)

      578,600        37,597,428  

 

  

Health Care Facilities–1.72%

 

Select Medical Holdings Corp.

      903,100        20,527,463  

 

  

Universal Health Services, Inc., Class B

      230,500        29,017,645  

 

  
        49,545,108  

 

  

Health Care Services–0.47%

 

   

Fresenius Medical Care AG & Co. KGaA (Germany)

      410,003        13,611,888  

 

  

Hotels, Resorts & Cruise Lines–3.15%

 

Expedia Group, Inc.(b)

      566,100        53,943,669  

 

  

Travel + Leisure Co.

      1,091,176        37,132,719  

 

  
        91,076,388  

 

  

Household Products–2.02%

 

   

Spectrum Brands Holdings, Inc.

      773,759        58,279,528  

 

  

Human Resource & Employment Services–1.85%

 

Kelly Services, Inc., Class A

      348,610        6,222,688  

 

  

ManpowerGroup, Inc.

      558,700        39,092,239  

 

  
 

 

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

 

4   Invesco Small Cap Value Fund

     Shares      Value  

 

  

Human Resource & Employment Services–(continued)

 

TrueBlue, Inc.(b)

      734,600      $ 8,132,022  

 

  
             53,446,949  

 

  

Independent Power Producers & Energy Traders–2.02%

 

Vistra Corp.

      1,782,900        58,336,488  

 

  

Industrial Machinery & Supplies & Components–0.33%

 

Gates Industrial Corp. PLC(b)

      863,800        9,432,696  

 

  

IT Consulting & Other Services–0.52%

 

Converge Technology Solutions Corp. (Canada)

      7,531,000        14,988,686  

 

  

Life Sciences Tools & Services–1.81%

 

Avantor, Inc.(b)

      3,000,000        52,290,000  

 

  

Managed Health Care–1.46%

 

Molina Healthcare, Inc.(b)(c)

      126,300        42,051,585  

 

  

Office Services & Supplies–1.02%

 

Interface, Inc.

      363,420        3,230,804  

 

  

MillerKnoll, Inc.

      797,800        18,748,300  

 

  

Steelcase, Inc., Class A

      677,700        7,393,707  

 

  
        29,372,811  

 

  

Oil & Gas Drilling–0.70%

 

   

Patterson-UTI Energy, Inc.(c)

      1,580,787        20,075,995  

 

  

Oil & Gas Exploration & Production–13.65%

 

Advantage Energy Ltd. (Canada)(b)

      3,467,300        25,178,086  

 

  

APA Corp.

      1,059,400        42,079,368  

 

  

ARC Resources Ltd. (Canada)

      3,756,700        60,437,698  

 

  

Crescent Point Energy Corp. (Canada)

      4,927,900        39,515,593  

 

  

Enerplus Corp. (Canada)

      1,528,600        25,848,689  

 

  

Kosmos Energy Ltd. (Ghana)(b)

      6,901,300        49,965,412  

 

  

Northern Oil and Gas, Inc.(c)

      1,696,380        65,039,209  

 

  

Ovintiv, Inc.(c)

      608,900        29,227,200  

 

  

Southwestern Energy Co.(b)(c)

      5,782,300        41,227,799  

 

  

Tamarack Valley Energy Ltd. (Canada)(c)

      5,141,000        15,533,290  

 

  
        394,052,344  

 

  

Oil & Gas Storage & Transportation–1.38%

 

   

New Fortress Energy, Inc.(c)

      1,317,023        39,905,797  

 

  

Paper & Plastic Packaging Products & Materials–0.89%

 

Sealed Air Corp.

      839,100        25,835,889  

 

  

Passenger Ground Transportation–0.09%

 

Mobico Group PLC (United Kingdom)

      3,590,860        2,729,066  

 

  

Regional Banks–7.05%

 

Five Star Bancorp

      335,054        6,523,501  

 

  

Huntington Bancshares, Inc.

      4,169,458        40,235,270  

 

  

Pinnacle Financial Partners, Inc.

      1,045,700        65,209,852  

 

  

Texas Capital Bancshares, Inc.(b)

      408,000        22,464,480  

 

  

Webster Financial Corp.

      1,142,500        43,380,725  

 

  

Western Alliance Bancorporation

      625,900        25,724,490  

 

  
        203,538,318  

 

  

Research & Consulting Services–1.92%

 

   

KBR, Inc.(c)

      951,300        55,318,095  

 

  

Restaurants–1.15%

 

Cheesecake Factory, Inc. (The)(c)

      980,847        30,474,916  

 

  
     Shares      Value  

 

  

Restaurants–(continued)

 

Marston’s PLC (United Kingdom)(b)

      7,656,649      $ 2,708,227  

 

  
        33,183,143  

 

  

Semiconductor Materials & Equipment–2.24%

 

Ichor Holdings Ltd.(b)(c)

      495,080        12,010,641  

 

  

MKS Instruments, Inc.(c)

      473,913        31,117,127  

 

  

Ultra Clean Holdings, Inc.(b)

      896,800        21,397,648  

 

  
        64,525,416  

 

  

Semiconductors–2.55%

 

   

MaxLinear, Inc.(b)

      2,648,050        40,250,360  

 

  

Silicon Motion Technology Corp., ADR (Taiwan)(b)

      624,829        33,478,338  

 

  
             73,728,698  

 

  

Silver–1.14%

 

   

Pan American Silver Corp. (Canada)

      2,249,613        32,866,846  

 

  

Specialized Finance–0.74%

 

Burford Capital Ltd.

      1,707,126        21,236,647  

 

  

Specialty Chemicals–0.94%

 

Element Solutions, Inc.(c)

      1,485,900        27,087,957  

 

  

Steel–1.54%

 

Carpenter Technology Corp.(c)

      709,930        44,526,810  

 

  

Trading Companies & Distributors–1.97%

 

Air Lease Corp., Class A

      847,900        29,362,777  

 

  

DXP Enterprises, Inc.(b)

      216,191        7,047,827  

 

  

WESCO International, Inc.

      158,800        20,358,160  

 

  
        56,768,764  

 

  

Total Common Stocks & Other Equity Interests
(Cost $2,647,025,373)

 

      2,751,784,335  

 

  

Exchange-Traded Funds–0.90%

 

Global X Uranium ETF
(Cost $19,370,495)(c)

      962,300        25,828,132  

 

  

Money Market Funds–3.33%

 

Invesco Government & Agency Portfolio, Institutional Class, 5.27%(d)(e)

      33,787,782        33,787,782  

 

  

Invesco Liquid Assets Portfolio, Institutional Class, 5.40%(d)(e)

      23,759,390        23,766,518  

 

  

Invesco Treasury Portfolio, Institutional Class, 5.27%(d)(e)

      38,614,607        38,614,607  

 

  

Total Money Market Funds
(Cost $96,163,651)

 

      96,168,907  

 

  

TOTAL INVESTMENTS IN SECURITIES
(excluding investments purchased with cash collateral from securities on loan)–99.56%
(Cost $2,762,559,519)

 

      2,873,781,374  

 

  

Investments Purchased with Cash Collateral from Securities on Loan

 

Money Market Funds–8.15%

 

Invesco Private Government Fund, 5.32%(d)(e)(f)

      65,890,856        65,890,856  

 

  
 

 

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

 

5   Invesco Small Cap Value Fund

     Shares      Value  

 

  

Money Market Funds–(continued)

 

Invesco Private Prime Fund, 5.53%(d)(e)(f)

      169,456,657      $ 169,473,603  

 

  

Total Investments Purchased with Cash Collateral from Securities on Loan
(Cost $235,358,545)

 

      235,364,459  

 

  

TOTAL INVESTMENTS IN SECURITIES–107.71%
(Cost $2,997,918,064)

 

      3,109,145,833  

 

  

OTHER ASSETS LESS LIABILITIES–(7.71)%

 

      (222,490,875 ) 

 

  

NET ASSETS–100.00%

       $ 2,886,654,958  

 

  

    

 

 

Investment Abbreviations:

 

ADR

 - American Depositary Receipt

ETF

  - Exchange-Traded 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 & Poor’s.

(b) 

Non-income producing security.

(c) 

All or a portion of this security was out on loan at October 31, 2023.

(d) 

Affiliated holding. Affiliated holdings are investments in entities which are under common ownership or control of Invesco Ltd. or are investments in entities in which the Fund owns 5% or more of the outstanding voting securities. The table below shows the Fund’s transactions in, and earnings from, its investments in affiliates for the six months ended October 31, 2023.

 

     Value
April 30, 2023		     Purchases
at Cost		     Proceeds
from Sales		     Change in
Unrealized
Appreciation		   Realized
Gain		     Value
October 31, 2023		     Dividend Income  
Investments in Affiliated Money Market Funds:                                                        

Invesco Government & Agency Portfolio, Institutional Class

     $  14,518,112       $   189,466,697       $   (170,197,027)       $           -       $          -       $  33,787,782       $     623,208  

Invesco Liquid Assets Portfolio, Institutional Class

     9,998,880       135,333,355       (121,569,306)       2,534       1,055       23,766,518       444,975  

Invesco Treasury Portfolio, Institutional Class

     16,592,129       216,533,368       (194,510,890)       -       -       38,614,607       710,969  
Investments Purchased with Cash Collateral from Securities on Loan:                                                        

Invesco Private Government Fund

     61,733,491       381,159,275       (377,001,910)       -       -       65,890,856       1,741,482*  

Invesco Private Prime Fund

     159,859,183       814,385,091       (804,798,254)       10,022       17,561       169,473,603       4,619,365*  

Total

     $262,701,795       $1,736,877,786       $(1,668,077,387)       $12,556       $18,616       $331,533,366       $  8,139,999  

 

  *

Represents the income earned on the investment of cash collateral, which is included in securities lending income on the Statement of Operations. Does not include rebates and fees paid to lending agent or premiums received from borrowers, if any.

 

(e) 

The rate shown is the 7-day SEC standardized yield as of October 31, 2023.

(f) 

The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrower’s return of the securities loaned. See Note 1I.

 

Open Forward Foreign Currency Contracts

Settlement

Date

         Contract to     

Unrealized

Appreciation
(Depreciation)

   Counterparty    Deliver      Receive  

Currency Risk

                            

11/15/2023

    Royal Bank of Canada    GBP   221,654      USD   269,566      $       137 

11/15/2023

    Royal Bank of Canada    USD   825,633      GBP   680,125      1,085 

11/15/2023

    UBS AG    EUR   146,799,668      USD   155,833,279      424,220 

11/15/2023

    UBS AG    GBP   5,134,929      USD   6,306,340      64,636 

11/15/2023

    UBS AG    USD   8,040,892      EUR   7,617,850      23,723 

Subtotal–Appreciation

                      513,801 

Currency Risk

                            

11/15/2023

    Barclays Bank PLC    USD   7,954,583      EUR   7,509,531      (4,639)

11/15/2023

    Royal Bank of Canada    USD   9,926,042      EUR   9,344,796      (33,200)

 

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

 

6   Invesco Small Cap Value Fund

Open Forward Foreign Currency Contracts–(continued)

Settlement

Date

         Contract to     

Unrealized

Appreciation
(Depreciation)

   Counterparty    Deliver      Receive  

11/15/2023

    Royal Bank of Canada    USD     328,868      GBP     270,501      $        (63)

Subtotal–Depreciation

                      (37,902)

Total Forward Foreign Currency Contracts

                      $475,899 

Abbreviations:

 

EUR

  -  Euro

GBP

  -  British Pound Sterling

USD

  -  U.S. Dollar

 

Portfolio Composition

By sector, based on Net Assets

as of October 31, 2023

 

Industrials

      24.02 % 

Energy

      17.37  

Information Technology

      11.83  

Materials

      11.28  

Financials

      7.79  

Consumer Discretionary

      7.36  

Health Care

      6.76  

Consumer Staples

      4.66  

Utilities

      4.26  

Other Sectors, Each Less than 2% of Net Assets

      0.90  

Money Market Funds Plus Other Assets Less Liabilities

      3.77  

    

 

 

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

 

7   Invesco Small Cap Value Fund

Statement of Assets and Liabilities

October 31, 2023

(Unaudited)

 

Assets:

   

Investments in unaffiliated securities, at value (Cost $2,666,395,868)*

    $ 2,777,612,467  

 

  

Investments in affiliated money market funds, at value (Cost $331,522,196)

      331,533,366  

 

  

Other investments:

   

Unrealized appreciation on forward foreign currency contracts outstanding

      513,801  

 

  

Foreign currencies, at value (Cost $750,775)

      739,798  

 

  

Receivable for:

   

Investments sold

      592,294  

 

  

Fund shares sold

      18,786,920  

 

  

Dividends

      1,850,633  

 

  

Investment for trustee deferred compensation and retirement plans

      175,347  

 

  

Other assets

      114,282  

 

  

Total assets

      3,131,918,908  

 

  

Liabilities:

   

Other investments:

   

Unrealized depreciation on forward foreign currency contracts outstanding

      37,902  

 

  

Payable for:

   

Fund shares reacquired

      8,522,191  

 

  

Collateral upon return of securities loaned

      235,358,545  

 

  

Accrued fees to affiliates

      1,113,930  

 

  

Accrued trustees’ and officers’ fees and benefits

      3,066  

 

  

Accrued other operating expenses

      38,373  

 

  

Trustee deferred compensation and retirement plans

      189,943  

 

  

Total liabilities

      245,263,950  

 

  

Net assets applicable to shares outstanding

    $ 2,886,654,958  

 

  

Net assets consist of:

   

Shares of beneficial interest

    $ 2,631,212,331  

 

  

Distributable earnings

      255,442,627  

 

  
   $ 2,886,654,958  

 

  

Net Assets:

   

Class A

    $ 809,601,474  

 

  

Class C

    $ 30,180,947  

 

  

Class R

    $ 17,077,022  

 

  

Class Y

    $ 1,516,296,991  

 

  

Class R6

    $ 513,498,524  

 

  

Shares outstanding, no par value, with an unlimited number of shares authorized:

 

Class A

      45,093,629  

 

  

Class C

      3,396,587  

 

  

Class R

      958,542  

 

  

Class Y

      77,508,871  

 

  

Class R6

      25,972,559  

 

  

Class A:

   

Net asset value per share

    $ 17.95  

 

  

Maximum offering price per share
(Net asset value of $17.95 ÷ 94.50%)

    $ 18.99  

 

  

Class C:

   

Net asset value and offering price per share

    $ 8.89  

 

  

Class R:

   

Net asset value and offering price per share

    $ 17.82  

 

  

Class Y:

   

Net asset value and offering price per share

    $ 19.56  

 

  

Class R6:

   

Net asset value and offering price per share

    $ 19.77  

 

  

 

*

At October 31, 2023, securities with an aggregate value of $231,964,022 were on loan to brokers.

 

 

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

 

8   Invesco Small Cap Value Fund

Statement of Operations

For the six months ended October 31, 2023

(Unaudited)

 

Investment income:

   

Dividends (net of foreign withholding taxes of $546,886)

    $ 20,246,872  

 

  

Dividends from affiliated money market funds (includes net securities lending income of $192,183)

      1,971,335  

 

  

Total investment income

      22,218,207  

 

  

Expenses:

   

Advisory fees

      9,107,691  

 

  

Administrative services fees

      203,113  

 

  

Custodian fees

      17,406  

 

  

Distribution fees:

   

Class A

      1,051,545  

 

  

Class C

      150,185  

 

  

Class R

      42,720  

 

  

Transfer agent fees – A, C, R and Y

      2,257,824  

 

  

Transfer agent fees – R6

      74,990  

 

  

Trustees’ and officers’ fees and benefits

      27,676  

 

  

Registration and filing fees

      132,693  

 

  

Reports to shareholders

      97,469  

 

  

Professional services fees

      33,231  

 

  

Other

      19,326  

 

  

Total expenses

      13,215,869  

 

  

Less: Fees waived and/or expense offset arrangement(s)

      (41,265 ) 

 

  

Net expenses

      13,174,604  

 

  

Net investment income

      9,043,603  

 

  

Realized and unrealized gain (loss) from:

   

Net realized gain from:

   

Unaffiliated investment securities

      78,658,461  

 

  

Affiliated investment securities

      18,616  

 

  

Foreign currencies

      1,922  

 

  

Forward foreign currency contracts

      5,368,459  

 

  
     84,047,458  

 

  

Change in net unrealized appreciation (depreciation) of:

   

Unaffiliated investment securities

      (3,703,430 ) 

 

  

Affiliated investment securities

      12,556  

 

  

Foreign currencies

      (26,682 ) 

 

  

Forward foreign currency contracts

      1,060,555  

 

  
     (2,657,001 ) 

 

  

Net realized and unrealized gain

      81,390,457  

 

  

Net increase in net assets resulting from operations

    $ 90,434,060  

 

  

 

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

 

9   Invesco Small Cap Value Fund

Statement of Changes in Net Assets

For the six months ended October 31, 2023 and the year ended April 30, 2023

(Unaudited)

 

     October 31,     April 30,  
     2023     2023  

 

  

Operations:

     

Net investment income

    $ 9,043,603     $ 18,287,865  

 

  

Net realized gain

      84,047,458       97,788,633  

 

  

Change in net unrealized appreciation (depreciation)

      (2,657,001 )      (23,733,520 ) 

 

  

Net increase in net assets resulting from operations

      90,434,060       92,342,978  

 

  

Distributions to shareholders from distributable earnings:

     

Class A

      –       (71,798,839 ) 

 

  

Class C

      –       (4,955,135 ) 

 

  

Class R

      –       (1,274,881 ) 

 

  

Class Y

      –       (115,989,366 ) 

 

  

Class R6

      –       (32,077,278 ) 

 

  

Total distributions from distributable earnings

      –       (226,095,499 ) 

 

  

Share transactions–net:

     

Class A

      (16,418,565 )      120,945,262  

 

  

Class C

      (2,865,865 )      13,206,738  

 

  

Class R

      1,288,132       4,726,898  

 

  

Class Y

      49,498,730       398,772,213  

 

  

Class R6

      75,532,637       221,460,575  

 

  

Net increase in net assets resulting from share transactions

      107,035,069       759,111,686  

 

  

Net increase in net assets

      197,469,129       625,359,165  

 

  

Net assets:

     

Beginning of period

      2,689,185,829       2,063,826,664  

 

  

End of period

    $ 2,886,654,958     $ 2,689,185,829  

 

  

 

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

 

10   Invesco Small Cap Value Fund

Financial Highlights

(Unaudited)

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
(000’s 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 10/31/23

      $17.33         $ 0.04       $  0.54       $  0.58       $ 0.04       $      –       $ 0.04       $17.95         3.58 %      $   809,601             1.11 %(d)          1.11 %(d)          0.43 %(d)      28 % 

Year ended 04/30/23

      18.37       0.10       0.62       0.72       (0.06 )        (1.70 )      (1.76 )        17.33       4.09       798,428       1.09       1.09       0.58       51  

Year ended 04/30/22

      20.84       0.01       0.62       0.63       (0.00 )      (3.10 )        (3.10 )      18.37       3.75       721,429       1.09       1.09       0.11       79  

Year ended 04/30/21

      9.62       0.03       11.24       11.27       (0.05 )      –       (0.05 )      20.84       117.30       687,428       1.12       1.12       0.24       71  

Year ended 04/30/20

      14.10       0.02       (4.14 )        (4.12 )        –       (0.36 )      (0.36 )      9.62       (30.02 )      372,448       1.13       1.13       0.16       47  

Year ended 04/30/19

      18.53       (0.04 )        (1.22 )      (1.26 )      –       (3.17 )      (3.17 )      14.10       (3.16 )      662,115       1.12       1.12       (0.22 )      43  

Class C

                                                                                                                 

Six months ended 10/31/23

      8.61       (0.01 )      0.26       0.25       0.03       –       0.03       8.89       3.25 (e)      30,181       1.83 (d)(e)      1.83 (d)(e)      (0.29 )(d)(e)      28  

Year ended 04/30/23

      10.00       (0.02 )      0.33       0.31       (0.00 )      (1.70 )      (1.70 )      8.61       3.36       32,363       1.84       1.84       (0.17 )      51  

Year ended 04/30/22

      12.85       (0.07 )      0.32       0.25       (0.00 )      (3.10 )      (3.10 )      10.00       2.99       23,397       1.84       1.84       (0.64 )      79  

Year ended 04/30/21

      5.96       (0.04 )      6.94       6.90       (0.01 )      –       (0.01 )      12.85       115.93 (e)      17,598       1.81 (e)      1.81 (e)      (0.45 )(e)      71  

Year ended 04/30/20

      8.93       (0.04 )      (2.57 )      (2.61 )      –       (0.36 )      (0.36 )      5.96       (30.50 )(e)      10,133       1.84 (e)      1.84 (e)      (0.55 )(e)      47  

Year ended 04/30/19

      13.29       (0.11 )      (1.08 )      (1.19 )      –       (3.17 )      (3.17 )      8.93       (3.98 )      22,059       1.87       1.87       (0.97 )      43  

Class R

                                                                                                                 

Six months ended 10/31/23

      17.22       0.02       0.55       0.57       0.03       –       0.03       17.82       3.48       17,077       1.36 (d)      1.36 (d)      0.18 (d)      28  

Year ended 04/30/23

      18.28       0.06       0.61       0.67       (0.03 )      (1.70 )      (1.73 )      17.22       3.83       15,241       1.34       1.34       0.33       51  

Year ended 04/30/22

      20.79       (0.03 )      0.62       0.59       (0.00 )      (3.10 )      (3.10 )      18.28       3.52       11,315       1.34       1.34       (0.14 )      79  

Year ended 04/30/21

      9.61       (0.00 )(f)      11.21       11.21       (0.03 )      –       (0.03 )      20.79       116.81       9,140       1.37       1.37       (0.01 )      71  

Period ended 04/30/20(g)

      8.49       (0.00 )(f)      1.12       1.12       –       –       –       9.61       13.19       3,866       1.37 (d)      1.37 (d)      (0.08 )(d)      47  

Class Y

                                                                                                                 

Six months ended 10/31/23

      18.86       0.07       0.59       0.66       0.04       –       0.04       19.56       3.71       1,516,297       0.86 (d)      0.86 (d)      0.68 (d)      28  

Year ended 04/30/23

      19.84       0.16       0.66       0.82       (0.10 )      (1.70 )      (1.80 )      18.86       4.31       1,416,555       0.84       0.84       0.83       51  

Year ended 04/30/22

      22.23       0.08       0.67       0.75       (0.04 )      (3.10 )      (3.14 )      19.84       4.06       1,085,935       0.84       0.84       0.36       79  

Year ended 04/30/21

      10.25       0.07       11.98       12.05       (0.07 )      –       (0.07 )      22.23       117.78       812,019       0.87       0.87       0.49       71  

Year ended 04/30/20

      14.95       0.06       (4.40 )      (4.34 )      –       (0.36 )      (0.36 )      10.25       (29.79 )      457,857       0.88       0.88       0.41       47  

Year ended 04/30/19

      19.37       0.01       (1.26 )      (1.25 )      –       (3.17 )      (3.17 )      14.95       (2.97 )      875,875       0.87       0.87       0.03       43  

Class R6

                                                                                                                 

Six months ended 10/31/23

      19.05       0.09       0.59       0.68       0.04       –       0.04       19.77       3.78       513,499       0.70 (d)      0.70 (d)      0.84 (d)      28  

Year ended 04/30/23

      20.01       0.19       0.68       0.87       (0.13 )      (1.70 )      (1.83 )      19.05       4.50       426,599       0.70       0.70       0.97       51  

Year ended 04/30/22

      22.39       0.11       0.67       0.78       (0.06 )      (3.10 )      (3.16 )      20.01       4.17       221,751       0.70       0.70       0.50       79  

Year ended 04/30/21

      10.31       0.09       12.07       12.16       (0.08 )      –       (0.08 )      22.39       118.25       78,279       0.73       0.73       0.63       71  

Year ended 04/30/20

      15.02       0.08       (4.43 )      (4.35 )      –       (0.36 )      (0.36 )      10.31       (29.71 )      60,628       0.70       0.70       0.59       47  

Year ended 04/30/19

      19.41       0.03       (1.25 )      (1.22 )      –       (3.17 )      (3.17 )      15.02       (2.80 )      65,409       0.71       0.71       0.19       43  

 

(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, 2020, the portfolio turnover calculation excludes the value of securities purchased of $23,823,797 in connection with the acquisition of Invesco Oppenheimer Small Cap Value Fund into the Fund.

(d) 

Annualized.

(e) 

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%, 0.94% and 0.99% for the six months ended October 31, 2023 and the years ended April 30, 2021 and 2020, respectively.

(f) 

Amount represents less than $(0.005).

(g) 

Commencement date of April 17, 2020.

 

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

 

11   Invesco Small Cap Value Fund

Notes to Financial Statements

October 31, 2023

(Unaudited)

NOTE 1–Significant 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 authorized to issue an unlimited number of shares of beneficial interest. Information presented in these financial statements pertains only to the Fund. Matters affecting the Fund or each class will be voted on exclusively by the shareholders of the Fund or each class.

The Fund’s investment objective is long-term growth of capital.

The Fund currently consists of five different classes of shares: Class A, Class C, Class R, Class Y and Class R6. Class Y shares are available only to certain investors. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met. 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 R6 shares are sold at net asset value. Class C shares held for eight years after purchase are eligible for automatic conversion into Class A shares of the same Fund (the “Conversion Feature”). The automatic conversion pursuant to the Conversion Feature will generally occur at the end of the month following the eighth anniversary after a purchase of Class C shares.

The Fund is an investment company and accordingly follows the investment company accounting and reporting guidance in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 946, Financial Services – Investment Companies.

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 is generally valued at its trade price or official closing price that day as of the close of the exchange where the security is principally traded, or lacking any trades or official closing price on a particular day, the security may be valued at the closing bid or ask 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 using prices provided by an independent pricing service they may be considered fair valued. Futures contracts are valued at the daily settlement price set by an exchange on which they are principally traded. Where a final settlement price exists, exchange-traded options are valued at the final settlement price from the exchange where the option principally trades. Where a final settlement price does not exist, exchange-traded options are valued at the mean between the last bid and ask price generally from the exchange where the option principally trades.

Securities of investment companies that are not exchange-traded (e.g., open-end mutual funds) are valued using such company’s end-of-business-day net asset value per share.

Deposits, other obligations of U.S. and non-U.S. banks and financial institutions are valued at their daily account value.

Fixed income securities (including convertible debt securities) generally are valued on the basis of prices provided by independent pricing services. Prices 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. Pricing services generally value debt obligations assuming orderly transactions of institutional round lot size, but a fund may hold or transact in the same securities in smaller, odd lot sizes. Odd lots often trade at lower prices than institutional round lots, and their value may be adjusted accordingly. 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 New York Stock Exchange (“NYSE”). If market quotations are available and reliable for foreign exchange-traded equity securities, the securities will be valued at the market quotations. Invesco Advisers, Inc. (the “Adviser” or “Invesco”) may use various pricing services to obtain market quotations as well as fair value prices. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become not representative of market value in the Adviser’s judgment (“unreliable”). If, between the time trading ends on a particular security and the close of the customary trading session on the NYSE, a significant event occurs that makes the closing price of the security unreliable, the Adviser 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 in accordance with Board- approved policies and related Adviser procedures (“Valuation Procedures”). 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 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.

Unlisted securities will be valued using prices provided by independent pricing services or by another method that the Adviser, in its judgment, believes better reflects the security’s fair value in accordance with the Valuation Procedures.

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 mean between the last bid and ask prices may be used to value debt obligations, including corporate loans.

Securities for which market quotations are not readily available are fair valued by the Adviser in accordance with the Valuation Procedures. If a fair value price provided by a pricing service is unreliable, the Adviser will fair value the security using the Valuation Procedures. 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 security’s 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 Fund investments.

Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general market conditions which are not specifically related to the particular issuer, such as real or perceived adverse economic conditions, changes in the general outlook for revenues or corporate earnings, changes in interest or currency rates, regional or global instability, natural or environmental disasters, widespread disease or other public health issues, war, acts of terrorism, significant governmental actions or adverse investor sentiment generally 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.

The price the Fund could receive upon the sale of any investment may differ from the Adviser’s valuation of the investment, particularly for securities that are valued using a fair valuation technique. When fair valuation techniques are applied, the Adviser uses available information, including both observable and unobservable inputs and assumptions, to determine a methodology that will result in a valuation that the Adviser believes approximates market value. Fund securities that are fair valued may be subject to greater fluctuation in their value from one day to the next than would be the case if market quotations were used.

 

12   Invesco Small Cap Value Fund

Because of the inherent uncertainties of valuation, and the degree of subjectivity in such decisions, the Fund could realize a greater or lesser than expected gain or loss upon the sale of the investment.

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 an accrual basis from settlement date and includes coupon interest and amortization of premium and accretion of discount on debt securities as applicable. 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 Fund’s net asset value and, accordingly, they reduce the Fund’s 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 the Statement of Changes in Net Assets, or the net investment income per share and the 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, the country that has the primary market for the issuer’s securities and its “country of risk” as determined by a third party service provider, 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 Fund’s 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 Fund’s 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 R6 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 Trust’s 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 Fund’s servicing agreements, that contain a variety of indemnification clauses. The Fund’s 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 Fund’s 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, unregistered investment companies that comply with Rule 2a-7 under the 1940 Act and money market funds (collectively, “affiliated money market funds”) and is shown as such on the Schedule of Investments. The Fund bears the risk of loss with respect to the investment of collateral. It is the Fund’s 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. When loaning securities, the Fund retains certain benefits of owning the securities, including the economic equivalent of dividends or interest generated by the security. 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. The securities loaned are subject to termination at the option of the borrower or the Fund. Upon termination, the borrower will return to the Fund the securities loaned and the Fund will return the collateral. 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 and the securities may lose value during the delay which could result in potential losses to the Fund. Some of these losses may be indemnified by the lending agent. 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, are included in Dividends from affiliated money market funds on the Statement of Operations. The aggregate value of securities out on loan, if any, is shown as a footnote on the Statement of Assets and Liabilities.

The Adviser serves as an affiliated securities lending agent for the Fund. The Bank of New York Mellon also serves as a securities lending agent. To the extent the Fund utilizes the Adviser as an affiliated securities lending agent, the Fund conducts its securities lending in accordance with, and in reliance upon, no-action letters issued by the SEC staff that provide guidance on how an affiliate may act as a direct agent lender and receive compensation for those services in a manner consistent with the federal securities laws. For the six months ended October 31, 2023, the Fund paid the Adviser $11,490 in fees for securities lending agent services. Fees paid to the Adviser for securities lending agent services, if any, are included in Dividends from affiliated money market funds on the Statement of Operations.

 

13   Invesco Small Cap Value Fund

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 the 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 Fund’s 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 exchange of the two currencies on the settlement date, 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).

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 for hedging 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 2–Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with the Adviser. Under the terms of the investment advisory agreement, the Fund accrues daily and pays monthly an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

 

Average Daily Net Assets    Rate  

 

  

First $ 500 million

      0.670%  

 

  

Next $500 million

      0.645%  

 

  

Over $1 billion

      0.620%  

 

  

For the six months ended October 31, 2023, the effective advisory fee rate 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 Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Canada Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, will 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 Affiliated Sub-Adviser(s).

Effective July 1, 2023, the Adviser has agreed, for an indefinite period, 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 C, Class R, Class Y and Class R6 shares to 2.00%, 2.75%, 2.25%, 1.75% and 1.75%, respectively, of the Fund’s average daily net assets (the “boundary limits”). Prior to July 1, 2023, the same boundary limits were in effect with an expiration date of June 30, 2023. In determining the Adviser’s 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. Invesco may amend and/or terminate these boundary limits at any time in its sole discretion and will inform the Board of Trustees of any such changes. The Adviser did not waive fees and/or reimburse expenses during the period under these boundary limits.

Further, the Adviser has contractually agreed, through at least June 30, 2025, 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, 2023, the Adviser waived advisory fees of $32,173.

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, 2023, expenses incurred under the agreement are shown in the Statement of Operations as Administrative services fees. Invesco has entered into a sub-administration agreement whereby State Street Bank and Trust Company (“SSB”) serves as fund accountant and provides certain administrative services to the Fund. Pursuant to a custody agreement with the Trust on behalf of the Fund, SSB also serves as the Fund’s custodian.

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 services are charged back to the Fund, subject to certain limitations approved by the Trust’s Board of Trustees. For the six months ended October 31, 2023, 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 C, Class R, Class Y 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 Fund’s Class A, Class C and Class R shares (collectively the “Plans”). The Fund, pursuant to the Plans, reimburses IDI for its allocated share of expenses incurred for the period, up to a maximum annual rate of 0.25% of the average daily net assets of Class A shares and up to a maximum annual rate of 1.00% of the average daily net assets of Class C shares. The Fund pursuant to the Class R Plan, pays IDI compensation at the annual rate of 0.50% of the average daily net assets of Class R shares. The fees are accrued daily and paid

 

14   Invesco Small Cap Value Fund

monthly. Of the Plans 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, 2023, 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, 2023, IDI advised the Fund that IDI retained $66,934 in front-end sales commissions from the sale of Class A shares and $2,314 and $12,546 from Class A and Class C shares, respectively, for CDSC imposed upon redemptions by shareholders.

For the six months ended October 31, 2023, the Fund incurred $84,996 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 3–Additional 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. 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 investment’s 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 Adviser’s 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, 2023. 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  

 

  

Investments in Securities

           

 

  

Common Stocks & Other Equity Interests

      $2,614,414,781        $137,369,554       $–        $2,751,784,335  

 

  

Exchange-Traded Funds

      25,828,132        –         –        25,828,132  

 

  

Money Market Funds

      96,168,907        235,364,459         –        331,533,366  

 

  

Total Investments in Securities

      2,736,411,820        372,734,013         –        3,109,145,833  

 

  

Other Investments - Assets*

           

 

  

Forward Foreign Currency Contracts

      –        513,801         –        513,801  

 

  

Other Investments - Liabilities*

           

 

  

Forward Foreign Currency Contracts

      –        (37,902 )        –        (37,902 ) 

 

  

Total Other Investments

      –        475,899         –        475,899  

 

  

Total Investments

      $2,736,411,820        $373,209,912       $–        $3,109,621,732  

 

  

 

*

Unrealized appreciation (depreciation).

NOTE 4–Derivative Investments

The Fund may enter into an International Swaps and Derivatives Association Master Agreement (“ISDA Master Agreement”) under which a fund may trade OTC derivatives. An OTC transaction entered into under an ISDA Master Agreement typically involves a collateral posting arrangement, payment netting provisions and close-out netting provisions. These netting provisions allow for reduction of credit risk through netting of contractual obligations. The enforceability of the netting provisions of the ISDA Master Agreement depends on the governing law of the ISDA Master Agreement, among other factors.

For financial reporting purposes, the Fund does not offset OTC derivative assets or liabilities that are subject to ISDA Master Agreements in the Statement of Assets and Liabilities.

Value of Derivative Investments at Period-End

The table below summarizes the value of the Fund’s derivative investments, detailed by primary risk exposure, held as of October 31, 2023:

 

     Value  
     Currency  
Derivative Assets    Risk  

 

  

Unrealized appreciation on forward foreign currency contracts outstanding

    $ 513,801  

 

  

Derivatives not subject to master netting agreements

      –  

 

  

Total Derivative Assets subject to master netting agreements

    $ 513,801  

 

  

 

15   Invesco Small Cap Value Fund

     Value  
     Currency  
Derivative Liabilities    Risk  

 

  

Unrealized depreciation on forward foreign currency contracts outstanding

    $ (37,902 ) 

 

  

Derivatives not subject to master netting agreements

      –  

 

  

Total Derivative Liabilities subject to master netting agreements

    $ (37,902 ) 

 

  

Offsetting Assets and Liabilities

The table below reflects the Fund’s exposure to Counterparties subject to either an ISDA Master Agreement or other agreement for OTC derivative transactions as of October 31, 2023.

 

     Financial   Financial                    
     Derivative   Derivative       Collateral       
     Assets   Liabilities       (Received)/Pledged       
     Forward Foreign   Forward Foreign   Net Value of             Net  
Counterparty    Currency Contracts   Currency Contracts   Derivatives   Non-Cash    Cash    Amount  

 

  

Barclays Bank PLC

      $           –       $  (4,639 )      $   (4,639 )    $–    $–    $ (4,639 ) 

 

  

Royal Bank of Canada

      1,222           (33,263 )          (32,041 )       –      –      (32,041 ) 

 

  

UBS AG

      512,579       –       512,579       –      –      512,579  

 

  

Total

      $513,801       $(37,902 )      $475,899     $–    $–    $ 475,899  

 

  

Effect of Derivative Investments for the six months ended October 31, 2023

The table below summarizes the gains (losses) on derivative investments, detailed by primary risk exposure, recognized in earnings during the period:

 

     Location of Gain on  
     Statement of Operations  
     Currency  
     Risk  

 

  

Realized Gain:

   

Forward foreign currency contracts

      $5,368,459  

 

  

Change in Net Unrealized Appreciation:

   

Forward foreign currency contracts

        1,060,555  

 

  

Total

      $6,429,014  

 

  

The table below summarizes the average notional value of derivatives held during the period.

 

     Forward  
     Foreign Currency  
     Contracts  

 

  

Average notional value

      $143,996,479  

 

  

NOTE 5–Expense 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, 2023, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $9,092.

NOTE 6–Trustees’ 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 7–Cash Balances

The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with SSB, 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 8–Tax 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 Fund’s 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 Fund’s fiscal year-end.

 

16   Invesco Small Cap Value Fund

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. The ability to utilize capital loss carryforward 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, 2023, as follows:

 

Capital Loss Carryforward*  

 

  
Expiration    Short-Term             Long-Term             Total  

 

  

Not subject to expiration

    $ 5,569,001         $ 1,119,483         $ 6,688,484  

 

  

 

*

Capital loss carryforward 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 9–Investment Transactions

The aggregate amount of investment securities (other than short-term securities, U.S. Government obligations and money market funds, if any) purchased and sold by the Fund during the six months ended October 31, 2023 was $874,672,941 and $790,073,946, respectively. Cost of investments, including any derivatives, 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 Investments on a Tax Basis  

 

  

Aggregate unrealized appreciation of investments

    $ 380,844,266  

 

  

Aggregate unrealized (depreciation) of investments

      (275,460,631 ) 

 

  

Net unrealized appreciation of investments

    $ 105,383,635  

 

  

Cost of investments for tax purposes is $3,004,238,097.

NOTE 10–Share Information

 

     Summary of Share Activity  

 

  
     Six months ended     Year ended  
     October 31, 2023(a)     April 30, 2023  
     Shares     Amount     Shares     Amount  

 

  

Sold:

         

Class A

      3,721,947     $ 69,331,800       11,231,349     $ 203,041,369  

 

  

Class C

      662,004       6,175,944       1,909,727       18,175,305  

 

  

Class R

      195,001       3,543,726       309,010       5,549,466  

 

  

Class Y

      20,837,055       417,869,168       51,152,710       996,010,001  

 

  

Class R6

      8,213,525       168,468,713       15,858,483       310,382,838  

 

  

Issued as reinvestment of dividends:

         

Class A

      -       -       3,995,064       67,956,014  

 

  

Class C

      -       -       559,784       4,741,369  

 

  

Class R

      -       -       75,348       1,274,881  

 

  

Class Y

      -       -       5,183,189       95,889,004  

 

  

Class R6

      -       -       1,637,428       30,570,788  

 

  

Automatic conversion of Class C shares to Class A shares:

         

Class A

      46,666       845,994       85,885       1,540,040  

 

  

Class C

      (94,109 )      (845,994 )      (166,840 )      (1,540,040 ) 

 

  

Reacquired:

         

Class A

      (4,738,247 )      (86,596,359 )      (8,515,585 )      (151,592,161 ) 

 

  

Class C

      (930,133 )      (8,195,815 )      (882,740 )      (8,169,896 ) 

 

  

Class R

      (121,366 )      (2,255,594 )      (118,347 )      (2,097,449 ) 

 

  

Class Y

      (18,424,797 )      (368,370,438 )      (35,985,175 )      (693,126,792 ) 

 

  

Class R6

      (4,636,096 )      (92,936,076 )      (6,183,012 )      (119,493,051 ) 

 

  

Net increase in share activity

      4,731,450     $ 107,035,069       40,146,278     $ 759,111,686  

 

  

 

(a) 

There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 57% 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.

 

17   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, 2023 through October 31, 2023.

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 Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s 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.

 

         

ACTUAL

  

HYPOTHETICAL

(5% annual return before
expenses)

     
     Beginning
     Account Value     
(05/01/23)		   Ending
     Account Value     
(10/31/23)1		   Expenses
       Paid During       
Period2 		  Ending
     Account Value     
(10/31/23)		   Expenses
       Paid During       
Period2 		         Annualized        
Expense
Ratio

Class A

   $1,000.00   $1,035.80   $5.68   $1,019.56   $5.63   1.11%

Class C

     1,000.00     1,032.50     9.35     1,015.94     9.27   1.83    

Class R

     1,000.00     1,034.80     6.96     1,018.30     6.90   1.36    

Class Y

     1,000.00     1,037.10     4.40     1,020.81     4.37   0.86    

Class R6

     1,000.00     1,037.80     3.59     1,021.62     3.56   0.70    

 

1 

The actual ending account value is based on the actual total return of the Fund for the period May 1, 2023 through October 31, 2023, after actual expenses and will differ from the hypothetical ending account value which is based on the Fund’s expense ratio and a hypothetical annual return of 5% before expenses.

2 

Expenses are equal to the Fund’s annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 184/366 to reflect the most recent fiscal half year.

 

18   Invesco Small Cap Value Fund

Approval of Investment Advisory and Sub-Advisory Contracts

    

 

At meetings held on June 13, 2023, the Board of Trustees (the Board or the Trustees) of AIM Sector Funds (Invesco Sector Funds) as a whole, and the independent Trustees, who comprise over 75% of the Board, voting separately, approved the continuance of the Invesco Small Cap Value Fund’s (the Fund) Master Investment Advisory Agreement with Invesco Advisers, Inc. (Invesco Advisers and the investment advisory agreement) and the Master Intergroup Sub-Advisory Contract for Mutual Funds with Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Canada Ltd. (collectively, the Affiliated Sub-Advisers and the sub-advisory contracts) for another year, effective July 1, 2023. After evaluating the factors discussed below, among others, the Board approved the renewal of the Fund’s investment advisory agreement and the sub-advisory contracts and determined that the compensation payable thereunder by the Fund to Invesco Advisers and by Invesco Advisers to the Affiliated Sub-Advisers is fair and reasonable.

The Board’s Evaluation Process

The Board has established an Investments Committee, b-Committees, that meet throughout the year to review the performance of funds advised by Invesco Advisers (the Invesco Funds). The Sub-Committees meet regularly with portfolio managers for their assigned Invesco Funds and other members of management to review information about investment performance and portfolio attributes of these funds. The Board has established additional standing and ad hoc committees that meet regularly throughout the year to review matters within their purview, including a working group focused on opportunities to make ongoing and continuous improvements to the annual review process for the Invesco Funds’ investment advisory and sub-advisory contracts. The Board took into account evaluations and reports that it received from its committees and sub-committees, as well as the information provided to the Board and its committees and sub-committees throughout the year, in considering whether to approve each Invesco Fund’s investment advisory agreement and sub-advisory contracts.

    As part of the contract renewal process, the Board reviews and considers information provided in response to requests for information submitted to management by the independent Trustees with assistance from legal counsel to the independent Trustees and the Senior Officer, an officer of the Invesco Funds who reports directly to the independent Trustees. The Board receives comparative investment performance and fee and expense data regarding the Invesco Funds prepared by Broadridge Financial Solutions, Inc. (Broadridge), an independent mutual fund data provider, as well as information on the composition of the peer groups provided by Broadridge and its methodology for determining peer groups. The Board also receives an independent written evaluation from the Senior Officer. The Senior Officer’s evaluation is prepared as part of his responsibility to manage the process by which the Invesco Funds’ proposed management fees are negotiated during the annual contract renewal

process to ensure they are negotiated in a manner that is at arms’ length and reasonable in accordance with certain negotiated regulatory requirements. In addition to meetings with Invesco Advisers and fund counsel throughout the year and as part of meetings convened on May 2, 2023 and June 13, 2023, the independent Trustees also discussed the continuance of the investment advisory agreement and sub-advisory contracts in separate sessions with the Senior Officer and with independent legal counsel. Also, as part of the contract renewal process, the independent Trustees reviewed and considered information provided in response to follow-up requests for information submitted by the independent Trustees to management. The independent Trustees met and discussed those follow-up responses with legal counsel to the independent Trustees and the Senior Officer.

    The discussion below is a summary of the Senior Officer’s independent written evaluation with respect to the Fund’s investment advisory agreement and sub-advisory contracts, as well as a discussion of the material factors and related conclusions that formed the basis for the Board’s approval of the Fund’s investment advisory agreement and sub-advisory contracts. The Trustees’ review and conclusions are based on the comprehensive consideration of all information presented to them during the course of the year and in prior years and are not the result of any single determinative factor. Moreover, one Trustee may have weighed a particular piece of information or factor differently than another Trustee. The information received and considered by the Board was current as of various dates prior to the Board’s approval on June 13, 2023.

Factors and Conclusions and Summary of Independent Written Fee Evaluation

A.

Nature, Extent and Quality of Services Provided by Invesco Advisers and the Affiliated Sub-Advisers

The Board reviewed the nature, extent and quality of the advisory services provided to the Fund by Invesco Advisers under the Fund’s investment advisory agreement, and the credentials and experience of the officers and employees of Invesco Advisers who provide these services, including the Fund’s portfolio manager(s). The Board considered recent senior management changes at Invesco and Invesco Advisers, including the appointment of new Co-Heads of Investments, that had been presented to and discussed with the Board. The Board’s review included consideration of Invesco Advisers’ investment process and oversight, credit analysis, and research capabilities. The Board considered information regarding Invesco Advisers’ programs for and resources devoted to risk management, including management of investment, enterprise, operational, liquidity, derivatives, valuation and compliance risks, and technology used to manage such risks. The Board received information regarding Invesco’s methodology for compensating its investment professionals and the incentives and accountability it creates, as well as how it impacts Invesco’s ability to attract and retain talent. The Board received a description of, and reports related to, Invesco Advisers’ global security program and business continuity plans and of its approach to data privacy and cybersecurity, including related testing. The

Board also considered non-advisory services that Invesco Advisers and its affiliates provide to the Invesco Funds, such as various middle office and back office support functions, third party oversight, internal audit, valuation, portfolio trading and legal and compliance. The Board observed that Invesco Advisers’ systems preparedness and ongoing investment enabled Invesco Advisers to manage, operate and oversee the Invesco Funds with minimal impact or disruption through challenging environments. The Board reviewed and considered the benefits to shareholders of investing in a Fund that is part of the family of funds under the umbrella of Invesco Ltd., Invesco Advisers’ parent company, and noted Invesco Ltd.’s depth and experience in running an investment management business, as well as its commitment of financial and other resources to such business. The Board concluded that the nature, extent and quality of the services provided to the Fund by Invesco Advisers are appropriate and satisfactory.

    The Board reviewed the services that may be provided to the Fund by the Affiliated Sub-Advisers under the sub-advisory contracts and the credentials and experience of the officers and employees of the Affiliated Sub-Advisers who provide these services. The Board noted the Affiliated Sub-Advisers’ expertise with respect to certain asset classes and that the Affiliated Sub-Advisers have offices and personnel that are located in financial centers around the world. As a result, the Board noted that the Affiliated Sub-Advisers can provide research and investment analysis on the markets and economies of various countries and territories in which the Fund may invest, make recommendations regarding securities and assist with portfolio trading. The Board concluded that the sub-advisory contracts may benefit the Fund and its shareholders by permitting Invesco Advisers to use the resources and talents of the Affiliated Sub-Advisers in managing the Fund. The Board concluded that the nature, extent and quality of the services that may be provided to the Fund by the Affiliated Sub-Advisers are appropriate and satisfactory.

B.

Fund Investment Performance

The Board considered Fund investment performance as a relevant factor in considering whether to approve the investment advisory agreement. The Board did not view Fund investment performance as a relevant factor in considering whether to approve the sub-advisory contracts for the Fund, as no Affiliated Sub-Adviser currently manages assets of the Fund.

    The Board compared the Fund’s investment performance over multiple time periods ending December 31, 2022 to the performance of funds in the Broadridge performance universe and against the Russell 2000® Value Index (Index). The Board noted that performance of Class A shares of the Fund was in the first quintile of its performance universe for the one, three and five year periods (the first quintile being the best performing funds and the fifth quintile being the worst performing funds). The Board noted that performance of Class A shares of the Fund was above the performance of the Index for the one, three and five year periods. The Board recognized that the performance data reflects a snapshot in time as of a particular date and that selecting a different performance period could produce different results.

 

 

19   Invesco Small Cap Value Fund

    

 

The Board also reviewed more recent Fund performance as well as other performance metrics, which did not change its conclusions.

C.

Advisory and Sub-Advisory Fees and Fund Expenses

The Board compared the Fund’s contractual management fee rate to the contractual management fee rates of funds in the Fund’s Broadridge expense group. The Board noted that the contractual management fee rate for Class A shares of the Fund was below the median contractual management fee rate of funds in its expense group. The Board noted that the term “contractual management fee” for funds in the expense group may include both advisory and certain non-portfolio management administrative services fees, but that Broadridge is not able to provide information on a fund-by-fund basis as to what is included. The Board also reviewed the methodology used by Broadridge in calculating expense group information, which includes using each fund’s contractual management fee schedule (including any applicable breakpoints) as reported in the most recent prospectus or statement of additional information for each fund in the expense group. The Board requested and considered additional information from management regarding the Fund’s actual management fees and the levels of the Fund’s breakpoints in light of current asset levels. The Board also considered comparative information regarding the Fund’s total expense ratio and its various components.

    The Board noted that Invesco Advisers has contractually agreed to waive fees and/or limit expenses of the Fund for the term disclosed in the Fund’s registration statement in an amount necessary to limit total annual operating expenses to a specified percentage of average daily net assets for each class of the Fund.

    The Board noted that Invesco Advisers and the Affiliated Sub-Advisers do not manage other similarly managed mutual funds or client accounts.

    The Board also considered the services that may be provided by the Affiliated Sub-Advisers pursuant to the sub-advisory contracts, as well as the fees payable by Invesco Advisers to the Affiliated Sub-Advisers pursuant to the sub-advisory contracts.

D.

Economies of Scale and Breakpoints

The Board considered the extent to which there may be economies of scale in the provision of advisory services to the Fund and the Invesco Funds, and the extent to which such economies of scale are shared with the Fund and the Invesco Funds. The Board acknowledged the difficulty in calculating and measuring economies of scale at the individual fund level; noting that only indicative and estimated measures are available at the individual fund level and that such measures are subject to uncertainty. The Board considered that the Fund benefits from economies of scale through contractual breakpoints in the Fund’s advisory fee schedule, which generally operate to reduce the Fund’s expense ratio as it grows in size. The Board considered information from Invesco Advisers regarding the levels of the Fund’s breakpoints in light of current assets. The Board noted that the Fund also shares in economies of scale through Invesco Advisers’ ability to negotiate lower fee arrangements with third party service providers. The Board noted that the Fund may also benefit from economies of scale through initial fee setting, fee waivers and expense reimbursements, as well as Invesco Advisers’ investment in its business,

including investments in business infrastructure, technology and cybersecurity.

E.

Profitability and Financial Resources

The Board reviewed information from Invesco Advisers concerning the costs of the advisory and other services that Invesco Advisers and its affiliates provide to the Fund and the Invesco Funds and the profitability of Invesco Advisers and its affiliates in providing these services in the aggregate and on an individual fund-by-fund basis. The Board considered the methodology used for calculating profitability and the periodic review and enhancement of such methodology. The Board noted that Invesco Advisers continues to operate at a net profit from services Invesco Advisers and its affiliates provide to the Invesco Funds in the aggregate and to most Invesco Funds individually. The Board considered that profits to Invesco Advisers can vary significantly depending on the particular Invesco Fund, with some Invesco Funds showing indicative losses to Invesco Advisers and others showing indicative profits at healthy levels, and that Invesco Advisers’ support for and commitment to an Invesco Fund are not, however, solely dependent on the profits realized as to that Fund. The Board did not deem the level of profits realized by Invesco Advisers and its affiliates from providing such services to be excessive, given the nature, extent and quality of the services provided. The Board noted that Invesco Advisers provided information demonstrating that Invesco Advisers is financially sound and has the resources necessary to perform its obligations under the investment advisory agreement, and provided representations indicating that the Affiliated Sub-Advisers are financially sound and have the resources necessary to perform their obligations under the sub-advisory contracts. The Board noted the cyclical and competitive nature of the global asset management industry.

F.

Collateral Benefits to Invesco Advisers and its Affiliates

The Board considered various other benefits received by Invesco Advisers and its affiliates from the relationship with the Fund, including the fees received for providing administrative, transfer agency and distribution services to the Fund. The Board received comparative information regarding fees charged for these services, including information provided by Broadridge and other independent sources. The Board reviewed the performance of Invesco Advisers and its affiliates in providing these services and the organizational structure employed to provide these services. The Board noted that these services are provided to the Fund pursuant to written contracts that are reviewed and subject to approval on an annual basis by the Board based on its determination that the services are required for the operation of the Fund.

    The Board considered the benefits realized by Invesco Advisers and the Affiliated Sub-Advisers as a result of portfolio brokerage transactions executed through “soft dollar” arrangements. The Board noted that soft dollar arrangements may result in the Fund bearing costs to purchase research that may be used by Invesco Advisers or the Affiliated Sub-Advisers with other clients and may reduce Invesco Advisers’ or the Affiliated Sub-Advisers’ expenses. The Board also considered that it receives from Invesco Advisers periodic reports that include a representation to the effect that these arrangements are consistent with regulatory requirements. The Board did not deem the soft dollar arrangements to be inappropriate.

    The Board considered that the Fund’s uninvested cash and cash collateral from any securities lending arrangements may be invested in registered money market funds or, with regard to securities lending cash collateral, unregistered funds that comply with Rule 2a-7 (collectively referred to as “affiliated money market funds”) advised by Invesco Advisers. The Board considered information regarding the returns of the affiliated money market funds relative to comparable overnight investments, as well as the fees paid by the affiliated money market funds to Invesco Advisers and its affiliates. In this regard, the Board noted that Invesco Advisers receives advisory fees from these affiliated money market funds attributable to the Fund’s investments. The Board also noted that Invesco Advisers has contractually agreed to waive through varying periods an amount equal to 100% of the net advisory fee Invesco Advisers receives from the affiliated money market funds with respect to the Fund’s investment in the affiliated money market funds of uninvested cash, but not cash collateral. The Board concluded that the advisory fees payable to Invesco Advisers from the Fund’s investment of cash collateral from any securities lending arrangements in the affiliated money market funds are for services that are not duplicative of services provided by Invesco Advisers to the Fund.

    The Board considered that Invesco Advisers may serve as the Fund’s affiliated securities lending agent and evaluated the benefits realized by Invesco Advisers when serving in such role, including the compensation received. The Board considered Invesco Advisers’ securities lending platform and corporate governance structure for securities lending, including Invesco Advisers’ Securities Lending Governance Committee and its related responsibilities. The Board noted that to the extent the Fund utilizes Invesco Advisers as an affiliated securities lending agent, the Fund conducts its securities lending in accordance with, and in reliance upon, no-action letters issued by the SEC staff that provide guidance on how an affiliate may act as a direct agent lender and receive compensation for those services without obtaining exemptive relief. The Board considered information provided by Invesco Advisers related to the performance of Invesco Advisers as securities lending agent, including a summary of the securities lending services provided to the Fund by Invesco Advisers and the compensation paid to Invesco Advisers for such services, as well as any revenues generated for the Fund in connection with such securities lending activity and the allocation of such revenue between the Fund and Invesco Advisers.

    The Board also received information about commissions that an affiliated broker may receive for executing certain trades for the Fund. Invesco Advisers and the Affiliated Sub-Advisers advised the Board of the benefits to the Fund of executing trades through the affiliated broker and that such trades were executed in compliance with rules under the federal securities laws and consistent with best execution obligations.

 

 

20   Invesco Small Cap Value Fund

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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 portfolio holdings four times each year, at the end of each fiscal quarter. For the second and fourth quarters, the list appears, respectively, in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the list with the Securities and Exchange Commission (SEC) as an exhibit to its reports on Form N-PORT. The most recent list of portfolio holdings is available at invesco.com/completeqtrholdings. Shareholders can also look up the Fund’s Form N-PORT filings on the SEC website, 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/corporate/about-us/esg. 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. This 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.

 

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SEC file number(s): 811-03826 and 002-85905                 Invesco Distributors, Inc.    VK-SCV-SAR-1                                         

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Semiannual Report to Shareholders   October 31, 2023

Invesco Technology Fund

Nasdaq:

A: ITYAX ∎ C: ITHCX ∎ Y: ITYYX ∎ Investor: FTCHX ∎ R5: FTPIX ∎ R6: FTPSX

 

 

   
2   Fund Performance
4   Schedule of Investments
7   Financial Statements
10   Financial Highlights
11   Notes to Financial Statements
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 is 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, 4/30/23 to 10/31/23, 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

     8.15 % 

Class C Shares

     7.72  

Class Y Shares

     8.27  

Investor Class Shares

     8.19  

Class R5 Shares

     8.33  

Class R6 Shares

     8.36  

NASDAQ Composite Total Return Index▼* (Broad Market Index)

     5.54  

S&P 500 Index▼* (Broad Market Index)

     1.39  

S&P North American Technology Sector Index▼ (Style-Specific Index)

     10.78  

Lipper Science & Technology Funds Index∎ (Peer Group Index)

     6.12  

 

Source(s): ▼Bloomberg LP; ∎Lipper Inc.

  

*Effective August 28, 2023, the Fund changed its broad-based securities market benchmark from the NASDAQ Composite Total Return Index to the S&P 500 Index. The Fund believes the S&P 500 Index is an appropriate benchmark for evaluating the Fund’s performance against the overall applicable market.

 

The NASDAQ Composite Total Return Index is a broad-based, market index of the common stocks and similar securities listed on the Nasdaq stock market.

 

  The S&P 500® Index is an unmanaged index considered representative of the US stock market.

 

  The S&P North American Technology Sector Index represents US securities classified under the GICS® information technology sector as well as the internet & direct marketing retail, interactive home entertainment, and interactive media and services sub-industries.

 

  The Lipper Science & Technology Funds Index is an unmanaged index considered representative of science and technology 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.

 

 

 

For more information about your Fund

Read the most recent quarterly commentary from your Fund’s portfolio managers by visiting invesco.com/us. Click on “Products” and select “Mutual Funds.” Use the “Product Finder” to locate your Fund; then click on its name to access its product detail page. There, you can learn more about your Fund’s investment strategies, holdings and performance.

  Also, visit blog.invesco.us.com, where many of Invesco’s investment professionals share their insights about market and economic news and trends.

 

 

2   Invesco Technology Fund

    

    

    

 

 

Average Annual Total Returns

 

As of 10/31/23, including maximum applicable sales charges

 

Class A Shares

        

Inception (3/28/02)

     5.98 % 

10 Years

     10.15  

  5 Years

     7.46  

  1 Year

     12.25  

Class C Shares

        

Inception (2/14/00)

     0.58 % 

10 Years

     10.11  

  5 Years

     7.87  

  1 Year

     16.86  

Class Y Shares

        

Inception (10/3/08)

     12.04 % 

10 Years

     11.05  

  5 Years

     8.95  

  1 Year

     19.07  

Investor Class Shares

        

Inception (1/19/84)

     9.99 % 

10 Years

     10.88  

  5 Years

     8.80  

  1 Year

     18.91  

Class R5 Shares

        

Inception (12/21/98)

     5.97 % 

10 Years

     11.24  

  5 Years

     9.05  

  1 Year

     19.17  

Class R6 Shares

        

10 Years

     11.07 % 

  5 Years

     9.11  

  1 Year

     19.27  

Class R6 shares incepted on April 4, 2017. Performance shown prior to that date is that of Class A shares at net asset value and includes the 12b-1 fees applicable to Class A shares.

    The performance data quoted represent past performance and cannot guarantee future results; current performance may be lower or higher. Please visit invesco.com/performance for the most recent month-end performance. Performance figures reflect reinvested distributions, changes in net asset value and the effect of the maximum sales charge unless otherwise stated. Performance figures do not reflect deduction of taxes a shareholder would pay on Fund distributions or sale of Fund shares. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

    Class A share performance reflects the maximum 5.50% sales charge, and Class C share performance reflects the applicable contingent deferred sales charge (CDSC) for the period involved. The CDSC on Class C shares is 1% for the first year after purchase. Class Y, Investor Class, Class R5 and Class R6 shares do not have a front-end sales charge or a CDSC; therefore, performance is at net asset value.

    The performance of the Fund’s share classes will differ primarily due to different sales charge structures and class expenses.

    Fund performance reflects any applicable fee waivers and/or expense reimbursements. Had the adviser not waived fees and/or reimbursed expenses currently or in the past, returns would have been lower. See current prospectus for more information.

 

 

3   Invesco Technology Fund

Schedule of Investments(a)

October 31, 2023

(Unaudited)

 

     Shares      Value  

 

  

Common Stocks & Other Equity Interests–95.86%

 

Advertising–2.03%

 

Trade Desk, Inc. (The), Class A(b)

     341,879      $ 24,259,734  

 

  

Aerospace & Defense–3.09%

 

Airbus SE (France)

      67,897        9,081,767  

 

  

Axon Enterprise, Inc.(b)

     46,818        9,573,813  

 

  

TransDigm Group, Inc.(b)

     22,099        18,299,961  

 

  
     36,955,541  

 

  

Application Software–15.65%

 

Adobe, Inc.(b)

     71,675        38,135,401  

 

  

Braze, Inc., Class A(b)(c)

     151,574        6,454,021  

 

  

Confluent, Inc., Class A(b)(c)

     454,486        13,139,190  

 

  

Datadog, Inc., Class A(b)(c)

     72,853        5,935,334  

 

  

Guidewire Software, Inc.(b)

     69,446        6,259,168  

 

  

HubSpot, Inc.(b)

     35,676        15,118,419  

 

  

Manhattan Associates, Inc.(b)

     61,421        11,975,867  

 

  

Procore Technologies, Inc.(b)(c)

     224,389        13,707,924  

 

  

Samsara, Inc., Class A(b)

     636,762        14,690,099  

 

  

Sprout Social, Inc., Class A(b)(c)

     61,404        2,657,565  

 

  

Synopsys, Inc.(b)

     84,287        39,567,689  

 

  

Workday, Inc., Class A(b)

     92,272        19,534,905  

 

  
        187,175,582  

 

  

Automobile Manufacturers–0.77%

 

Tesla, Inc.(b)

     45,683        9,174,974  

 

  

Automotive Parts & Equipment–0.54%

 

Mobileye Global, Inc., Class A
(Israel)(b)(c)

     179,766        6,412,253  

 

  

Broadline Retail–4.21%

 

Amazon.com, Inc.(b)

     281,754        37,498,640  

 

  

MercadoLibre, Inc. (Brazil)(b)

     10,410        12,916,103  

 

  
     50,414,743  

 

  

Cargo Ground Transportation–0.30%

 

Saia, Inc.(b)

     10,174        3,647,277  

 

  

Casinos & Gaming–0.87%

 

DraftKings, Inc., Class A(b)(c)

     377,333        10,421,937  

 

  

Construction & Engineering–0.61%

 

Comfort Systems USA, Inc.

      39,926        7,260,543  

 

  

Education Services–0.97%

 

Duolingo, Inc.(b)(c)

     79,298        11,581,473  

 

  

Electrical Components & Equipment–0.85%

 

Eaton Corp. PLC

      49,155        10,219,816  

 

  

Electronic Components–0.74%

 

Amphenol Corp., Class A

      110,499        8,900,694  

 

  

Electronic Manufacturing Services–1.55%

 

Flex Ltd.(b)

     721,183        18,548,827  

 

  

Health Care Equipment–0.68%

 

DexCom, Inc.(b)

     92,208        8,190,837  

 

  
     Shares      Value  

 

  

Health Care Technology–0.73%

 

Veeva Systems, Inc., Class A(b)

     45,533      $ 8,774,664  

 

  

Industrial Machinery & Supplies & Components–0.53%

 

Parker-Hannifin Corp.

      17,058        6,292,867  

 

  

Interactive Home Entertainment–0.72%

 

Take-Two Interactive Software, Inc.(b)

     64,671        8,649,746  

 

  

Interactive Media & Services–10.73%

 

Alphabet, Inc., Class A(b)

     467,836        58,049,091  

 

  

Meta Platforms, Inc., Class A(b)

     233,259        70,273,939  

 

  
     128,323,030  

 

  

Internet Services & Infrastructure–2.75%

 

MongoDB, Inc.(b)

     58,893        20,293,939  

 

  

Shopify, Inc., Class A (Canada)(b)

     204,587        9,654,460  

 

  

Snowflake, Inc., Class A(b)

     20,631        2,994,177  

 

  
     32,942,576  

 

  

Movies & Entertainment–3.47%

 

Atlanta Braves Holdings, Inc., Series C(b)

     4,441        154,458  

 

  

Liberty Media Corp.-Liberty Formula One(b)

     96,487        6,241,744  

 

  

Liberty Media Corp.-Liberty Live, Series C(b)

     6,563        209,163  

 

  

Netflix, Inc.(b)

     62,367        25,675,870  

 

  

TKO Group Holdings, Inc.(c)

     112,024        9,183,728  

 

  
          41,464,963  

 

  

Passenger Ground Transportation–1.05%

 

Uber Technologies, Inc.(b)

     290,692        12,581,150  

 

  

Semiconductor Materials & Equipment–3.14%

 

Applied Materials, Inc.

      69,252        9,165,502  

 

  

Entegris, Inc.

      162,101        14,271,372  

 

  

Lam Research Corp.

      23,951        14,088,458  

 

  
     37,525,332  

 

  

Semiconductors–15.40%

 

Advanced Micro Devices, Inc.(b)

     118,081        11,630,978  

 

  

Broadcom, Inc.

      44,346        37,311,394  

 

  

Lattice Semiconductor Corp.(b)(c)

     203,251        11,302,788  

 

  

Monolithic Power Systems, Inc.

      43,663        19,287,694  

 

  

NVIDIA Corp.

      191,760        78,199,728  

 

  

ON Semiconductor Corp.(b)(c)

     123,390        7,729,150  

 

  

Taiwan Semiconductor Manufacturing Co. Ltd., ADR (Taiwan)

      217,716        18,791,068  

 

  
     184,252,800  

 

  

Systems Software–17.28%

 

CrowdStrike Holdings, Inc., Class A(b)

     92,556        16,361,124  

 

  

CyberArk Software Ltd.(b)

     59,722        9,772,908  

 

  

Microsoft Corp.

      298,128        100,800,058  

 

  

Oracle Corp.

      261,755        27,065,467  

 

  

Palo Alto Networks, Inc.(b)

     80,759        19,626,052  

 

  

ServiceNow, Inc.(b)

     56,802        33,050,244  

 

  
     206,675,853  

 

  
 

 

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

 

4   Invesco Technology Fund

     Shares      Value  

 

  

Technology Distributors–1.00%

      

CDW Corp.

      59,758      $ 11,975,503  

 

  

Technology Hardware, Storage & Peripherals–3.14%

 

Apple, Inc.

      219,712        37,520,218  

 

  

Trading Companies & Distributors–0.25%

 

   

W.W. Grainger, Inc.

      4,176        3,047,770  

 

  

Transaction & Payment Processing Services–2.81%

 

Mastercard, Inc., Class A

      36,779        13,841,777  

 

  

Visa, Inc., Class A(c)

     83,920        19,729,592  

 

  
        33,571,369  

 

  

Total Common Stocks & Other Equity Interests
(Cost $826,385,905)

 

      1,146,762,072  

 

  

Money Market Funds–4.04%

      

Invesco Government & Agency Portfolio, Institutional Class, 5.27%(d)(e)

     16,778,408        16,778,408  

 

  

Invesco Liquid Assets Portfolio, Institutional Class, 5.40%(d)(e)

     12,410,462        12,414,185  

 

  

Invesco Treasury Portfolio, Institutional Class, 5.27%(d)(e)

     19,175,324        19,175,324  

 

  

Total Money Market Funds
(Cost $48,366,444)

 

      48,367,917  

 

  

TOTAL INVESTMENTS IN SECURITIES
(excluding investments purchased with cash collateral from securities on loan)–99.90%
(Cost $874,752,349)

 

      1,195,129,989  

 

  
     Shares      Value  

 

  

Investments Purchased with Cash Collateral from Securities on Loan

 

Money Market Funds–5.92%

      

Invesco Private Government Fund, 5.32%(d)(e)(f)

     19,829,960      $ 19,829,960  

 

  

Invesco Private Prime Fund, 5.53%(d)(e)(f)

     50,999,769        51,004,869  

 

  

Total Investments Purchased with Cash Collateral from Securities on Loan (Cost $70,834,314)

 

      70,834,829  

 

  

TOTAL INVESTMENTS IN SECURITIES–105.82%
(Cost $945,586,663)

 

      1,265,964,818  

 

  

OTHER ASSETS LESS LIABILITIES–(5.82)%

 

      (69,627,543 ) 

 

  

NET ASSETS–100.00%

 

    $ 1,196,337,275  

 

  
 

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 & Poor’s.

(b) 

Non-income producing security.

(c) 

All or a portion of this security was out on loan at October 31, 2023.

(d) 

Affiliated holding. Affiliated holdings are investments in entities which are under common ownership or control of Invesco Ltd. or are investments in entities in which the Fund owns 5% or more of the outstanding voting securities. The table below shows the Fund’s transactions in, and earnings from, its investments in affiliates for the six months ended October 31, 2023.

 

      Value
April 30, 2023		    Purchases
at Cost		    Proceeds
from Sales		   Change in
Unrealized
Appreciation		   

Realized

Gain

(Loss)

    Value
October 31, 2023		    Dividend Income
Investments in Affiliated Money Market Funds:                                                                            

Invesco Government & Agency Portfolio, Institutional Class

      $ 5,835,409      $ 61,183,531      $ (50,240,532 )     $ -      $ -      $ 16,778,408      $ 174,743  

Invesco Liquid Assets Portfolio, Institutional Class

        4,597,308        43,702,522        (35,886,094 )       483        (34)          12,414,185        136,191  

Invesco Treasury Portfolio, Institutional Class

        6,669,039        69,924,035        (57,417,750 )       -        -          19,175,324        195,109  
Investments Purchased with Cash Collateral from Securities on Loan:                                                                            

Invesco Private Government Fund

        15,785,224        142,588,757        (138,544,021 )       -        -          19,829,960        579,270*  

Invesco Private Prime Fund

        40,590,577        352,471,557        (342,062,866 )       928        4,673          51,004,869        1,547,186*  

Total

      $ 73,477,557      $ 669,870,402      $ (624,151,263 )     $ 1,411      $ 4,639        $ 119,202,746      $ 2,632,499  

 

  *

Represents the income earned on the investment of cash collateral, which is included in securities lending income on the Statement of Operations. Does not include rebates and fees paid to lending agent or premiums received from borrowers, if any.

 

(e) 

The rate shown is the 7-day SEC standardized yield as of October 31, 2023.

(f) 

The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrower’s return of the securities loaned. See Note 1I.

 

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

 

5   Invesco Technology Fund

Portfolio Composition

By sector, based on Net Assets

as of October 31, 2023

 

Information Technology

      60.64 % 

Communication Services

      16.94  

Consumer Discretionary

      7.36  

Industrials

      6.69  

Financials

      2.81  

Health Care

      1.42  

Money Market Funds Plus Other Assets Less Liabilities

      4.14  

 

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, 2023

(Unaudited)

 

Assets:

 

Investments in unaffiliated securities, at value (Cost $826,385,905)*

    $ 1,146,762,072  

 

  

Investments in affiliated money market funds, at value (Cost $119,200,758)

      119,202,746  

 

  

Foreign currencies, at value (Cost $524)

      502  

 

  

Receivable for:

 

Investments sold

      2,033,141  

 

  

Fund shares sold

      188,035  

 

  

Dividends

      274,791  

 

  

Investment for trustee deferred compensation and retirement plans

      131,333  

 

  

Other assets

      54,170  

 

  

Total assets

      1,268,646,790  

 

  

Liabilities:

 

Payable for:

 

Fund shares reacquired

      666,419  

 

  

Collateral upon return of securities loaned

      70,834,314  

 

  

Accrued fees to affiliates

      558,903  

 

  

Accrued trustees’ and officers’ fees and benefits

      1,905  

 

  

Accrued other operating expenses

      104,176  

 

  

Trustee deferred compensation and retirement plans

      143,798  

 

  

Total liabilities

      72,309,515  

 

  

Net assets applicable to shares outstanding

    $ 1,196,337,275  

 

  

Net assets consist of:

 

Shares of beneficial interest

    $ 868,132,826  

 

  

Distributable earnings

      328,204,449  

 

  
   $ 1,196,337,275  

 

  

Net Assets:

 

Class A

    $ 656,390,340  

 

  

Class C

    $ 32,882,291  

 

  

Class Y

    $ 35,722,441  

 

  

Investor Class

    $    467,780,668  

 

  

Class R5

    $ 482,598  

 

  

Class R6

    $ 3,078,937  

 

  

Shares outstanding, no par value, with an unlimited number of shares authorized:

 

Class A

      15,034,256  

 

  

Class C

      1,166,259  

 

  

Class Y

      785,925  

 

  

Investor Class

      10,733,219  

 

  

Class R5

      8,392  

 

  

Class R6

      53,375  

 

  

Class A:

 

Net asset value per share

    $ 43.66  

 

  

Maximum offering price per share
(Net asset value of $43.66 ÷ 94.50%)

    $ 46.20  

 

  

Class C:

 

Net asset value and offering price per share

    $ 28.19  

 

  

Class Y:

 

Net asset value and offering price per share

    $ 45.45  

 

  

Investor Class:

 

Net asset value and offering price per share

    $ 43.58  

 

  

Class R5:

 

Net asset value and offering price per share

    $ 57.51  

 

  

Class R6:

 

Net asset value and offering price per share

    $ 57.69  

 

  

 

*

At October 31, 2023, securities with an aggregate value of $69,910,785 were on loan to brokers.

 

 

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, 2023

(Unaudited)

 

Investment income:

   

Dividends (net of foreign withholding taxes of $58,051)

    $ 2,145,302  

 

  

Dividends from affiliated money market funds (includes net securities lending income of $183,009)

      689,052  

 

  

Total investment income

      2,834,354  

 

  

Expenses:

   

Advisory fees

      3,965,363  

 

  

Administrative services fees

      87,613  

 

  

Custodian fees

      4,621  

 

  

Distribution fees:

   

Class A

      861,403  

 

  

Class C

      172,336  

 

  

Investor Class

      413,249  

 

  

Transfer agent fees – A, C, Y and Investor

      1,022,918  

 

  

Transfer agent fees – R5

      255  

 

  

Transfer agent fees – R6

      453  

 

  

Trustees’ and officers’ fees and benefits

      16,731  

 

  

Registration and filing fees

      49,401  

 

  

Reports to shareholders

      121,320  

 

  

Professional services fees

      28,328  

 

  

Other

      12,251  

 

  

Total expenses

      6,756,242  

 

  

Less: Fees waived and/or expense offset arrangement(s)

      (41,528 ) 

 

  

Net expenses

      6,714,714  

 

  

Net investment income (loss)

      (3,880,360 ) 

 

  

Realized and unrealized gain (loss) from:

   

Net realized gain (loss) from:

   

Unaffiliated investment securities

      33,306,209  

 

  

Affiliated investment securities

      4,639  

 

  

Foreign currencies

      (20,651 ) 

 

  
     33,290,197  

 

  

Change in net unrealized appreciation (depreciation) of:

   

Unaffiliated investment securities

      61,397,483  

 

  

Affiliated investment securities

      1,411  

 

  

Foreign currencies

      (3,565 ) 

 

  
     61,395,329  

 

  

Net realized and unrealized gain

      94,685,526  

 

  

Net increase in net assets resulting from operations

    $ 90,805,166  

 

  

 

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, 2023 and the year ended April 30, 2023

(Unaudited)

 

     October 31,
2023		    

April 30,

2023

  

 

  

Operations:

     

Net investment income (loss)

    $ (3,880,360 )    $ (4,267,208 ) 

 

  

Net realized gain (loss)

      33,290,197       (10,688,020 ) 

 

  

Change in net unrealized appreciation (depreciation)

      61,395,329       (96,060,092 ) 

 

  

Net increase (decrease) in net assets resulting from operations

      90,805,166       (111,015,320 ) 

 

  

Distributions to shareholders from distributable earnings:

     

Class A

      –       (8,480,586 ) 

 

  

Class C

      –       (629,186 ) 

 

  

Class Y

      –       (481,970 ) 

 

  

Investor Class

      –       (6,284,245 ) 

 

  

Class R5

      –       (5,774 ) 

 

  

Class R6

      –       (20,093 ) 

 

  

Total distributions from distributable earnings

      –       (15,901,854 ) 

 

  

Share transactions–net:

     

Class A

      7,309,593       (26,687,914 ) 

 

  

Class C

      1,294,143       (3,474,883 ) 

 

  

Class Y

      (1,067,989 )      (7,558,270 ) 

 

  

Investor Class

      (12,692,071 )      (21,571,417 ) 

 

  

Class R5

      (10,728 )      (19,449 ) 

 

  

Class R6

      573,452       1,021,731  

 

  

Net increase (decrease) in net assets resulting from share transactions

      (4,593,600 )      (58,290,202 ) 

 

  

Net increase (decrease) in net assets

      86,211,566       (185,207,376 ) 

 

  

Net assets:

     

Beginning of period

      1,110,125,709       1,295,333,085  

 

  

End of period

    $ 1,196,337,275     $ 1,110,125,709  

 

  

 

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

 

9   Invesco Technology Fund

Financial Highlights

(Unaudited)

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(b)

  

Net assets,

end of period

(000’s 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 10/31/23

     $ 40.36     $ (0.15 )     $ 3.45     $ 3.30     $ -     $ 43.66       8.18 %     $ 656,390       1.08 %(d)       1.09 %(d)       (0.63 )%(d)       44 %

Year ended 04/30/23

       44.73       (0.17 )       (3.63 )       (3.80 )       (0.57 )       40.36       (8.37 )       600,500       1.13       1.13       (0.43 )       142

Year ended 04/30/22

       72.50       (0.49 )       (10.69 )       (11.18 )       (16.59 )       44.73       (20.67 )       695,429       1.02       1.02       (0.75 )       95

Year ended 04/30/21

       50.35       (0.46 )       27.38       26.92       (4.77 )       72.50       54.37       927,620       1.10       1.10       (0.71 )       59

Year ended 04/30/20

       49.68       (0.29 )       5.71       5.42       (4.75 )       50.35       11.31       572,351       1.19       1.19       (0.58 )       38

Year ended 04/30/19

       46.98       (0.34 )       6.66       6.32       (3.62 )       49.68       14.87       443,050       1.23       1.23       (0.71 )       48

Class C

                                                

Six months ended 10/31/23

       26.16       (0.21 )       2.24       2.03       -       28.19       7.76       32,882       1.83 (d)        1.84 (d)        (1.38 )(d)       44

Year ended 04/30/23

       29.46       (0.31 )       (2.42 )       (2.73 )       (0.57 )       26.16       (9.08 )       29,413       1.88       1.88       (1.18 )       142

Year ended 04/30/22

       53.59       (0.68 )       (6.86 )       (7.54 )       (16.59 )       29.46       (21.24 )(e)       37,022       1.74 (e)        1.74 (e)        (1.47 )(e)       95

Year ended 04/30/21

       38.38       (0.72 )       20.70       19.98       (4.77 )       53.59       53.20 (e)        56,566       1.84 (e)        1.84 (e)        (1.45 )(e)       59

Year ended 04/30/20

       39.21       (0.51 )       4.43       3.92       (4.75 )       38.38       10.47       32,723       1.94       1.94       (1.33 )       38

Year ended 04/30/19

       38.15       (0.57 )       5.25       4.68       (3.62 )       39.21       13.98       28,217       1.98       1.98       (1.46 )       48

Class Y

                                                

Six months ended 10/31/23

       41.97       (0.09 )       3.57       3.48       -       45.45       8.29       35,722       0.83 (d)        0.84 (d)        (0.38 )(d)       44

Year ended 04/30/23

       46.37       (0.07 )       (3.76 )       (3.83 )       (0.57 )       41.97       (8.14 )       33,882       0.88       0.88       (0.18 )       142

Year ended 04/30/22

       74.39       (0.34 )       (11.09 )       (11.43 )       (16.59 )       46.37       (20.46 )       46,149       0.77       0.77       (0.50 )       95

Year ended 04/30/21

       51.45       (0.31 )       28.02       27.71       (4.77 )       74.39       54.75       62,294       0.85       0.85       (0.46 )       59

Year ended 04/30/20

       50.55       (0.17 )       5.82       5.65       (4.75 )       51.45       11.57       36,341       0.94       0.94       (0.33 )       38

Year ended 04/30/19

       47.62       (0.22 )       6.77       6.55       (3.62 )       50.55       15.16       32,658       0.98       0.98       (0.46 )       48

Investor Class

                                                

Six months ended 10/31/23

       40.27       (0.13 )       3.44       3.31       -       43.58       8.22 (f)         467,781       1.00 (d)(f)        1.01 (d)(f)        (0.55 )(d)(f)       44

Year ended 04/30/23

       44.58       (0.12 )       (3.62 )       (3.74 )       (0.57 )       40.27       (8.26 )(f)       443,544       1.00 (f)        1.00 (f)        (0.30 )(f)       142

Year ended 04/30/22

       72.24       (0.42 )       (10.65 )       (11.07 )       (16.59 )       44.58       (20.59 )(f)       514,752       0.91 (f)        0.91 (f)        (0.64 )(f)       95

Year ended 04/30/21

       50.13       (0.39 )       27.27       26.88       (4.77 )       72.24       54.53 (f)        698,143       1.00 (f)        1.00 (f)        (0.61 )(f)       59

Year ended 04/30/20

       49.44       (0.24 )       5.68       5.44       (4.75 )       50.13       11.41 (f)        483,563       1.09 (f)        1.09 (f)        (0.48 )(f)       38

Year ended 04/30/19

       46.71       (0.28 )       6.63       6.35       (3.62 )       49.44       15.02 (f)        475,857       1.11 (f)        1.11 (f)        (0.59 )(f)       48

Class R5

                                                

Six months ended 10/31/23

       53.08       (0.10 )       4.53       4.43       -       57.51       8.34       483       0.78 (d)        0.78 (d)        (0.33 )(d)       44

Year ended 04/30/23

       58.42       (0.05 )       (4.72 )       (4.77 )       (0.57 )       53.08       (8.07 )       453       0.79       0.79       (0.09 )       142

Year ended 04/30/22

       89.51       (0.38 )       (14.12 )       (14.50 )       (16.59 )       58.42       (20.43 )       520       0.72       0.72       (0.45 )       95

Year ended 04/30/21

       61.17       (0.32 )       33.43       33.11       (4.77 )       89.51       54.88       794       0.77       0.77       (0.38 )       59

Year ended 04/30/20

       59.18       (0.12 )       6.86       6.74       (4.75 )       61.17       11.74       267       0.81       0.81       (0.20 )       38

Year ended 04/30/19

       55.03       (0.16 )       7.93       7.77       (3.62 )       59.18       15.34       263       0.81       0.81       (0.29 )       48

Class R6

                                                

Six months ended 10/31/23

       53.22       (0.08 )       4.55       4.47       -       57.69       8.40       3,079       0.71 (d)        0.71 (d)        (0.26 )(d)       44

Year ended 04/30/23

       58.54       (0.01 )       (4.74 )       (4.75 )       (0.57 )       53.22       (8.02 )       2,334       0.72       0.72       (0.02 )       142

Year ended 04/30/22

       89.60       (0.32 )       (14.15 )       (14.47 )       (16.59 )       58.54       (20.37 )       1,460       0.65       0.65       (0.38 )       95

Year ended 04/30/21

       61.21       (0.29 )       33.45       33.16       (4.77 )       89.60       54.93       1,647       0.74       0.74       (0.35 )       59

Year ended 04/30/20

       59.20       (0.10 )       6.86       6.76       (4.75 )       61.21       11.77       545       0.77       0.77       (0.16 )       38

Year ended 04/30/19

       55.04       (0.15 )       7.93       7.78       (3.62 )       59.20       15.36       483       0.80       0.80       (0.28 )       48

 

(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, 2020, the portfolio turnover calculation excludes the value of securities purchased of $50,768,823 in the effort to realign the Fund’s portfolio holdings after the reorganization of Invesco Technology Sector Fund into the Fund.

(d) 

Annualized.

(e) 

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% and 0.99% for the year ended April 30, 2022 and 2021, respectively.

(f) 

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 0.17%, 0.12%, 0.14%, 0.15%, 0.15% and 0.13% for the six months ended October 31, 2023 and the years ended April 30, 2023, 2022, 2021, 2020 and 2019, respectively.

 

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

 

10   Invesco Technology Fund

Notes to Financial Statements

October 31, 2023

(Unaudited)

NOTE 1–Significant 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 authorized to issue an unlimited number of shares of beneficial interest. Information presented in these financial statements pertains only to the Fund. Matters affecting the Fund or each class will be voted on exclusively by the shareholders of the Fund or each class.

The Fund’s investment objective is long-term growth of capital.

The Fund currently consists of six different classes of shares: Class A, Class C, Class Y, Investor Class, Class R5 and Class R6. Class Y and Investor Class shares are available only to certain 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. Class C shares held for eight years after purchase are eligible for automatic conversion into Class A shares of the same Fund (the “Conversion Feature”). The automatic conversion pursuant to the Conversion Feature will generally occur at the end of the month following the eighth anniversary after a purchase of Class C shares.

The Fund is an investment company and accordingly follows the investment company accounting and reporting guidance in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 946, Financial Services – Investment Companies.

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 is generally valued at its trade price or official closing price that day as of the close of the exchange where the security is principally traded, or lacking any trades or official closing price on a particular day, the security may be valued at the closing bid or ask 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 using prices provided by an independent pricing service they may be considered fair valued. Futures contracts are valued at the daily settlement price set by an exchange on which they are principally traded. Where a final settlement price exists, exchange-traded options are valued at the final settlement price from the exchange where the option principally trades. Where a final settlement price does not exist, exchange-traded options are valued at the mean between the last bid and ask price generally from the exchange where the option principally trades.

Securities of investment companies that are not exchange-traded (e.g., open-end mutual funds) are valued using such company’s end-of-business-day net asset value per share.

Deposits, other obligations of U.S. and non-U.S. banks and financial institutions are valued at their daily account value.

Fixed income securities (including convertible debt securities) generally are valued on the basis of prices provided by independent pricing services. Prices 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. Pricing services generally value debt obligations assuming orderly transactions of institutional round lot size, but a fund may hold or transact in the same securities in smaller, odd lot sizes. Odd lots often trade at lower prices than institutional round lots, and their value may be adjusted accordingly. 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 New York Stock Exchange (“NYSE”). If market quotations are available and reliable for foreign exchange-traded equity securities, the securities will be valued at the market quotations. Invesco Advisers, Inc. (the “Adviser” or “Invesco”) may use various pricing services to obtain market quotations as well as fair value prices. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become not representative of market value in the Adviser’s judgment (“unreliable”). If, between the time trading ends on a particular security and the close of the customary trading session on the NYSE, a significant event occurs that makes the closing price of the security unreliable, the Adviser 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 in accordance with Board- approved policies and related Adviser procedures (“Valuation Procedures”). 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 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.

Unlisted securities will be valued using prices provided by independent pricing services or by another method that the Adviser, in its judgment, believes better reflects the security’s fair value in accordance with the Valuation Procedures.

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 mean between the last bid and ask prices may be used to value debt obligations, including corporate loans.

Securities for which market quotations are not readily available are fair valued by the Adviser in accordance with the Valuation Procedures. If a fair value price provided by a pricing service is unreliable, the Adviser will fair value the security using the Valuation Procedures. 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 security’s 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 Fund investments.

Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general market conditions which are not specifically related to the particular issuer, such as real or perceived adverse economic conditions, changes in the general outlook for revenues or corporate earnings, changes in interest or currency rates, regional or global instability, natural or environmental disasters, widespread disease or other public health issues, war, acts of terrorism, significant governmental actions or adverse investor sentiment generally 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.

The price the Fund could receive upon the sale of any investment may differ from the Adviser’s valuation of the investment, particularly for securities that are valued using a fair valuation technique. When fair valuation techniques are applied, the Adviser uses available information, including both observable and unobservable inputs and assumptions, to determine a methodology that will result in a valuation that the Adviser believes approximates market value. Fund securities that are fair valued may be subject to greater fluctuation in their value from one day to the next than would be the case if market quotations were used.

 

11   Invesco Technology Fund

Because of the inherent uncertainties of valuation, and the degree of subjectivity in such decisions, the Fund could realize a greater or lesser than expected gain or loss upon the sale of the investment.

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 an accrual basis from settlement date and includes coupon interest and amortization of premium and accretion of discount on debt securities as applicable. 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 Fund’s net asset value and, accordingly, they reduce the Fund’s 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 the Statement of Changes in Net Assets, or the net investment income per share and the 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, the country that has the primary market for the issuer’s securities and its “country of risk” as determined by a third party service provider, 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 Fund’s 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 Fund’s 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 based on relative net assets of Class R5 and Class R6. 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 Trust’s 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 Fund’s servicing agreements, that contain a variety of indemnification clauses. The Fund’s 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 Fund’s 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, unregistered investment companies that comply with Rule 2a-7 under the 1940 Act and money market funds (collectively, “affiliated money market funds”) and is shown as such on the Schedule of Investments. The Fund bears the risk of loss with respect to the investment of collateral. It is the Fund’s 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. When loaning securities, the Fund retains certain benefits of owning the securities, including the economic equivalent of dividends or interest generated by the security. 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. The securities loaned are subject to termination at the option of the borrower or the Fund. Upon termination, the borrower will return to the Fund the securities loaned and the Fund will return the collateral. 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 and the securities may lose value during the delay which could result in potential losses to the Fund. Some of these losses may be indemnified by the lending agent. 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, are included in Dividends from affiliated money market funds on the Statement of Operations. The aggregate value of securities out on loan, if any, is shown as a footnote on the Statement of Assets and Liabilities.

The Adviser serves as an affiliated securities lending agent for the Fund. The Bank of New York Mellon also serves as a securities lending agent. To the extent the Fund utilizes the Adviser as an affiliated securities lending agent, the Fund conducts its securities lending in accordance with, and in reliance upon, no-action letters issued by the SEC staff that provide guidance on how an affiliate may act as a direct agent lender and receive compensation for those services in a manner

 

12   Invesco Technology Fund

consistent with the federal securities laws. For the six months ended October 31, 2023, the Fund paid the Adviser $13,171 in fees for securities lending agent services. Fees paid to the Adviser for securities lending agent services, if any, are included in Dividends from affiliated money market funds on the Statement of Operations.

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 the 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 Fund’s 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 exchange of the two currencies on the settlement date, 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).

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 for hedging 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 Fund’s 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.

The Fund is non-diversified and may invest in securities of fewer issuers than if it were diversified. Thus, the value of the Fund’s shares may vary more widely and the Fund may be subject to greater market and credit risk than if the Fund invested more broadly.

Active trading of portfolio securities may result in added expenses, a lower return and increased tax liability.

NOTE 2–Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with the Adviser. Under the terms of the investment advisory agreement, the Fund accrues daily and pays monthly an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

 

Average Daily Net Assets    Rate  

 

  

First $ 500 million

      0.670%  

 

  

Next $500 million

      0.640%  

 

  

Next $1 billion

      0.520%  

 

  

Next $2 billion

      0.450%  

 

  

Next $2 billion

      0.400%  

 

  

Next $2 billion

      0.375%  

 

  

Over $8 billion

      0.350%  

 

  

For the six months ended October 31, 2023, the effective advisory fee rate 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 Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Canada Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, will 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 Affiliated Sub-Adviser(s).

Effective July 1, 2023, the Adviser has agreed, for an indefinite period, 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 C, Class Y, Investor Class, Class R5 and Class R6 shares to 2.00%, 2.75%, 1.75%, 2.00%, 1.75% and 1.75%, respectively, of the Fund’s average daily net assets (the “boundary limits”). Prior to July 1, 2023, the same boundary limits were in effect with an expiration date of June 30, 2023. In determining the Adviser’s 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. Invesco may amend and/or terminate these boundary limits at any time in its sole discretion and will inform the Board of Trustees of any such changes. The Adviser did not waive fees and/or reimburse expenses during the period under these boundary limits.

Further, the Adviser has contractually agreed, through at least June 30, 2025, 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, 2023, the Adviser waived advisory fees of $9,450.

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, 2023, expenses incurred under the agreement are shown in the Statement of Operations as Administrative services fees. Invesco has entered into a sub-administration agreement whereby State Street Bank and Trust Company

 

13   Invesco Technology Fund

(“SSB”) serves as fund accountant and provides certain administrative services to the Fund. Pursuant to a custody agreement with the Trust on behalf of the Fund, SSB also serves as the Fund’s custodian.

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 services are charged back to the Fund, subject to certain limitations approved by the Trust’s Board of Trustees. For the six months ended October 31, 2023, 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 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 Fund’s Class A, Class C and Investor Class shares (collectively, the “Plans”). The Fund, pursuant to the Plans, reimburses IDI for its allocated share of expenses incurred for the period, up to a maximum annual rate of 0.25% of the average daily net assets of Class A shares, up to 1.00% of the average daily net assets of Class C shares, and up to 0.25% of the average daily net assets of Investor Class shares. The fees are accrued daily and paid monthly. Of the Plans 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, 2023, 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, 2023, IDI advised the Fund that IDI retained $67,566 in front-end sales commissions from the sale of Class A shares and $3,929 and $2,126 from Class A and Class C shares, respectively, for CDSC imposed upon redemptions by shareholders.

For the six months ended October 31, 2023, the Fund incurred $12,935 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 3–Additional 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. 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 investment’s 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 Adviser’s 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, 2023. 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  

 

  

Investments in Securities

            

 

  

Common Stocks & Other Equity Interests

    $ 1,137,680,305      $ 9,081,767        $–       $ 1,146,762,072  

 

  

Money Market Funds

      48,367,917        70,834,829          –         119,202,746  

 

  

Total Investments

    $ 1,186,048,222      $ 79,916,596        $–       $ 1,265,964,818  

 

  

NOTE 4–Expense 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, 2023, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $32,078.

NOTE 5–Trustees’ 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 6–Cash Balances

The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with SSB, 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 Technology Fund

NOTE 7–Tax 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 Fund’s 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 Fund’s 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. The ability to utilize capital loss carryforward 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, 2023, as follows:

 

Capital Loss Carryforward*
Expiration    Short-Term    Long-Term    Total

Not subject to expiration

      $ 10,895,919      $ –      $ 10,895,919

 

*

Capital loss carryforward 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 8–Investment Transactions

The aggregate amount of investment securities (other than short-term securities, U.S. Government obligations and money market funds, if any) purchased and sold by the Fund during the six months ended October 31, 2023 was $545,452,472 and $575,137,030, respectively. Cost of investments, including any derivatives, 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 Investments on a Tax Basis       

 

  

Aggregate unrealized appreciation of investments

    $ 344,335,216  

 

  

Aggregate unrealized (depreciation) of investments

      (32,751,673 ) 

 

  

Net unrealized appreciation of investments

    $ 311,583,543  

 

  

 

Cost of investments for tax purposes is $954,381,275.

   

NOTE 9–Share Information

 

     Summary of Share Activity  

 

  
     Six months ended
October 31, 2023(a) 		    Year ended
April 30, 2023		  
     Shares     Amount     Shares     Amount  

 

  

Sold:

         

Class A

      1,082,680     $   49,579,426        1,492,652     $ 59,794,545  

 

  

Class C

      221,512       6,594,657       326,522       8,541,652  

 

  

Class Y

      113,911       5,396,627       205,849       8,636,636  

 

  

Investor Class

      190,241       8,773,480       263,201       10,511,644  

 

  

Class R5

      442       25,393       1,580       79,272  

 

  

Class R6

      18,660       1,121,392       31,780       1,681,803  

 

  

Issued as reinvestment of dividends:

         

Class A

      -       -       220,620        8,039,076  

 

  

Class C

      -       -       25,783       610,811  

 

  

Class Y

      -       -       11,153       422,234  

 

  

Investor Class

      -       -       163,393       5,939,318  

 

  

Class R5

      -       -       109       5,194  

 

  

Class R6

      -       -       403       19,321  

 

  

Automatic conversion of Class C shares to Class A shares:

         

Class A

      38,891       1,747,171       70,604       2,774,024  

 

  

Class C

      (60,118 )      (1,747,171 )      (108,110 )      (2,774,024 ) 

 

  

Reacquired:

         

Class A

      (965,732 )      (44,017,004 )      (2,451,473 )      (97,295,559 ) 

 

  

Class C

      (119,369 )      (3,553,343 )      (376,717 )      (9,853,322 ) 

 

  

Class Y

      (135,373 )      (6,464,616 )      (404,891 )      (16,617,140 ) 

 

  

Investor Class

      (470,648 )      (21,465,551 )      (960,051 )      (38,022,379 ) 

 

  

Class R5

      (582 )      (36,121 )      (2,057 )      (103,915 ) 

 

  

Class R6

      (9,132 )      (547,940 )      (13,276 )      (679,393 ) 

 

  

Net increase (decrease) in share activity

      (94,617 )    $ (4,593,600 )      (1,502,926 )    $ (58,290,202 ) 

 

  

 

(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.

 

15   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, 2023 through October 31, 2023.

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 Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s 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.

 

          ACTUAL  

HYPOTHETICAL

(5% annual return before

expenses)

     
     Beginning
     Account Value      
(05/01/23)		   Ending
    Account Value      
(10/31/23)1 		  Expenses
    Paid During      
Period		   Ending
    Account Value      
(10/31/23)1		   Expenses
    Paid During     
Period2 		 

      Annualized      
Expense

Ratio

Class A    

   $1,000.00   $1,081.50   $5.65   $1,019.71   $5.48   1.08%

Class C    

     1,000.00     1,077.20     9.56     1,015.94     9.27   1.83    

Class Y    

     1,000.00     1,082.70     4.35     1,020.96     4.22   0.83    

Investor Class    

     1,000.00     1,081.90     5.23     1,020.11     5.08   1.00    

Class R5    

     1,000.00     1,083.30     4.08     1,021.22     3.96   0.78    

Class R6    

     1,000.00     1,083.60     3.72     1,021.57     3.61   0.71    

 

1 

The actual ending account value is based on the actual total return of the Fund for the period May 1, 2023 through October 31, 2023, after actual expenses and will differ from the hypothetical ending account value which is based on the Fund’s expense ratio and a hypothetical annual return of 5% before expenses.

2 

Expenses are equal to the Fund’s annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 184/366 to reflect the most recent fiscal half year.

 

16   Invesco Technology Fund

Approval of Investment Advisory and Sub-Advisory Contracts

    

 

At meetings held on June 13, 2023, the Board of Trustees (the Board or the Trustees) of AIM Sector Funds (Invesco Sector Funds) as a whole, and the independent Trustees, who comprise over 75% of the Board, voting separately, approved the continuance of the Invesco Technology Fund’s (the Fund) Master Investment Advisory Agreement with Invesco Advisers, Inc. (Invesco Advisers and the investment advisory agreement) and the Master Intergroup Sub-Advisory Contract for Mutual Funds with Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and by Invesco Canada Ltd. (collectively, the Affiliated Sub-Advisers and the sub-advisory contracts) for another year, effective July 1, 2023. After evaluating the factors discussed below, among others, the Board approved the renewal of the Fund’s investment advisory agreement and the sub-advisory contracts and determined that the compensation payable thereunder by the Fund to Invesco Advisers and by Invesco Advisers to the Affiliated Sub-Advisers is fair and reasonable.

The Board’s Evaluation Process

The Board has established an Investments Committee, which in turn has established Sub-Committees, that meet throughout the year to review the performance of funds advised by Invesco Advisers (the Invesco Funds). The Sub-Committees meet regularly with portfolio managers for their assigned Invesco Funds and other members of management to review information about investment performance and portfolio attributes of these funds. The Board has established additional standing and ad hoc committees that meet regularly throughout the year to review matters within their purview, including a working group focused on opportunities to make ongoing and continuous improvements to the annual review process for the Invesco Funds’ investment advisory and sub-advisory contracts. The Board took into account evaluations and reports that it received from its committees and sub-committees, as well as the information provided to the Board and its committees and sub-committees throughout the year, in considering whether to approve each Invesco Fund’s investment advisory agreement and sub-advisory contracts.

    As part of the contract renewal process, the Board reviews and considers information provided in response to requests for information submitted to management by the independent Trustees with assistance from legal counsel to the independent Trustees and the Senior Officer, an officer of the Invesco Funds who reports directly to the independent Trustees. The Board receives comparative investment performance and fee and expense data regarding the Invesco Funds prepared by Broadridge Financial Solutions, Inc. (Broadridge), an independent mutual fund data provider, as well as information on the composition of the peer groups provided by Broadridge and its methodology for determining peer groups. The Board also receives an independent written evaluation from the Senior Officer. The Senior Officer’s evaluation is prepared as part of his responsibility to manage the process by which the Invesco Funds’ proposed management fees

are negotiated during the annual contract renewal process to ensure they are negotiated in a manner that is at arms’ length and reasonable in accordance with certain negotiated regulatory requirements. In addition to meetings with Invesco Advisers and fund counsel throughout the year and as part of meetings convened on May 2, 2023 and June 13, 2023, the independent Trustees also discussed the continuance of the investment advisory agreement and sub-advisory contracts in separate sessions with the Senior Officer and with independent legal counsel. Also, as part of the contract renewal process, the independent Trustees reviewed and considered information provided in response to follow-up requests for information submitted by the independent Trustees to management. The independent Trustees met and discussed those follow-up responses with legal counsel to the independent Trustees and the Senior Officer.

    The discussion below is a summary of the Senior Officer’s independent written evaluation with respect to the Fund’s investment advisory agreement and sub-advisory contracts, as well as a discussion of the material factors and related conclusions that formed the basis for the Board’s approval of the Fund’s investment advisory agreement and sub-advisory contracts. The Trustees’ review and conclusions are based on the comprehensive consideration of all information presented to them during the course of the year and in prior years and are not the result of any single determinative factor. Moreover, one Trustee may have weighed a particular piece of information or factor differently than another Trustee. The information received and considered by the Board was current as of various dates prior to the Board’s approval on June 13, 2023.

Factors and Conclusions and Summary of Independent Written Fee Evaluation

A.

Nature, Extent and Quality of Services Provided by Invesco Advisers and the Affiliated Sub-Advisers

The Board reviewed the nature, extent and quality of the advisory services provided to the Fund by Invesco Advisers under the Fund’s investment advisory agreement, and the credentials and experience of the officers and employees of Invesco Advisers who provide these services, including the Fund’s portfolio manager(s). The Board considered recent senior management changes at Invesco and Invesco Advisers, including the appointment of new Co-Heads of Investments, that had been presented to and discussed with the Board. The Board’s review included consideration of Invesco Advisers’ investment process and oversight, credit analysis, and research capabilities. The Board considered information regarding Invesco Advisers’ programs for and resources devoted to risk management, including management of investment, enterprise, operational, liquidity, derivatives, valuation and compliance risks, and technology used to manage such risks. The Board received information regarding Invesco’s methodology for compensating its investment professionals and the incentives and accountability it creates, as well as how it impacts Invesco’s ability to attract and retain talent. The Board received a description of, and reports related to, Invesco Advisers’ global security program and business continuity plans and of its approach to data privacy

and cybersecurity, including related testing. The Board also considered non-advisory services that Invesco Advisers and its affiliates provide to the Invesco Funds, such as various middle office and back office support functions, third party oversight, internal audit, valuation, portfolio trading and legal and compliance. The Board observed that Invesco Advisers’ systems preparedness and ongoing investment enabled Invesco Advisers to manage, operate and oversee the Invesco Funds with minimal impact or disruption through challenging environments. The Board reviewed and considered the benefits to shareholders of investing in a Fund that is part of the family of funds under the umbrella of Invesco Ltd., Invesco Advisers’ parent company, and noted Invesco Ltd.’s depth and experience in running an investment management business, as well as its commitment of financial and other resources to such business. The Board concluded that the nature, extent and quality of the services provided to the Fund by Invesco Advisers are appropriate and satisfactory.

    The Board reviewed the services that may be provided to the Fund by the Affiliated Sub-Advisers under the sub-advisory contracts and the credentials and experience of the officers and employees of the Affiliated Sub-Advisers who provide these services. The Board noted the Affiliated Sub-Advisers’ expertise with respect to certain asset classes and that the Affiliated Sub-Advisers have offices and personnel that are located in financial centers around the world. As a result, the Board noted that the Affiliated Sub-Advisers can provide research and investment analysis on the markets and economies of various countries and territories in which the Fund may invest, make recommendations regarding securities and assist with portfolio trading. The Board concluded that the sub-advisory contracts may benefit the Fund and its shareholders by permitting Invesco Advisers to use the resources and talents of the Affiliated Sub-Advisers in managing the Fund. The Board concluded that the nature, extent and quality of the services that may be provided to the Fund by the Affiliated Sub-Advisers are appropriate and satisfactory.

B.

Fund Investment Performance

The Board considered Fund investment performance as a relevant factor in considering whether to approve the investment advisory agreement. The Board did not view Fund investment performance as a relevant factor in considering whether to approve the sub-advisory contracts for the Fund, as no Affiliated Sub-Adviser currently manages assets of the Fund.

    The Board compared the Fund’s investment performance over multiple time periods ending December 31, 2022 to the performance of funds in the Broadridge performance universe and against the NASDAQ Composite Index (Index). The Board noted that performance of Class A shares of the Fund was in the fourth quintile of its performance universe for the one and five year periods and the fifth quintile for the three year period (the first quintile being the best performing funds and the fifth quintile being the worst performing funds). The Board noted that performance of Class A shares of the Fund was below the performance of the Index for the one, three and five year periods. The Board considered that security selection in and overweight and underweight

 

 

17   Invesco Technology Fund

exposures to certain sectors and technology industries negatively impacted the Fund’s relative performance. The Board also considered that the Fund underwent a portfolio management team change and investment process change in November 2022, and that performance results prior to such date were those of the prior portfolio management team. The Board recognized that the performance data reflects a snapshot in time as of a particular date and that selecting a different performance period could produce different results. The Board also reviewed more recent Fund performance as well as other performance metrics, which did not change its conclusions.

C.

Advisory and Sub-Advisory Fees and Fund Expenses

The Board compared the Fund’s contractual management fee rate to the contractual management fee rates of funds in the Fund’s Broadridge expense group. The Board noted that the contractual management fee rate for Class A shares of the Fund was below the median contractual management fee rate of funds in its expense group. The Board noted that the term “contractual management fee” for funds in the expense group may include both advisory and certain non-portfolio management administrative services fees, but that Broadridge is not able to provide information on a fund-by-fund basis as to what is included. The Board also reviewed the methodology used by Broadridge in calculating expense group information, which includes using each fund’s contractual management fee schedule (including any applicable breakpoints) as reported in the most recent prospectus or statement of additional information for each fund in the expense group. The Board also considered comparative information regarding the Fund’s total expense ratio and its various components.

    The Board noted that Invesco Advisers has contractually agreed to waive fees and/or limit expenses of the Fund for the term disclosed in the Fund’s registration statement in an amount necessary to limit total annual operating expenses to a specified percentage of average daily net assets for each class of the Fund.

    The Board noted that Invesco Advisers and the Affiliated Sub-Advisers do not manage other similarly managed mutual funds or client accounts.

    The Board also considered the services that may be provided by the Affiliated Sub-Advisers pursuant to the sub-advisory contracts, as well as the fees payable by Invesco Advisers to the Affiliated Sub-Advisers pursuant to the sub-advisory contracts.

D.

Economies of Scale and Breakpoints

The Board considered the extent to which there may be economies of scale in the provision of advisory services to the Fund and the Invesco Funds, and the extent to which such economies of scale are shared with the Fund and the Invesco Funds. The Board acknowledged the difficulty in calculating and measuring economies of scale at the individual fund level; noting that only indicative and estimated measures are available at the individual fund level and that such measures are subject to uncertainty. The Board considered that the Fund benefits from economies of scale through contractual breakpoints in the Fund’s advisory fee schedule, which generally operate to reduce the Fund’s expense ratio as it grows in size. The Board noted

that the Fund also shares in economies of scale through Invesco Advisers’ ability to negotiate lower fee arrangements with third party service providers. The Board noted that the Fund may also benefit from economies of scale through initial fee setting, fee waivers and expense reimbursements, as well as Invesco Advisers’ investment in its business, including investments in business infrastructure, technology and cybersecurity.

E. Profitability and Financial Resources

The Board reviewed information from Invesco Advisers concerning the costs of the advisory and other services that Invesco Advisers and its affiliates provide to the Fund and the Invesco Funds and the profitability of Invesco Advisers and its affiliates in providing these services in the aggregate and on an individual fund-by-fund basis. The Board considered the methodology used for calculating profitability and the periodic review and enhancement of such methodology. The Board noted that Invesco Advisers continues to operate at a net profit from services Invesco Advisers and its affiliates provide to the Invesco Funds in the aggregate and to most Invesco Funds individually. The Board considered that profits to Invesco Advisers can vary significantly depending on the particular Invesco Fund, with some Invesco Funds showing indicative losses to Invesco Advisers and others showing indicative profits at healthy levels, and that Invesco Advisers’ support for and commitment to an Invesco Fund are not, however, solely dependent on the profits realized as to that Fund. The Board did not deem the level of profits realized by Invesco Advisers and its affiliates from providing such services to be excessive, given the nature, extent and quality of the services provided. The Board noted that Invesco Advisers provided information demonstrating that Invesco Advisers is financially sound and has the resources necessary to perform its obligations under the investment advisory agreement, and provided representations indicating that the Affiliated Sub-Advisers are financially sound and have the resources necessary to perform their obligations under the sub-advisory contracts. The Board noted the cyclical and competitive nature of the global asset management industry.

F.

Collateral Benefits to Invesco Advisers and its Affiliates

The Board considered various other benefits received by Invesco Advisers and its affiliates from the relationship with the Fund, including the fees received for providing administrative, transfer agency and distribution services to the Fund. The Board received comparative information regarding fees charged for these services, including information provided by Broadridge and other independent sources. The Board reviewed the performance of Invesco Advisers and its affiliates in providing these services and the organizational structure employed to provide these services. The Board noted that these services are provided to the Fund pursuant to written contracts that are reviewed and subject to approval on an annual basis by the Board based on its determination that the services are required for the operation of the Fund.

    The Board considered the benefits realized by Invesco Advisers and the Affiliated Sub-Advisers as a result of portfolio brokerage transactions executed through “soft dollar” arrangements. The Board noted that soft dollar arrangements may result in the Fund bearing costs to purchase research that may be used by Invesco Advisers or the Affiliated Sub-Advisers with other clients and may reduce Invesco Advisers’ or the Affiliated Sub-Advisers’ expenses. The Board also considered that it receives from Invesco Advisers periodic reports that include a representation to the

effect that these arrangements are consistent with regulatory requirements. The Board did not deem the soft dollar arrangements to be inappropriate.

    The Board considered that the Fund’s uninvested cash and cash collateral from any securities lending arrangements may be invested in registered money market funds or, with regard to securities lending cash collateral, unregistered funds that comply with Rule 2a-7 (collectively referred to as “affiliated money market funds”) advised by Invesco Advisers. The Board considered information regarding the returns of the affiliated money market funds relative to comparable overnight investments, as well as the fees paid by the affiliated money market funds to Invesco Advisers and its affiliates. In this regard, the Board noted that Invesco Advisers receives advisory fees from these affiliated money market funds attributable to the Fund’s investments. The Board also noted that Invesco Advisers has contractually agreed to waive through varying periods an amount equal to 100% of the net advisory fee Invesco Advisers receives from the affiliated money market funds with respect to the Fund’s investment in the affiliated money market funds of uninvested cash, but not cash collateral. The Board concluded that the advisory fees payable to Invesco Advisers from the Fund’s investment of cash collateral from any securities lending arrangements in the affiliated money market funds are for services that are not duplicative of services provided by Invesco Advisers to the Fund.

    The Board considered that Invesco Advisers may serve as the Fund’s affiliated securities lending agent and evaluated the benefits realized by Invesco Advisers when serving in such role, including the compensation received. The Board considered Invesco Advisers’ securities lending platform and corporate governance structure for securities lending, including Invesco Advisers’ Securities Lending Governance Committee and its related responsibilities. The Board noted that to the extent the Fund utilizes Invesco Advisers as an affiliated securities lending agent, the Fund conducts its securities lending in accordance with, and in reliance upon, no-action letters issued by the SEC staff that provide guidance on how an affiliate may act as a direct agent lender and receive compensation for those services without obtaining exemptive relief. The Board considered information provided by Invesco Advisers related to the performance of Invesco Advisers as securities lending agent, including a summary of the securities lending services provided to the Fund by Invesco Advisers and the compensation paid to Invesco Advisers for such services, as well as any revenues generated for the Fund in connection with such securities lending activity and the allocation of such revenue between the Fund and Invesco Advisers.

    The Board also received information about commissions that an affiliated broker may receive for executing certain trades for the Fund. Invesco Advisers and the Affiliated Sub-Advisers advised the Board of the benefits to the Fund of executing trades through the affiliated broker and that such trades were executed in compliance with rules under the federal securities laws and consistent with best execution obligations.

 

 

18   Invesco Technology Fund

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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 portfolio holdings four times each year, at the end of each fiscal quarter. For the second and fourth quarters, the list appears, respectively, in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the list with the Securities and Exchange Commission (SEC) as an exhibit to its reports on Form N-PORT. The most recent list of portfolio holdings is available at invesco.com/completeqtrholdings. Shareholders can also look up the Fund’s Form N-PORT filings on the SEC website, 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/corporate/about-us/esg. 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. This 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.

 

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SEC file number(s): 811-03826 and 002-85905                    Invesco Distributors, Inc.    I-TEC-SAR-1                                         

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Semiannual Report to Shareholders    October 31, 2023

Invesco Value Opportunities Fund

Nasdaq:

A: VVOAX ∎ C: VVOCX ∎ R: VVORX ∎ Y: VVOIX ∎ R5: VVONX ∎ R6: VVOSX

 

    

   
2   Fund Performance
4   Schedule of Investments
7   Financial Statements
10   Financial Highlights
11   Notes to Financial Statements
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 is 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, 4/30/23 to 10/31/23, 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

     2.50 % 

Class C Shares

     2.17  

Class R Shares

     2.34  

Class Y Shares

     2.68  

Class R5 Shares

     2.65  

Class R6 Shares

     2.71  

S&P 500 Index▼ (Broad Market Index)

     1.39  

Russell Midcap Value Index▼ (Style-Specific Index)

     -5.69  

Lipper Mid-Cap Value Funds Index∎ (Peer Group Index)

     -3.84  

Source(s): ▼RIMES Technologies Corp.; ∎Lipper Inc.

  

 

The S&P 500® Index is an unmanaged index considered representative of the US stock market.

  The Russell Midcap® Value Index is an unmanaged index considered representative of mid-cap value stocks. The Russell Midcap Value Index is a trademark/service mark of the Frank Russell Co. Russell® is a trademark of the Frank Russell Co.

  The Lipper Mid-Cap Value Funds Index is an unmanaged index considered representative of mid-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.

 

 

 

 

 

 

 

 

 

 

For more information about your Fund

 

Read the most recent quarterly commentary from your Fund’s portfolio managers by visiting invesco.com/us. Click on “Products” and select “Mutual Funds.” Use the “Product Finder” to locate your Fund; then click on its name to access its product detail page. There, you can learn more about your Fund’s investment strategies, holdings and performance.

  Also, visit blog.invesco.us.com, where many of Invesco’s investment professionals share their insights about market and economic news and trends.

 

 

    

 

 

2   Invesco Value Opportunities Fund

    

    

    

 

Average Annual Total Returns

 

As of 10/31/23, including maximum applicable sales charges

 

Class A Shares

        

Inception (6/25/01)

     5.99 % 

10 Years

     7.07  

  5 Years

     9.22  

  1 Year

     -2.80  

Class C Shares

        

Inception (6/25/01)

     5.98 % 

10 Years

     7.07  

  5 Years

     9.70  

  1 Year

     1.21  

Class R Shares

        

Inception (5/23/11)

     8.50 % 

10 Years

     7.41  

  5 Years

     10.19  

  1 Year

     2.55  

Class Y Shares

        

Inception (3/23/05)

     6.53 % 

10 Years

     7.94  

  5 Years

     10.75  

  1 Year

     3.12  

Class R5 Shares

        

Inception (5/23/11)

     9.22 % 

10 Years

     8.09  

  5 Years

     10.88  

  1 Year

     3.14  

Class R6 Shares

        

10 Years

     7.97 % 

  5 Years

     10.92  

  1 Year

     3.27  

Performance includes litigation proceeds. Had these proceeds not been received, total returns would have been lower.

    Effective June 1, 2010, Class A, Class C and Class I shares of the predecessor fund, Van Kampen Value Opportunities Fund, advised by Van Kampen Asset Management were reorganized into Class A, Class C and Class Y shares, respectively, of Invesco Van Kampen Value Opportunities Fund (renamed Invesco Value Opportunities Fund). Returns shown above, prior to June 1, 2010, for Class A, Class C and Class Y shares are those for Class A, Class C and Class I shares of the predecessor fund. Share class returns will differ from the predecessor fund because of different expenses.

    Class R6 shares incepted on April 4, 2017. Performance shown prior to that date is that of the Fund’s Class A shares at net asset value and includes the 12b-1 fees applicable to Class A shares.

    The performance data quoted represent past performance and cannot guarantee future results; current performance may be lower or higher. Please visit invesco.com/performance for the most recent month-end performance. Performance figures reflect reinvested distributions, changes in net asset value and the effect of the maximum sales charge unless otherwise stated.

Performance figures do not reflect deduction of taxes a shareholder would pay on Fund distributions or sale of Fund shares. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

    Class A share performance reflects the maximum 5.50% sales charge, and Class C share performance reflects the applicable contingent deferred sales charge (CDSC) for the period involved. The CDSC on Class C shares is 1% for the first year after purchase. Class R, Class Y, Class R5 and Class R6 shares do not have a front-end sales charge or a CDSC; therefore, performance is at net asset value.

    The performance of the Fund’s share classes will differ primarily due to different sales charge structures and class expenses.

    Fund performance reflects any applicable fee waivers and/or expense reimbursements. Had the adviser not waived fees and/or reimbursed expenses currently or in the past, returns would have been lower. See current prospectus for more information.

    

 

 

3   Invesco Value Opportunities Fund

Schedule of Investments(a)

October 31, 2023

(Unaudited)

 

     Shares      Value  

 

  

Common Stocks & Other Equity Interests–96.87%

 

Aerospace & Defense–4.18%

      

Huntington Ingalls Industries, Inc.

      194,000      $      42,645,080  

 

  

Leonardo S.p.A. (Italy)

      4,756,000        71,751,478  

 

  
        114,396,558  

 

  

Automotive Parts & Equipment–1.11%

 

Dana, Inc.

      2,652,868        30,454,925  

 

  

Coal & Consumable Fuels–1.75%

 

Cameco Corp. (Canada)

      1,173,344        48,001,503  

 

  

Communications Equipment–1.74%

 

Lumentum Holdings, Inc.(b)(c)

      1,214,500        47,620,545  

 

  

Construction & Engineering–4.72%

 

AECOM(c)

      740,526        56,687,265  

 

  

HOCHTIEF AG (Germany)

      293,600        30,324,944  

 

  

MasTec, Inc.(b)

      712,000        42,321,280  

 

  
        129,333,489  

 

  

Construction Machinery & Heavy Transportation Equipment– 1.01%

 

Oshkosh Corp.

      315,546        27,682,851  

 

  

Copper–1.70%

 

Freeport-McMoRan, Inc.

      1,378,000        46,548,840  

 

  

Diversified Chemicals–1.48%

 

Huntsman Corp.

      1,733,100        40,433,223  

 

  

Diversified Metals & Mining–1.91%

 

Teck Resources Ltd., Class B (Canada)

      1,476,800        52,190,112  

 

  

Electric Utilities–2.29%

 

NRG Energy, Inc.

      1,483,100        62,853,778  

 

  

Electrical Components & Equipment–2.30%

 

Vertiv Holdings Co.

      1,604,614        63,013,192  

 

  

Electronic Components–1.75%

 

Coherent Corp.(b)(c)

      1,618,200        47,898,720  

 

  

Electronic Manufacturing Services–1.98%

 

Flex Ltd.(b)

      2,113,623        54,362,383  

 

  

Food Distributors–3.56%

 

Performance Food Group Co.(b)

      782,654        45,206,095  

 

  

US Foods Holding Corp.(b)

      1,344,916        52,371,029  

 

  
        97,577,124  

 

  

Gold–1.87%

 

Agnico Eagle Mines Ltd. (Canada)

      1,091,370        51,196,167  

 

  

Health Care Distributors–1.85%

 

Henry Schein, Inc.(b)

      780,100        50,690,898  

 

  

Health Care Facilities–1.03%

 

Universal Health Services, Inc., Class B

      223,810        28,175,441  

 

  

Health Care Services–3.18%

 

Cigna Group (The)

      239,200             73,960,640  

 

  
     Shares      Value  

 

  

Health Care Services–(continued)

 

Fresenius Medical Care AG & Co. KGaA (Germany)

      392,900      $      13,044,077  

 

  
        87,004,717  

 

  

Hotels, Resorts & Cruise Lines–2.65%

 

Expedia Group, Inc.(b)(c)

      617,800        58,870,162  

 

  

Travel + Leisure Co.

      402,132        13,684,552  

 

  
        72,554,714  

 

  

Household Products–2.07%

 

Spectrum Brands Holdings, Inc.(c)

      754,271        56,811,692  

 

  

Human Resource & Employment Services–0.94%

 

ManpowerGroup, Inc.

      367,704        25,728,249  

 

  

Independent Power Producers & Energy Traders–2.18%

 

Vistra Corp.

      1,822,600        59,635,472  

 

  

Insurance Brokers–2.34%

 

Willis Towers Watson PLC

      272,000        64,162,080  

 

  

Integrated Oil & Gas–2.04%

 

Cenovus Energy, Inc. (Canada)

      2,934,300        55,986,444  

 

  

Investment Banking & Brokerage–1.43%

 

Goldman Sachs Group, Inc. (The)

      129,000        39,165,690  

 

  

Life Sciences Tools & Services–2.36%

 

Avantor, Inc.(b)(c)

      3,708,600        64,640,898  

 

  

Managed Health Care–6.05%

 

Centene Corp.(b)(c)

      1,396,721        96,345,815  

 

  

Molina Healthcare, Inc.(b)(c)

      208,300        69,353,485  

 

  
        165,699,300  

 

  

Metal, Glass & Plastic Containers–0.87%

 

Crown Holdings, Inc.(c)

      297,300        23,962,380  

 

  

Oil & Gas Exploration & Production–10.51%

 

APA Corp.

      1,581,800        62,829,096  

 

  

ARC Resources Ltd. (Canada)

      4,303,300        69,231,385  

 

  

EQT Corp.(c)

      1,031,400        43,710,732  

 

  

Murphy Oil Corp.

      659,700        29,600,739  

 

  

Ovintiv, Inc.(c)

      907,600        43,564,800  

 

  

Southwestern Energy Co.(b)(c)

      5,461,700        38,941,921  

 

  
        287,878,673  

 

  

Oil & Gas Refining & Marketing–1.43%

 

Phillips 66(c)

      343,400        39,171,638  

 

  

Oil & Gas Storage & Transportation–1.86%

 

New Fortress Energy, Inc.(c)

      1,681,150        50,938,845  

 

  

Paper & Plastic Packaging Products & Materials–0.89%

 

Sealed Air Corp.

      794,700        24,468,813  

 

  

Regional Banks–5.28%

 

Huntington Bancshares, Inc.

      4,986,199        48,116,820  

 

  

Pinnacle Financial Partners, Inc.

      816,500             50,916,940  

 

  
 

 

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

 

4   Invesco Value Opportunities Fund

     Shares      Value  

 

  

Regional Banks–(continued)

 

Webster Financial Corp.

      1,198,332      $ 45,500,666  

 

  
        144,534,426  

 

  

Research & Consulting Services–5.03%

 

Jacobs Solutions, Inc.

      462,900        61,704,570  

 

  

KBR, Inc.(c)

      1,306,000        75,943,900  

 

  
        137,648,470  

 

  

Semiconductor Materials & Equipment–2.07%

 

Applied Materials, Inc.

      90,600        11,990,910  

 

  

Lam Research Corp.

      23,100        13,587,882  

 

  

MKS Instruments, Inc.

      474,623        31,163,746  

 

  
        56,742,538  

 

  

Semiconductors–1.41%

 

Skyworks Solutions, Inc.

      444,600        38,564,604  

 

  

Silver–1.06%

 

Pan American Silver Corp. (Canada)

      1,978,572        28,906,937  

 

  

Trading Companies & Distributors–2.72%

 

Air Lease Corp., Class A

      1,341,600        46,459,608  

 

  

WESCO International, Inc.

      219,300        28,114,260  

 

  
        74,573,868  

 

  

Transaction & Payment Processing Services–2.27%

 

Fidelity National Information Services, Inc.

      1,265,200        62,133,972  

 

  

Total Common Stocks & Other Equity Interests
(Cost $2,574,724,867)

 

      2,653,344,169  

 

  
     Shares      Value  

 

  

Money Market Funds–3.04%

      

Invesco Government & Agency Portfolio, Institutional Class, 5.27%(d)(e)

      29,200,596      $ 29,200,596  

 

  

Invesco Liquid Assets Portfolio, Institutional Class, 5.40%(d)(e)

      20,716,404        20,722,619  

 

  

Invesco Treasury Portfolio, Institutional Class, 5.27%(d)(e)

      33,372,110        33,372,110  

 

  

Total Money Market Funds
(Cost $83,291,683)

 

      83,295,325  

 

  

TOTAL INVESTMENTS IN SECURITIES (excluding investments purchased with cash collateral from securities on loan)-99.91%
(Cost $2,658,016,550)

         2,736,639,494  

 

  

Investments Purchased with Cash Collateral from Securities on Loan

 

Money Market Funds–4.23%

 

Invesco Private Government Fund, 5.32%(d)(e)(f)

      32,458,868        32,458,868  

 

  

Invesco Private Prime Fund, 5.53%(d)(e)(f)

      83,484,452        83,492,800  

 

  

Total Investments Purchased with Cash Collateral from Securities on Loan
(Cost $115,951,387)

 

      115,951,668  

 

  

TOTAL INVESTMENTS IN SECURITIES–104.14%
(Cost $2,773,967,937)

 

      2,852,591,162  

 

  

OTHER ASSETS LESS LIABILITIES–(4.14)%

 

      (113,354,929 ) 

 

  

NET ASSETS–100.00%

 

    $ 2,739,236,233  

 

  
 

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 & Poor’s.

(b) 

Non-income producing security.

(c) 

All or a portion of this security was out on loan at October 31, 2023.

(d) 

Affiliated holding. Affiliated holdings are investments in entities which are under common ownership or control of Invesco Ltd. or are investments in entities in which the Fund owns 5% or more of the outstanding voting securities. The table below shows the Fund’s transactions in, and earnings from, its investments in affiliates for the six months ended October 31, 2023.

 

     

Value

April 30, 2023

     

Purchases

at Cost

     

Proceeds

from Sales

      Change in
Unrealized
Appreciation
(Depreciation)		      Realized
Gain		     

Value

October 31, 2023

      Dividend Income  
Investments in Affiliated Money Market Funds:                                                               

Invesco Government & Agency Portfolio, Institutional Class

      $  33,035,494        $   160,853,801        $  (164,688,700)        $       1            $         -        $  29,200,596          $     574,700    

Invesco Liquid Assets Portfolio, Institutional Class

      23,460,147        114,895,573        (117,634,786)        (520)            2,205        20,722,619          415,803    

Invesco Treasury Portfolio, Institutional Class

      37,754,851        183,832,916        (188,215,657)        -            -        33,372,110          655,564    
Investments Purchased with Cash Collateral from Securities on Loan:                                                               

Invesco Private Government Fund

      28,820,789        326,502,574        (322,864,495)        -            -        32,458,868          1,018,224*    

Invesco Private Prime Fund

      69,737,895        659,285,139        (645,539,255)        1,803            7,218        83,492,800          2,695,746*    

Total

      $192,809,176        $1,445,370,003        $(1,438,942,893)        $1,284            $9,423        $199,246,993          $  5,360,037    

 

  *

Represents the income earned on the investment of cash collateral, which is included in securities lending income on the Statement of Operations. Does not include rebates and fees paid to lending agent or premiums received from borrowers, if any.

 

(e) 

The rate shown is the 7-day SEC standardized yield as of October 31, 2023.

(f) 

The security has been segregated to satisfy the commitment to return the cash collateral received in securities lending transactions upon the borrower’s return of the securities loaned. See Note 1I.

 

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

 

5   Invesco Value Opportunities Fund

Open Forward Foreign Currency Contracts  

 

  
                                      Unrealized  
Settlement          Contract to      Appreciation  
      

 

 

     
Date      Counterparty   Deliver      Receive      (Depreciation)  

 

  

Currency Risk

             

 

  

11/15/2023

      Barclays Bank PLC     EUR       7,465,670        USD        7,934,743        $  31,232    

 

  

11/15/2023

      J.P. Morgan Chase Bank, N.A.     USD       11,405,628        EUR        10,795,047        22,519    

 

  

11/15/2023

      Merrill Lynch International     EUR       2,010,358        USD        2,133,459        5,199    

 

  

11/15/2023

      UBS AG     EUR       137,896,514        USD        146,382,252        398,492    

 

  

11/15/2023

      UBS AG     USD       8,847,109        EUR        8,381,651        26,102    

 

  

Subtotal–Appreciation

                483,544    

 

  

Currency Risk

             

 

  

11/15/2023

      Barclays Bank PLC     USD       7,752,949        EUR        7,319,178        (4,522)   

 

  

11/15/2023

      Royal Bank of Canada     USD       11,635,932        EUR        10,954,558        (38,919)   

 

  

Subtotal–Depreciation

                (43,441)   

 

  

Total Forward Foreign Currency Contracts

                $440,103    

 

  

Abbreviations:

EUR – Euro

USD – U.S. Dollar

Portfolio Composition

By sector, based on Net Assets

as of October 31, 2023

 

Industrials

      20.90 % 

Energy

      17.60  

Health Care

      14.46  

Financials

      11.32  

Materials

      9.77  

Information Technology

      8.95  

Consumer Staples

      5.64  

Utilities

      4.47  

Consumer Discretionary

      3.76  

Money Market Funds Plus Other Assets Less Liabilities

      3.13  

 

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, 2023

(Unaudited)

 

Assets:

   

Investments in unaffiliated securities, at value
(Cost $2,574,724,867)*

    $ 2,653,344,169  

 

  

Investments in affiliated money market funds, at value (Cost $199,243,070)

      199,246,993  

 

  

Other investments:

   

Unrealized appreciation on forward foreign currency contracts outstanding

      483,544  

 

  

Foreign currencies, at value (Cost $568,433)

      568,353  

 

  

Receivable for:

   

Investments sold

      1,644,455  

 

  

Fund shares sold

      1,782,868  

 

  

Dividends

      2,115,163  

 

  

Investment for trustee deferred compensation and retirement plans

      565,707  

 

  

Other assets

      78,105  

 

  

Total assets

      2,859,829,357  

 

  

Liabilities:

   

Other investments:

   

Unrealized depreciation on forward foreign currency contracts outstanding

      43,441  

 

  

Payable for:

   

Fund shares reacquired

      2,654,480  

 

  

Collateral upon return of securities loaned

      115,951,387  

 

  

Accrued fees to affiliates

      1,215,202  

 

  

Accrued trustees’ and officers’ fees and benefits

      3,293  

 

  

Accrued other operating expenses

      38,635  

 

  

Trustee deferred compensation and retirement plans

      686,686  

 

  

Total liabilities

      120,593,124  

 

  

Net assets applicable to shares outstanding

    $ 2,739,236,233  

 

  

Net assets consist of:

   

Shares of beneficial interest

    $ 2,668,337,477  

 

  

Distributable earnings

      70,898,756  

 

  
   $ 2,739,236,233  

 

  

Net Assets:

   

Class A

    $ 2,016,472,896  

 

  

Class C

    $ 53,105,089  

 

  

Class R

    $ 67,680,522  

 

  

Class Y

    $ 287,342,357  

 

  

Class R5

    $ 10,120,382  

 

  

Class R6

    $ 304,514,987  

 

  

Shares outstanding, no par value, with an unlimited number of shares authorized:

 

Class A

      129,142,833  

 

  

Class C

      3,761,887  

 

  

Class R

      4,414,228  

 

  

Class Y

      18,303,197  

 

  

Class R5

      638,024  

 

  

Class R6

      19,163,539  

 

  

Class A:

   

Net asset value per share

    $ 15.61  

 

  

Maximum offering price per share
(Net asset value of $15.61 ÷ 94.50%)

    $ 16.52  

 

  

Class C:

   

Net asset value and offering price per share

    $ 14.12  

 

  

Class R:

   

Net asset value and offering price per share

    $ 15.33  

 

  

Class Y:

   

Net asset value and offering price per share

    $ 15.70  

 

  

Class R5:

   

Net asset value and offering price per share

    $ 15.86  

 

  

Class R6:

   

Net asset value and offering price per share

    $ 15.89  

 

  

 

*

At October 31, 2023, securities with an aggregate value of $113,315,367 were on loan to brokers.

 

 

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, 2023

(Unaudited)

 

Investment income:

   

Dividends (net of foreign withholding taxes of $653,818)

    $ 24,007,588  

 

  

Dividends from affiliated money market funds (includes net securities lending income of $101,424)

      1,747,491  

 

  

Total investment income

      25,755,079  

 

  

Expenses:

   

Advisory fees

      8,978,674  

 

  

Administrative services fees

      254,115  

 

  

Custodian fees

      11,367  

 

  

Distribution fees:

   

Class A

      2,663,086  

 

  

Class C

      294,536  

 

  

Class R

      180,517  

 

  

Transfer agent fees – A, C, R and Y

      2,162,856  

 

  

Transfer agent fees – R5

      5,302  

 

  

Transfer agent fees – R6

      48,539  

 

  

Trustees’ and officers’ fees and benefits

      24,952  

 

  

Registration and filing fees

      76,213  

 

  

Reports to shareholders

      69,365  

 

  

Professional services fees

      31,205  

 

  

Other

      15,275  

 

  

Total expenses

      14,816,002  

 

  

Less: Fees waived and/or expense offset arrangement(s)

      (79,432 ) 

 

  

Net expenses

      14,736,570  

 

  

Net investment income

      11,018,509  

 

  

Realized and unrealized gain (loss) from:

   

Net realized gain (loss) from:

   

Unaffiliated investment securities

      72,079,412  

 

  

Affiliated investment securities

      9,423  

 

  

Foreign currencies

      (19,259 ) 

 

  

Forward foreign currency contracts

      5,672,303  

 

  
     77,741,879  

 

  

Change in net unrealized appreciation (depreciation) of:

   

Unaffiliated investment securities

      (15,414,365 ) 

 

  

Affiliated investment securities

      1,284  

 

  

Foreign currencies

      (14,229 ) 

 

  

Forward foreign currency contracts

      634,979  

 

  
     (14,792,331 ) 

 

  

Net realized and unrealized gain

      62,949,548  

 

  

Net increase in net assets resulting from operations

    $ 73,968,057  

 

  

 

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, 2023 and the year ended April 30, 2023

(Unaudited)

 

    

October 31,

2023

    

April 30,

2023

  

 

  

Operations:

     

Net investment income

    $ 11,018,509     $ 18,249,429  

 

  

Net realized gain

      77,741,879       22,265,718  

 

  

Change in net unrealized appreciation (depreciation)

      (14,792,331 )      (177,868,717 ) 

 

  

Net increase (decrease) in net assets resulting from operations

      73,968,057       (137,353,570 ) 

 

  

Distributions to shareholders from distributable earnings:

     

Class A

      –       (68,612,556 ) 

 

  

Class C

      –       (1,654,187 ) 

 

  

Class R

      –       (1,280,060 ) 

 

  

Class Y

      –       (11,608,802 ) 

 

  

Class R5

      –       (28,476 ) 

 

  

Class R6

      –       (24,873,218 ) 

 

  

Total distributions from distributable earnings

      –       (108,057,299 ) 

 

  

Share transactions–net:

     

Class A

      (112,494,370 )      1,517,501,777  

 

  

Class C

      (8,386,611 )      49,167,618  

 

  

Class R

      (4,867,940 )      65,002,994  

 

  

Class Y

      3,654,038       179,925,533  

 

  

Class R5

      451,978       9,856,926  

 

  

Class R6

      (28,483,096 )      108,688,495  

 

  

Net increase (decrease) in net assets resulting from share transactions

      (150,126,001 )      1,930,143,343  

 

  

Net increase (decrease) in net assets

      (76,157,944 )      1,684,732,474  

 

  

Net assets:

     

Beginning of period

      2,815,394,177       1,130,661,703  

 

  

End of period

    $ 2,739,236,233     $ 2,815,394,177  

 

  

 

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

 

9   Invesco Value Opportunities Fund

Financial Highlights

(Unaudited)

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

(000’s 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 10/31/23

       $15.23       $ 0.06       $ 0.32       $ 0.38       $       –       $       –       $       –       $15.61       2.50 %       $2,016,473       1.08 %(d)       1.08 %(d)       0.70 %(d)       25 %

Year ended 04/30/23

       16.52       0.18       0.07       0.25       (0.12 )       (1.42 )       (1.54 )       15.23       1.09       2,074,880       1.08       1.08       1.12       70

Year ended 04/30/22

       17.34       0.08       0.60       0.68       (0.10 )       (1.40 )       (1.50 )       16.52       4.01       739,860       1.11       1.11       0.44       65

Year ended 04/30/21

       9.44       0.06       7.87       7.93       (0.03 )       –       (0.03 )       17.34       84.15       726,801       1.22       1.22       0.45       62

Year ended 04/30/20

       12.84       0.03       (3.18 )(e)       (3.15 )       –       (0.25 )       (0.25 )       9.44       (25.02 )(e)       440,826       1.21       1.21       0.27       41

Year ended 04/30/19

       14.24       0.00       0.18       0.18       –       (1.58 )       (1.58 )       12.84       3.58       658,685       1.21       1.21       0.02       51

Class C

                                                        

Six months ended 10/31/23

       13.82       (0.00 )       0.30       0.30       –       –       –       14.12       2.17       53,105       1.83 (d)        1.83 (d)        (0.05 )(d)       25

Year ended 04/30/23

       15.14       0.06       0.06       0.12       (0.02 )       (1.42 )       (1.44 )       13.82       0.37 (f)        60,082       1.80 (f)        1.80 (f)        0.40 (f)        70

Year ended 04/30/22

       16.04       (0.05 )       0.55       0.50       –       (1.40 )       (1.40 )       15.14       3.16       16,682       1.86       1.86       (0.31 )       65

Year ended 04/30/21

       8.77       (0.02 )       7.29       7.27       –       –       –       16.04       82.90 (f)        12,906       1.89 (f)        1.89 (f)        (0.22 )(f)       62

Year ended 04/30/20

       12.02       (0.04 )       (2.96 )(e)       (3.00 )       –       (0.25 )       (0.25 )       8.77       (25.48 )(e)(f)       10,107       1.85 (f)        1.85 (f)        (0.37 )(f)       41

Year ended 04/30/19

       13.54       (0.09 )       0.15       0.06       –       (1.58 )       (1.58 )       12.02       2.83 (f)        17,027       1.92 (f)        1.92 (f)        (0.69 )(f)       51

Class R

                                                        

Six months ended 10/31/23

       14.97       0.04       0.32       0.36       –       –       –       15.33       2.40       67,681       1.33 (d)        1.33 (d)        0.45 (d)        25

Year ended 04/30/23

       16.27       0.14       0.06       0.20       (0.08 )       (1.42 )       (1.50 )       14.97       0.82       70,744       1.33       1.33       0.87       70

Year ended 04/30/22

       17.09       0.03       0.60       0.63       (0.05 )       (1.40 )       (1.45 )       16.27       3.73       12,018       1.36       1.36       0.19       65

Year ended 04/30/21

       9.31       0.03       7.75       7.78       –       –       –       17.09       83.57       10,385       1.47       1.47       0.20       62

Year ended 04/30/20

       12.69       0.00       (3.13 )(e)       (3.13 )       –       (0.25 )       (0.25 )       9.31       (25.16 )(e)       6,362       1.46       1.46       0.02       41

Year ended 04/30/19

       14.13       (0.03 )       0.17       0.14       –       (1.58 )       (1.58 )       12.69       3.32       10,898       1.46       1.46       (0.23 )       51

Class Y

                                                        

Six months ended 10/31/23

       15.29       0.08       0.33       0.41       –       –       –       15.70       2.68       287,342       0.83 (d)        0.83 (d)        0.95 (d)        25

Year ended 04/30/23

       16.58       0.22       0.07       0.29       (0.16 )       (1.42 )       (1.58 )       15.29       1.33       276,929       0.83       0.83       1.37       70

Year ended 04/30/22

       17.42       0.12       0.61       0.73       (0.17 )       (1.40 )       (1.57 )       16.58       4.25       123,154       0.86       0.86       0.69       65

Year ended 04/30/21

       9.49       0.09       7.91       8.00       (0.07 )       –       (0.07 )       17.42       84.48       81,115       0.97       0.97       0.70       62

Year ended 04/30/20

       12.86       0.06       (3.18 )(e)       (3.12 )       –       (0.25 )       (0.25 )       9.49       (24.74 )(e)       23,760       0.96       0.96       0.52       41

Year ended 04/30/19

       14.23       0.04       0.17       0.21       –       (1.58 )       (1.58 )       12.86       3.80       37,469       0.96       0.96       0.27       51

Class R5

                                                        

Six months ended 10/31/23

       15.45       0.08       0.33       0.41       –       –       –       15.86       2.65       10,120       0.76 (d)        0.76 (d)        1.02 (d)        25

Year ended 04/30/23

       16.74       0.22       0.08       0.30       (0.17 )       (1.42 )       (1.59 )       15.45       1.37       9,322       0.78       0.78       1.42       70

Year ended 04/30/22

       17.58       0.13       0.62       0.75       (0.19 )       (1.40 )       (1.59 )       16.74       4.35       311       0.81       0.81       0.74       65

Year ended 04/30/21

       9.58       0.11       7.98       8.09       (0.09 )       –       (0.09 )       17.58       84.70       714       0.84       0.84       0.83       62

Year ended 04/30/20

       12.95       0.08       (3.20 )(e)       (3.12 )       –       (0.25 )       (0.25 )       9.58       (24.57 )(e)       406       0.80       0.80       0.68       41

Year ended 04/30/19

       14.29       0.05       0.19       0.24       –       (1.58 )       (1.58 )       12.95       4.01       2,212       0.84       0.84       0.39       51

Class R6

                                                        

Six months ended 10/31/23

       15.47       0.09       0.33       0.42       –       –       –       15.89       2.71       304,515       0.69 (d)        0.69 (d)        1.09 (d)        25

Year ended 04/30/23

       16.75       0.24       0.08       0.32       (0.18 )       (1.42 )       (1.60 )       15.47       1.50       323,438       0.71       0.71       1.49       70

Year ended 04/30/22

       17.60       0.14       0.62       0.76       (0.21 )       (1.40 )       (1.61 )       16.75       4.38       238,636       0.74       0.74       0.81       65

Year ended 04/30/21

       9.59       0.11       8.00       8.11       (0.10 )       –       (0.10 )       17.60       84.81       47,501       0.78       0.78       0.89       62

Year ended 04/30/20

       12.97       0.09       (3.22 )(e)       (3.13 )       –       (0.25 )       (0.25 )       9.59       (24.61 )(e)       25,226       0.75       0.75       0.73       41

Year ended 04/30/19

       14.31       0.06       0.18       0.24       –       (1.58 )       (1.58 )       12.97       4.00       32,666       0.79       0.79       0.44       51

 

(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, 2023, the portfolio turnover calculation excludes the value of securities purchased of $1,658,856,812 in connection with the acquisition of Invesco American Value Fund into the Fund.

(d) 

Annualized.

(e) 

Includes litigation proceeds received during the period. Had these litigation proceeds not been received, Net gains (losses) on securities (both realized and unrealized) per share would have been $(3.28), $(3.06), $(3.23), $(3.28), $(3.30) and $(3.32) for Class A, Class C, Class R, Class Y, Class R5 and Class R6 shares, respectively. Total returns would have been lower.

(f) 

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%, 0.92%, 0.89% and 0.96% for the years ended April 30, 2023, 2021, 2020 and 2019, respectively.

 

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

 

10   Invesco Value Opportunities Fund

Notes to Financial Statements

October 31, 2023

(Unaudited)

NOTE 1–Significant 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 authorized to issue an unlimited number of shares of beneficial interest. Information presented in these financial statements pertains only to the Fund. Matters affecting the Fund or each class will be voted on exclusively by the shareholders of the Fund or each class.

The Fund’s 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 C, Class R, Class Y, Class R5 and Class R6. Class Y shares are available only to certain investors. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met. 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. Class C shares held for eight years after purchase are eligible for automatic conversion into Class A shares of the same Fund (the “Conversion Feature”). The automatic conversion pursuant to the Conversion Feature will generally occur at the end of the month following the eighth anniversary after a purchase of Class C shares.

The Fund is an investment company and accordingly follows the investment company accounting and reporting guidance in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 946, Financial Services – Investment Companies.

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 is generally valued at its trade price or official closing price that day as of the close of the exchange where the security is principally traded, or lacking any trades or official closing price on a particular day, the security may be valued at the closing bid or ask 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 using prices provided by an independent pricing service they may be considered fair valued. Futures contracts are valued at the daily settlement price set by an exchange on which they are principally traded. Where a final settlement price exists, exchange-traded options are valued at the final settlement price from the exchange where the option principally trades. Where a final settlement price does not exist, exchange-traded options are valued at the mean between the last bid and ask price generally from the exchange where the option principally trades.

Securities of investment companies that are not exchange-traded (e.g., open-end mutual funds) are valued using such company’s end-of-business-day net asset value per share.

Deposits, other obligations of U.S. and non-U.S. banks and financial institutions are valued at their daily account value.

Fixed income securities (including convertible debt securities) generally are valued on the basis of prices provided by independent pricing services. Prices 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. Pricing services generally value debt obligations assuming orderly transactions of institutional round lot size, but a fund may hold or transact in the same securities in smaller, odd lot sizes. Odd lots often trade at lower prices than institutional round lots, and their value may be adjusted accordingly. 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 New York Stock Exchange (“NYSE”). If market quotations are available and reliable for foreign exchange-traded equity securities, the securities will be valued at the market quotations. Invesco Advisers, Inc. (the “Adviser” or “Invesco”) may use various pricing services to obtain market quotations as well as fair value prices. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become not representative of market value in the Adviser’s judgment (“unreliable”). If, between the time trading ends on a particular security and the close of the customary trading session on the NYSE, a significant event occurs that makes the closing price of the security unreliable, the Adviser 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 in accordance with Board- approved policies and related Adviser procedures (“Valuation Procedures”). 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 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.

Unlisted securities will be valued using prices provided by independent pricing services or by another method that the Adviser, in its judgment, believes better reflects the security’s fair value in accordance with the Valuation Procedures.

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 mean between the last bid and ask prices may be used to value debt obligations, including corporate loans.

Securities for which market quotations are not readily available are fair valued by the Adviser in accordance with the Valuation Procedures. If a fair value price provided by a pricing service is unreliable, the Adviser will fair value the security using the Valuation Procedures. 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 security’s 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 Fund investments.

Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general market conditions which are not specifically related to the particular issuer, such as real or perceived adverse economic conditions, changes in the general outlook for revenues or corporate earnings, changes in interest or currency rates, regional or global instability, natural or environmental disasters, widespread disease or other public health issues, war, acts of terrorism, significant governmental actions or adverse investor sentiment generally 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.

The price the Fund could receive upon the sale of any investment may differ from the Adviser’s valuation of the investment, particularly for securities that are valued using a fair valuation technique. When fair valuation techniques are applied, the Adviser uses available information, including both observable and unobservable inputs and assumptions, to determine a methodology that will result in a valuation that the Adviser believes approximates market value. Fund securities that are fair valued may be subject to greater fluctuation in their value from one day to the next than would be the case if market quotations were used.

 

11   Invesco Value Opportunities Fund

Because of the inherent uncertainties of valuation, and the degree of subjectivity in such decisions, the Fund could realize a greater or lesser than expected gain or loss upon the sale of the investment.

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 an accrual basis from settlement date and includes coupon interest and amortization of premium and accretion of discount on debt securities as applicable. 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 Fund’s net asset value and, accordingly, they reduce the Fund’s 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 the Statement of Changes in Net Assets, or the net investment income per share and the 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, the country that has the primary market for the issuer’s securities and its “country of risk” as determined by a third party service provider, 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 Fund’s 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 Fund’s 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 based on relative net assets of Class R5 and Class R6. 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 Trust’s 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 Fund’s servicing agreements, that contain a variety of indemnification clauses. The Fund’s 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 Fund’s 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, unregistered investment companies that comply with Rule 2a-7 under the 1940 Act and money market funds (collectively, “affiliated money market funds”) and is shown as such on the Schedule of Investments. The Fund bears the risk of loss with respect to the investment of collateral. It is the Fund’s 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. When loaning securities, the Fund retains certain benefits of owning the securities, including the economic equivalent of dividends or interest generated by the security. 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. The securities loaned are subject to termination at the option of the borrower or the Fund. Upon termination, the borrower will return to the Fund the securities loaned and the Fund will return the collateral. 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 and the securities may lose value during the delay which could result in potential losses to the Fund. Some of these losses may be indemnified by the lending agent. 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, are included in Dividends from affiliated money market funds on the Statement of Operations. The aggregate value of securities out on loan, if any, is shown as a footnote on the Statement of Assets and Liabilities.

The Adviser serves as an affiliated securities lending agent for the Fund. The Bank of New York Mellon also serves as a securities lending agent. To the extent the Fund utilizes the Adviser as an affiliated securities lending agent, the Fund conducts its securities lending in accordance with, and in reliance upon, no-action letters issued by the SEC staff that provide guidance on how an affiliate may act as a direct agent lender and receive compensation for those services in a manner

 

12   Invesco Value Opportunities Fund

consistent with the federal securities laws. For the six months ended October 31, 2023, the Fund paid the Adviser $6,847 in fees for securities lending agent services. Fees paid to the Adviser for securities lending agent services, if any, are included in Dividends from affiliated money market funds on the Statement of Operations.

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 the 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 Fund’s 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 exchange of the two currencies on the settlement date, 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).

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 for hedging 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 2–Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with the Adviser. Under the terms of the investment advisory agreement, the Fund accrues daily and pays monthly an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

 

Average Daily Net Assets    Rate  

 

  

First $250 million

      0.695%  

 

  

Next $250 million

      0.670%  

 

  

Next $500 million

      0.645%  

 

  

Next $1.5 billion

      0.610%  

 

  

Next $3.5 billion

      0.560%  

 

  

Next $4 billion

      0.545%  

 

  

Over $10 billion

      0.520%  

 

  

For the six months ended October 31, 2023, the effective advisory fee rate incurred by the Fund was 0.62%.

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 Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Canada Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, will 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 Affiliated Sub-Adviser(s).

Effective July 1, 2023, the Adviser has agreed, for an indefinite period, 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 C, Class R, Class Y, Class R5 and Class R6 shares to 2.00%, 2.75%, 2.25%, 1.75%, 1.75% and 1.75%, respectively, of the Fund’s average daily net assets (the “boundary limits”). Prior to July 1, 2023, the same boundary limits were in effect with an expiration date of June 30, 2023. In determining the Adviser’s 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. Invesco may amend and/or terminate these boundary limits at any time in its sole discretion and will inform the Board of Trustees of any such changes. The Adviser did not waive fees and/or reimburse expenses during the period under these boundary limits.

Further, the Adviser has contractually agreed, through at least June 30, 2025, 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, 2023, the Adviser waived advisory fees of $34,705.

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, 2023, expenses incurred under the agreement are shown in the Statement of Operations as Administrative services fees. Invesco has entered into a sub-administration agreement whereby State Street Bank and Trust Company (“SSB”) serves as fund accountant and provides certain administrative services to the Fund. Pursuant to a custody agreement with the Trust on behalf of the Fund, SSB also serves as the Fund’s custodian.

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

 

13   Invesco Value Opportunities Fund

intermediaries that provide omnibus account services or sub-accounting services are charged back to the Fund, subject to certain limitations approved by the Trust’s Board of Trustees. For the six months ended October 31, 2023, 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 C, Class R, Class Y, 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 Fund’s Class A, Class C and Class R shares (collectively the “Plans”). The Fund, pursuant to the Plans, reimburses IDI for its allocated share of expenses incurred for the period, up to a maximum annual rate of 0.25% of the average daily net assets of Class A shares, up to a maximum annual rate of 1.00% of the average daily net assets of Class C shares and up to 0.50% of the average net assets of Class R shares. Prior to February 10, 2023, the Fund pursuant to the Class R Plan, paid IDI compensation at the annual rate of 0.50% of the average daily net assets of Class R shares. The fees are accrued daily and paid monthly. Of the Plans 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, 2023, 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, 2023, IDI advised the Fund that IDI retained $75,381 in front-end sales commissions from the sale of Class A shares and $3,031 and $998 from Class A and Class C shares, respectively, for CDSC imposed upon redemptions by shareholders.

For the six months ended October 31, 2023, the Fund incurred $59,695 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 3–Additional 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. 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 investment’s 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 Adviser’s 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, 2023. 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  

 

  

Investments in Securities

           

 

  

Common Stocks & Other Equity Interests

      $2,538,223,670        $115,120,499       $–        $2,653,344,169  

 

  

Money Market Funds

      83,295,325        115,951,668         –        199,246,993  

 

  

Total Investments in Securities

      2,621,518,995        231,072,167         –        2,852,591,162  

 

  

Other Investments - Assets*

           

 

  

Forward Foreign Currency Contracts

      –        483,544         –        483,544  

 

  

Other Investments - Liabilities*

           

 

  

Forward Foreign Currency Contracts

      –        (43,441 )        –        (43,441 ) 

 

  

Total Other Investments

      –        440,103         –        440,103  

 

  

Total Investments

      $2,621,518,995        $231,512,270       $–        $2,853,031,265  

 

  

 

*

Unrealized appreciation (depreciation).

NOTE 4–Derivative Investments

The Fund may enter into an International Swaps and Derivatives Association Master Agreement (“ISDA Master Agreement”) under which a fund may trade OTC derivatives. An OTC transaction entered into under an ISDA Master Agreement typically involves a collateral posting arrangement, payment netting provisions and close-out netting provisions. These netting provisions allow for reduction of credit risk through netting of contractual obligations. The enforceability of the netting provisions of the ISDA Master Agreement depends on the governing law of the ISDA Master Agreement, among other factors.

For financial reporting purposes, the Fund does not offset OTC derivative assets or liabilities that are subject to ISDA Master Agreements in the Statement of Assets and Liabilities.

 

     Value  
     Currency  
Derivative Assets    Risk  

 

  

Unrealized appreciation on forward foreign currency contracts outstanding

    $ 483,544  

 

  

Derivatives not subject to master netting agreements

      –  

 

  

Total Derivative Assets subject to master netting agreements

    $ 483,544  

 

  

 

14   Invesco Value Opportunities Fund

     Value  
     Currency  
Derivative Liabilities    Risk  

 

  

Unrealized depreciation on forward foreign currency contracts outstanding

    $ (43,441 ) 

 

  

Derivatives not subject to master netting agreements

      –  

 

  

Total Derivative Liabilities subject to master netting agreements

    $ (43,441 ) 

 

  

The table below reflects the Fund’s exposure to Counterparties subject to either an ISDA Master Agreement or other agreement for OTC derivative transactions as of October 31, 2023.

 

     Financial
Derivative
Assets		    Financial
Derivative
Liabilities		       

Collateral
(Received)/Pledged

       
Counterparty    Forward Foreign
Currency Contracts		    Forward Foreign
Currency Contracts		   Net Value of
Derivatives		    Non-Cash    Cash    Net
Amount		  

 

  

Barclays Bank PLC

    $  31,232    $  (4,522)   $  26,710    $–    $–    $ 26,710  

 

  

J.P. Morgan Chase Bank, N.A.

        22,519                  –           22,519      –      –      22,519  

 

  

Merrill Lynch International

          5,199                  –             5,199      –      –      5,199  

 

  

Royal Bank of Canada

                –    (38,919)      (38,919)      –      –      (38,919 ) 

 

  

UBS AG

      424,594                  –         424,594      –      –      424,594  

 

  

Total

    $483,544    $(43,441)   $440,103    $–    $–      $440,103  

 

  

Effect of Derivative Investments for the six months ended October 31, 2023

The table below summarizes the gains (losses) on derivative investments, detailed by primary risk exposure, recognized in earnings during the period:

 

     Location of Gain on
Statement of Operations
     Currency
     Risk

 

Realized Gain:

   

Forward foreign currency contracts

    $5,672,303

 

Change in Net Unrealized Appreciation:

   

Forward foreign currency contracts

         634,979

 

Total

    $6,307,282

 

The table below summarizes the average notional value of derivatives held during the period.

 

     Forward
Foreign Currency
Contracts

 

Average notional value

    $139,519,726

 

NOTE 5–Expense 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, 2023, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $44,727.

NOTE 6–Trustees’ 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 7–Cash Balances

The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with SSB, 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.

 

15   Invesco Value Opportunities Fund

NOTE 8–Tax 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 Fund’s 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 Fund’s 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. The ability to utilize capital loss carryforward 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, 2023, as follows:

 

Capital Loss Carryforward*  

 

  
Expiration    Short-Term      Long-Term      Total  

 

  

Not subject to expiration

    $ 77,832,743      $ 11,557,922      $ 89,390,665  

 

  

 

*

Capital loss carryforward 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 9–Investment Transactions

The aggregate amount of investment securities (other than short-term securities, U.S. Government obligations and money market funds, if any) purchased and sold by the Fund during the six months ended October 31, 2023 was $647,489,815 and $790,074,591, respectively. Cost of investments, including any derivatives, 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 Investments on a Tax Basis  

 

  

Aggregate unrealized appreciation of investments

    $ 291,830,835  

 

  

Aggregate unrealized (depreciation) of investments

      (219,786,365 ) 

 

  

Net unrealized appreciation of investments

    $ 72,044,470  

 

  

Cost of investments for tax purposes is $2,780,986,795.

NOTE 10–Share Information

 

     Summary of Share Activity  

 

  
     Six months ended     Year ended  
     October 31, 2023(a)     April 30, 2023  
     Shares     Amount     Shares     Amount  

 

  

Sold:

         

Class A

      2,825,068     $ 45,276,724       5,708,709     $ 91,615,505  

 

  

Class C

      227,367       3,333,428       409,186       6,012,929  

 

  

Class R

      299,337       4,680,946       513,995       8,036,177  

 

  

Class Y

      3,025,655       48,857,052       8,514,047       138,761,080  

 

  

Class R5

      179,669       2,811,418       40,918       648,953  

 

  

Class R6

      1,639,603       26,633,154       5,722,008       91,725,786  

 

  

Issued as reinvestment of dividends:

         

Class A

      -       -       4,027,358       64,357,184  

 

  

Class C

      -       -       107,987       1,570,130  

 

  

Class R

      -       -       81,301       1,278,864  

 

  

Class Y

      -       -       632,536       10,139,560  

 

  

Class R5

      -       -       1,164       18,852  

 

  

Class R6

      -       -       1,511,522       24,501,770  

 

  

Automatic conversion of Class C shares to Class A shares:

         

Class A

      212,894       3,388,627       220,950       3,420,139  

 

  

Class C

      (235,043 )      (3,388,627 )      (243,066 )      (3,420,139 ) 

 

  

Issued in connection with acquisitions:(b)

         

Class A

      -       -       90,760,772       1,504,034,870  

 

  

Class C

      -       -       3,342,631       50,339,180  

 

  

Class R

      -       -       3,881,097       63,270,433  

 

  

Class Y

      -       -       8,110,851       134,901,684  

 

  

Class R5

      -       -       611,702       10,275,987  

 

  

Class R6

      -       -       3,529,313       59,357,533  

 

  

 

16   Invesco Value Opportunities Fund

     Summary of Share Activity  

 

  
     Six months ended     Year ended  
     October 31, 2023(a)     April 30, 2023  
     Shares     Amount     Shares     Amount  

 

  

Reacquired:

         

Class A

      (10,119,269 )    $ (161,159,721 )      (9,278,577 )    $ (145,925,921 ) 

 

  

Class C

      (577,154 )      (8,331,412 )      (371,583 )      (5,334,482 ) 

 

  

Class R

      (609,285 )      (9,548,886 )      (490,787 )      (7,582,480 ) 

 

  

Class Y

      (2,828,601 )      (45,203,014 )      (6,578,317 )      (103,876,791 ) 

 

  

Class R5

      (145,107 )      (2,359,440 )      (68,928 )      (1,086,866 ) 

 

  

Class R6

      (3,382,578 )      (55,116,250 )      (4,100,984 )      (66,896,594 ) 

 

  

Net increase (decrease) in share activity

      (9,487,444 )    $ (150,126,001 )      116,595,805     $ 1,930,143,343  

 

  

 

(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.

 
(b) 

After the close of business on February 10, 2023, the Fund acquired all the net assets of Invesco American Value Fund (the “Target Fund”) pursuant to a plan of reorganization approved by the Board of Trustees of the Fund on September 20, 2022. The reorganization was executed in order to reduce overlap and increase efficiencies in the Adviser’s product line. The acquisition was accomplished by a tax-free exchange of 110,236,366 shares of the Fund for 62,423,301 shares outstanding of the Target Fund as of the close of business on February 10, 2023. Shares of the Target Fund were 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 on the close of business, February 10, 2023. The Target Fund’s net assets as of the close of business on February 10, 2023 of $1,822,179,687, including $133,143,707 of unrealized appreciation (depreciation), were combined with those of the Fund. The net assets of the Fund immediately before the acquisition were $1,284,207,818 and $3,106,387,505 immediately after the acquisition.

 

The pro forma results of operations for the year ended April 30, 2023 assuming the reorganization had been completed on May 1, 2022, the beginning of the annual reporting period are as follows:

 

Net investment income

    $ 32,887,684  

 

  

Net realized/unrealized gains

      3,468,110  

 

  

Change in net assets resulting from operations

    $ 36,355,794  

 

  

As 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 have been included in the Fund’s Statement of Operations since February 11, 2023.

 

17   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, 2023 through October 31, 2023.

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 Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s 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.

 

          ACTUAL  

HYPOTHETICAL

(5% annual return before

expenses)

     
    

Beginning

    Account Value    

(05/01/23)

  

Ending

    Account Value    

(10/31/23)1

  

Expenses

      Paid During      

Period2

  

Ending

    Account Value    

(10/31/23)

  

Expenses

      Paid During      

Period2

 

      Annualized       

Expense 

Ratio 

Class A

   $1,000.00   $1,025.00   $5.50   $1,019.71   $5.48   1.08% 

Class C

     1,000.00     1,021.70     9.30     1,015.94     9.27   1.83    

Class R

     1,000.00     1,023.40     6.76     1,018.45     6.75   1.33    

Class Y

     1,000.00     1,026.80     4.23     1,020.96     4.22   0.83    

Class R5

     1,000.00     1,026.50     3.87     1,021.32     3.86   0.76    

Class R6

     1,000.00     1,027.10     3.52     1,021.67     3.51   0.69    

 

1 

The actual ending account value is based on the actual total return of the Fund for the period May 1, 2023 through October 31, 2023, after actual expenses and will differ from the hypothetical ending account value which is based on the Fund’s expense ratio and a hypothetical annual return of 5% before expenses.

2 

Expenses are equal to the Fund’s annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 184/366 to reflect the most recent fiscal half year.

 

18   Invesco Value Opportunities Fund

Approval of Investment Advisory and Sub-Advisory Contracts

    

 

At meetings held on June 13, 2023, the Board of Trustees (the Board or the Trustees) of AIM Sector Funds (Invesco Sector Funds) as a whole, and the independent Trustees, who comprise over 75% of the Board, voting separately, approved the continuance of the Invesco Value Opportunities Fund’s (the Fund) Master Investment Advisory Agreement with Invesco Advisers, Inc. (Invesco Advisers and the investment advisory agreement) and the Master Intergroup Sub-Advisory Contract for Mutual Funds with Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Canada Ltd. (collectively, the Affiliated Sub-Advisers and the sub-advisory contracts) for another year, effective July 1, 2023. After evaluating the factors discussed below, among others, the Board approved the renewal of the Fund’s investment advisory agreement and the sub-advisory contracts and determined that the compensation payable thereunder by the Fund to Invesco Advisers and by Invesco Advisers to the Affiliated Sub-Advisers is fair and reasonable.

The Board’s Evaluation Process

The Board has established an Investments Committee, which in turn has established Sub-Committees, that meet throughout the year to review the performance of funds advised by Invesco Advisers (the Invesco Funds). The Sub-Committees meet regularly with portfolio managers for their assigned Invesco Funds and other members of management to review information about investment performance and portfolio attributes of these funds. The Board has established additional standing and ad hoc committees that meet regularly throughout the year to review matters within their purview, including a working group focused on opportunities to make ongoing and continuous improvements to the annual review process for the Invesco Funds’ investment advisory and sub-advisory contracts. The Board took into account evaluations and reports that it received from its committees and sub-committees, as well as the information provided to the Board and its committees and sub-committees throughout the year, in considering whether to approve each Invesco Fund’s investment advisory agreement and sub-advisory contracts.

    As part of the contract renewal process, the Board reviews and considers information provided in response to requests for information submitted to management by the independent Trustees with assistance from legal counsel to the independent Trustees and the Senior Officer, an officer of the Invesco Funds who reports directly to the independent Trustees. The Board receives comparative investment performance and fee and expense data regarding the Invesco Funds prepared by Broadridge Financial Solutions, Inc. (Broadridge), an independent mutual fund data provider, as well as information on the composition of the peer groups provided by Broadridge and its methodology for determining peer groups. The Board also receives an independent written evaluation from the Senior Officer. The Senior Officer’s evaluation is prepared as part of his responsibility to manage the process by which the Invesco Funds’ proposed management fees

are negotiated during the annual contract renewal process to ensure they are negotiated in a manner that is at arms’ length and reasonable in accordance with certain negotiated regulatory requirements. In addition to meetings with Invesco Advisers and fund counsel throughout the year and as part of meetings convened on May 2, 2023 and June 13, 2023, the independent Trustees also discussed the continuance of the investment advisory agreement and sub-advisory contracts in separate sessions with the Senior Officer and with independent legal counsel. Also, as part of the contract renewal process, the independent Trustees reviewed and considered information provided in response to follow-up requests for information submitted by the independent Trustees to management. The independent Trustees met and discussed those follow-up responses with legal counsel to the independent Trustees and the Senior Officer.

    The discussion below is a summary of the Senior Officer’s independent written evaluation with respect to the Fund’s investment advisory agreement and sub-advisory contracts, as well as a discussion of the material factors and related conclusions that formed the basis for the Board’s approval of the Fund’s investment advisory agreement and sub-advisory contracts. The Trustees’ review and conclusions are based on the comprehensive consideration of all information presented to them during the course of the year and in prior years and are not the result of any single determinative factor. Moreover, one Trustee may have weighed a particular piece of information or factor differently than another Trustee. The information received and considered by the Board was current as of various dates prior to the Board’s approval on June 13, 2023.

Factors and Conclusions and Summary of Independent Written Fee Evaluation

A.

Nature, Extent and Quality of Services Provided by Invesco Advisers and the Affiliated Sub-Advisers

The Board reviewed the nature, extent and quality of the advisory services provided to the Fund by Invesco Advisers under the Fund’s investment advisory agreement, and the credentials and experience of the officers and employees of Invesco Advisers who provide these services, including the Fund’s portfolio manager(s). The Board considered recent senior management changes at Invesco and Invesco Advisers, including the appointment of new Co-Heads of Investments, that had been presented to and discussed with the Board. The Board’s review included consideration of Invesco Advisers’ investment process and oversight, credit analysis, and research capabilities. The Board considered information regarding Invesco Advisers’ programs for and resources devoted to risk management, including management of investment, enterprise, operational, liquidity, derivatives, valuation and compliance risks, and technology used to manage such risks. The Board received information regarding Invesco’s methodology for compensating its investment professionals and the incentives and accountability it creates, as well as how it impacts Invesco’s ability to attract and retain talent. The Board received a description of, and reports related to, Invesco Advisers’ global security program and business continuity plans and of its approach to data privacy

and cybersecurity, including related testing. The Board also considered non-advisory services that Invesco Advisers and its affiliates provide to the Invesco Funds, such as various middle office and back office support functions, third party oversight, internal audit, valuation, portfolio trading and legal and compliance. The Board observed that Invesco Advisers’ systems preparedness and ongoing investment enabled Invesco Advisers to manage, operate and oversee the Invesco Funds with minimal impact or disruption through challenging environments. The Board reviewed and considered the benefits to shareholders of investing in a Fund that is part of the family of funds under the umbrella of Invesco Ltd., Invesco Advisers’ parent company, and noted Invesco Ltd.’s depth and experience in running an investment management business, as well as its commitment of financial and other resources to such business. The Board concluded that the nature, extent and quality of the services provided to the Fund by Invesco Advisers are appropriate and satisfactory.

    The Board reviewed the services that may be provided to the Fund by the Affiliated Sub-Advisers under the sub-advisory contracts and the credentials and experience of the officers and employees of the Affiliated Sub-Advisers who provide these services. The Board noted the Affiliated Sub-Advisers’ expertise with respect to certain asset classes and that the Affiliated Sub-Advisers have offices and personnel that are located in financial centers around the world. As a result, the Board noted that the Affiliated Sub-Advisers can provide research and investment analysis on the markets and economies of various countries and territories in which the Fund may invest, make recommendations regarding securities and assist with portfolio trading. The Board concluded that the sub-advisory contracts may benefit the Fund and its shareholders by permitting Invesco Advisers to use the resources and talents of the Affiliated Sub-Advisers in managing the Fund. The Board concluded that the nature, extent and quality of the services that may be provided to the Fund by the Affiliated Sub-Advisers are appropriate and satisfactory.

B.

Fund Investment Performance

The Board considered Fund investment performance as a relevant factor in considering whether to approve the investment advisory agreement. The Board did not view Fund investment performance as a relevant factor in considering whether to approve the sub-advisory contracts for the Fund, as no Affiliated Sub-Adviser currently manages assets of the Fund.

    The Board compared the Fund’s investment performance over multiple time periods ending December 31, 2022 to the performance of funds in the Broadridge performance universe and against the S&P Composite 1500® Value Index (Index). The Board noted that performance of Class A shares of the Fund was in the first quintile of its performance universe for the one, three and five year periods (the first quintile being the best performing funds and the fifth quintile being the worst performing funds). The Board noted that performance of Class A shares of the Fund was above the performance of the Index for the one, three and five year periods. The Board recognized that the performance data reflects a snapshot in time as of a particular date and that

 

 

19   Invesco Value Opportunities Fund

selecting a different performance period could produce different results. The Board also reviewed more recent Fund performance as well as other performance metrics, which did not change its conclusions.

C.

Advisory and Sub-Advisory Fees and Fund Expenses

The Board compared the Fund’s contractual management fee rate to the contractual management fee rates of funds in the Fund’s Broadridge expense group. The Board noted that the contractual management fee rate for Class A shares of the Fund was below the median contractual management fee rate of funds in its expense group. The Board noted that the term “contractual management fee” for funds in the expense group may include both advisory and certain non-portfolio management administrative services fees, but that Broadridge is not able to provide information on a fund-by-fund basis as to what is included. The Board also reviewed the methodology used by Broadridge in calculating expense group information, which includes using each fund’s contractual management fee schedule (including any applicable breakpoints) as reported in the most recent prospectus or statement of additional information for each fund in the expense group. The Board also considered comparative information regarding the Fund’s total expense ratio and its various components.

    The Board noted that Invesco Advisers has contractually agreed to waive fees and/or limit expenses of the Fund for the term disclosed in the Fund’s registration statement in an amount necessary to limit total annual operating expenses to a specified percentage of average daily net assets for each class of the Fund.

    The Board noted that Invesco Advisers and the Affiliated Sub-Advisers do not manage other similarly managed mutual funds or client accounts.

    The Board also considered the services that may be provided by the Affiliated Sub-Advisers pursuant to the sub-advisory contracts, as well as the fees payable by Invesco Advisers to the Affiliated Sub-Advisers pursuant to the sub-advisory contracts.

D.

Economies of Scale and Breakpoints

The Board considered the extent to which there may be economies of scale in the provision of advisory services to the Fund and the Invesco Funds, and the extent to which such economies of scale are shared with the Fund and the Invesco Funds. The Board acknowledged the difficulty in calculating and measuring economies of scale at the individual fund level; noting that only indicative and estimated measures are available at the individual fund level and that such measures are subject to uncertainty. The Board considered that the Fund benefits from economies of scale through contractual breakpoints in the Fund’s advisory fee schedule, which generally operate to reduce the Fund’s expense ratio as it grows in size. The Board noted that the Fund also shares in economies of scale through Invesco Advisers’ ability to negotiate lower fee arrangements with third party service providers. The Board noted that the Fund may also benefit from economies of scale through initial fee setting, fee waivers and expense reimbursements, as well as Invesco Advisers’ investment in its business, including investments in business infrastructure, technology and cybersecurity.

E.

Profitability and Financial Resources

The Board reviewed information from Invesco Advisers concerning the costs of the advisory and other services that Invesco Advisers and its affiliates provide to the Fund and the Invesco Funds and the profitability of Invesco Advisers and its affiliates in providing these services in the aggregate and on an individual fund-by-fund basis. The Board considered the methodology used for calculating profitability and the periodic review and enhancement of such methodology. The Board noted that Invesco Advisers continues to operate at a net profit from services Invesco Advisers and its affiliates provide to the Invesco Funds in the aggregate and to most Invesco Funds individually. The Board considered that profits to Invesco Advisers can vary significantly depending on the particular Invesco Fund, with some Invesco Funds showing indicative losses to Invesco Advisers and others showing indicative profits at healthy levels, and that Invesco Advisers’ support for and commitment to an Invesco Fund are not, however, solely dependent on the profits realized as to that Fund. The Board did not deem the level of profits realized by Invesco Advisers and its affiliates from providing such services to be excessive, given the nature, extent and quality of the services provided. The Board noted that Invesco Advisers provided information demonstrating that Invesco Advisers is financially sound and has the resources necessary to perform its obligations under the investment advisory agreement, and provided representations indicating that the Affiliated Sub-Advisers are financially sound and have the resources necessary to perform their obligations under the sub-advisory contracts. The Board noted the cyclical and competitive nature of the global asset management industry.

F.

Collateral Benefits to Invesco Advisers and its Affiliates

The Board considered various other benefits received by Invesco Advisers and its affiliates from the relationship with the Fund, including the fees received for providing administrative, transfer agency and distribution services to the Fund. The Board received comparative information regarding fees charged for these services, including information provided by Broadridge and other independent sources. The Board reviewed the performance of Invesco Advisers and its affiliates in providing these services and the organizational structure employed to provide these services. The Board noted that these services are provided to the Fund pursuant to written contracts that are reviewed and subject to approval on an annual basis by the Board based on its determination that the services are required for the operation of the Fund.

    The Board considered the benefits realized by Invesco Advisers and the Affiliated Sub-Advisers as a result of portfolio brokerage transactions executed through “soft dollar” arrangements. The Board noted that soft dollar arrangements may result in the Fund bearing costs to purchase research that may be used by Invesco Advisers or the Affiliated Sub-Advisers with other clients and may reduce Invesco Advisers’ or the Affiliated Sub-Advisers’ expenses. The Board also considered that it receives from Invesco Advisers periodic reports that include a representation to the effect that these arrangements are consistent with regulatory requirements. The Board did not deem the soft dollar arrangements to be inappropriate.

    The Board considered that the Fund’s uninvested cash and cash collateral from any securities lending arrangements may be invested in registered money

market funds or, with regard to securities lending cash collateral, unregistered funds that comply with Rule 2a-7 (collectively referred to as “affiliated money market funds”) advised by Invesco Advisers. The Board considered information regarding the returns of the affiliated money market funds relative to comparable overnight investments, as well as the fees paid by the affiliated money market funds to Invesco Advisers and its affiliates. In this regard, the Board noted that Invesco Advisers receives advisory fees from these affiliated money market funds attributable to the Fund’s investments. The Board also noted that Invesco Advisers has contractually agreed to waive through varying periods an amount equal to 100% of the net advisory fee Invesco Advisers receives from the affiliated money market funds with respect to the Fund’s investment in the affiliated money market funds of uninvested cash, but not cash collateral. The Board concluded that the advisory fees payable to Invesco Advisers from the Fund’s investment of cash collateral from any securities lending arrangements in the affiliated money market funds are for services that are not duplicative of services provided by Invesco Advisers to the Fund.

    The Board considered that Invesco Advisers may serve as the Fund’s affiliated securities lending agent and evaluated the benefits realized by Invesco Advisers when serving in such role, including the compensation received. The Board considered Invesco Advisers’ securities lending platform and corporate governance structure for securities lending, including Invesco Advisers’ Securities Lending Governance Committee and its related responsibilities. The Board noted that to the extent the Fund utilizes Invesco Advisers as an affiliated securities lending agent, the Fund conducts its securities lending in accordance with, and in reliance upon, no-action letters issued by the SEC staff that provide guidance on how an affiliate may act as a direct agent lender and receive compensation for those services without obtaining exemptive relief. The Board considered information provided by Invesco Advisers related to the performance of Invesco Advisers as securities lending agent, including a summary of the securities lending services provided to the Fund by Invesco Advisers and the compensation paid to Invesco Advisers for such services, as well as any revenues generated for the Fund in connection with such securities lending activity and the allocation of such revenue between the Fund and Invesco Advisers.

    The Board also received information about commissions that an affiliated broker may receive for executing certain trades for the Fund. Invesco Advisers and the Affiliated Sub-Advisers advised the Board of the benefits to the Fund of executing trades through the affiliated broker and that such trades were executed in compliance with rules under the federal securities laws and consistent with best execution obligations.

 

 

20   Invesco Value Opportunities Fund

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LOGO

Go paperless with eDelivery

Visit invesco.com/edelivery to enjoy the convenience and security of anytime electronic access to your investment documents.

With eDelivery, you can elect to have any or all of the following materials delivered straight to your inbox to download, save and print from your own computer:

∎ Fund reports and prospectuses

∎ Quarterly statements

∎ Daily confirmations

∎ Tax forms

 

 

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 portfolio holdings four times each year, at the end of each fiscal quarter. For the second and fourth quarters, the list appears, respectively, in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the list with the Securities and Exchange Commission (SEC) as an exhibit to its reports on Form N-PORT. The most recent list of portfolio holdings is available at invesco.com/completeqtrholdings. Shareholders can also look up the Fund’s Form N-PORT filings on the SEC website, 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/corporate/about-us/esg. 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. This 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.

 

LOGO

 

SEC file number(s): 811-03826 and 002-85905                     Invesco Distributors, Inc.    VK-VOPP-SAR-1                                         

(b) Not applicable.

ITEM 2.

CODE OF ETHICS.

Not applicable for a semi-annual 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 December 14, 2023, an evaluation was performed under the supervision and with the participation of the officers of the Registrant, including the PEO and PFO, to assess the effectiveness of the Registrant’s 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 Registrant’s officers, including the PEO and PFO, concluded that, as of December 14, 2023, the Registrant’s 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 Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting.

 

ITEM 12.

DISCLOSURE OF SECURITIES LENDING ACTIVITIES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

Not applicable.

 

ITEM 13.

EXHIBITS.

 

13(a) (1)

Not applicable.

 

13(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 and Section 302 of the Sarbanes-Oxley Act of 2002.

 

13(a) (3)

Not applicable.

 

13(a) (4)

Not applicable.

 

13(b)

Certifications of principal executive officer and principal financial officer as required by Rule 30a-2(b) under the Investment Company Act of 1940 and Section 906 of the Sarbanes-Oxley Act of 2002.

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/ Glenn Brightman

   Glenn Brightman
   Principal Executive Officer
  Date:      January 3, 2024

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/ Glenn Brightman

   Glenn Brightman
   Principal Executive Officer
  Date:      January 3, 2024

 

  By:  

 /s/ Adrien Deberghes

   Adrien Deberghes
   Principal Financial Officer
  Date:      January 3, 2024