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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 811-06463
AIM International Mutual Funds (Invesco International Mutual Funds)
(Exact name of registrant as specified in charter)
11 Greenway Plaza, Suite 1000 Houston, Texas 77046
(Address of principal executive offices) (Zip code)
Philip A. Taylor 11 Greenway Plaza, Suite 1000 Houston, Texas 77046
(Name and address of agent for service)
Registrant’s telephone number, including area code: (713) 626-1919
Date of fiscal year end: 10/31
Date of reporting period: 4/30/14
Item 1. Report to Stockholders.
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Semiannual Report to Shareholders
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April 30, 2014 | ||
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| Invesco Asia Pacific Growth Fund
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| Nasdaq: | ||||
| A: ASIAX n B: ASIBX n C: ASICX n Y: ASIYX | ||||
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2 Fund Performance
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| 3 Letters to Shareholders
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| 4 Schedule of Investments
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| 6 Financial Statements
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| 8 Notes to Financial Statements
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| 14 Financial Highlights
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| 15 Fund Expenses | ||||
| For the most current month-end Fund performance and commentary, please visit invesco.com/performance. | ||||
| Unless otherwise noted, all data provided by Invesco. | ||||
| This report must be accompanied or preceded by a currently effective Fund prospectus, which contains more complete information, including sales charges and expenses. Investors should read it carefully before investing.
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| NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE | ||||
Fund Performance
2 Invesco Asia Pacific Growth Fund
Letters to Shareholders
|
Bruce Crockett |
Dear Fellow Shareholders: Members of the Invesco Funds Board work continually to oversee how the Invesco Funds are performing in light of ever-changing and often unpredictable economic and market conditions. In light of market conditions over the last few years, the financial news media have given increased attention to “alternative investment strategies” of late. Still, many investors don’t know very much about these types of investments. After a careful and thorough examination of the potential risks and potential benefits of alternative investment strategies, the Invesco Funds Board has approved the launch of several new alternative funds for the Invesco product lineup, to be managed by teams we determined have the depth and experience to pursue the funds’ investment objectives. That’s especially important, given that alternative products typically hold more non-traditional investments and employ more complex trading strategies, including hedging and leveraging through derivatives, |
short selling and opportunistic strategies that change with market conditions. Investors considering alternatives should be aware of their unique characteristics and the additional risks of the strategies they use. Like all investments, performance will fluctuate. You can lose money.
Your financial adviser is a good source of information about alternative investment strategies; he or she can explain the risks associated with them as well as their potential benefits. This type of professional guidance is why Invesco believes it’s so important that individual investors work with trusted, experienced financial advisers.
Be assured that the Invesco Funds Board will continue working on your behalf and on behalf of all our fund shareholders, keeping your needs and interests uppermost in our minds.
As always, please contact me at bruce@brucecrockett.com with any questions or concerns you may have. On behalf of the Board, we look forward to continuing to represent your interests and serving your needs.
Sincerely,
Bruce L. Crockett
Independent Chair
Invesco Funds Board of Trustees
|
Philip Taylor |
Dear Shareholders: This semiannual report includes information about your Fund, including performance data and a list of its investments as of the close of the reporting period. I hope you find this report of interest. Our website, invesco.com/us, offers a wide range of market insights and investment perspectives. On the website, you’ll find detailed information about our funds, including prices, performance, holdings and portfolio manager commentaries. You can access information about your individual Invesco account whenever it’s convenient for you; just complete a simple, secure online registration. Use the “Login” box on our home page to get started. Invesco’s mobile app for iPad® (available free from the App StoreSM) allows you to obtain the same detailed information about your Fund and the same investment insights from our investment leaders, market strategists, economists and retirement experts on the go. Also, you can obtain timely updates to help you stay informed about the markets, the economy |
and investing by connecting with Invesco on Twitter, LinkedIn or Facebook. You can access our blog at blog.invesco.us.com or by visiting the “Intentional Investing Forum” on our home page.
For questions about your account, feel free to contact an Invesco client services representative at 800 959 4246. For Invesco-related questions or comments, please email me directly at phil@invesco.com.
Thank you for investing with us.
Sincerely,
Philip Taylor
Senior Managing Director, Invesco Ltd.
iPad is a trademark of Apple Inc., registered in the US and other countries. App Store is a service mark of Apple Inc. Invesco Distributors, Inc. is not affiliated with Apple Inc.
3 Invesco Asia Pacific Growth Fund
Schedule of Investments
April 30, 2014
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
4 Invesco Asia Pacific Growth Fund
Investment Abbreviations:
| ADR | – American Depositary Receipt | |
| PDR | – Philippine Depositary Receipt | |
| REIT | – Real Estate Investment Trust |
Notes to Schedule of Investments:
| (a) | Non-income producing security. |
| (b) | The money market fund and the Fund are affiliated by having the same investment adviser. |
Portfolio Composition
By sector, based on Net Assets
as of April 30, 2014
| Financials |
26.1 | % | ||
| Consumer Discretionary |
15.3 | |||
| Information Technology |
12.1 | |||
| Industrials |
8.8 | |||
| Telecommunication Services |
6.5 | |||
| Materials |
6.4 | |||
| Utilities |
5.5 | |||
| Health Care |
4.2 | |||
| Consumer Staples |
3.2 | |||
| Energy |
1.2 | |||
| Money Market Funds Plus Other Assets Less Liabilities |
10.7 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco Asia Pacific Growth Fund
Statement of Assets and Liabilities
April 30, 2014
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco Asia Pacific Growth Fund
Statement of Operations
For the six months ended April 30, 2014
(Unaudited)
| Investment income: |
||||
| Dividends (net of foreign withholding taxes of $878,750) |
$ | 8,524,803 | ||
| Dividends from affiliated money market funds |
16,149 | |||
| Total investment income |
8,540,952 | |||
| Expenses: |
||||
| Advisory fees |
3,473,479 | |||
| Administrative services fees |
95,293 | |||
| Custodian fees |
256,246 | |||
| Distribution fees: |
||||
| Class A |
647,338 | |||
| Class B |
97,195 | |||
| Class C |
452,403 | |||
| Transfer agent fees |
764,111 | |||
| Trustees’ and officers’ fees and benefits |
27,065 | |||
| Other |
158,415 | |||
| Total expenses |
5,971,545 | |||
| Less: Fees waived and expense offset arrangement(s) |
(56,086 | ) | ||
| Net expenses |
5,915,459 | |||
| Net investment income |
2,625,493 | |||
| Realized and unrealized gain (loss) from: |
||||
| Net realized gain (loss) from: |
||||
| Investment securities |
12,020,391 | |||
| Foreign currencies |
(75,103 | ) | ||
| 11,945,288 | ||||
| Change in net unrealized appreciation (depreciation) of: |
||||
| Investment securities (net of foreign taxes on holdings of $48,197) |
(20,138,869 | ) | ||
| Foreign currencies |
(245,834 | ) | ||
| (20,384,703 | ) | |||
| Net realized and unrealized gain (loss) |
(8,439,415 | ) | ||
| Net increase (decrease) in net assets resulting from operations |
$ | (5,813,922 | ) | |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco Asia Pacific Growth Fund
Statement of Changes in Net Assets
For the six months ended April 30, 2014 and the year ended October 31, 2013
(Unaudited)
| April 30, 2014 |
October 31, 2013 |
|||||||
| Operations: |
||||||||
| Net investment income |
$ | 2,625,493 | $ | 6,288,256 | ||||
| Net realized gain |
11,945,288 | 40,343,992 | ||||||
| Change in net unrealized appreciation (depreciation) |
(20,384,703 | ) | 31,144,966 | |||||
| Net increase (decrease) in net assets resulting from operations |
(5,813,922 | ) | 77,777,214 | |||||
| Distributions to shareholders from net investment income: |
||||||||
| Class A |
(4,576,841 | ) | (3,012,794 | ) | ||||
| Class B |
(30,320 | ) | — | |||||
| Class C |
(134,057 | ) | — | |||||
| Class Y |
(1,264,757 | ) | (540,337 | ) | ||||
| Total distributions from net investment income |
(6,005,975 | ) | (3,553,131 | ) | ||||
| Distributions to shareholders from net realized gains: |
||||||||
| Class A |
(28,052,778 | ) | (9,721,485 | ) | ||||
| Class B |
(1,182,957 | ) | (603,903 | ) | ||||
| Class C |
(5,230,363 | ) | (1,852,367 | ) | ||||
| Class Y |
(6,036,431 | ) | (1,304,896 | ) | ||||
| Total distributions from net realized gains |
(40,502,529 | ) | (13,482,651 | ) | ||||
| Share transactions–net: |
||||||||
| Class A |
3,834,569 | 53,882,110 | ||||||
| Class B |
(4,134,536 | ) | (6,880,003 | ) | ||||
| Class C |
(292,887 | ) | 9,131,466 | |||||
| Class Y |
61,642,695 | 54,724,041 | ||||||
| Net increase in net assets resulting from share transactions |
61,049,841 | 110,857,614 | ||||||
| Net increase in net assets |
8,727,415 | 171,599,046 | ||||||
| Net assets: |
||||||||
| Beginning of period |
795,476,124 | 623,877,078 | ||||||
| End of period (includes undistributed net investment income of $2,294,979 and $5,675,461, respectively) |
$ | 804,203,539 | $ | 795,476,124 | ||||
Notes to Financial Statements
April 30, 2014
(Unaudited)
NOTE 1—Significant Accounting Policies
Invesco Asia Pacific Growth Fund (the “Fund”) is a series portfolio of AIM International Mutual Funds (Invesco International Mutual Funds) (the “Trust”). The Trust is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company consisting of eight separate portfolios, each authorized to issue an unlimited number of shares of beneficial interest. The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each portfolio or class will be voted on exclusively by the shareholders of such portfolio or class.
The Fund’s investment objective is long-term growth of capital.
The Fund currently consists of four different classes of shares: Class A, Class B, Class C and Class Y. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met and under certain circumstances load waived shares may be subject to contingent deferred sales charges (“CDSC”). Class C shares are sold with a CDSC. Class Y shares are sold at net asset value. Effective November 30, 2010, new or additional investments in Class B shares are no longer permitted. Existing shareholders of Class B shares may continue to reinvest dividends and capital gains distributions in Class B shares until they convert to Class A shares. Also, shareholders in Class B shares will be able to exchange those shares for Class B shares of other Invesco Funds offering such shares until they convert to Class A shares. Generally, Class B shares will automatically convert to Class A shares on or about the month-end, which is at least eight years after the date of purchase. Redemption of Class B shares prior to the conversion date will be subject to a CDSC.
8 Invesco Asia Pacific Growth Fund
The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.
| A. | Security Valuations — Securities, including restricted securities, are valued according to the following policy. |
A security listed or traded on an exchange (except convertible securities) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).
Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
Debt obligations (including convertible securities) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate (for unlisted equities), yield (for debt obligations), quality, type of issue, coupon rate (for debt obligations), maturity (for debt obligations), individual trading characteristics and other market data. Debt obligations are subject to interest rate and credit risks. In addition, all debt obligations involve some risk of default with respect to interest and/or principal payments.
Foreign securities’ (including foreign exchange contracts) prices are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange-traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that the Adviser determines are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities’ prices meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including corporate loans.
Securities for which market quotations are not readily available or became unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a 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 of the Fund’s 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 economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
| B. | Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. |
The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the 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 Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
9 Invesco Asia Pacific Growth Fund
| C. | Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted. |
| D. | Distributions — Distributions from 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 and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets. |
| G. | Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print. |
| H. | Indemnifications — Under the 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 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.
| J. | Forward Foreign Currency Contracts — The Fund may enter into 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. A forward foreign currency contract is an obligation to purchase or sell a specific currency for an agreed-upon price at a future date. The use of forward foreign currency contracts does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with forward foreign currency contracts include failure of the counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities. |
10 Invesco Asia Pacific Growth Fund
NOTE 2—Advisory Fees and Other Fees Paid to Affiliates
The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:
| Average Daily Net Assets | Rate | |||||
| First $250 million |
0 | .935% | ||||
| Next $250 million |
0 | .91% | ||||
| Next $500 million |
0 | .885% | ||||
| Next $1.5 billion |
0 | .86% | ||||
| Next $2.5 billion |
0 | .835% | ||||
| Next $2.5 billion |
0 | .81% | ||||
| Next $2.5 billion |
0 | .785% | ||||
| Over $10 billion |
0 | .76% | ||||
Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Canada Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide(s) discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).
The Adviser has contractually agreed, through at least June 30, 2015, to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver and/or expense reimbursement (excluding certain items discussed below) of Class A, Class B, Class C and Class Y shares to 2.25%, 3.00%, 3.00% and 2.00%, respectively, of average daily net assets. 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; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless Invesco continues the fee waiver agreement, it will terminate on June 30, 2015. The fee waiver agreement cannot be terminated during its term. The Adviser did not waive fees and/or reimburse expenses during the period under this expense limitation.
Further, the Adviser has contractually agreed, through at least June 30, 2016, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market funds.
For the six months ended April 30, 2014, the Adviser waived advisory fees of $55,670.
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 April 30, 2014, expenses incurred under the agreement are shown in the Statement of Operations as Administrative services fees.
The Trust has entered into a transfer agency and service agreement with Invesco Investment Services, Inc. (“IIS”) pursuant to which the Fund has agreed to pay IIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IIS for certain expenses incurred by IIS in the course of providing such services. IIS may make payments to intermediaries that provide omnibus account services, sub-accounting services and/or networking services. All fees payable by IIS to intermediaries that provide omnibus account services or sub-accounting are charged back to the Fund, subject to certain limitations approved by the Trust’s Board of Trustees. For the six months ended April 30, 2014, the expenses incurred under the agreement are shown in the Statement of Operations as Transfer agent fees.
The Trust has entered into master distribution agreements with Invesco Distributors, Inc. (“IDI”) to serve as the distributor for the Class A, Class B, Class C and Class Y 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 B and Class C 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 and 1.00% of the average daily net assets of each class of Class B and Class C shares. Of the Plan payments, up to 0.25% of the average daily net assets of each class of shares may be paid to furnish continuing personal shareholder services to customers who purchase and own shares of such classes. Any amounts not paid as a service fee under the Plans would constitute an asset-based sales charge. Rules of the Financial Industry Regulatory Authority (“FINRA”) impose a cap on the total sales charges, including asset-based sales charges, that may be paid by any class of shares of the Fund. For the six months ended April 30, 2014, expenses incurred under the Plans are shown in the Statement of Operations as Distribution fees.
Front-end sales commissions and CDSC (collectively, the “sales charges”) are not recorded as expenses of the Fund. Front-end sales commissions are deducted from proceeds from the sales of Fund shares prior to investment in Class A shares of the Fund. CDSC are deducted from redemption proceeds prior to remittance to the shareholder. During the six months ended April 30, 2014, IDI advised the Fund that IDI retained $98,016 in front-end sales commissions from the sale of Class A shares and $6,538, $7,882 and $13,725 from Class A, Class B and Class C shares, respectively, for CDSC imposed on redemptions by shareholders.
Certain officers and trustees of the Trust are officers and directors of the Adviser, IIS and/or IDI.
11 Invesco Asia Pacific Growth Fund
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 or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an 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 Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information. |
The following is a summary of the tiered valuation input levels, as of April 30, 2014. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
During the six months ended April 30, 2014, there were transfers from Level 1 to Level 2 of $121,585,956 and from Level 2 to Level 1 of $293,380,213, due to foreign fair value adjustments.
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Australia |
$ | — | $ | 79,016,118 | $ | — | $ | 79,016,118 | ||||||||
| China |
161,525,704 | — | — | 161,525,704 | ||||||||||||
| Hong Kong |
31,692,444 | 62,381,282 | — | 94,073,726 | ||||||||||||
| Indonesia |
54,427,365 | 25,179,658 | — | 79,607,023 | ||||||||||||
| Malaysia |
21,607,250 | 21,966,091 | — | 43,573,341 | ||||||||||||
| Philippines |
48,866,891 | 30,040,536 | — | 78,907,427 | ||||||||||||
| Singapore |
57,850,495 | — | — | 57,850,495 | ||||||||||||
| South Korea |
28,484,164 | 14,984,675 | — | 43,468,839 | ||||||||||||
| Taiwan |
— | 23,558,019 | — | 23,558,019 | ||||||||||||
| Thailand |
15,013,804 | 41,785,147 | — | 56,798,951 | ||||||||||||
| United States |
75,162,733 | — | — | 75,162,733 | ||||||||||||
| Total Investments |
$ | 494,630,850 | $ | 298,911,526 | $ | — | $ | 793,542,376 | ||||||||
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 April 30, 2014, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $416.
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 State Street Bank and Trust Company, the custodian bank. Such balances, if any at period end, are shown in the Statement of Assets and Liabilities under the payable caption Amount due custodian. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.
12 Invesco Asia Pacific Growth 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. Capital losses generated in years beginning after December 22, 2010 can be carried forward for an unlimited period, whereas previous losses expire in 8 tax years. Capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Capital loss carryforwards with no expiration date will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss 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 October 31, 2013.
NOTE 8—Investment Securities
The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the six months ended April 30, 2014 was $88,479,433 and $53,160,324, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed federal income tax reporting period-end.
| Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis | ||||
| Aggregate unrealized appreciation of investment securities |
$ | 212,056,749 | ||
| Aggregate unrealized (depreciation) of investment securities |
(23,513,046 | ) | ||
| Net unrealized appreciation of investment securities |
$ | 188,543,703 | ||
Cost of investments for tax purposes is $604,998,673.
NOTE 9—Share Information
| Summary of Share Activity | ||||||||||||||||
| Six months ended April 30, 2014(a) |
Year ended October 31, 2013 |
|||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||
| Sold: |
||||||||||||||||
| Class A |
1,652,399 | $ | 51,027,398 | 5,889,455 | $ | 189,661,022 | ||||||||||
| Class B |
6,334 | 183,173 | 60,321 | 1,805,112 | ||||||||||||
| Class C |
284,421 | 8,199,913 | 932,471 | 27,957,828 | ||||||||||||
| Class Y |
2,960,154 | 89,564,262 | 3,751,686 | 121,128,269 | ||||||||||||
| Issued as reinvestment of dividends: |
||||||||||||||||
| Class A |
986,445 | 29,474,975 | 371,809 | 11,455,419 | ||||||||||||
| Class B |
39,872 | 1,117,602 | 19,368 | 562,054 | ||||||||||||
| Class C |
178,309 | 4,967,701 | 59,702 | 1,722,404 | ||||||||||||
| Class Y |
206,630 | 6,182,381 | 47,330 | 1,460,123 | ||||||||||||
| Automatic conversion of Class B shares to Class A shares: |
||||||||||||||||
| Class A |
80,569 | 2,459,419 | 134,345 | 4,441,862 | ||||||||||||
| Class B |
(86,060 | ) | (2,459,419 | ) | (146,371 | ) | (4,441,862 | ) | ||||||||
| Reacquired: |
||||||||||||||||
| Class A |
(2,583,656 | ) | (79,127,223 | ) | (4,730,060 | ) | (151,676,193 | ) | ||||||||
| Class B |
(103,269 | ) | (2,975,892 | ) | (160,134 | ) | (4,805,307 | ) | ||||||||
| Class C |
(468,365 | ) | (13,460,501 | ) | (687,635 | ) | (20,548,766 | ) | ||||||||
| Class Y |
(1,107,566 | ) | (34,103,948 | ) | (2,107,171 | ) | (67,864,351 | ) | ||||||||
| Net increase in share activity |
2,046,217 | $ | 61,049,841 | 3,435,116 | $ | 110,857,614 | ||||||||||
| (a) | There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 29% of the outstanding shares of the Fund. IDI has an agreement with these entities to sell Fund shares. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as securities brokerage, distribution, third party record keeping and account servicing. The Fund has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially. |
13 Invesco Asia Pacific Growth Fund
NOTE 10—Financial Highlights
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
| Net asset value, beginning of period |
Net investment income(a) |
Net gains (losses) on securities (both realized and unrealized) |
Total from investment operations |
Dividends from net investment income |
Distributions from net realized gains |
Total distributions |
Net
asset value, end of period(b) |
Total return(c) |
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(d) |
|||||||||||||||||||||||||||||||||||||||||||
| Class A |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Six months ended 04/30/14 |
$ | 33.45 | $ | 0.12 | $ | (0.46 | ) | $ | (0.34 | ) | $ | (0.28 | ) | $ | (1.70 | ) | $ | (1.98 | ) | $ | 31.13 | (0.79 | )% | $ | 521,141 | 1.49 | %(e) | 1.50 | %(e) | 0.75 | %(e) | 8 | % | |||||||||||||||||||||||
| Year ended 10/31/13 |
30.65 | 0.30 | 3.35 | 3.65 | (0.20 | ) | (0.65 | ) | (0.85 | ) | 33.45 | 12.16 | 555,505 | 1.47 | 1.49 | 0.95 | 18 | |||||||||||||||||||||||||||||||||||||||
| Year ended 10/31/12 |
28.42 | 0.26 | 4.34 | 4.60 | (0.27 | ) | (2.10 | ) | (2.37 | ) | 30.65 | 17.77 | 457,964 | 1.54 | 1.55 | 0.89 | 16 | |||||||||||||||||||||||||||||||||||||||
| Year ended 10/31/11 |
30.30 | 0.28 | (1.68 | ) | (1.40 | ) | (0.23 | ) | (0.25 | ) | (0.48 | ) | 28.42 | (4.67 | ) | 385,828 | 1.53 | 1.55 | 0.93 | 27 | ||||||||||||||||||||||||||||||||||||
| Year ended 10/31/10 |
22.23 | 0.23 | 8.12 | 8.35 | (0.28 | ) | — | (0.28 | ) | 30.30 | 37.97 | 429,596 | 1.60 | 1.61 | 0.91 | 25 | ||||||||||||||||||||||||||||||||||||||||
| Year ended 10/31/09 |
13.52 | 0.24 | 8.82 | 9.06 | (0.35 | ) | — | (0.35 | ) | 22.23 | 68.89 | 298,982 | 1.78 | 1.79 | 1.43 | 28 | ||||||||||||||||||||||||||||||||||||||||
| Class B |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Six months ended 04/30/14 |
31.29 | 0.00 | (0.43 | ) | (0.43 | ) | (0.04 | ) | (1.70 | ) | (1.74 | ) | 29.12 | (1.16 | ) | 16,697 | 2.24 | (e) | 2.25 | (e) | 0.00 | (e) | 8 | |||||||||||||||||||||||||||||||||
| Year ended 10/31/13 |
28.74 | 0.06 | 3.14 | 3.20 | — | (0.65 | ) | (0.65 | ) | 31.29 | 11.32 | 22,421 | 2.22 | 2.24 | 0.20 | 18 | ||||||||||||||||||||||||||||||||||||||||
| Year ended 10/31/12 |
26.73 | 0.04 | 4.10 | 4.14 | (0.03 | ) | (2.10 | ) | (2.13 | ) | 28.74 | 16.94 | 27,112 | 2.29 | 2.30 | 0.14 | 16 | |||||||||||||||||||||||||||||||||||||||
| Year ended 10/31/11 |
28.58 | 0.05 | (1.59 | ) | (1.54 | ) | (0.06 | ) | (0.25 | ) | (0.31 | ) | 26.73 | (5.41 | ) | 30,394 | 2.28 | 2.30 | 0.18 | 27 | ||||||||||||||||||||||||||||||||||||
| Year ended 10/31/10 |
21.02 | 0.04 | 7.69 | 7.73 | (0.17 | ) | — | (0.17 | ) | 28.58 | 36.98 | 40,299 | 2.35 | 2.36 | 0.16 | 25 | ||||||||||||||||||||||||||||||||||||||||
| Year ended 10/31/09 |
12.65 | 0.11 | 8.37 | 8.48 | (0.11 | ) | — | (0.11 | ) | 21.02 | 67.63 | 35,178 | 2.53 | 2.54 | 0.68 | 28 | ||||||||||||||||||||||||||||||||||||||||
| Class C |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Six months ended 04/30/14 |
31.11 | 0.00 | (0.43 | ) | (0.43 | ) | (0.04 | ) | (1.70 | ) | (1.74 | ) | 28.94 | (1.16 | ) | 89,620 | 2.24 | (e) | 2.25 | (e) | 0.00 | (e) | 8 | |||||||||||||||||||||||||||||||||
| Year ended 10/31/13 |
28.58 | 0.06 | 3.12 | 3.18 | — | (0.65 | ) | (0.65 | ) | 31.11 | 11.31 | 96,520 | 2.22 | 2.24 | 0.20 | 18 | ||||||||||||||||||||||||||||||||||||||||
| Year ended 10/31/12 |
26.60 | 0.04 | 4.07 | 4.11 | (0.03 | ) | (2.10 | ) | (2.13 | ) | 28.58 | 16.91 | 79,959 | 2.29 | 2.30 | 0.14 | 16 | |||||||||||||||||||||||||||||||||||||||
| Year ended 10/31/11 |
28.44 | 0.05 | (1.58 | ) | (1.53 | ) | (0.06 | ) | (0.25 | ) | (0.31 | ) | 26.60 | (5.41 | ) | 76,962 | 2.28 | 2.30 | 0.18 | 27 | ||||||||||||||||||||||||||||||||||||
| Year ended 10/31/10 |
20.92 | 0.04 | 7.65 | 7.69 | (0.17 | ) | — | (0.17 | ) | 28.44 | 36.97 | 85,918 | 2.35 | 2.36 | 0.16 | 25 | ||||||||||||||||||||||||||||||||||||||||
| Year ended 10/31/09 |
12.59 | 0.11 | 8.33 | 8.44 | (0.11 | ) | — | (0.11 | ) | 20.92 | 67.64 | 55,810 | 2.53 | 2.54 | 0.68 | 28 | ||||||||||||||||||||||||||||||||||||||||
| Class Y |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Six months ended 04/30/14 |
33.57 | 0.15 | (0.46 | ) | (0.31 | ) | (0.36 | ) | (1.70 | ) | (2.06 | ) | 31.20 | (0.68 | ) | 176,745 | 1.24 | (e) | 1.25 | (e) | 1.00 | (e) | 8 | |||||||||||||||||||||||||||||||||
| Year ended 10/31/13 |
30.75 | 0.39 | 3.35 | 3.74 | (0.27 | ) | (0.65 | ) | (0.92 | ) | 33.57 | 12.43 | 121,030 | 1.22 | 1.24 | 1.20 | 18 | |||||||||||||||||||||||||||||||||||||||
| Year ended 10/31/12 |
28.52 | 0.33 | 4.35 | 4.68 | (0.35 | ) | (2.10 | ) | (2.45 | ) | 30.75 | 18.07 | 58,843 | 1.29 | 1.30 | 1.14 | 16 | |||||||||||||||||||||||||||||||||||||||
| Year ended 10/31/11 |
30.39 | 0.35 | (1.68 | ) | (1.33 | ) | (0.29 | ) | (0.25 | ) | (0.54 | ) | 28.52 | (4.43 | ) | 35,862 | 1.28 | 1.30 | 1.18 | 27 | ||||||||||||||||||||||||||||||||||||
| Year ended 10/31/10 |
22.28 | 0.30 | 8.14 | 8.44 | (0.33 | ) | — | (0.33 | ) | 30.39 | 38.31 | 32,436 | 1.35 | 1.36 | 1.16 | 25 | ||||||||||||||||||||||||||||||||||||||||
| Year ended 10/31/09 |
13.52 | 0.29 | 8.82 | 9.11 | (0.35 | ) | — | (0.35 | ) | 22.28 | 69.31 | 11,785 | 1.53 | 1.54 | 1.68 | 28 | ||||||||||||||||||||||||||||||||||||||||
| (a) | Calculated using average shares outstanding. |
| (b) | Includes redemption fees added to shares of beneficial interest which were less than $0.005 per share for the fiscal years ended October 31, 2012 and prior. |
| (c) | Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable. |
| (d) | Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable. |
| (e) | Ratios are annualized and based on average daily net assets (000’s omitted) of $522,163, $19,600, $91,230 and $137,293 for Class A, Class B, Class C and Class Y shares, respectively. |
14 Invesco Asia Pacific Growth Fund
Calculating your ongoing Fund expenses
Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, if any; and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period November 1, 2013 through April 30, 2014.
Actual expenses
The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled “Actual Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical example for comparison purposes
The table below also provides information about hypothetical account values and hypothetical expenses based on the 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.
| Class | Beginning Account Value (11/01/13) |
ACTUAL | HYPOTHETICAL (5% annual return before expenses) |
Annualized Expense Ratio |
||||||||||||||||||||
| Ending Account Value (04/30/14)1 |
Expenses Paid During Period2 |
Ending Account Value (04/30/14) |
Expenses Paid During Period2 |
|||||||||||||||||||||
| A | $ | 1,000.00 | $ | 991.80 | $ | 7.36 | $ | 1,017.41 | $ | 7.45 | 1.49 | % | ||||||||||||
| B | 1,000.00 | 987.80 | 11.04 | 1,013.69 | 11.18 | 2.24 | ||||||||||||||||||
| C | 1,000.00 | 988.10 | 11.04 | 1,013.69 | 11.18 | 2.24 | ||||||||||||||||||
| Y | 1,000.00 | 993.20 | 6.13 | 1,018.65 | 6.21 | 1.24 | ||||||||||||||||||
| 1 | The actual ending account value is based on the actual total return of the Fund for the period November 1, 2013 through April 30, 2014, 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 181/365 to reflect the most recent fiscal half year. |
15 Invesco Asia Pacific Growth Fund
Invesco mailing information
Send general correspondence to Invesco Investment Services, Inc., P.O. Box 219078, Kansas City, MO 64121-9078.
Important notice regarding delivery of security holder documents
To reduce Fund expenses, only one copy of most shareholder documents may be mailed to shareholders with multiple accounts at the same address (Householding). Mailing of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact Invesco Investment Services, Inc. at 800 959 4246 or contact your financial institution. We will begin sending you individual copies for each account within 30 days after receiving your request.
Fund holdings and proxy voting information
The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The most recent list of portfolio holdings is available at invesco.com/completeqtrholdings. Shareholders can also look up the Fund’s Forms N-Q on the SEC website at sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are shown below.
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 959 4246 or at invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.
| Information regarding how the Fund voted proxies related to its portfolio securities during the most recent 12-month period ended June 30 is available at invesco.com/proxysearch. The information is also available on the SEC website, sec.gov. Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the US distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd. |
|
| SEC file numbers: 811-06463 and 033-44611 | APG-SAR-1 | Invesco Distributors, Inc. |
|
| ||||
|
Semiannual Report to Shareholders
|
April 30, 2014 | ||
|
| ||||
| Invesco European Growth Fund
| ||||
| Nasdaq: | ||||
|
A: AEDAX n B: AEDBX n C: AEDCX n R: AEDRX n Y: AEDYX n Investor: EGINX | ||||
| ||||
|
| ||||
|
2 Fund Performance
| ||||
| 4 Letters to Shareholders
| ||||
| 5 Schedule of Investments
| ||||
| 7 Financial Statements
| ||||
| 9 Notes to Financial Statements
| ||||
| 16 Financial Highlights
| ||||
| 17 Fund Expenses | ||||
| For the most current month-end Fund performance and commentary, please visit invesco.com/performance. | ||||
| Unless otherwise noted, all data provided by Invesco. | ||||
| This report must be accompanied or preceded by a currently effective Fund prospectus, which contains more complete information, including sales charges and expenses. Investors should read it carefully before investing. | ||||
|
| ||||
| NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE | ||||
Fund Performance
2 Invesco European Growth Fund
3 Invesco European Growth Fund
Letters to Shareholders
|
Bruce Crockett |
Dear Fellow Shareholders: Members of the Invesco Funds Board work continually to oversee how the Invesco Funds are performing in light of ever-changing and often unpredictable economic and market conditions. In light of market conditions over the last few years, the financial news media have given increased attention to “alternative investment strategies” of late. Still, many investors don’t know very much about these types of investments. After a careful and thorough examination of the potential risks and potential benefits of alternative investment strategies, the Invesco Funds Board has approved the launch of several new alternative funds for the Invesco product lineup, to be managed by teams we determined have the depth and experience to pursue the funds’ investment objectives. That’s especially important, given that alternative products typically hold more non-traditional investments and employ more complex trading strategies, including hedging and leveraging through derivatives, |
short selling and opportunistic strategies that change with market conditions. Investors considering alternatives should be aware of their unique characteristics and the additional risks of the strategies they use. Like all investments, performance will fluctuate. You can lose money.
Your financial adviser is a good source of information about alternative investment strategies; he or she can explain the risks associated with them as well as their potential benefits. This type of professional guidance is why Invesco believes it’s so important that individual investors work with trusted, experienced financial advisers.
Be assured that the Invesco Funds Board will continue working on your behalf and on behalf of all our fund shareholders, keeping your needs and interests uppermost in our minds.
As always, please contact me at bruce@brucecrockett.com with any questions or concerns you may have. On behalf of the Board, we look forward to continuing to represent your interests and serving your needs.
Sincerely,
Bruce L. Crockett
Independent Chair
Invesco Funds Board of Trustees
|
Philip Taylor |
Dear Shareholders: This semiannual report includes information about your Fund, including performance data and a list of its investments as of the close of the reporting period. I hope you find this report of interest. Our website, invesco.com/us, offers a wide range of market insights and investment perspectives. On the website, you’ll find detailed information about our funds, including prices, performance, holdings and portfolio manager commentaries. You can access information about your individual Invesco account whenever it’s convenient for you; just complete a simple, secure online registration. Use the “Login” box on our home page to get started. Invesco’s mobile app for iPad® (available free from the App StoreSM) allows you to obtain the same detailed information about your Fund and the same investment insights from our investment leaders, market strategists, economists and retirement experts on the go. Also, you can obtain timely updates to help you stay informed about the markets, the |
economy and investing by connecting with Invesco on Twitter, LinkedIn or Facebook. You can access our blog at blog.invesco.us.com or by visiting the “Intentional Investing Forum” on our home page.
For questions about your account, feel free to contact an Invesco client services representative at 800 959 4246. For Invesco-related questions or comments, please email me directly at phil@invesco.com.
Thank you for investing with us.
Sincerely,
Philip Taylor
Senior Managing Director, Invesco Ltd.
iPad is a trademark of Apple Inc., registered in the US and other countries. App Store is a service mark of Apple Inc. Invesco Distributors, Inc. is not affiliated with Apple Inc.
4 Invesco European Growth Fund
Schedule of Investments
April 30, 2014
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco European Growth Fund
Notes to Schedule of Investments:
| (a) | Non-income producing security. |
| (b) | The money market fund and the Fund are affiliated by having the same investment adviser. |
Portfolio Composition
By sector, based on Net Assets
as of April 30, 2014
| Consumer Discretionary |
17.6 | % | ||
| Industrials |
15.3 | |||
| Financials |
14.3 | |||
| Energy |
11.1 | |||
| Consumer Staples |
8.9 | |||
| Health Care |
8.4 | |||
| Information Technology |
3.8 | |||
| Materials |
3.4 | |||
| Telecommunication Services |
0.9 | |||
| Utilities |
0.7 | |||
| Money Market Funds Plus Other Assets Less Liabilities |
15.6 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco European Growth Fund
Statement of Assets and Liabilities
April 30, 2014
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco European Growth Fund
Statement of Operations
For the six months ended April 30, 2014
(Unaudited)
| Investment income: |
||||
| Dividends (net of foreign withholding taxes of $1,069,178) |
$ | 21,363,535 | ||
| Dividends from affiliated money market funds |
58,482 | |||
| Total investment income |
21,422,017 | |||
| Expenses: |
||||
| Advisory fees |
7,425,033 | |||
| Administrative services fees |
195,740 | |||
| Custodian fees |
202,725 | |||
| Distribution fees: |
||||
| Class A |
697,627 | |||
| Class B |
60,196 | |||
| Class C |
382,813 | |||
| Class R |
42,885 | |||
| Investor Class |
235,650 | |||
| Transfer agent fees |
1,228,263 | |||
| Trustees’ and officers’ fees and benefits |
36,737 | |||
| Other |
154,701 | |||
| Total expenses |
10,662,370 | |||
| Less: Fees waived and expense offset arrangement(s) |
(180,474 | ) | ||
| Net expenses |
10,481,896 | |||
| Net investment income |
10,940,121 | |||
| Realized and unrealized gain (loss) from: |
||||
| Net realized gain (loss) from: |
||||
| Investment securities |
28,634,198 | |||
| Foreign currencies |
(79,423 | ) | ||
| 28,554,775 | ||||
| Change in net unrealized appreciation of: |
||||
| Investment securities |
80,441,028 | |||
| Foreign currencies |
55,156 | |||
| 80,496,184 | ||||
| Net realized and unrealized gain |
109,050,959 | |||
| Net increase in net assets resulting from operations |
$ | 119,991,080 | ||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
8 Invesco European Growth Fund
Statement of Changes in Net Assets
For the six months ended April 30, 2014 and the year ended October 31, 2013
(Unaudited)
| April 30, 2014 |
October 31, 2013 |
|||||||
| Operations: |
|
|||||||
| Net investment income |
$ | 10,940,121 | $ | 14,629,464 | ||||
| Net realized gain |
28,554,775 | 27,493,111 | ||||||
| Change in net unrealized appreciation |
80,496,184 | 184,001,486 | ||||||
| Net increase in net assets resulting from operations |
119,991,080 | 226,124,061 | ||||||
| Distributions to shareholders from net investment income: |
||||||||
| Class A |
(5,988,738 | ) | (6,852,015 | ) | ||||
| Class B |
(82,972 | ) | (183,960 | ) | ||||
| Class C |
(439,562 | ) | (487,737 | ) | ||||
| Class R |
(161,586 | ) | (209,318 | ) | ||||
| Class Y |
(9,199,162 | ) | (5,374,817 | ) | ||||
| Investor Class |
(2,330,739 | ) | (2,895,808 | ) | ||||
| Total distributions from net investment income |
(18,202,759 | ) | (16,003,655 | ) | ||||
| Distributions to shareholders from net realized gains: |
||||||||
| Class A |
(9,666,633 | ) | (6,911,369 | ) | ||||
| Class B |
(243,679 | ) | (281,354 | ) | ||||
| Class C |
(1,290,952 | ) | (745,958 | ) | ||||
| Class R |
(308,730 | ) | (238,372 | ) | ||||
| Class Y |
(12,656,807 | ) | (4,888,767 | ) | ||||
| Investor Class |
(3,737,516 | ) | (2,846,909 | ) | ||||
| Total distributions from net realized gains |
(27,904,317 | ) | (15,912,729 | ) | ||||
| Share transactions–net: |
||||||||
| Class A |
121,591,767 | 41,814,991 | ||||||
| Class B |
(1,242,609 | ) | (5,042,754 | ) | ||||
| Class C |
37,741,945 | 9,812,963 | ||||||
| Class R |
2,052,334 | 320,311 | ||||||
| Class Y |
342,070,794 | 287,835,044 | ||||||
| Investor Class |
2,581,317 | 11,131,571 | ||||||
| Net increase in net assets resulting from share transactions |
504,795,548 | 345,872,126 | ||||||
| Net increase in net assets |
578,679,552 | 540,079,803 | ||||||
| Net assets: |
||||||||
| Beginning of period |
1,400,420,508 | 860,340,705 | ||||||
| End of period (includes undistributed net investment income of $6,069,787 and $13,332,425, respectively) |
$ | 1,979,100,060 | $ | 1,400,420,508 | ||||
Notes to Financial Statements
April 30, 2014
(Unaudited)
NOTE 1—Significant Accounting Policies
Invesco European Growth Fund (the “Fund”) is a series portfolio of AIM International Mutual Funds (Invesco International Mutual Funds) (the “Trust”). The Trust is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company consisting of eight separate portfolios, each authorized to issue an unlimited number of shares of beneficial interest. The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each portfolio or class will be voted on exclusively by the shareholders of such portfolio or class.
The Fund’s investment objective is long-term growth of capital.
The Fund currently consists of six different classes of shares: Class A, Class B, Class C, Class R, Class Y and Investor Class. Investor Class shares of the Fund are offered only to certain grandfathered investors. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met and under certain circumstances load waived shares may be subject to contingent deferred sales charges (“CDSC”). Class C shares are sold with a
9 Invesco European Growth Fund
CDSC. Class R, Class Y and Investor Class shares are sold at net asset value. Effective November 30, 2010, new or additional investments in Class B shares are no longer permitted. Existing shareholders of Class B shares may continue to reinvest dividends and capital gains distributions in Class B shares until they convert to Class A shares. Also, shareholders in Class B shares will be able to exchange those shares for Class B shares of other Invesco Funds offering such shares until they convert to Class A shares. Generally, Class B shares will automatically convert to Class A shares on or about the month-end, which is at least eight years after the date of purchase. Redemption of Class B shares prior to the conversion date will be subject to a CDSC.
The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.
| A. | Security Valuations — Securities, including restricted securities, are valued according to the following policy. |
A security listed or traded on an exchange (except convertible securities) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).
Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
Debt obligations (including convertible securities) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate (for unlisted equities), yield (for debt obligations), quality, type of issue, coupon rate (for debt obligations), maturity (for debt obligations), individual trading characteristics and other market data. Debt obligations are subject to interest rate and credit risks. In addition, all debt obligations involve some risk of default with respect to interest and/or principal payments.
Foreign securities’ (including foreign exchange contracts) prices are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange-traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that the Adviser determines are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities’ prices meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including corporate loans.
Securities for which market quotations are not readily available or became unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a 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 of the Fund’s 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 economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
| B. | Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. |
The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the
10 Invesco European Growth Fund
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 Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
| C. | Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted. |
| D. | Distributions — Distributions from 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 and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets. |
| G. | Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print. |
| H. | Indemnifications — Under the 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 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.
| J. | Forward Foreign Currency Contracts — The Fund may enter into 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. A forward foreign currency contract is an obligation to purchase or sell a specific currency for an agreed-upon price at a future date. The use of forward foreign currency contracts does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with forward foreign currency contracts include failure of the counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities. |
11 Invesco European Growth Fund
NOTE 2—Advisory Fees and Other Fees Paid to Affiliates
The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:
| Average Daily Net Assets | Rate | |||||
| First $250 million |
0 | .935% | ||||
| Next $250 million |
0 | .91% | ||||
| Next $500 million |
0 | .885% | ||||
| Next $1.5 billion |
0 | .86% | ||||
| Next $2.5 billion |
0 | .835% | ||||
| Next $2.5 billion |
0 | .81% | ||||
| Next $2.5 billion |
0 | .785% | ||||
| Over $10 billion |
0 | .76% | ||||
Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Canada Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide(s) discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).
The Adviser has contractually agreed, through at least June 30, 2015, to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver and/or expense reimbursement (excluding certain items discussed below) of Class A, Class B, Class C, Class R, Class Y and Investor Class shares to 2.25%, 3.00%, 3.00%, 2.50%, 2.00% and 2.25%, respectively, of average daily net assets. 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. Unless Invesco continues the fee waiver agreement, it will terminate on June 30, 2015. The fee waiver agreement cannot be terminated during its term. The Adviser did not waive fees and/or reimburse expenses during the period under this expense limitation.
Further, the Adviser has contractually agreed, through at least June 30, 2016, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market funds.
For the six months ended April 30, 2014, the Adviser waived advisory fees of $179,995.
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 April 30, 2014, expenses incurred under the agreement are shown in the Statement of Operations as Administrative services fees.
The Trust has entered into a transfer agency and service agreement with Invesco Investment Services, Inc. (“IIS”) pursuant to which the Fund has agreed to pay IIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IIS for certain expenses incurred by IIS in the course of providing such services. IIS may make payments to intermediaries that provide omnibus account services, sub-accounting services and/or networking services. All fees payable by IIS to intermediaries that provide omnibus account services or sub-accounting are charged back to the Fund, subject to certain limitations approved by the Trust’s Board of Trustees. For the six months ended April 30, 2014, expenses incurred under the agreement are shown in the Statement of Operations as Transfer agent fees.
The Trust has entered into master distribution agreements with Invesco Distributors, Inc. (“IDI”) to serve as the distributor for the Class A, Class B, Class C, Class R, Class Y and Investor Class shares of the Fund. The Trust has adopted plans pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Class A, Class B, Class C, Class R 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 B and Class C shares and 0.50% of the average daily net assets of Class R shares. The Fund, pursuant to the Investor Class Plan, reimburses IDI for its allocated share of expenses incurred pursuant to the Investor Class Plan for the period, up to a maximum annual rate of 0.25% of the average daily net assets of Investor Class shares. Of the Plan payments, up to 0.25% of the average daily net assets of each class of shares may be paid to furnish continuing personal shareholder services to customers who purchase and 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 April 30, 2014, expenses incurred under the Plans are shown in the Statement of Operations as Distribution fees.
Front-end sales commissions and CDSC (collectively, the “sales charges”) are not recorded as expenses of the Fund. Front-end sales commissions are deducted from proceeds from the sales of Fund shares prior to investment in Class A shares of the Fund. CDSC are deducted from redemption proceeds prior to remittance to the shareholder. During the six months ended April 30, 2014, IDI advised the Fund that IDI retained $122,210 in front-end sales commissions from the sale of Class A shares and $195, $2,132 and $3,870 from Class A, Class B and Class C shares, respectively, for CDSC imposed on redemptions by shareholders.
Certain officers and trustees of the Trust are officers and directors of the Adviser, IIS and/or IDI.
12 Invesco European Growth Fund
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 or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an 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 Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information. |
The following is a summary of the tiered valuation input levels, as of April 30, 2014. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
During the six months ended April 30, 2014, there were transfers from Level 1 to Level 2 of $506,832,815 and from Level 2 to Level 1 of $152,829,037, due to foreign fair value adjustments.
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Belgium |
$ | 16,781,045 | $ | 24,049,992 | $ | — | $ | 40,831,037 | ||||||||
| Denmark |
— | 47,507,742 | — | 47,507,742 | ||||||||||||
| France |
— | 121,176,763 | — | 121,176,763 | ||||||||||||
| Germany |
154,936,717 | 32,115,992 | — | 187,052,709 | ||||||||||||
| Ireland |
— | 65,656,283 | — | 65,656,283 | ||||||||||||
| Israel |
— | 15,050,070 | — | 15,050,070 | ||||||||||||
| Italy |
— | 70,689,946 | — | 70,689,946 | ||||||||||||
| Netherlands |
— | 24,510,710 | — | 24,510,710 | ||||||||||||
| Norway |
16,026,988 | 35,969,792 | — | 51,996,780 | ||||||||||||
| Russia |
— | 22,600,486 | — | 22,600,486 | ||||||||||||
| Spain |
16,638,694 | — | — | 16,638,694 | ||||||||||||
| Sweden |
— | 67,653,956 | — | 67,653,956 | ||||||||||||
| Switzerland |
83,984,902 | 181,338,772 | — | 265,323,674 | ||||||||||||
| Turkey |
9,820,049 | 34,232,907 | — | 44,052,956 | ||||||||||||
| Turkmenistan |
— | 31,109,615 | — | 31,109,615 | ||||||||||||
| United Kingdom |
77,412,687 | 521,776,373 | — | 599,189,060 | ||||||||||||
| United States |
293,490,374 | — | — | 293,490,374 | ||||||||||||
| Total Investments |
$ | 669,091,456 | $ | 1,295,439,399 | $ | — | $ | 1,964,530,855 | ||||||||
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 April 30, 2014, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $479.
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.
13 Invesco European Growth Fund
NOTE 6—Cash Balances
The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with State Street Bank and Trust Company, the custodian bank. Such balances, if any at period end, are shown in the Statement of Assets and Liabilities under the payable caption Amount due custodian. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.
NOTE 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. Capital losses generated in years beginning after December 22, 2010 can be carried forward for an unlimited period, whereas previous losses expire in 8 tax years. Capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Capital loss carryforwards with no expiration date will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss 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 October 31, 2013.
NOTE 8—Investment Securities
The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the six months ended April 30, 2014 was $452,668,074 and $67,487,908, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed federal income tax reporting period-end.
| Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis | ||||
| Aggregate unrealized appreciation of investment securities |
$ | 458,913,305 | ||
| Aggregate unrealized (depreciation) of investment securities |
(16,919,219 | ) | ||
| Net unrealized appreciation of investment securities |
$ | 441,994,086 | ||
Cost of investments for tax purposes is $1,522,536,769.
14 Invesco European Growth Fund
NOTE 9—Share Information
| Summary of Share Activity | ||||||||||||||||
| Six months ended April 30, 2014(a) |
Year ended October 31, 2013 |
|||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||
| Sold: |
||||||||||||||||
| Class A |
3,998,397 | $ | 156,349,266 | 3,051,834 | $ | 110,544,363 | ||||||||||
| Class B |
28,252 | 1,034,008 | 13,038 | 444,040 | ||||||||||||
| Class C |
1,136,150 | 41,696,640 | 472,914 | 16,366,896 | ||||||||||||
| Class R |
98,408 | 3,842,517 | 167,063 | 5,906,853 | ||||||||||||
| Class Y |
10,904,925 | 425,416,290 | 8,950,533 | 324,100,471 | ||||||||||||
| Investor Class |
291,133 | 11,371,712 | 712,095 | 25,579,255 | ||||||||||||
| Issued as reinvestment of dividends: |
||||||||||||||||
| Class A |
384,642 | 14,469,995 | 413,345 | 13,363,444 | ||||||||||||
| Class B |
8,937 | 314,423 | 15,041 | 458,756 | ||||||||||||
| Class C |
44,940 | 1,582,826 | 38,712 | 1,181,877 | ||||||||||||
| Class R |
12,556 | 468,963 | 13,827 | 446,317 | ||||||||||||
| Class Y |
373,625 | 14,003,465 | 311,924 | 10,090,743 | ||||||||||||
| Investor Class |
152,084 | 5,678,807 | 172,999 | 5,579,228 | ||||||||||||
| Automatic conversion of Class B shares to Class A shares: |
||||||||||||||||
| Class A |
41,146 | 1,622,871 | 99,082 | 3,489,071 | ||||||||||||
| Class B |
(43,868 | ) | (1,622,871 | ) | (105,372 | ) | (3,489,071 | ) | ||||||||
| Reacquired: |
||||||||||||||||
| Class A |
(1,297,118 | ) | (50,850,365 | ) | (2,433,163 | ) | (85,581,887 | ) | ||||||||
| Class B |
(26,357 | ) | (968,169 | ) | (75,199 | ) | (2,456,479 | ) | ||||||||
| Class C |
(151,498 | ) | (5,537,521 | ) | (232,876 | ) | (7,735,810 | ) | ||||||||
| Class R |
(57,732 | ) | (2,259,146 | ) | (170,746 | ) | (6,032,859 | ) | ||||||||
| Class Y |
(2,483,977 | ) | (97,348,961 | ) | (1,297,649 | ) | (46,356,170 | ) | ||||||||
| Investor Class |
(371,247 | ) | (14,469,202 | ) | (573,336 | ) | (20,026,912 | ) | ||||||||
| Net increase in share activity |
13,043,398 | $ | 504,795,548 | 9,544,066 | $ | 345,872,126 | ||||||||||
| (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. |
15 Invesco European Growth Fund
NOTE 10—Financial Highlights
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
| Net asset value, beginning of period |
Net investment income(a) |
Net gains (losses) on securities (both realized and unrealized) |
Total from investment operations |
Dividends from net investment income |
Distributions from net realized gains |
Total distributions |
Net
asset value, end of period(b) |
Total return(c) |
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(d) |
|||||||||||||||||||||||||||||||||||||||||||
| Class A |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Six months ended 04/30/14 |
$ | 39.17 | $ | 0.24 | $ | 2.39 | $ | 2.63 | $ | (0.45 | ) | $ | (0.74 | ) | $ | (1.19 | ) | $ | 40.61 | 6.97 | % | $ | 639,461 | 1.33 | %(e) | 1.35 | %(e) | 1.23 | %(e) | 5 | % | |||||||||||||||||||||||||
| Year ended 10/31/13 |
32.84 | 0.48 | 7.06 | 7.54 | (0.60 | ) | (0.61 | ) | (1.21 | ) | 39.17 | 23.72 | 494,360 | 1.39 | 1.41 | 1.35 | 15 | |||||||||||||||||||||||||||||||||||||||
| Year ended 10/31/12 |
30.13 | 0.59 | 3.07 | (f) | 3.66 | (0.95 | ) | — | (0.95 | ) | 32.84 | 12.64 | (f) | 377,331 | 1.47 | 1.48 | 1.94 | 14 | ||||||||||||||||||||||||||||||||||||||
| Year ended 10/31/11 |
30.81 | 0.58 | (0.89 | )(f) | (0.31 | ) | (0.37 | ) | — | (0.37 | ) | 30.13 | (1.02 | )(f) | 362,913 | 1.44 | 1.45 | 1.84 | 21 | |||||||||||||||||||||||||||||||||||||
| Year ended 10/31/10 |
26.66 | 0.29 | 4.23 | 4.52 | (0.37 | ) | — | (0.37 | ) | 30.81 | 17.12 | 433,347 | 1.50 | 1.51 | 1.07 | 25 | ||||||||||||||||||||||||||||||||||||||||
| Year ended 10/31/09 |
22.86 | 0.32 | 5.64 | 5.96 | (0.78 | ) | (1.38 | ) | (2.16 | ) | 26.66 | 29.54 | 443,525 | 1.64 | 1.65 | 1.48 | 21 | |||||||||||||||||||||||||||||||||||||||
| Class B |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Six months ended 04/30/14 |
36.71 | 0.09 | 2.24 | 2.33 | (0.25 | ) | (0.74 | ) | (0.99 | ) | 38.05 | 6.56 | 11,538 | 2.08 | (e) | 2.10 | (e) | 0.48 | (e) | 5 | ||||||||||||||||||||||||||||||||||||
| Year ended 10/31/13 |
30.87 | 0.20 | 6.64 | 6.84 | (0.39 | ) | (0.61 | ) | (1.00 | ) | 36.71 | 22.82 | 12,343 | 2.14 | 2.16 | 0.60 | 15 | |||||||||||||||||||||||||||||||||||||||
| Year ended 10/31/12 |
28.27 | 0.34 | 2.90 | (f) | 3.24 | (0.64 | ) | — | (0.64 | ) | 30.87 | 11.80 | (f) | 15,089 | 2.22 | 2.23 | 1.19 | 14 | ||||||||||||||||||||||||||||||||||||||
| Year ended 10/31/11 |
28.92 | 0.32 | (0.84 | )(f) | (0.52 | ) | (0.13 | ) | — | (0.13 | ) | 28.27 | (1.78 | )(f) | 21,177 | 2.19 | 2.20 | 1.09 | 21 | |||||||||||||||||||||||||||||||||||||
| Year ended 10/31/10 |
25.06 | 0.08 | 3.97 | 4.05 | (0.19 | ) | — | (0.19 | ) | 28.92 | 16.24 | 31,767 | 2.25 | 2.26 | 0.32 | 25 | ||||||||||||||||||||||||||||||||||||||||
| Year ended 10/31/09 |
21.37 | 0.15 | 5.33 | 5.48 | (0.41 | ) | (1.38 | ) | (1.79 | ) | 25.06 | 28.60 | 39,459 | 2.39 | 2.40 | 0.73 | 21 | |||||||||||||||||||||||||||||||||||||||
| Class C |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Six months ended 04/30/14 |
36.74 | 0.09 | 2.25 | 2.34 | (0.25 | ) | (0.74 | ) | (0.99 | ) | 38.09 | 6.58 | 97,022 | 2.08 | (e) | 2.10 | (e) | 0.48 | (e) | 5 | ||||||||||||||||||||||||||||||||||||
| Year ended 10/31/13 |
30.90 | 0.20 | 6.64 | 6.84 | (0.39 | ) | (0.61 | ) | (1.00 | ) | 36.74 | 22.80 | 55,760 | 2.14 | 2.16 | 0.60 | 15 | |||||||||||||||||||||||||||||||||||||||
| Year ended 10/31/12 |
28.30 | 0.34 | 2.90 | (f) | 3.24 | (0.64 | ) | — | (0.64 | ) | 30.90 | 11.79 | (f) | 38,282 | 2.22 | 2.23 | 1.19 | 14 | ||||||||||||||||||||||||||||||||||||||
| Year ended 10/31/11 |
28.95 | 0.32 | (0.84 | )(f) | (0.52 | ) | (0.13 | ) | — | (0.13 | ) | 28.30 | (1.78 | )(f) | 41,078 | 2.19 | 2.20 | 1.09 | 21 | |||||||||||||||||||||||||||||||||||||
| Year ended 10/31/10 |
25.08 | 0.08 | 3.98 | 4.06 | (0.19 | ) | — | (0.19 | ) | 28.95 | 16.27 | 56,637 | 2.25 | 2.26 | 0.32 | 25 | ||||||||||||||||||||||||||||||||||||||||
| Year ended 10/31/09 |
21.39 | 0.15 | 5.33 | 5.48 | (0.41 | ) | (1.38 | ) | (1.79 | ) | 25.08 | 28.57 | 59,971 | 2.39 | 2.40 | 0.73 | 21 | |||||||||||||||||||||||||||||||||||||||
| Class R |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Six months ended 04/30/14 |
39.02 | 0.19 | 2.38 | 2.57 | (0.38 | ) | (0.74 | ) | (1.12 | ) | 40.47 | 6.83 | 18,891 | 1.58 | (e) | 1.60 | (e) | 0.98 | (e) | 5 | ||||||||||||||||||||||||||||||||||||
| Year ended 10/31/13 |
32.73 | 0.39 | 7.04 | 7.43 | (0.53 | ) | (0.61 | ) | (1.14 | ) | 39.02 | 23.42 | 16,137 | 1.64 | 1.66 | 1.10 | 15 | |||||||||||||||||||||||||||||||||||||||
| Year ended 10/31/12 |
30.00 | 0.51 | 3.07 | (f) | 3.58 | (0.85 | ) | — | (0.85 | ) | 32.73 | 12.36 | (f) | 13,204 | 1.72 | 1.73 | 1.69 | 14 | ||||||||||||||||||||||||||||||||||||||
| Year ended 10/31/11 |
30.68 | 0.50 | (0.89 | )(f) | (0.39 | ) | (0.29 | ) | — | (0.29 | ) | 30.00 | (1.28 | )(f) | 14,911 | 1.69 | 1.70 | 1.59 | 21 | |||||||||||||||||||||||||||||||||||||
| Year ended 10/31/10 |
26.56 | 0.22 | 4.21 | 4.43 | (0.31 | ) | — | (0.31 | ) | 30.68 | 16.82 | 17,578 | 1.75 | 1.76 | 0.82 | 25 | ||||||||||||||||||||||||||||||||||||||||
| Year ended 10/31/09 |
22.70 | 0.27 | 5.63 | 5.90 | (0.66 | ) | (1.38 | ) | (2.04 | ) | 26.56 | 29.24 | 16,933 | 1.89 | 1.90 | 1.23 | 21 | |||||||||||||||||||||||||||||||||||||||
| Class Y |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Six months ended 04/30/14 |
39.28 | 0.29 | 2.39 | 2.68 | (0.53 | ) | (0.74 | ) | (1.27 | ) | 40.69 | 7.10 | 1,004,393 | 1.08 | (e) | 1.10 | (e) | 1.48 | (e) | 5 | ||||||||||||||||||||||||||||||||||||
| Year ended 10/31/13 |
32.92 | 0.57 | 7.07 | 7.64 | (0.67 | ) | (0.61 | ) | (1.28 | ) | 39.28 | 24.01 | 624,166 | 1.14 | 1.16 | 1.60 | 15 | |||||||||||||||||||||||||||||||||||||||
| Year ended 10/31/12 |
30.22 | 0.67 | 3.08 | (f) | 3.75 | (1.05 | ) | — | (1.05 | ) | 32.92 | 12.96 | (f) | 260,860 | 1.22 | 1.23 | 2.19 | 14 | ||||||||||||||||||||||||||||||||||||||
| Year ended 10/31/11 |
30.91 | 0.66 | (0.91 | )(f) | (0.25 | ) | (0.44 | ) | — | (0.44 | ) | 30.22 | (0.80 | )(f) | 215,716 | 1.19 | 1.20 | 2.09 | 21 | |||||||||||||||||||||||||||||||||||||
| Year ended 10/31/10 |
26.73 | 0.36 | 4.25 | 4.61 | (0.43 | ) | — | (0.43 | ) | 30.91 | 17.44 | 190,994 | 1.25 | 1.26 | 1.32 | 25 | ||||||||||||||||||||||||||||||||||||||||
| Year ended 10/31/09 |
22.87 | 0.42 | 5.61 | 6.03 | (0.79 | ) | (1.38 | ) | (2.17 | ) | 26.73 | 29.84 | 84,793 | 1.39 | 1.40 | 1.73 | 21 | |||||||||||||||||||||||||||||||||||||||
| Investor Class |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Six months ended 04/30/14 |
39.08 | 0.24 | 2.39 | 2.63 | (0.46 | ) | (0.74 | ) | (1.20 | ) | 40.51 | 6.97 | 207,796 | 1.32 | (e) | 1.34 | (e) | 1.24 | (e) | 5 | ||||||||||||||||||||||||||||||||||||
| Year ended 10/31/13 |
32.78 | 0.48 | 7.04 | 7.52 | (0.61 | ) | (0.61 | ) | (1.22 | ) | 39.08 | 23.74 | 197,655 | 1.38 | 1.40 | 1.36 | 15 | |||||||||||||||||||||||||||||||||||||||
| Year ended 10/31/12 |
30.07 | 0.61 | 3.07 | (f) | 3.68 | (0.97 | ) | — | (0.97 | ) | 32.78 | 12.75 | (f) | 155,575 | 1.41 | 1.42 | 2.00 | 14 | ||||||||||||||||||||||||||||||||||||||
| Year ended 10/31/11 |
30.76 | 0.60 | (0.92 | )(f) | (0.32 | ) | (0.37 | ) | — | (0.37 | ) | 30.07 | (1.03 | )(f) | 153,892 | 1.38 | 1.39 | 1.90 | 21 | |||||||||||||||||||||||||||||||||||||
| Year ended 10/31/10 |
26.61 | 0.30 | 4.22 | 4.52 | (0.37 | ) | — | (0.37 | ) | 30.76 | 17.16 | 175,069 | 1.47 | 1.48 | 1.10 | 25 | ||||||||||||||||||||||||||||||||||||||||
| Year ended 10/31/09 |
22.83 | 0.32 | 5.64 | 5.96 | (0.80 | ) | (1.38 | ) | (2.18 | ) | 26.61 | 29.58 | 178,106 | 1.64 | 1.65 | 1.48 | 21 | |||||||||||||||||||||||||||||||||||||||
| (a) | Calculated using average shares outstanding. |
| (b) | Includes redemption fees added to shares of beneficial interest for Class A, Class B, Class C, Class R, Class Y and Investor Class shares, which were less than $0.005 per share for the fiscal years ended October 31, 2012 and prior. |
| (c) | Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable. |
| (d) | Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable. |
| (e) | Ratios are annualized and based on average daily net assets (000’s omitted) of $562,727, $12,139, $77,197, $17,296, $818,200 and $202,631 for Class A, Class B, Class C, Class R, Class Y and Investor Class shares, respectively. |
| (f) | Includes litigation proceeds received during the period. Had the litigation proceeds not been received, Net gains (losses) on securities (both realized and unrealized) per share, for the year ended October 31, 2012, would have been $2.96, $2.79, $2.79, $2.95, $2.97 and $2.96 for Class A, Class B, Class C, Class R, Class Y and Investor Class shares, respectively and total return would have been lower. Net gains (losses) on securities (both realized and unrealized) per share, for the year ended October 31, 2011, would have been $(1.11), $(1.06), $(1.06), $(1.11), $(1.13) and $(1.14) for Class A, Class B, Class C, Class R, Class Y and Investor Class shares, respectively, and total returns would have been lower. |
16 Invesco European Growth Fund
Calculating your ongoing Fund expenses
Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, if any; and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period November 1, 2013 through April 30, 2014.
Actual expenses
The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled “Actual Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical example for comparison purposes
The table below also provides information about hypothetical account values and hypothetical expenses based on the 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.
| Class | Beginning Account Value (11/01/13) |
ACTUAL | HYPOTHETICAL (5% annual return before expenses) |
Annualized Expense Ratio |
||||||||||||||||||||
| Ending Account Value (04/30/14)1 |
Expenses Paid During Period2 |
Ending Account Value (04/30/14) |
Expenses Paid During Period2 |
|||||||||||||||||||||
| A | $ | 1,000.00 | $ | 1,069.70 | $ | 6.83 | $ | 1,018.20 | $ | 6.66 | 1.33 | % | ||||||||||||
| B | 1,000.00 | 1,065.80 | 10.65 | 1,014.48 | 10.39 | 2.08 | ||||||||||||||||||
| C | 1,000.00 | 1,065.80 | 10.65 | 1,014.48 | 10.39 | 2.08 | ||||||||||||||||||
| R | 1,000.00 | 1,068.30 | 8.10 | 1,016.96 | 7.90 | 1.58 | ||||||||||||||||||
| Y | 1,000.00 | 1,071.00 | 5.55 | 1,019.44 | 5.41 | 1.08 | ||||||||||||||||||
| Investor | 1,000.00 | 1,069.70 | 6.77 | 1,018.25 | 6.61 | 1.32 | ||||||||||||||||||
| 1 | The actual ending account value is based on the actual total return of the Fund for the period November 1, 2013 through April 30, 2014, 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 181/365 to reflect the most recent fiscal half year. |
17 Invesco European Growth Fund
Invesco mailing information
Send general correspondence to Invesco Investment Services, Inc., P.O. Box 219078, Kansas City, MO 64121-9078.
Important notice regarding delivery of security holder documents
To reduce Fund expenses, only one copy of most shareholder documents may be mailed to shareholders with multiple accounts at the same address (Householding). Mailing of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact Invesco Investment Services, Inc. at 800 959 4246 or contact your financial institution. We will begin sending you individual copies for each account within 30 days after receiving your request.
Fund holdings and proxy voting information
The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The most recent list of portfolio holdings is available at invesco.com/completeqtrholdings. Shareholders can also look up the Fund’s Forms N-Q on the SEC website at sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are shown below.
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 959 4246 or at invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.
| Information regarding how the Fund voted proxies related to its portfolio securities during the most recent 12-month period ended June 30 is available at invesco.com/proxysearch. The information is also available on the SEC website, sec.gov. Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the US distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd. |
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| SEC file numbers: 811-06463 and 033-44611 | EGR-SAR-1 | Invesco Distributors, Inc. |
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Semiannual Report to Shareholders
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April 30, 2014 | ||
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| Invesco Global Growth Fund
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| Nasdaq: | ||||
| A: AGGAX n B: AGGBX n C: AGGCX n Y: AGGYX n R5: GGAIX n R6: AGGFX | ||||
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2 Fund Performance
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| 4 Letters to Shareholders
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| 5 Schedule of Investments
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| 7 Financial Statements
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| 9 Notes to Financial Statements
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| 16 Financial Highlights
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| 17 Fund Expenses | ||||
| For the most current month-end Fund performance and commentary, please visit invesco.com/performance. | ||||
| Unless otherwise noted, all data provided by Invesco. | ||||
| This report must be accompanied or preceded by a currently effective Fund prospectus, which contains more complete information, including sales charges and expenses. Investors should read it carefully before investing.
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| NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE | ||||
Fund Performance
2 Invesco Global Growth Fund
3 Invesco Global Growth Fund
Letters to Shareholders
|
Bruce Crockett |
Dear Fellow Shareholders: Members of the Invesco Funds Board work continually to oversee how the Invesco Funds are performing in light of ever-changing and often unpredictable economic and market conditions. In light of market conditions over the last few years, the financial news media have given increased attention to “alternative investment strategies” of late. Still, many investors don’t know very much about these types of investments. After a careful and thorough examination of the potential risks and potential benefits of alternative investment strategies, the Invesco Funds Board has approved the launch of several new alternative funds for the Invesco product lineup, to be managed by teams we determined have the depth and experience to pursue the funds’ investment objectives. That’s especially important, given that alternative products typically hold more non-traditional investments and employ more complex trading strategies, including hedging and leveraging through derivatives, short selling and opportunistic strategies that change with market conditions. Investors |
considering alternatives should be aware of their unique characteristics and the additional risks of the strategies they use. Like all investments, performance will fluctuate. You can lose money.
Your financial adviser is a good source of information about alternative investment strategies; he or she can explain the risks associated with them as well as their potential benefits. This type of professional guidance is why Invesco believes it’s so important that individual investors work with trusted, experienced financial advisers.
Be assured that the Invesco Funds Board will continue working on your behalf and on behalf of all our fund shareholders, keeping your needs and interests uppermost in our minds.
As always, please contact me at bruce@brucecrockett.com with any questions or concerns you may have. On behalf of the Board, we look forward to continuing to represent your interests and serving your needs.
Sincerely,
Bruce L. Crockett
Independent Chair
Invesco Funds Board of Trustees
|
Philip Taylor |
Dear Shareholders: This semiannual report includes information about your Fund, including performance data and a list of its investments as of the close of the reporting period. I hope you find this report of interest. Our website, invesco.com/us, offers a wide range of market insights and investment perspectives. On the website, you’ll find detailed information about our funds, including prices, performance, holdings and portfolio manager commentaries. You can access information about your individual Invesco account whenever it’s convenient for you; just complete a simple, secure online registration. Use the “Login” box on our home page to get started. Invesco’s mobile app for iPad® (available free from the App StoreSM) allows you to obtain the same detailed information about your Fund and the same investment insights from our investment leaders, market strategists, economists and retirement experts on the go. Also, you can obtain timely updates to help you stay informed about the markets, the |
economy and investing by connecting with Invesco on Twitter, LinkedIn or Facebook. You can access our blog at blog.invesco.us.com or by visiting the “Intentional Investing Forum” on our home page.
For questions about your account, feel free to contact an Invesco client services representative at 800 959 4246. For Invesco-related questions or comments, please email me directly at phil@invesco.com.
Thank you for investing with us.
Sincerely,
Philip Taylor
Senior Managing Director, Invesco Ltd.
iPad is a trademark of Apple Inc., registered in the US and other countries. App Store is a service mark of Apple Inc. Invesco Distributors, Inc. is not affiliated with Apple Inc.
4 Invesco Global Growth Fund
Schedule of Investments
April 30, 2014
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco Global Growth Fund
Investment Abbreviations:
| ADR | – American Depositary Receipt | |
| NVDR | – Non-Voting Depositary Receipt |
Notes to Schedule of Investments:
| (a) | Non-income producing security. |
| (b) | The money market fund and the Fund are affiliated by having the same investment adviser. |
Portfolio Composition
By sector, based on Net Assets
as of April 30, 2014
| Information Technology |
23.6 | % | ||
| Consumer Discretionary |
22.9 | |||
| Financials |
13.7 | |||
| Health Care |
10.7 | |||
| Energy |
9.4 | |||
| Industrials |
7.3 | |||
| Consumer Staples |
5.9 | |||
| Materials |
2.8 | |||
| Utilities |
0.8 | |||
| Telecommunication Services |
0.7 | |||
| Money Market Funds Plus Other Assets Less Liabilities |
2.2 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco Global Growth Fund
Statement of Assets and Liabilities
April 30, 2014
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco Global Growth Fund
Statement of Operations
For the six months ended April 30, 2014
(Unaudited)
| Investment income: |
| |||
| Dividends (net of foreign withholding taxes of $230,343) |
$ | 3,556,702 | ||
| Dividends from affiliated money market funds |
2,406 | |||
| Total investment income |
3,559,108 | |||
| Expenses: |
||||
| Advisory fees |
1,396,425 | |||
| Administrative services fees |
52,843 | |||
| Custodian fees |
77,155 | |||
| Distribution fees: |
||||
| Class A |
393,354 | |||
| Class B |
37,159 | |||
| Class C |
127,135 | |||
| Transfer agent fees — A, B, C and Y |
444,349 | |||
| Transfer agent fees — R5 |
26 | |||
| Trustees’ and officers’ fees and benefits |
18,954 | |||
| Other |
138,203 | |||
| Total expenses |
2,685,603 | |||
| Less: Fees waived and expense offset arrangement(s) |
(9,130 | ) | ||
| Net expenses |
2,676,473 | |||
| Net investment income |
882,635 | |||
| Realized and unrealized gain (loss) from: |
||||
| Net realized gain (loss) from: |
||||
| Investment securities |
16,162,125 | |||
| Foreign currencies |
(2,216 | ) | ||
| 16,159,909 | ||||
| Change in net unrealized appreciation of: |
||||
| Investment securities (net of foreign taxes on holdings of $(51,816)) |
6,029,212 | |||
| Foreign currencies |
1,379 | |||
| 6,030,591 | ||||
| Net realized and unrealized gain |
22,190,500 | |||
| Net increase in net assets resulting from operations |
$ | 23,073,135 | ||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
8 Invesco Global Growth Fund
Statement of Changes in Net Assets
For the six months ended April 30, 2014 and the year ended October 31, 2013
(Unaudited)
| April 30, 2014 |
October 31, 2013 |
|||||||
| Operations: |
| |||||||
| Net investment income |
$ | 882,635 | $ | 1,601,274 | ||||
| Net realized gain |
16,159,909 | 16,487,121 | ||||||
| Change in net unrealized appreciation |
6,030,591 | 54,403,225 | ||||||
| Net increase in net assets resulting from operations |
23,073,135 | 72,491,620 | ||||||
| Distributions to shareholders from net investment income: |
||||||||
| Class A |
(2,140,604 | ) | (2,395,341 | ) | ||||
| Class B |
(4,867 | ) | (15,637 | ) | ||||
| Class C |
(15,887 | ) | (37,417 | ) | ||||
| Class Y |
(30,510 | ) | (26,329 | ) | ||||
| Class R5 |
(9,515 | ) | (4,626 | ) | ||||
| Class R6 |
(139 | ) | (123 | ) | ||||
| Total distributions from net investment income |
(2,201,522 | ) | (2,479,473 | ) | ||||
| Distributions to shareholders from net realized gains: |
||||||||
| Class A |
(10,686,961 | ) | (1,505,256 | ) | ||||
| Class B |
(275,973 | ) | (53,432 | ) | ||||
| Class C |
(900,875 | ) | (127,872 | ) | ||||
| Class Y |
(108,786 | ) | (12,951 | ) | ||||
| Class R5 |
(27,580 | ) | (2,094 | ) | ||||
| Class R6 |
(402 | ) | (54 | ) | ||||
| Total distributions from net realized gains |
(12,000,577 | ) | (1,701,659 | ) | ||||
| Share transactions–net: |
||||||||
| Class A |
(13,976,128 | ) | (13,001,461 | ) | ||||
| Class B |
(1,322,323 | ) | (3,152,701 | ) | ||||
| Class C |
562,137 | (1,434,446 | ) | |||||
| Class Y |
261,640 | 177,617 | ||||||
| Class R5 |
281,659 | 306,498 | ||||||
| Net increase (decrease) in net assets resulting from share transactions |
(14,193,015 | ) | (17,104,493 | ) | ||||
| Net increase (decrease) in net assets |
(5,321,979 | ) | 51,205,995 | |||||
| Net assets: |
||||||||
| Beginning of period |
362,450,161 | 311,244,166 | ||||||
| End of period (includes undistributed net investment income of $156,595 and $1,475,482, respectively) |
$ | 357,128,182 | $ | 362,450,161 | ||||
Notes to Financial Statements
April 30, 2014
(Unaudited)
NOTE 1—Significant Accounting Policies
Invesco Global Growth Fund (the “Fund”) is a series portfolio of AIM International Mutual Funds (Invesco International Mutual Funds) (the “Trust”). The Trust is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company consisting of eight separate portfolios, each authorized to issue an unlimited number of shares of beneficial interest. The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each portfolio or class will be voted on exclusively by the shareholders of such portfolio or class.
The Fund’s investment objective is long-term growth of capital.
The Fund currently consists of six different classes of shares: Class A, Class B, Class C, Class Y, Class R5 and Class R6. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met and under certain circumstances load waived shares may be subject to contingent deferred sales charges (“CDSC”). Class C shares are sold with a CDSC. Class Y, Class R5 and Class R6 shares are sold at net asset value. Effective November 30, 2010, new or additional investments in Class B shares are no longer permitted. Existing shareholders of Class B shares may continue
9 Invesco Global Growth Fund
to reinvest dividends and capital gains distributions in Class B shares until they convert to Class A shares. Also, shareholders in Class B shares will be able to exchange those shares for Class B shares of other Invesco Funds offering such shares until they convert to Class A shares. Generally, Class B shares will automatically convert to Class A shares on or about the month-end, which is at least eight years after the date of purchase. Redemption of Class B shares prior to the conversion date will be subject to a CDSC.
The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.
| A. | Security Valuations — Securities, including restricted securities, are valued according to the following policy. |
A security listed or traded on an exchange (except convertible securities) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).
Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
Debt obligations (including convertible securities) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate (for unlisted equities), yield (for debt obligations), quality, type of issue, coupon rate (for debt obligations), maturity (for debt obligations), individual trading characteristics and other market data. Debt obligations are subject to interest rate and credit risks. In addition, all debt obligations involve some risk of default with respect to interest and/or principal payments.
Foreign securities’ (including foreign exchange contracts) prices are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange-traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that the Adviser determines are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities’ prices meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including corporate loans.
Securities for which market quotations are not readily available or became unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a 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 of the Fund’s 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 economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
| B. | Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. |
The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the 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 Statement of Changes in Net Assets, or the net investment
10 Invesco Global Growth Fund
income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
| C. | Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted. |
| D. | Distributions — Distributions from 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 to each share class based on relative net assets. Sub-accounting fees attributable to Class R5 are charged to the operations of the class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses relating to all other classes are allocated among those classes based on relative net assets. All other expenses are allocated among the classes based on relative net assets. |
| G. | Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print. |
| H. | Indemnifications — Under the 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 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.
| J. | Forward Foreign Currency Contracts — The Fund may enter into 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. A forward foreign currency contract is an obligation to purchase or sell a specific currency for an agreed-upon price at a future date. The use of forward foreign currency contracts does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with forward foreign currency contracts include failure of the counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities. |
11 Invesco Global Growth Fund
NOTE 2—Advisory Fees and Other Fees Paid to Affiliates
The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:
| Average Daily Net Assets | Rate | |||
| First $250 million |
0.80% | |||
| Next $250 million |
0.78% | |||
| Next $500 million |
0.76% | |||
| Next $1.5 billion |
0.74% | |||
| Next $2.5 billion |
0.72% | |||
| Next $2.5 billion |
0.70% | |||
| Next $2.5 billion |
0.68% | |||
| Over $10 billion |
0.66% | |||
Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc., Invesco Canada Ltd. and Invesco PowerShares Capital Management LLC (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide(s) discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).
The Adviser has contractually agreed, through at least June 30, 2015, to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver and/or expense reimbursement (excluding certain items discussed below) of Class A, Class B, Class C, Class Y, Class R5 and Class R6 shares to 2.25%, 3.00%, 3.00%, 2.00%, 2.00% and 2.00%, respectively, of average daily net assets. 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, litigation expenses; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless Invesco continues the fee waiver agreement, it will terminate on June 30, 2015. The fee waiver agreement cannot be terminated during its term. The Adviser did not waive fees and/or reimburse expenses during the period under this expense limitation.
Further, the Adviser has contractually agreed, through at least June 30, 2016, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market funds.
For the six months ended April 30, 2014, the Adviser waived advisory fees of $8,653.
The Trust has entered into a transfer agency and service agreement with Invesco Investment Services, Inc. (“IIS”) pursuant to which the Fund has agreed to pay IIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IIS for certain expenses incurred by IIS in the course of providing such services. IIS may make payments to intermediaries that provide omnibus account services, sub-accounting services and/or networking services. All fees payable by IIS to intermediaries that provide omnibus account services or sub-accounting are charged back to the Fund, subject to certain limitations approved by the Trust’s Board of Trustees. For the six months ended April 30, 2014, expenses incurred under the agreement are shown in the Statement of Operations as Transfer agent fees.
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 April 30, 2014, expenses incurred under the agreement are shown in the Statement of Operations as Administrative services fees.
The Trust has entered into master distribution agreements with Invesco Distributors, Inc. (“IDI”) to serve as the distributor for the Class A, Class B, Class C, Class Y, 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 B and Class C 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 and 1.00% of the average daily net assets of Class B and Class C shares. Of the Plan payments, up to 0.25% of the average daily net assets of each class of shares may be paid to furnish continuing personal shareholder services to customers who purchase and own shares of such classes. Any amounts not paid as a service fee under the Plans would constitute an asset-based sales charge. Rules of the Financial Industry Regulatory Authority (“FINRA”) impose a cap on the total sales charges, including asset-based sales charges, that may be paid by any class of shares of the Fund. For the six months ended April 30, 2014, expenses incurred under the Plans are shown in the Statement of Operations as Distribution fees.
Front-end sales commissions and CDSC (collectively, the “sales charges”) are not recorded as expenses of the Fund. Front-end sales commissions are deducted from proceeds from the sales of Fund shares prior to investment in Class A shares of the Fund. CDSC are deducted from redemption proceeds prior to remittance to the shareholder. During the six months ended April 30, 2014, IDI advised the Fund that IDI retained $14,369 in front-end sales commissions from the sale of Class A shares and $17, $1,554 and $224 from Class A, Class B and Class C shares, respectively, for CDSC imposed on redemptions by shareholders.
Certain officers and trustees of the Trust are officers and directors of the Adviser, IIS and/or IDI.
12 Invesco Global Growth Fund
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 or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an 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 Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information. |
The following is a summary of the tiered valuation input levels, as of April 30, 2014. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
During the six months ended April 30, 2014, there were transfers from Level 1 to Level 2 of $35,134,575 and from Level 2 to Level 1 of $39,291,386, due to foreign fair value adjustments.
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Australia |
$ | — | $ | 7,467,253 | $ | — | $ | 7,467,253 | ||||||||
| Belgium |
— | 4,394,166 | — | 4,394,166 | ||||||||||||
| Brazil |
15,690,158 | — | — | 15,690,158 | ||||||||||||
| Canada |
17,104,639 | — | — | 17,104,639 | ||||||||||||
| China |
10,868,731 | — | — | 10,868,731 | ||||||||||||
| Denmark |
— | 8,702,631 | — | 8,702,631 | ||||||||||||
| France |
— | 12,632,909 | — | 12,632,909 | ||||||||||||
| Germany |
16,053,574 | — | — | 16,053,574 | ||||||||||||
| Hong Kong |
— | 8,235,113 | — | 8,235,113 | ||||||||||||
| Indonesia |
4,379,102 | — | — | 4,379,102 | ||||||||||||
| Israel |
9,584,644 | — | — | 9,584,644 | ||||||||||||
| Italy |
— | 3,092,982 | — | 3,092,982 | ||||||||||||
| Japan |
11,961,706 | 3,582,814 | — | 15,544,520 | ||||||||||||
| Mexico |
3,230,233 | — | — | 3,230,233 | ||||||||||||
| Netherlands |
— | 3,061,860 | — | 3,061,860 | ||||||||||||
| Singapore |
7,318,891 | — | — | 7,318,891 | ||||||||||||
| South Korea |
4,278,159 | 4,842,386 | — | 9,120,545 | ||||||||||||
| Spain |
— | 3,882,512 | — | 3,882,512 | ||||||||||||
| Sweden |
— | 3,867,163 | 3,867,163 | |||||||||||||
| Switzerland |
2,928,594 | 20,075,055 | — | 23,003,649 | ||||||||||||
| Taiwan |
— | 5,664,307 | — | 5,664,307 | ||||||||||||
| Thailand |
— | 3,313,798 | — | 3,313,798 | ||||||||||||
| Turkey |
2,346,487 | — | — | 2,346,487 | ||||||||||||
| United Kingdom |
2,925,281 | 40,061,393 | — | 42,986,674 | ||||||||||||
| United States |
114,419,626 | — | — | 114,419,626 | ||||||||||||
| Total Investments |
$ | 223,089,825 | $ | 132,876,342 | $ | — | $ | 355,966,167 | ||||||||
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 April 30, 2014, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $477.
13 Invesco Global Growth Fund
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 State Street Bank and Trust Company, the custodian bank. Such balances, if any at period end, are shown in the Statement of Assets and Liabilities under the payable caption Amount due custodian. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.
NOTE 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. Capital losses generated in years beginning after December 22, 2010 can be carried forward for an unlimited period, whereas previous losses expire in 8 tax years. Capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Capital loss carryforwards with no expiration date will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss 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 October 31, 2013.
NOTE 8—Investment Securities
The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the six months ended April 30, 2014 was $54,543,659 and $77,962,268, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed federal income tax reporting period-end.
| Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis | ||||
| Aggregate unrealized appreciation of investment securities |
$ | 106,249,842 | ||
| Aggregate unrealized (depreciation) of investment securities |
(2,133,084 | ) | ||
| Net unrealized appreciation of investment securities |
$ | 104,116,758 | ||
Cost of investments for tax purposes is $251,849,409.
14 Invesco Global Growth Fund
NOTE 9—Share Information
| Summary of Share Activity | ||||||||||||||||
| Six months ended April 30, 2014(a) |
Year ended October 31, 2013 |
|||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||
| Sold: |
||||||||||||||||
| Class A |
276,699 | $ | 8,212,422 | 956,280 | $ | 26,752,277 | ||||||||||
| Class B |
7,806 | 214,449 | 7,664 | 190,510 | ||||||||||||
| Class C |
61,498 | 1,706,248 | 77,900 | 1,962,790 | ||||||||||||
| Class Y |
34,958 | 1,041,592 | 49,882 | 1,325,358 | ||||||||||||
| Class R5 |
9,026 | 268,888 | 11,730 | 299,943 | ||||||||||||
| Issued as reinvestment of dividends: |
||||||||||||||||
| Class A |
411,588 | 11,705,557 | 144,891 | 3,528,101 | ||||||||||||
| Class B |
10,187 | 271,391 | 2,889 | 66,151 | ||||||||||||
| Class C |
32,091 | 854,895 | 6,632 | 151,871 | ||||||||||||
| Class Y |
3,966 | 112,890 | 1,408 | 34,337 | ||||||||||||
| Class R5 |
1,294 | 36,579 | 271 | 6,555 | ||||||||||||
| Automatic conversion of Class B shares to Class A shares: |
||||||||||||||||
| Class A |
39,572 | 1,175,774 | 90,938 | 2,400,034 | ||||||||||||
| Class B |
(42,321 | ) | (1,175,774 | ) | (97,048 | ) | (2,400,034 | ) | ||||||||
| Reacquired: |
||||||||||||||||
| Class A |
(1,182,271 | ) | (35,069,881 | ) | (1,740,636 | ) | (45,681,873 | ) | ||||||||
| Class B |
(22,772 | ) | (632,389 | ) | (41,159 | ) | (1,009,328 | ) | ||||||||
| Class C |
(72,512 | ) | (1,999,006 | ) | (144,223 | ) | (3,549,107 | ) | ||||||||
| Class Y |
(30,055 | ) | (892,842 | ) | (43,887 | ) | (1,182,078 | ) | ||||||||
| Class R5 |
(804 | ) | (23,808 | ) | — | — | ||||||||||
| Net increase (decrease) in share activity |
(462,050 | ) | $ | (14,193,015 | ) | (716,468 | ) | $ | (17,104,493 | ) | ||||||
| (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. |
15 Invesco Global Growth Fund
NOTE 10—Financial Highlights
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
| Net asset value, beginning of period |
Net investment income (loss)(a) |
Net gains (losses) on securities (both realized and unrealized) |
Total from investment operations |
Dividends from net investment income |
Distributions from net realized gains |
Total distributions |
Net asset
value, end of period(b) |
Total return(c) |
Net assets, end of period (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(d) |
|||||||||||||||||||||||||||||||||||||||||||
| Class A |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Six months ended 04/30/14 |
$ | 29.84 | $ | 0.08 | $ | 1.85 | $ | 1.93 | $ | (0.20 | ) | $ | (1.00 | ) | $ | (1.20 | ) | $ | 30.57 | 6.76 | % | $ | 319,284 | 1.46 | %(e) | 1.46 | %(e) | 0.57 | %(e) | 16 | % | |||||||||||||||||||||||||
| Year ended 10/31/13 |
24.22 | 0.15 | 5.82 | 5.97 | (0.22 | ) | (0.13 | ) | (0.35 | ) | 29.84 | 24.96 | 325,319 | 1.43 | 1.47 | 0.56 | 29 | |||||||||||||||||||||||||||||||||||||||
| Year ended 10/31/12 |
22.26 | 0.20 | 1.90 | 2.10 | (0.14 | ) | — | (0.14 | ) | 24.22 | 9.50 | 277,313 | 1.34 | 1.56 | 0.85 | 33 | ||||||||||||||||||||||||||||||||||||||||
| Year ended 10/31/11 |
22.30 | 0.12 | (0.02 | ) | 0.10 | (0.14 | ) | — | (0.14 | ) | 22.26 | 0.41 | 185,484 | 1.62 | 1.63 | 0.50 | 28 | |||||||||||||||||||||||||||||||||||||||
| Year ended 10/31/10 |
19.51 | 0.09 | 2.88 | 2.97 | (0.18 | ) | — | (0.18 | ) | 22.30 | 15.33 | 208,436 | 1.62 | 1.63 | 0.44 | 41 | ||||||||||||||||||||||||||||||||||||||||
| Year ended 10/31/09 |
16.56 | 0.14 | 3.05 | (f) | 3.19 | (0.24 | ) | — | (0.24 | ) | 19.51 | 19.62 | (f) | 204,605 | 1.79 | 1.80 | 0.83 | 40 | ||||||||||||||||||||||||||||||||||||||
| Class B |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Six months ended 04/30/14 |
27.87 | (0.03 | ) | 1.73 | 1.70 | (0.02 | ) | (1.00 | ) | (1.02 | ) | 28.55 | 6.35 | 6,824 | 2.21 | (e) | 2.21 | (e) | (0.18 | )(e) | 16 | |||||||||||||||||||||||||||||||||||
| Year ended 10/31/13 |
22.64 | (0.05 | ) | 5.45 | 5.40 | (0.04 | ) | (0.13 | ) | (0.17 | ) | 27.87 | 24.03 | 7,975 | 2.18 | 2.22 | (0.19 | ) | 29 | |||||||||||||||||||||||||||||||||||||
| Year ended 10/31/12 |
20.83 | 0.02 | 1.79 | 1.81 | — | — | — | 22.64 | 8.69 | 9,368 | 2.09 | 2.31 | 0.10 | 33 | ||||||||||||||||||||||||||||||||||||||||||
| Year ended 10/31/11 |
20.90 | (0.05 | ) | (0.02 | ) | (0.07 | ) | — | — | — | 20.83 | (0.33 | ) | 10,776 | 2.37 | 2.38 | (0.25 | ) | 28 | |||||||||||||||||||||||||||||||||||||
| Year ended 10/31/10 |
18.29 | (0.06 | ) | 2.71 | 2.65 | (0.04 | ) | — | (0.04 | ) | 20.90 | 14.53 | 15,713 | 2.37 | 2.38 | (0.31 | ) | 41 | ||||||||||||||||||||||||||||||||||||||
| Year ended 10/31/09 |
15.42 | 0.01 | 2.86 | (f) | 2.87 | (0.00 | ) | — | (0.00 | ) | 18.29 | 18.64 | (f) | 19,325 | 2.54 | 2.55 | 0.08 | 40 | ||||||||||||||||||||||||||||||||||||||
| Class C |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Six months ended 04/30/14 |
27.87 | (0.03 | ) | 1.73 | 1.70 | (0.02 | ) | (1.00 | ) | (1.02 | ) | 28.55 | 6.35 | 26,387 | 2.21 | (e) | 2.21 | (e) | (0.18 | )(e) | 16 | |||||||||||||||||||||||||||||||||||
| Year ended 10/31/13 |
22.64 | (0.05 | ) | 5.45 | 5.40 | (0.04 | ) | (0.13 | ) | (0.17 | ) | 27.87 | 24.03 | 25,175 | 2.18 | 2.22 | (0.19 | ) | 29 | |||||||||||||||||||||||||||||||||||||
| Year ended 10/31/12 |
20.83 | 0.02 | 1.79 | 1.81 | — | — | — | 22.64 | 8.69 | 21,803 | 2.09 | 2.31 | 0.10 | 33 | ||||||||||||||||||||||||||||||||||||||||||
| Year ended 10/31/11 |
20.90 | (0.05 | ) | (0.02 | ) | (0.07 | ) | — | — | — | 20.83 | (0.33 | ) | 10,838 | 2.37 | 2.38 | (0.25 | ) | 28 | |||||||||||||||||||||||||||||||||||||
| Year ended 10/31/10 |
18.30 | (0.06 | ) | 2.70 | 2.64 | (0.04 | ) | — | (0.04 | ) | 20.90 | 14.47 | 12,893 | 2.37 | 2.38 | (0.31 | ) | 41 | ||||||||||||||||||||||||||||||||||||||
| Year ended 10/31/09 |
15.42 | 0.01 | 2.87 | (f) | 2.88 | (0.00 | ) | — | (0.00 | ) | 18.30 | 18.71 | (f) | 13,192 | 2.54 | 2.55 | 0.08 | 40 | ||||||||||||||||||||||||||||||||||||||
| Class Y |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Six months ended 04/30/14 |
29.94 | 0.12 | 1.84 | 1.96 | (0.28 | ) | (1.00 | ) | (1.28 | ) | 30.62 | 6.86 | 3,487 | 1.21 | (e) | 1.21 | (e) | 0.82 | (e) | 16 | ||||||||||||||||||||||||||||||||||||
| Year ended 10/31/13 |
24.29 | 0.22 | 5.83 | 6.05 | (0.27 | ) | (0.13 | ) | (0.40 | ) | 29.94 | 25.31 | 3,144 | 1.18 | 1.22 | 0.81 | 29 | |||||||||||||||||||||||||||||||||||||||
| Year ended 10/31/12 |
22.33 | 0.25 | 1.91 | 2.16 | (0.20 | ) | — | (0.20 | ) | 24.29 | 9.78 | 2,372 | 1.09 | 1.31 | 1.10 | 33 | ||||||||||||||||||||||||||||||||||||||||
| Year ended 10/31/11 |
22.37 | 0.17 | (0.02 | ) | 0.15 | (0.19 | ) | — | (0.19 | ) | 22.33 | 0.66 | 1,400 | 1.37 | 1.38 | 0.75 | 28 | |||||||||||||||||||||||||||||||||||||||
| Year ended 10/31/10 |
19.57 | 0.14 | 2.89 | 3.03 | (0.23 | ) | — | (0.23 | ) | 22.37 | 15.58 | 1,123 | 1.37 | 1.38 | 0.69 | 41 | ||||||||||||||||||||||||||||||||||||||||
| Year ended 10/31/09 |
16.57 | 0.19 | 3.05 | (f) | 3.24 | (0.24 | ) | — | (0.24 | ) | 19.57 | 19.93 | (f) | 1,395 | 1.54 | 1.55 | 1.08 | 40 | ||||||||||||||||||||||||||||||||||||||
| Class R5 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Six months ended 04/30/14 |
29.82 | 0.16 | 1.81 | 1.97 | (0.34 | ) | (1.00 | ) | (1.34 | ) | 30.45 | 6.96 | 1,133 | 0.96 | (e) | 0.96 | (e) | 1.07 | (e) | 16 | ||||||||||||||||||||||||||||||||||||
| Year ended 10/31/13 |
24.18 | 0.27 | 5.80 | 6.07 | (0.30 | ) | (0.13 | ) | (0.43 | ) | 29.82 | 25.51 | 825 | 0.99 | 0.99 | 1.00 | 29 | |||||||||||||||||||||||||||||||||||||||
| Year ended 10/31/12 |
22.33 | 0.28 | 1.90 | 2.18 | (0.33 | ) | — | (0.33 | ) | 24.18 | 9.95 | 379 | 0.99 | 0.99 | 1.20 | 33 | ||||||||||||||||||||||||||||||||||||||||
| Year ended 10/31/11 |
22.37 | 0.28 | (0.06 | ) | 0.22 | (0.26 | ) | — | (0.26 | ) | 22.33 | 0.95 | 306 | 0.82 | 0.83 | 1.30 | 28 | |||||||||||||||||||||||||||||||||||||||
| Year ended 10/31/10 |
19.59 | 0.20 | 2.89 | 3.09 | (0.31 | ) | — | (0.31 | ) | 22.37 | 15.93 | 9 | 1.07 | 1.08 | 0.99 | 41 | ||||||||||||||||||||||||||||||||||||||||
| Year ended 10/31/09 |
16.65 | 0.26 | 3.05 | (f) | 3.31 | (0.37 | ) | — | (0.37 | ) | 19.59 | 20.49 | (f) | 1,013 | 1.07 | 1.08 | 1.55 | 40 | ||||||||||||||||||||||||||||||||||||||
| Class R6 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Six months ended 04/30/14 |
29.80 | 0.16 | 1.82 | 1.98 | (0.34 | ) | (1.00 | ) | (1.34 | ) | 30.44 | 7.00 | 12 | 0.96 | (e) | 0.96 | (e) | 1.07 | (e) | 16 | ||||||||||||||||||||||||||||||||||||
| Year ended 10/31/13 |
24.17 | 0.27 | 5.79 | 6.06 | (0.30 | ) | (0.13 | ) | (0.43 | ) | 29.80 | 25.52 | 12 | 0.99 | 0.99 | 1.00 | 29 | |||||||||||||||||||||||||||||||||||||||
| Period ended 10/31/12(g) |
24.84 | 0.03 | (0.70 | ) | (0.67 | ) | — | — | — | 24.17 | (2.70 | ) | 10 | 0.95 | (h) | 0.96 | (h) | 1.24 | (h) | 33 | ||||||||||||||||||||||||||||||||||||
| (a) | Calculated using average shares outstanding. |
| (b) | Includes redemption fees added to shares of beneficial interest for Class A, Class B, Class C, Class Y and Class R5 shares, which were less than $0.005 per share for the fiscal years ended October 31, 2012 and prior. |
| (c) | Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable. |
| (d) | Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable. For the period ended October 31, 2012, the portfolio turnover calculation excludes the value of securities purchased of $92,850,953 and sold of $35,562,826 in effect to realign the Fund’s portfolio after the reorganization of Invesco Global Advantage Fund into the Fund. |
| (e) | Ratios are annualized and based on average daily net assets (000’s omitted) of $317,291, $7,493, $25,638, $3,269, $991 and $12 for Class A, Class B, Class C, Class Y, Class R5 and Class R6 shares, respectively. |
| (f) | Includes litigation proceeds received during the period. Had the litigation proceeds not been received, net gains (losses) on securities (both realized and unrealized) per share would have been $2.93, $2.74, $2.75, $2.93 and $2.93 for Class A, Class B, Class C, Class Y and Class R5 shares, respectively and total returns would have been lower. |
| (g) | Commencement date of September 24, 2012. |
| (h) | Annualized. |
16 Invesco Global Growth Fund
Calculating your ongoing Fund expenses
Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, if any; and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period November 1, 2013 through April 30, 2014.
Actual expenses
The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled “Actual Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical example for comparison purposes
The table below also provides information about hypothetical account values and hypothetical expenses based on the 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.
| Class | Beginning Account Value (11/01/13) |
ACTUAL |
HYPOTHETICAL expenses) |
Annualized Ratio |
||||||||||||||||||||
| Ending Account Value (04/30/14)1 |
Expenses Paid During Period2 |
Ending Account Value (04/30/14) |
Expenses Paid During Period2 |
|||||||||||||||||||||
| A | $ | 1,000.00 | $ | 1,067.60 | $ | 7.48 | $ | 1,017.55 | $ | 7.30 | 1.46 | % | ||||||||||||
| B | 1,000.00 | 1,063.50 | 11.31 | 1,013.84 | 11.04 | 2.21 | ||||||||||||||||||
| C | 1,000.00 | 1,063.50 | 11.31 | 1,013.84 | 11.04 | 2.21 | ||||||||||||||||||
| Y | 1,000.00 | 1,069.00 | 6.21 | 1,018.79 | 6.06 | 1.21 | ||||||||||||||||||
| R5 | 1,000.00 | 1,069.60 | 4.93 | 1,020.03 | 4.81 | 0.96 | ||||||||||||||||||
| R6 | 1,000.00 | 1,070.00 | 4.93 | 1,020.03 | 4.81 | 0.96 | ||||||||||||||||||
| 1 | The actual ending account value is based on the actual total return of the Fund for the period November 1, 2013 through April 30, 2014, 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 181/365 to reflect the most recent fiscal half year. |
17 Invesco Global Growth Fund
Invesco mailing information
Send general correspondence to Invesco Investment Services, Inc., P.O. Box 219078, Kansas City, MO 64121-9078.
Important notice regarding delivery of security holder documents
To reduce Fund expenses, only one copy of most shareholder documents may be mailed to shareholders with multiple accounts at the same address (Householding). Mailing of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact Invesco Investment Services, Inc. at 800 959 4246 or contact your financial institution. We will begin sending you individual copies for each account within 30 days after receiving your request.
Fund holdings and proxy voting information
The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The most recent list of portfolio holdings is available at invesco.com/completeqtrholdings. Shareholders can also look up the Fund’s Forms N-Q on the SEC website at sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are shown below.
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 959 4246 or at invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.
| Information regarding how the Fund voted proxies related to its portfolio securities during the most recent 12-month period ended June 30 is available at invesco.com/proxysearch. The information is also available on the SEC website, sec.gov. Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the US distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd. |
|
| SEC file numbers: 811-06463 and 033-44611 | GLG-SAR-1 | Invesco Distributors, Inc. |
|
| ||||
|
Semiannual Report to Shareholders
|
April 30, 2014 | ||
|
| ||||
| Invesco Global Opportunities Fund
| ||||
| Nasdaq: | ||||
| A: IAOPX n C: ICOPX n R: IROPX n Y: IYOPX n R5: IIOPX n R6: IFOPX | ||||
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|
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|
2 Fund Performance
| ||||
| 3 Letters to Shareholders
| ||||
| 4 Schedule of Investments
| ||||
| 6 Financial Statements
| ||||
| 8 Notes to Financial Statements
| ||||
| 14 Financial Highlights
| ||||
| 15 Fund Expenses | ||||
| For the most current month-end Fund performance and commentary, please visit invesco.com/performance. | ||||
| Unless otherwise noted, all data provided by Invesco. | ||||
| This report must be accompanied or preceded by a currently effective Fund prospectus, which contains more complete information, including sales charges and expenses. Investors should read it carefully before investing. | ||||
|
| ||||
| NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE | ||||
Fund Performance
| 2 Invesco Global Opportunities Fund |
Letters to Shareholders
|
Bruce Crockett |
Dear Fellow Shareholders: Members of the Invesco Funds Board work continually to oversee how the Invesco Funds are performing in light of ever-changing and often unpredictable economic and market conditions. In light of market conditions over the last few years, the financial news media have given increased attention to “alternative investment strategies” of late. Still, many investors don’t know very much about these types of investments. After a careful and thorough examination of the potential risks and potential benefits of alternative investment strategies, the Invesco Funds Board has approved the launch of several new alternative funds for the Invesco product lineup, to be managed by teams we determined have the depth and experience to pursue the funds’ investment objectives. That’s especially important, given that alternative products typically hold more non-traditional investments and employ more complex trading strategies, including hedging and leveraging through derivatives, short selling and opportunistic strategies that change with market conditions. Investors |
considering alternatives should be aware of their unique characteristics and the additional risks of the strategies they use. Like all investments, performance will fluctuate. You can lose money.
Your financial adviser is a good source of information about alternative investment strategies; he or she can explain the risks associated with them as well as their potential benefits. This type of professional guidance is why Invesco believes it’s so important that individual investors work with trusted, experienced financial advisers.
Be assured that the Invesco Funds Board will continue working on your behalf and on behalf of all our fund shareholders, keeping your needs and interests uppermost in our minds.
As always, please contact me at bruce@brucecrockett.com with any questions or concerns you may have. On behalf of the Board, we look forward to continuing to represent your interests and serving your needs.
Sincerely,
Bruce L. Crockett
Independent Chair
Invesco Funds Board of Trustees
|
Philip Taylor |
Dear Shareholders: This semiannual report includes information about your Fund, including performance data and a list of its investments as of the close of the reporting period. I hope you find this report of interest. Our website, invesco.com/us, offers a wide range of market insights and investment perspectives. On the website, you’ll find detailed information about our funds, including prices, performance, holdings and portfolio manager commentaries. You can access information about your individual Invesco account whenever it’s convenient for you; just complete a simple, secure online registration. Use the “Login” box on our home page to get started. Invesco’s mobile app for iPad® (available free from the App StoreSM) allows you to obtain the same detailed information about your Fund and the same investment insights from our investment leaders, market strategists, economists and retirement experts on the go. Also, you can obtain timely updates to help you stay informed about the markets, the economy and investing by connecting with Invesco on Twitter, LinkedIn or Facebook. You can access our |
blog at blog.invesco.us.com or by visiting the “Intentional Investing Forum” on our home page.
For questions about your account, feel free to contact an Invesco client services representative at 800 959 4246. For Invesco-related questions or comments, please email me directly at phil@invesco.com.
Thank you for investing with us.
Sincerely,
Philip Taylor
Senior Managing Director, Invesco Ltd.
iPad is a trademark of Apple Inc., registered in the US and other countries. App Store is a service mark of Apple Inc. Invesco Distributors, Inc. is not affiliated with Apple Inc.
3 Invesco Global Opportunities Fund
Schedule of Investments
April 30, 2014
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
4 Invesco Global Opportunities Fund
Investment Abbreviations:
| ADR | – American Depositary Receipt |
Notes to Schedule of Investments:
| (a) | Non-income producing security. |
| (b) | The money market fund and the Fund are affiliated by having the same investment adviser. |
Portfolio Composition
By sector, based on Net Assets as of April 30, 2014
| Financials |
19.2 | % | ||
| Information Technology |
18.5 | |||
| Consumer Staples |
15.4 | |||
| Consumer Discretionary |
15.0 | |||
| Industrials |
12.7 | |||
| Health Care |
7.5 | |||
| Materials |
5.6 | |||
| Energy |
3.0 | |||
| Telecommunication Services |
1.5 | |||
| Money Market Funds Plus Other Assets Less Liabilities |
1.6 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco Global Opportunities Fund
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco Global Opportunities Fund
Statement of Operations
For the six months ended April 30, 2014
(Unaudited)
| Investment income: |
| |||
| Dividends (net of foreign withholding taxes of $16,839) |
$ | 249,065 | ||
| Dividends from affiliated money market funds |
132 | |||
| Total investment income |
249,197 | |||
| Expenses: |
||||
| Advisory fees |
93,865 | |||
| Administrative services fees |
24,795 | |||
| Custodian fees |
18,961 | |||
| Distribution fees: |
||||
| Class A |
18,145 | |||
| Class C |
14,344 | |||
| Class R |
293 | |||
| Transfer agent fees — A, C, R and Y |
23,004 | |||
| Transfer agent fees — R5 |
5 | |||
| Transfer agent fees — R6 |
4 | |||
| Trustees’ and officers’ fees and benefits |
12,913 | |||
| Registration and filing fees |
34,983 | |||
| Professional services fees |
30,600 | |||
| Other |
15,863 | |||
| Total expenses |
287,775 | |||
| Less: Fees waived and expenses reimbursed |
(125,118 | ) | ||
| Net expenses |
162,657 | |||
| Net investment income |
86,540 | |||
| Realized and unrealized gain from: |
||||
| Net realized gain from: |
||||
| Investment securities |
735,632 | |||
| Foreign currencies |
5,302 | |||
| 740,934 | ||||
| Change in net unrealized appreciation of: |
||||
| Investment securities |
325,759 | |||
| Foreign currencies |
1,482 | |||
| 327,241 | ||||
| Net realized and unrealized gain |
1,068,175 | |||
| Net increase in net assets resulting from operations |
$ | 1,154,715 | ||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco Global Opportunities Fund
Statement of Changes in Net Assets
For the six months ended April 30, 2014 and the year ended October 31, 2013
(Unaudited)
| April 30, 2014 |
October 31, 2013 |
|||||||
| Operations: |
||||||||
| Net investment income |
$ | 86,540 | $ | 83,414 | ||||
| Net realized gain |
740,934 | 547,443 | ||||||
| Change in net unrealized appreciation |
327,241 | 1,936,534 | ||||||
| Net increase in net assets resulting from operations |
1,154,715 | 2,567,391 | ||||||
| Distributions to shareholders from net investment income: |
||||||||
| Class A |
(52,016 | ) | (11,076 | ) | ||||
| Class C |
(7,371 | ) | (149 | ) | ||||
| Class R |
(331 | ) | (70 | ) | ||||
| Class Y |
(26,397 | ) | (10,751 | ) | ||||
| Class R5 |
(72 | ) | (73 | ) | ||||
| Class R6 |
(67 | ) | (67 | ) | ||||
| Total distributions from net investment income |
(86,254 | ) | (22,186 | ) | ||||
| Distributions to shareholders from net realized gains: |
||||||||
| Class A |
(355,660 | ) | — | |||||
| Class C |
(68,538 | ) | — | |||||
| Class R |
(2,483 | ) | — | |||||
| Class Y |
(148,828 | ) | — | |||||
| Class R5 |
(409 | ) | — | |||||
| Class R6 |
(379 | ) | — | |||||
| Total distributions from net realized gains |
(576,297 | ) | — | |||||
| Share transactions–net: |
||||||||
| Class A |
3,526,501 | 7,678,774 | ||||||
| Class C |
2,214,158 | 1,172,984 | ||||||
| Class R |
91,000 | 24,088 | ||||||
| Class Y |
674,053 | 2,981,520 | ||||||
| Net increase in net assets resulting from share transactions |
6,505,712 | 11,857,366 | ||||||
| Net increase in net assets |
6,997,876 | 14,402,571 | ||||||
| Net assets: |
||||||||
| Beginning of period |
17,687,024 | 3,284,453 | ||||||
| End of period (includes undistributed net investment income of $80,673 and $80,387, respectively) |
$ | 24,684,900 | $ | 17,687,024 | ||||
Notes to Financial Statements
April 30, 2014
(Unaudited)
NOTE 1—Significant Accounting Policies
Invesco Global Opportunities Fund (the “Fund”) is a series portfolio of AIM International Mutual Funds (Invesco International Mutual Funds) (the “Trust”). The Trust is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company consisting of eight separate portfolios, each authorized to issue an unlimited number of shares of beneficial interest. The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each portfolio or class will be voted on exclusively by the shareholders of such portfolio or class.
The 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 R, Class Y, Class R5 and Class R6. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met and under certain circumstances load waived shares may be subject to contingent deferred sales charges (“CDSC”). Class C shares are sold with a CDSC. Class R, Class Y, Class R5 and Class R6 shares are sold at net asset value.
8 Invesco Global Opportunities Fund
The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.
| A. | Security Valuations — Securities, including restricted securities, are valued according to the following policy. |
A security listed or traded on an exchange (except convertible securities) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).
Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
Debt obligations (including convertible securities) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate (for unlisted equities), yield (for debt obligations), quality, type of issue, coupon rate (for debt obligations), maturity (for debt obligations), individual trading characteristics and other market data. Debt obligations are subject to interest rate and credit risks. In addition, all debt obligations involve some risk of default with respect to interest and/or principal payments.
Foreign securities’ (including foreign exchange contracts) prices are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange-traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that the Adviser determines are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities’ prices meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including corporate loans.
Securities for which market quotations are not readily available or became unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a 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 of the Fund’s 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 economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
| B. | Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. |
The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the 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 Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
9 Invesco Global Opportunities Fund
| C. | Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted. |
| D. | Distributions — Distributions from 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 to each share class based on relative net assets. Sub-accounting fees attributable to Class R5 are charged to the operations of the class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses relating to all other classes are allocated among those classes based on relative net assets. All other expenses are allocated among the classes based on relative net assets. |
| G. | Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print. |
| H. | Indemnifications — Under the 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 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.
| J. | Forward Foreign Currency Contracts — The Fund may enter into 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. A forward foreign currency contract is an obligation to purchase or sell a specific currency for an agreed-upon price at a future date. The use of forward foreign currency contracts does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with forward foreign currency contracts include failure of the counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities. |
10 Invesco Global Opportunities Fund
NOTE 2—Advisory Fees and Other Fees Paid to Affiliates
The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:
| Average Daily Net Assets | Rate | |||
| First $250 million |
0.80% | |||
| Next $250 million |
0.78% | |||
| Next $500 million |
0.76% | |||
| Next $1.5 billion |
0.74% | |||
| Next $2.5 billion |
0.72% | |||
| Next $2.5 billion |
0.70% | |||
| Next $2.5 billion |
0.68% | |||
| Over $10 billion |
0.66% | |||
Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc., Invesco Canada Ltd. and Invesco PowerShares Capital Management LLC (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide(s) discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).
The Adviser has contractually agreed, through at least February 28, 2015, to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver and/or expense reimbursement (excluding certain items discussed below) of Class A, Class C, Class R, Class Y, Class R5 and Class R6 shares to 1.36%, 2.11%, 1.61%, 1.11%, 1.11% and 1.11%, respectively, of average daily net assets. 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, litigation expenses; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless Invesco continues the fee waiver agreement, it will terminate on February 28, 2015. The fee waiver agreement cannot be terminated during its term. To the extent that the annualized expense ratio does not exceed the expense limitation, the Adviser will retain its ability to be reimbursed for such fee waivers or reimbursements prior to the end of each fiscal year.
Further, the Adviser has contractually agreed, through at least June 30, 2016, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market funds.
For the six months ended April 30, 2014, the Adviser waived advisory fees and reimbursed fund level expenses of $102,105 and reimbursed class level expenses of $14,248, $2,816, $115, $5,825, $5 and $4 of Class A, Class C, Class R, Class Y, Class R5 and Class R6 shares, respectively.
The Trust has entered into a transfer agency and service agreement with Invesco Investment Services, Inc. (“IIS”) pursuant to which the Fund has agreed to pay IIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IIS for certain expenses incurred by IIS in the course of providing such services. IIS may make payments to intermediaries that provide omnibus account services, sub-accounting services and/or networking services. All fees payable by IIS to intermediaries that provide omnibus account services or sub-accounting are charged back to the Fund, subject to certain limitations approved by the Trust’s Board of Trustees. For the six months ended April 30, 2014, expenses incurred under the agreement are shown in the Statement of Operations as Transfer agent fees.
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 April 30, 2014, expenses incurred under the agreement are shown in the Statement of Operations as Administrative services 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, 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 0.50% of the average daily net assets of Class R shares. Of the Plan payments, up to 0.25% of the average daily net assets of each class of shares may be paid to furnish continuing personal shareholder services to customers who purchase and own shares of such classes. Any amounts not paid as a service fee under the Plans would constitute an asset-based sales charge. Rules of the Financial Industry Regulatory Authority (“FINRA”) impose a cap on the total sales charges, including asset-based sales charges, that may be paid by any class of shares of the Fund. For the six months ended April 30, 2014, expenses incurred under the Plans are shown in the Statement of Operations as Distribution fees.
Front-end sales commissions and CDSC (collectively, the “sales charges”) are not recorded as expenses of the Fund. Front-end sales commissions are deducted from proceeds from the sales of Fund shares prior to investment in Class A shares of the Fund. CDSC are deducted from redemption proceeds prior to remittance to the shareholder. During the six months ended April 30, 2014, IDI advised the Fund that IDI retained $10,832 in front-end sales commissions from the sale of Class A shares and $31 from Class C shares for CDSC imposed upon redemptions by shareholders.
Certain officers and trustees of the Trust are officers and directors of the Adviser, IIS and/or IDI.
11 Invesco Global Opportunities Fund
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 or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an 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 Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information. |
The following is a summary of the tiered valuation input levels, as of April 30, 2014. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
During the six months ended April 30, 2014, there were transfers from Level 1 to Level 2 of $3,676,229 and from Level 2 to Level 1 of $3,633,460, due to foreign fair value adjustments.
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Australia |
$ | — | $ | 608,256 | $ | — | $ | 608,256 | ||||||||
| Cambodia |
248,805 | — | — | 248,805 | ||||||||||||
| China |
685,063 | — | — | 685,063 | ||||||||||||
| Finland |
— | 9,737 | — | 9,737 | ||||||||||||
| France |
497,658 | 472,977 | — | 970,635 | ||||||||||||
| Germany |
2,273,603 | — | — | 2,273,603 | ||||||||||||
| Hong Kong |
1,206,051 | 575,994 | — | 1,782,045 | ||||||||||||
| Japan |
268,262 | 167,522 | — | 435,784 | ||||||||||||
| Netherlands |
— | 196,339 | — | 196,339 | ||||||||||||
| Norway |
— | 743,238 | — | 743,238 | ||||||||||||
| South Korea |
— | 610,023 | — | 610,023 | ||||||||||||
| Spain |
— | 458,450 | — | 458,450 | ||||||||||||
| Switzerland |
— | 1,855,951 | — | 1,855,951 | ||||||||||||
| United Kingdom |
365,027 | 4,928,404 | — | 5,293,431 | ||||||||||||
| United States |
8,134,056 | — | — | 8,134,056 | ||||||||||||
| Total Investments |
$ | 13,678,525 | $ | 10,626,891 | $ | — | $ | 24,305,416 | ||||||||
NOTE 4—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 5—Cash Balances
The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with State Street Bank and Trust Company, the custodian bank. Such balances, if any at period end, are shown in the Statement of Assets and Liabilities under the payable caption Amount due custodian. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.
12 Invesco Global Opportunities Fund
NOTE 6—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. Capital losses generated in years beginning after December 22, 2010 can be carried forward for an unlimited period, whereas previous losses expire in 8 tax years. Capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Capital loss carryforwards with no expiration date will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss 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 October 31, 2013.
NOTE 7—Investment Securities
The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the six months ended April 30, 2014 was $15,075,535 and $8,967,388, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed federal income tax reporting period-end.
| Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis | ||||
| Aggregate unrealized appreciation of investment securities |
$ | 2,536,430 | ||
| Aggregate unrealized (depreciation) of investment securities |
(102,212 | ) | ||
| Net unrealized appreciation of investment securities |
$ | 2,434,218 | ||
Cost of investments for tax purposes is $21,871,198.
NOTE 8—Share Information
| Summary of Share Activity | ||||||||||||||||
| Six months ended April 30, 2014(a) |
Year ended October 31, 2013 |
|||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||
| Sold: |
||||||||||||||||
| Class A |
639,757 | $ | 9,654,262 | 945,762 | $ | 12,451,560 | ||||||||||
| Class C |
176,683 | 2,638,051 | 89,846 | 1,225,373 | ||||||||||||
| Class R |
7,876 | 118,934 | 1,692 | 24,088 | ||||||||||||
| Class Y |
48,327 | 736,508 | 223,414 | 3,118,586 | ||||||||||||
| Issued as reinvestment of dividends: |
||||||||||||||||
| Class A |
23,195 | 337,718 | 50 | 547 | ||||||||||||
| Class C |
5,221 | 75,282 | 7 | 80 | ||||||||||||
| Class R |
162 | 2,351 | — | — | ||||||||||||
| Class Y |
7,113 | 103,855 | — | — | ||||||||||||
| Reacquired: |
||||||||||||||||
| Class A |
(426,569 | ) | (6,465,479 | ) | (369,206 | ) | (4,773,333 | ) | ||||||||
| Class C |
(33,302 | ) | (499,175 | ) | (3,702 | ) | (52,469 | ) | ||||||||
| Class R |
(2,015 | ) | (30,285 | ) | — | — | ||||||||||
| Class Y |
(11,054 | ) | (166,310 | ) | (9,623 | ) | (137,066 | ) | ||||||||
| Net increase in share activity |
435,394 | $ | 6,505,712 | 878,240 | $ | 11,857,366 | ||||||||||
| (a) | There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 39% of the outstanding shares of the Fund. IDI has an agreement with these entities to sell Fund shares. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as securities brokerage, distribution, third party record keeping and account servicing. The Fund has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially. |
| In addition, 15% of the outstanding shares of the Fund are owned by the Adviser. |
13 Invesco Global Opportunities Fund
NOTE 9—Financial Highlights
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
| Net asset value, beginning of period |
Net investment income(a) |
Net gains (losses) on securities (both realized and unrealized) |
Total from investment operations |
Dividends from net investment income |
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 04/30/14 |
$ | 14.90 | $ | 0.06 | $ | 0.74 | $ | 0.80 | $ | (0.06 | ) | $ | (0.41 | ) | $ | (0.47 | ) | $ | 15.23 | 5.50 | % | $ | 14,756 | 1.36 | %(d) | 2.42 | %(d) | 0.76 | %(d) | 39 | % | |||||||||||||||||||||||||
| Year ended 10/31/13 |
10.64 | 0.13 | 4.20 | 4.33 | (0.07 | ) | — | (0.07 | ) | 14.90 | 40.94 | 10,912 | 1.36 | 4.80 | 0.97 | 76 | ||||||||||||||||||||||||||||||||||||||||
| Period ended 10/31/12(e) |
10.00 | 0.02 | 0.62 | 0.64 | — | — | — | 10.64 | 6.40 | 1,658 | 1.35 | (f) | 11.20 | (f) | 0.80 | (f) | 9 | |||||||||||||||||||||||||||||||||||||||
| Class C |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Six months ended 04/30/14 |
14.76 | 0.00 | 0.73 | 0.73 | (0.04 | ) | (0.41 | ) | (0.45 | ) | 15.04 | 5.09 | 3,552 | 2.11 | (d) | 3.17 | (d) | 0.01 | (d) | 39 | ||||||||||||||||||||||||||||||||||||
| Year ended 10/31/13 |
10.62 | 0.03 | 4.18 | 4.21 | (0.07 | ) | — | (0.07 | ) | 14.76 | 39.85 | 1,292 | 2.11 | 5.55 | 0.22 | 76 | ||||||||||||||||||||||||||||||||||||||||
| Period ended 10/31/12(e) |
10.00 | 0.00 | 0.62 | 0.62 | — | — | — | 10.62 | 6.20 | 14 | 2.10 | (f) | 11.95 | (f) | 0.05 | (f) | 9 | |||||||||||||||||||||||||||||||||||||||
| Class R |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Six months ended 04/30/14 |
14.85 | 0.04 | 0.74 | 0.78 | (0.05 | ) | (0.41 | ) | (0.46 | ) | 15.17 | 5.41 | 132 | 1.61 | (d) | 2.67 | (d) | 0.51 | (d) | 39 | ||||||||||||||||||||||||||||||||||||
| Year ended 10/31/13 |
10.63 | 0.09 | 4.20 | 4.29 | (0.07 | ) | — | (0.07 | ) | 14.85 | 40.59 | 40 | 1.61 | 5.05 | 0.72 | 76 | ||||||||||||||||||||||||||||||||||||||||
| Period ended 10/31/12(e) |
10.00 | 0.01 | 0.62 | 0.63 | — | — | — | 10.63 | 6.30 | 11 | 1.60 | (f) | 11.45 | (f) | 0.55 | (f) | 9 | |||||||||||||||||||||||||||||||||||||||
| Class Y |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Six months ended 04/30/14 |
14.94 | 0.08 | 0.74 | 0.82 | (0.07 | ) | (0.41 | ) | (0.48 | ) | 15.28 | 5.64 | 6,216 | 1.11 | (d) | 2.17 | (d) | 1.01 | (d) | 39 | ||||||||||||||||||||||||||||||||||||
| Year ended 10/31/13 |
10.65 | 0.16 | 4.20 | 4.36 | (0.07 | ) | — | (0.07 | ) | 14.94 | 41.21 | 5,414 | 1.11 | 4.55 | 1.22 | 76 | ||||||||||||||||||||||||||||||||||||||||
| Period ended 10/31/12(e) |
10.00 | 0.03 | 0.62 | 0.65 | — | — | — | 10.65 | 6.50 | 1,581 | 1.10 | (f) | 10.95 | (f) | 1.05 | (f) | 9 | |||||||||||||||||||||||||||||||||||||||
| Class R5 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Six months ended 04/30/14 |
14.94 | 0.08 | 0.74 | 0.82 | (0.07 | ) | (0.41 | ) | (0.48 | ) | 15.28 | 5.64 | 15 | 1.11 | (d) | 2.04 | (d) | 1.01 | (d) | 39 | ||||||||||||||||||||||||||||||||||||
| Year ended 10/31/13 |
10.64 | 0.16 | 4.21 | 4.37 | (0.07 | ) | — | (0.07 | ) | 14.94 | 41.34 | 15 | 1.11 | 4.53 | 1.22 | 76 | ||||||||||||||||||||||||||||||||||||||||
| Period ended 10/31/12(e) |
10.00 | 0.03 | 0.61 | 0.64 | — | — | — | 10.64 | 6.40 | 11 | 1.10 | (f) | 11.00 | (f) | 1.05 | (f) | 9 | |||||||||||||||||||||||||||||||||||||||
| Class R6 |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Six months ended 04/30/14 |
14.94 | 0.08 | 0.74 | 0.82 | (0.07 | ) | (0.41 | ) | (0.48 | ) | 15.28 | 5.64 | 14 | 1.11 | (d) | 2.04 | (d) | 1.01 | (d) | 39 | ||||||||||||||||||||||||||||||||||||
| Year ended 10/31/13 |
10.64 | 0.16 | 4.21 | 4.37 | (0.07 | ) | — | (0.07 | ) | 14.94 | 41.34 | 14 | 1.11 | 4.53 | 1.22 | 76 | ||||||||||||||||||||||||||||||||||||||||
| Period ended 10/31/12(e) |
10.76 | 0.01 | (0.13 | ) | (0.12 | ) | — | — | — | 10.64 | (1.12 | ) | 10 | 1.10 | (f) | 8.37 | (f) | 1.05 | (f) | 9 | ||||||||||||||||||||||||||||||||||||
| (a) | Calculated using average shares outstanding. |
| (b) | Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable. |
| (c) | Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable. |
| (d) | Ratios are annualized and based on average daily net assets (000’s omitted) of $14,637, $2,893, $118, $5,894, $15 and $14 for Class A, Class C, Class R, Class Y, Class R5 and Class R6 shares, respectively. |
| (e) | Commencement date of August 3, 2012 for Class A, Class C, Class R, Class Y and Class R5 shares and September 24, 2012 for Class R6 shares. |
| (f) | Annualized. |
14 Invesco Global 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 November 1, 2013 through April 30, 2014.
Actual expenses
The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled “Actual Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical example for comparison purposes
The table below also provides information about hypothetical account values and hypothetical expenses based on the 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.
| Class | Beginning Account Value (11/01/13) |
ACTUAL | HYPOTHETICAL (5% annual return before expenses) |
Annualized Expense Ratio |
||||||||||||||||||||
| Ending Account Value (04/30/14)1 |
Expenses Paid During Period2 |
Ending Account Value (04/30/14) |
Expenses Paid During Period2 |
|||||||||||||||||||||
| A | $ | 1,000.00 | $ | 1,055.00 | $ | 6.93 | $ | 1,018.05 | $ | 6.80 | 1.36 | % | ||||||||||||
| C | 1,000.00 | 1,050.90 | 10.73 | 1,014.33 | 10.54 | 2.11 | ||||||||||||||||||
| R | 1,000.00 | 1,054.10 | 8.20 | 1,016.81 | 8.05 | 1.61 | ||||||||||||||||||
| Y | 1,000.00 | 1,056.40 | 5.66 | 1,019.29 | 5.56 | 1.11 | ||||||||||||||||||
| R5 | 1,000.00 | 1,056.40 | 5.66 | 1,019.29 | 5.56 | 1.11 | ||||||||||||||||||
| R6 | 1,000.00 | 1,056.40 | 5.66 | 1,019.29 | 5.56 | 1.11 | ||||||||||||||||||
| 1 | The actual ending account value is based on the actual total return of the Fund for the period November 1, 2013 through April 30, 2014, 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 181/365 to reflect the most recent fiscal half year. |
15 Invesco Global Opportunities Fund
Invesco mailing information
Send general correspondence to Invesco Investment Services, Inc., P.O. Box 219078, Kansas City, MO 64121-9078.
Important notice regarding delivery of security holder documents
To reduce Fund expenses, only one copy of most shareholder documents may be mailed to shareholders with multiple accounts at the same address (Householding). Mailing of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact Invesco Investment Services, Inc. at 800 959 4246 or contact your financial institution. We will begin sending you individual copies for each account within 30 days after receiving your request.
Fund holdings and proxy voting information
The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The most recent list of portfolio holdings is available at invesco.com/completeqtrholdings. Shareholders can also look up the Fund’s Forms N-Q on the SEC website at sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are shown below.
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 959 4246 or at invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.
| Information regarding how the Fund voted proxies related to its portfolio securities during the most recent 12-month period ended June 30 is available at invesco.com/proxysearch. The information is also available on the SEC website, sec.gov. Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the US distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd. |
|
| SEC file numbers: 811-06463 and 033-44611 | GLOPP-SAR-1 | Invesco Distributors, Inc. |
|
| ||||
|
Semiannual Report to Shareholders
|
April 30, 2014 | ||
|
| ||||
| Invesco Global Small & Mid Cap Growth Fund
| ||||
| Nasdaq: | ||||
| A: AGAAX n B: AGABX n C: AGACX n Y: AGAYX n R5: GAIIX | ||||
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|
| ||||
|
2 Fund Performance
| ||||
| 4 Letters to Shareholders
| ||||
| 5 Schedule of Investments
| ||||
| 7 Financial Statements
| ||||
| 9 Notes to Financial Statements
| ||||
| 16 Financial Highlights
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| 17 Fund Expenses | ||||
| For the most current month-end Fund performance and commentary, please visit invesco.com/performance. | ||||
| Unless otherwise noted, all data provided by Invesco. | ||||
| This report must be accompanied or preceded by a currently effective Fund prospectus, which contains more complete information, including sales charges and expenses. Investors should read it carefully before investing. | ||||
|
| ||||
| NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE | ||||
Fund Performance
2 Invesco Global Small & Mid Cap Growth Fund
3 Invesco Global Small & Mid Cap Growth Fund
Letters to Shareholders
|
Bruce Crockett |
Dear Fellow Shareholders: Members of the Invesco Funds Board work continually to oversee how the Invesco Funds are performing in light of ever-changing and often unpredictable economic and market conditions. In light of market conditions over the last few years, the financial news media have given increased attention to “alternative investment strategies” of late. Still, many investors don’t know very much about these types of investments. After a careful and thorough examination of the potential risks and potential benefits of alternative investment strategies, the Invesco Funds Board has approved the launch of several new alternative funds for the Invesco product lineup, to be managed by teams we determined have the depth and experience to pursue the funds’ investment objectives. That’s especially important, given that alternative products typically hold more non-traditional investments and employ more complex trading strategies, including hedging and leveraging through derivatives, short selling and opportunistic strategies that change with market conditions. Investors |
considering alternatives should be aware of their unique characteristics and the additional risks of the strategies they use. Like all investments, performance will fluctuate. You can lose money.
Your financial adviser is a good source of information about alternative investment strategies; he or she can explain the risks associated with them as well as their potential benefits. This type of professional guidance is why Invesco believes it’s so important that individual investors work with trusted, experienced financial advisers.
Be assured that the Invesco Funds Board will continue working on your behalf and on behalf of all our fund shareholders, keeping your needs and interests uppermost in our minds.
As always, please contact me at bruce@brucecrockett.com with any questions or concerns you may have. On behalf of the Board, we look forward to continuing to represent your interests and serving your needs.
Sincerely,
Bruce L. Crockett
Independent Chair
Invesco Funds Board of Trustees
|
Philip Taylor |
Dear Shareholders: This semiannual report includes information about your Fund, including performance data and a list of its investments as of the close of the reporting period. I hope you find this report of interest. Our website, invesco.com/us, offers a wide range of market insights and investment perspectives. On the website, you’ll find detailed information about our funds, including prices, performance, holdings and portfolio manager commentaries. You can access information about your individual Invesco account whenever it’s convenient for you; just complete a simple, secure online registration. Use the “Login” box on our home page to get started. Invesco’s mobile app for iPad® (available free from the App StoreSM) allows you to obtain the same detailed information about your Fund and the same investment insights from our investment leaders, market strategists, economists and retirement experts on the go. Also, you can obtain timely updates to help you stay informed about the markets, the economy and investing by connecting with Invesco on Twitter, LinkedIn or Facebook. You can access our |
blog at blog.invesco.us.com or by visiting the “Intentional Investing Forum” on our home page.
For questions about your account, feel free to contact an Invesco client services representative at 800 959 4246. For Invesco-related questions or comments, please email me directly at phil@invesco.com.
Thank you for investing with us.
Sincerely,
Philip Taylor
Senior Managing Director, Invesco Ltd.
iPad is a trademark of Apple Inc., registered in the US and other countries. App Store is a service mark of Apple Inc. Invesco Distributors, Inc. is not affiliated with Apple Inc.
4 Invesco Global Small & Mid Cap Growth Fund
Schedule of Investments
April 30, 2014
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco Global Small & Mid Cap Growth Fund
Investment Abbreviations:
| ADR | – American Depositary Receipt |
Notes to Schedule of Investments:
| (a) | Non-income producing security. |
| (b) | The money market fund and the Fund are affiliated by having the same investment adviser. |
Portfolio Composition
By sector, based on Net Assets
as of April 30, 2014
| Financials |
19.9 | % | ||
| Industrials |
18.7 | |||
| Consumer Discretionary |
13.3 | |||
| Information Technology |
13.2 | |||
| Energy |
10.9 | |||
| Health Care |
7.8 | |||
| Consumer Staples |
4.6 | |||
| Materials |
4.6 | |||
| Utilities |
2.2 | |||
| Telecommunication Services |
0.7 | |||
| Money Market Funds Plus Other Assets Less Liabilities |
4.1 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco Global Small & Mid Cap Growth Fund
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco Global Small & Mid Cap Growth Fund
Statement of Operations
For the six months ended April 30, 2014
(Unaudited)
| Investment income: |
| |||
| Dividends (net of foreign withholding taxes of $325,084) |
$ | 5,735,828 | ||
| Dividends from affiliated money market funds |
7,579 | |||
| Total investment income |
5,743,407 | |||
| Expenses: |
||||
| Advisory fees |
2,437,611 | |||
| Administrative services fees |
81,436 | |||
| Custodian fees |
104,092 | |||
| Distribution fees: |
||||
| Class A |
682,036 | |||
| Class B |
72,112 | |||
| Class C |
144,507 | |||
| Transfer agent fees — A, B, C and Y |
628,109 | |||
| Transfer agent fees — R5 |
7,089 | |||
| Trustees’ and officers’ fees and benefits |
23,417 | |||
| Other |
134,037 | |||
| Total expenses |
4,314,446 | |||
| Less: Fees waived and expense offset arrangement(s) |
(26,096 | ) | ||
| Net expenses |
4,288,350 | |||
| Net investment income |
1,455,057 | |||
| Realized and unrealized gain from: |
||||
| Net realized gain from: |
||||
| Investment securities |
31,822,785 | |||
| Foreign currencies |
50,250 | |||
| 31,873,035 | ||||
| Change in net unrealized appreciation of: |
||||
| Investment securities (net of foreign taxes on holdings of $56,337) |
8,623,422 | |||
| Foreign currencies |
27,949 | |||
| 8,651,371 | ||||
| Net realized and unrealized gain |
40,524,406 | |||
| Net increase in net assets resulting from operations |
$ | 41,979,463 | ||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
8 Invesco Global Small & Mid Cap Growth Fund
Statement of Changes in Net Assets
For the six months ended April 30, 2014 and the year ended October 31, 2013
(Unaudited)
| April 30, 2014 |
October 31, 2013 |
|||||||
| Operations: |
|
|||||||
| Net investment income |
$ | 1,455,057 | $ | 4,842,929 | ||||
| Net realized gain |
31,873,035 | 52,924,561 | ||||||
| Change in net unrealized appreciation |
8,651,371 | 78,871,723 | ||||||
| Net increase in net assets resulting from operations |
41,979,463 | 136,639,213 | ||||||
| Distributions to shareholders from net investment income: |
||||||||
| Class A |
(4,339,708 | ) | (4,227,552 | ) | ||||
| Class B |
(31,051 | ) | (57,975 | ) | ||||
| Class C |
(59,285 | ) | (77,135 | ) | ||||
| Class Y |
(107,366 | ) | (79,225 | ) | ||||
| Class R5 |
(263,504 | ) | (261,890 | ) | ||||
| Total distributions from net investment income |
(4,800,914 | ) | (4,703,777 | ) | ||||
| Distributions to shareholders from net realized gains: |
||||||||
| Class A |
(46,022,180 | ) | (6,624,317 | ) | ||||
| Class B |
(1,462,237 | ) | (269,646 | ) | ||||
| Class C |
(2,791,809 | ) | (358,765 | ) | ||||
| Class Y |
(882,116 | ) | (100,004 | ) | ||||
| Class R5 |
(1,885,173 | ) | (280,332 | ) | ||||
| Total distributions from net realized gains |
(53,043,515 | ) | (7,633,064 | ) | ||||
| Share transactions–net: |
||||||||
| Class A |
30,619,354 | (40,619,630 | ) | |||||
| Class B |
(1,320,895 | ) | (5,498,523 | ) | ||||
| Class C |
2,682,966 | 787,053 | ||||||
| Class Y |
3,894,020 | 1,252,481 | ||||||
| Class R5 |
(9,063,218 | ) | (2,525,975 | ) | ||||
| Net increase (decrease) in net assets resulting from share transactions |
26,812,227 | (46,604,594 | ) | |||||
| Net increase in net assets |
10,947,261 | 77,697,778 | ||||||
| Net assets: |
||||||||
| Beginning of period |
627,566,504 | 549,868,726 | ||||||
| End of period (includes undistributed net investment income of $1,226,902 and $4,572,759, respectively) |
$ | 638,513,765 | $ | 627,566,504 | ||||
Notes to Financial Statements
April 30, 2014
(Unaudited)
NOTE 1—Significant Accounting Policies
Invesco Global Small & Mid Cap Growth Fund (the “Fund”) is a series portfolio of AIM International Mutual Funds (Invesco International Mutual Funds) (the “Trust”). The Trust is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company consisting of eight separate portfolios, each authorized to issue an unlimited number of shares of beneficial interest. The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each portfolio or class will be voted on exclusively by the shareholders of such portfolio or class.
The Fund’s investment objective is long-term growth of capital.
The Fund currently consists of five different classes of shares: Class A, Class B, Class C, Class Y and Class R5. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met and under certain circumstances load waived shares may be subject to contingent deferred sales charges (“CDSC”). Class C shares are sold with a CDSC. Class Y and Class R5 shares are sold at net asset value. Effective November 30, 2010, new or additional investments in Class B shares are no longer permitted. Existing shareholders of Class B shares may continue to reinvest dividends and capital gains distributions in Class B shares until they convert to Class A shares. Also, shareholders in Class B shares will be able to exchange those shares for Class B shares of other Invesco Funds offering such shares until they convert to Class A shares. Generally, Class B shares will
9 Invesco Global Small & Mid Cap Growth Fund
automatically convert to Class A shares on or about the month-end, which is at least eight years after the date of purchase. Redemption of Class B shares prior to the conversion date will be subject to a CDSC.
The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.
| A. | Security Valuations — Securities, including restricted securities, are valued according to the following policy. |
A security listed or traded on an exchange (except convertible securities) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).
Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
Debt obligations (including convertible securities) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate (for unlisted equities), yield (for debt obligations), quality, type of issue, coupon rate (for debt obligations), maturity (for debt obligations), individual trading characteristics and other market data. Debt obligations are subject to interest rate and credit risks. In addition, all debt obligations involve some risk of default with respect to interest and/or principal payments.
Foreign securities’ (including foreign exchange contracts) prices are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange-traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that the Adviser determines are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities’ prices meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including corporate loans.
Securities for which market quotations are not readily available or became unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a 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 of the Fund’s 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 economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
| B. | Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. |
The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the 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 Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
10 Invesco Global Small & Mid Cap Growth Fund
| C. | Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted. |
| D. | Distributions — Distributions from 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 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. | Foreign Currency Translations — Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (1) sales of foreign currencies, (2) currency gains or losses realized between the trade and settlement dates on securities transactions, and (3) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the 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.
| J. | Forward Foreign Currency Contracts — The Fund may enter into 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. A forward foreign currency contract is an obligation to purchase or sell a specific currency for an agreed-upon price at a future date. The use of forward foreign currency contracts does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with forward foreign currency contracts include failure of the counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities. |
11 Invesco Global Small & Mid Cap Growth Fund
NOTE 2—Advisory Fees and Other Fees Paid to Affiliates
The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:
| Average Daily Net Assets | Rate | |||||
| First $250 million |
0 | .80% | ||||
| Next $250 million |
0 | .78% | ||||
| Next $500 million |
0 | .76% | ||||
| Next $1.5 billion |
0 | .74% | ||||
| Next $2.5 billion |
0 | .72% | ||||
| Next $2.5 billion |
0 | .70% | ||||
| Next $2.5 billion |
0 | .68% | ||||
| Over $10 billion |
0 | .66% | ||||
Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Canada Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide(s) discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).
The Adviser has contractually agreed, through at least June 30, 2015, to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver and/or expense reimbursement (excluding certain items discussed below) of Class A, Class B, Class C, Class Y and Class R5 shares to 2.25%, 3.00%, 3.00%, 2.00% and 2.00%, respectively, of average daily net assets. 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. Unless Invesco continues the fee waiver agreement, it will terminate on June 30, 2015. The fee waiver agreement cannot be terminated during its term. The Adviser did not waive fees and/or reimburse expenses during the period under this expense limitation.
Further, the Adviser has contractually agreed, through at least June 30, 2016, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market funds.
For the six months ended April 30, 2014, the Adviser waived advisory fees of $25,690.
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 April 30, 2014, expenses incurred under the agreement are shown in the Statement of Operations as Administrative services fees.
The Trust has entered into a transfer agency and service agreement with Invesco Investment Services, Inc. (“IIS”) pursuant to which the Fund has agreed to pay IIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IIS for certain expenses incurred by IIS in the course of providing such services. IIS may make payments to intermediaries that provide omnibus account services, sub-accounting services and/or networking services. All fees payable by IIS to intermediaries that provide omnibus account services or sub-accounting are charged back to the Fund, subject to certain limitations approved by the Trust’s Board of Trustees. For the six months ended April 30, 2014, expenses incurred under the agreement are shown in the Statement of Operations as Transfer agent fees.
The Trust has entered into master distribution agreements with Invesco Distributors, Inc. (“IDI”) to serve as the distributor for the Class A, Class B, Class C, Class Y and Class R5 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 B and Class C 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 and 1.00% of the average daily net assets of Class B and Class C shares. Of the Plan payments, up to 0.25% of the average daily net assets of each class of shares may be paid to furnish continuing personal shareholder services to customers who purchase and own shares of such classes. Any amounts not paid as a service fee under the Plans would constitute an asset-based sales charge. Rules of the Financial Industry Regulatory Authority (“FINRA”) impose a cap on the total sales charges, including asset-based sales charges, that may be paid by any class of shares of the Fund. For the six months ended April 30, 2014, expenses incurred under the Plans are shown in the Statement of Operations as Distribution fees.
Front-end sales commissions and CDSC (collectively, the “sales charges”) are not recorded as expenses of the Fund. Front-end sales commissions are deducted from proceeds from the sales of Fund shares prior to investment in Class A shares of the Fund. CDSC are deducted from redemption proceeds prior to remittance to the shareholder. During the six months ended April 30, 2014, IDI advised the Fund that IDI retained $45,057 in front-end sales commissions from the sale of Class A shares and $290, $3,230 and $1,028 from Class A, Class B and Class C shares, respectively, for CDSC imposed on redemptions by shareholders.
For the six months ended April 30, 2014, the Fund incurred $614 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.
12 Invesco Global Small & Mid Cap Growth Fund
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 or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an 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 Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information. |
The following is a summary of the tiered valuation input levels, as of April 30, 2014. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
During the six months ended April 30, 2014, there were transfers from Level 1 to Level 2 of $75,516,815 and from Level 2 to Level 1 of $77,787,969, due to foreign fair value adjustments.
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Australia |
$ | — | $ | 8,980,813 | $ | — | $ | 8,980,813 | ||||||||
| Belgium |
3,985,222 | — | — | 3,985,222 | ||||||||||||
| Brazil |
38,433,652 | — | — | 38,433,652 | ||||||||||||
| Canada |
62,820,558 | — | — | 62,820,558 | ||||||||||||
| China |
12,220,037 | — | — | 12,220,037 | ||||||||||||
| Germany |
30,008,337 | 3,674,278 | — | 33,682,615 | ||||||||||||
| Hong Kong |
10,815,000 | — | — | 10,815,000 | ||||||||||||
| Indonesia |
7,983,815 | — | — | 7,983,815 | ||||||||||||
| Ireland |
— | 28,035,761 | — | 28,035,761 | ||||||||||||
| Israel |
— | 5,544,612 | — | 5,544,612 | ||||||||||||
| Italy |
— | 8,041,170 | — | 8,041,170 | ||||||||||||
| Japan |
17,883,501 | — | — | 17,883,501 | ||||||||||||
| Netherlands |
4,653,043 | — | — | 4,653,043 | ||||||||||||
| Philippines |
11,451,759 | — | — | 11,451,759 | ||||||||||||
| South Africa |
— | 3,318,646 | — | 3,318,646 | ||||||||||||
| Switzerland |
28,842,468 | — | — | 28,842,468 | ||||||||||||
| Thailand |
11,615,566 | — | — | 11,615,566 | ||||||||||||
| Turkey |
9,476,279 | 7,482,043 | — | 16,958,322 | ||||||||||||
| Turkmenistan |
— | 9,456,343 | — | 9,456,343 | ||||||||||||
| United Kingdom |
29,087,446 | 85,810,776 | — | 114,898,222 | ||||||||||||
| United States |
196,097,814 | — | — | 196,097,814 | ||||||||||||
| Total Investments |
$ | 475,374,497 | $ | 160,344,442 | $ | — | $ | 635,718,939 | ||||||||
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 April 30, 2014, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $406.
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.
13 Invesco Global Small & Mid Cap Growth Fund
NOTE 6—Cash Balances
The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with State Street Bank and Trust Company, the custodian bank. Such balances, if any at period end, are shown in the Statement of Assets and Liabilities under the payable caption Amount due custodian. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.
NOTE 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. Capital losses generated in years beginning after December 22, 2010 can be carried forward for an unlimited period, whereas previous losses expire in 8 tax years. Capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Capital loss carryforwards with no expiration date will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss 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 October 31, 2013.
NOTE 8—Investment Securities
The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the six months ended April 30, 2014 was $88,491,197 and $101,892,676, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed federal income tax reporting period-end.
| Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis | ||||
| Aggregate unrealized appreciation of investment securities |
$ | 217,151,628 | ||
| Aggregate unrealized (depreciation) of investment securities |
(11,436,760 | ) | ||
| Net unrealized appreciation of investment securities |
$ | 205,714,868 | ||
Cost of investments for tax purposes is $430,004,071.
14 Invesco Global Small & Mid Cap Growth Fund
NOTE 9—Share Information
| Summary of Share Activity | ||||||||||||||||
| Six months ended April 30, 2014(a) |
Year ended October 31, 2013 |
|||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||
| Sold: |
||||||||||||||||
| Class A |
1,074,305 | $ | 22,280,883 | 1,296,133 | $ | 25,675,345 | ||||||||||
| Class B |
12,988 | 233,530 | 32,838 | 561,476 | ||||||||||||
| Class C |
169,558 | 3,033,881 | 275,489 | 4,731,339 | ||||||||||||
| Class Y |
236,179 | 4,900,296 | 166,646 | 3,283,683 | ||||||||||||
| Class R5 |
32,191 | 669,214 | 99,367 | 1,906,509 | ||||||||||||
| Issued as reinvestment of dividends: |
||||||||||||||||
| Class A |
2,329,609 | 46,126,256 | 593,803 | 10,599,391 | ||||||||||||
| Class B |
84,985 | 1,447,288 | 20,760 | 323,648 | ||||||||||||
| Class C |
158,301 | 2,697,462 | 27,510 | 429,152 | ||||||||||||
| Class Y |
40,273 | 798,206 | 9,591 | 171,400 | ||||||||||||
| Class R5 |
57,798 | 1,138,611 | 13,878 | 246,478 | ||||||||||||
| Automatic conversion of Class B shares to Class A shares: |
||||||||||||||||
| Class A |
98,040 | 2,038,366 | 182,103 | 3,563,679 | ||||||||||||
| Class B |
(114,095 | ) | (2,038,366 | ) | (209,171 | ) | (3,563,679 | ) | ||||||||
| Reacquired: |
||||||||||||||||
| Class A |
(1,913,681 | ) | (39,826,151 | ) | (4,142,993 | ) | (80,458,045 | ) | ||||||||
| Class B |
(53,899 | ) | (963,347 | ) | (167,221 | ) | (2,819,968 | ) | ||||||||
| Class C |
(171,937 | ) | (3,048,377 | ) | (255,740 | ) | (4,373,438 | ) | ||||||||
| Class Y |
(87,182 | ) | (1,804,482 | ) | (113,951 | ) | (2,202,602 | ) | ||||||||
| Class R5 |
(512,453 | ) | (10,871,043 | ) | (237,867 | ) | (4,678,962 | ) | ||||||||
| Net increase (decrease) in share activity |
1,440,980 | $ | 26,812,227 | (2,408,825 | ) | $ | (46,604,594 | ) | ||||||||
| (a) | There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 32% 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 Global Small & Mid Cap Growth Fund
NOTE 10—Financial Highlights
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
| Net asset value, beginning of period |
Net investment income (loss)(a) |
Net gains (losses) on securities (both realized and unrealized) |
Total from investment operations |
Dividends from net investment income |
Distributions from net realized gains |
Total distributions |
Net asset value, end of period(b) |
Total return(c) |
Net assets, end of period (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(d) |
|||||||||||||||||||||||||||||||||||||||||||
| Class A |
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Six months ended 04/30/14 |
$ | 22.11 | $ | 0.05 | $ | 1.31 | $ | 1.36 | $ | (0.18 | ) | $ | (1.86 | ) | $ | (2.04 | ) | $ | 21.43 | 6.89 | % | $ | 567,754 | 1.34 | %(e) | 1.35 | %(e) | 0.51 | %(e) | 6 | % | |||||||||||||||||||||||||
| Year ended 10/31/13 |
17.87 | 0.17 | 4.48 | 4.65 | (0.16 | ) | (0.25 | ) | (0.41 | ) | 22.11 | 26.56 | 550,526 | 1.37 | 1.38 | 0.87 | 26 | |||||||||||||||||||||||||||||||||||||||
| Year ended 10/31/12 |
17.93 | 0.17 | 1.10 | 1.27 | (0.24 | ) | (1.09 | ) | (1.33 | ) | 17.87 | 7.94 | 482,051 | 1.42 | 1.43 | 1.00 | 37 | |||||||||||||||||||||||||||||||||||||||
| Year ended 10/31/11 |
18.57 | 0.18 | (0.74 | ) | (0.56 | ) | (0.08 | ) | — | (0.08 | ) | 17.93 | (3.05 | ) | 508,794 | 1.40 | 1.41 | 0.95 | 58 | |||||||||||||||||||||||||||||||||||||
| Year ended 10/31/10 |
14.79 | 0.06 | 3.78 | 3.84 | (0.06 | ) | — | (0.06 | ) | 18.57 | 26.07 | 589,712 | 1.45 | 1.46 | 0.37 | 39 | ||||||||||||||||||||||||||||||||||||||||
| Year ended 10/31/09 |
12.87 | 0.05 | 3.07 | 3.12 | (0.15 | ) | (1.05 | ) | (1.20 | ) | 14.79 | 28.24 | 521,223 | 1.61 | 1.62 | 0.40 | 54 | |||||||||||||||||||||||||||||||||||||||
| Class B |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Six months ended 04/30/14 |
19.18 | (0.02 | ) | 1.12 | 1.10 | (0.04 | ) | (1.86 | ) | (1.90 | ) | 18.38 | 6.52 | 13,475 | 2.09 | (e) | 2.10 | (e) | (0.24 | )(e) | 6 | |||||||||||||||||||||||||||||||||||
| Year ended 10/31/13 |
15.57 | 0.02 | 3.89 | 3.91 | (0.05 | ) | (0.25 | ) | (0.30 | ) | 19.18 | 25.58 | 15,405 | 2.12 | 2.13 | 0.12 | 26 | |||||||||||||||||||||||||||||||||||||||
| Year ended 10/31/12 |
15.74 | 0.04 | 0.96 | 1.00 | (0.08 | ) | (1.09 | ) | (1.17 | ) | 15.57 | 7.12 | 17,529 | 2.17 | 2.18 | 0.25 | 37 | |||||||||||||||||||||||||||||||||||||||
| Year ended 10/31/11 |
16.36 | 0.03 | (0.65 | ) | (0.62 | ) | — | — | — | 15.74 | (3.79 | ) | 23,124 | 2.15 | 2.16 | 0.20 | 58 | |||||||||||||||||||||||||||||||||||||||
| Year ended 10/31/10 |
13.07 | (0.05 | ) | 3.34 | 3.29 | — | — | — | 16.36 | 25.17 | 34,439 | 2.20 | 2.21 | (0.38 | ) | 39 | ||||||||||||||||||||||||||||||||||||||||
| Year ended 10/31/09 |
11.43 | (0.04 | ) | 2.73 | 2.69 | — | (1.05 | ) | (1.05 | ) | 13.07 | 27.33 | 38,709 | 2.36 | 2.37 | (0.35 | ) | 54 | ||||||||||||||||||||||||||||||||||||||
| Class C |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Six months ended 04/30/14 |
19.19 | (0.02 | ) | 1.12 | 1.10 | (0.04 | ) | (1.86 | ) | (1.90 | ) | 18.39 | 6.51 | 30,185 | 2.09 | (e) | 2.10 | (e) | (0.24 | )(e) | 6 | |||||||||||||||||||||||||||||||||||
| Year ended 10/31/13 |
15.58 | 0.02 | 3.89 | 3.91 | (0.05 | ) | (0.25 | ) | (0.30 | ) | 19.19 | 25.56 | 28,505 | 2.12 | 2.13 | 0.12 | 26 | |||||||||||||||||||||||||||||||||||||||
| Year ended 10/31/12 |
15.75 | 0.04 | 0.96 | 1.00 | (0.08 | ) | (1.09 | ) | (1.17 | ) | 15.58 | 7.11 | 22,401 | 2.17 | 2.18 | 0.25 | 37 | |||||||||||||||||||||||||||||||||||||||
| Year ended 10/31/11 |
16.37 | 0.03 | (0.65 | ) | (0.62 | ) | — | — | — | 15.75 | (3.79 | ) | 23,368 | 2.15 | 2.16 | 0.20 | 58 | |||||||||||||||||||||||||||||||||||||||
| Year ended 10/31/10 |
13.08 | (0.05 | ) | 3.34 | 3.29 | — | — | — | 16.37 | 25.15 | 26,369 | 2.20 | 2.21 | (0.38 | ) | 39 | ||||||||||||||||||||||||||||||||||||||||
| Year ended 10/31/09 |
11.43 | (0.04 | ) | 2.74 | 2.70 | — | (1.05 | ) | (1.05 | ) | 13.08 | 27.41 | 20,802 | 2.36 | 2.37 | (0.35 | ) | 54 | ||||||||||||||||||||||||||||||||||||||
| Class Y |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Six months ended 04/30/14 |
22.18 | 0.08 | 1.31 | 1.39 | (0.23 | ) | (1.86 | ) | (2.09 | ) | 21.48 | 7.04 | 14,279 | 1.09 | (e) | 1.10 | (e) | 0.76 | (e) | 6 | ||||||||||||||||||||||||||||||||||||
| Year ended 10/31/13 |
17.92 | 0.22 | 4.49 | 4.71 | (0.20 | ) | (0.25 | ) | (0.45 | ) | 22.18 | 26.87 | 10,546 | 1.12 | 1.13 | 1.12 | 26 | |||||||||||||||||||||||||||||||||||||||
| Year ended 10/31/12 |
18.00 | 0.22 | 1.09 | 1.31 | (0.30 | ) | (1.09 | ) | (1.39 | ) | 17.92 | 8.18 | 7,406 | 1.17 | 1.18 | 1.25 | 37 | |||||||||||||||||||||||||||||||||||||||
| Year ended 10/31/11 |
18.64 | 0.23 | (0.75 | ) | (0.52 | ) | (0.12 | ) | — | (0.12 | ) | 18.00 | (2.81 | ) | 7,589 | 1.15 | 1.16 | 1.20 | 58 | |||||||||||||||||||||||||||||||||||||
| Year ended 10/31/10 |
14.84 | 0.10 | 3.80 | 3.90 | (0.10 | ) | — | (0.10 | ) | 18.64 | 26.38 | 7,944 | 1.20 | 1.21 | 0.62 | 39 | ||||||||||||||||||||||||||||||||||||||||
| Year ended 10/31/09 |
12.87 | 0.09 | 3.09 | 3.18 | (0.16 | ) | (1.05 | ) | (1.21 | ) | 14.84 | 28.70 | 4,715 | 1.36 | 1.37 | 0.65 | 54 | |||||||||||||||||||||||||||||||||||||||
| Class R5 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Six months ended 04/30/14 |
22.08 | 0.09 | 1.30 | 1.39 | (0.26 | ) | (1.86 | ) | (2.12 | ) | 21.35 | 7.10 | 12,820 | 0.95 | (e) | 0.96 | (e) | 0.90 | (e) | 6 | ||||||||||||||||||||||||||||||||||||
| Year ended 10/31/13 |
17.85 | 0.25 | 4.46 | 4.71 | (0.23 | ) | (0.25 | ) | (0.48 | ) | 22.08 | 27.05 | 22,585 | 0.95 | 0.96 | 1.29 | 26 | |||||||||||||||||||||||||||||||||||||||
| Year ended 10/31/12 |
17.95 | 0.25 | 1.10 | 1.35 | (0.36 | ) | (1.09 | ) | (1.45 | ) | 17.85 | 8.46 | 20,481 | 0.94 | 0.95 | 1.48 | 37 | |||||||||||||||||||||||||||||||||||||||
| Year ended 10/31/11 |
18.59 | 0.27 | (0.74 | ) | (0.47 | ) | (0.17 | ) | — | (0.17 | ) | 17.95 | (2.57 | ) | 22,918 | 0.91 | 0.92 | 1.44 | 58 | |||||||||||||||||||||||||||||||||||||
| Year ended 10/31/10 |
14.81 | 0.15 | 3.78 | 3.93 | (0.15 | ) | — | (0.15 | ) | 18.59 | 26.72 | 27,683 | 0.92 | 0.93 | 0.90 | 39 | ||||||||||||||||||||||||||||||||||||||||
| Year ended 10/31/09 |
12.93 | 0.13 | 3.07 | 3.20 | (0.27 | ) | (1.05 | ) | (1.32 | ) | 14.81 | 29.20 | 23,859 | 0.96 | 0.97 | 1.05 | 54 | |||||||||||||||||||||||||||||||||||||||
| (a) | Calculated using average shares outstanding. |
| (b) | Includes redemption fees added to shares of beneficial interest which were less than $0.005 per share for the fiscal years ended October 31, 2012 and prior. |
| (c) | Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable. |
| (d) | Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable. |
| (e) | Ratios are annualized and based on average daily net assets (000’s omitted) of $550,151, $14,542, $29,141, $11,780 and $24,442 for Class A, Class B, Class C, Class Y and Class R5 shares, respectively. |
16 Invesco Global Small & Mid Cap Growth Fund
Calculating your ongoing Fund expenses
Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, if any; and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period November 1, 2013 through April 30, 2014.
Actual expenses
The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled “Actual Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical example for comparison purposes
The table below also provides information about hypothetical account values and hypothetical expenses based on the 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.
| Class | Beginning Account Value (11/01/13) |
ACTUAL | HYPOTHETICAL (5% annual return before |
Annualized Expense Ratio |
||||||||||||||||||||
| Ending Account Value (04/30/14)1 |
Expenses Paid During Period2 |
Ending Account Value (04/30/14) |
Expenses Paid During Period2 |
|||||||||||||||||||||
| A | $ | 1,000.00 | $ | 1,068.90 | $ | 6.87 | $ | 1,018.15 | $ | 6.71 | 1.34 | % | ||||||||||||
| B | 1,000.00 | 1,065.20 | 10.70 | 1,014.43 | 10.44 | 2.09 | ||||||||||||||||||
| C | 1,000.00 | 1,065.10 | 10.70 | 1,014.43 | 10.44 | 2.09 | ||||||||||||||||||
| Y | 1,000.00 | 1,070.40 | 5.60 | 1,019.39 | 5.46 | 1.09 | ||||||||||||||||||
| R5 | 1,000.00 | 1,071.00 | 4.88 | 1,020.08 | 4.76 | 0.95 | ||||||||||||||||||
| 1 | The actual ending account value is based on the actual total return of the Fund for the period November 1, 2013 through April 30, 2014, 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 181/365 to reflect the most recent fiscal half year. |
17 Invesco Global Small & Mid Cap Growth Fund
Invesco mailing information
Send general correspondence to Invesco Investment Services, Inc., P.O. Box 219078, Kansas City, MO 64121-9078.
Important notice regarding delivery of security holder documents
To reduce Fund expenses, only one copy of most shareholder documents may be mailed to shareholders with multiple accounts at the same address (Householding). Mailing of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact Invesco Investment Services, Inc. at 800 959 4246 or contact your financial institution. We will begin sending you individual copies for each account within 30 days after receiving your request.
Fund holdings and proxy voting information
The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The most recent list of portfolio holdings is available at invesco.com/completeqtrholdings. Shareholders can also look up the Fund’s Forms N-Q on the SEC website at sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are shown below.
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 959 4246 or at invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.
| Information regarding how the Fund voted proxies related to its portfolio securities during the most recent 12-month period ended June 30 is available at invesco.com/proxysearch. The information is also available on the SEC website, sec.gov. Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the US distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd. |
|
| SEC file numbers: 811-06463 and 033-44611 | GSMG-SAR-1 | Invesco Distributors, Inc. |
|
| ||||
|
Semiannual Report to Shareholders
|
April 30, 2014 | ||
|
| ||||
| Invesco International Core Equity Fund
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| Nasdaq: | ||||
| A: IBVAX n B: IBVBX n C: IBVCX n R: IIBRX n Y: IBVYX n Investor: IIBCX R5: IBVIX n R6: IBVFX | ||||
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2 Fund Performance
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| 4 Letters to Shareholders
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| 5 Schedule of Investments
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| 7 Financial Statements
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| 9 Notes to Financial Statements
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| 16 Financial Highlights
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| 17 Fund Expenses | ||||
| For the most current month-end Fund performance and commentary, please visit invesco.com/performance. | ||||
| Unless otherwise noted, all data provided by Invesco. | ||||
| This report must be accompanied or preceded by a currently effective Fund prospectus, which contains more complete information, including sales charges and expenses. Investors should read it carefully before investing. | ||||
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| NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE | ||||
Fund Performance
2 Invesco International Core Equity Fund
3 Invesco International Core Equity Fund
Letters to Shareholders
|
Bruce Crockett |
Dear Fellow Shareholders: Members of the Invesco Funds Board work continually to oversee how the Invesco Funds are performing in light of ever-changing and often unpredictable economic and market conditions. In light of market conditions over the last few years, the financial news media have given increased attention to “alternative investment strategies” of late. Still, many investors don’t know very much about these types of investments. After a careful and thorough examination of the potential risks and potential benefits of alternative investment strategies, the Invesco Funds Board has approved the launch of several new alternative funds for the Invesco product lineup, to be managed by teams we determined have the depth and experience to pursue the funds’ investment objectives. That’s especially important, given that alternative products typically hold more non-traditional investments and employ more complex trading strategies, including hedging and leveraging through derivatives, |
short selling and opportunistic strategies that change with market conditions. Investors considering alternatives should be aware of their unique characteristics and the additional risks of the strategies they use. Like all investments, performance will fluctuate. You can lose money.
Your financial adviser is a good source of information about alternative investment strategies; he or she can explain the risks associated with them as well as their potential benefits. This type of professional guidance is why Invesco believes it’s so important that individual investors work with trusted, experienced financial advisers.
Be assured that the Invesco Funds Board will continue working on your behalf and on behalf of all our fund shareholders, keeping your needs and interests uppermost in our minds.
As always, please contact me at bruce@brucecrockett.com with any questions or concerns you may have. On behalf of the Board, we look forward to continuing to represent your interests and serving your needs.
Sincerely,
Bruce L. Crockett
Independent Chair
Invesco Funds Board of Trustees
|
Philip Taylor |
Dear Shareholders: This semiannual report includes information about your Fund, including performance data and a list of its investments as of the close of the reporting period. I hope you find this report of interest. Our website, invesco.com/us, offers a wide range of market insights and investment perspectives. On the website, you’ll find detailed information about our funds, including prices, performance, holdings and portfolio manager commentaries. You can access information about your individual Invesco account whenever it’s convenient for you; just complete a simple, secure online registration. Use the “Login” box on our home page to get started. Invesco’s mobile app for iPad® (available free from the App StoreSM) allows you to obtain the same detailed information about your Fund and the same investment insights from our investment leaders, market strategists, economists and retirement experts on the go. Also, you can obtain timely updates to help you stay informed about the markets, the |
economy and investing by connecting with Invesco on Twitter, LinkedIn or Facebook. You can access our blog at blog.invesco.us.com or by visiting the “Intentional Investing Forum” on our home page.
For questions about your account, feel free to contact an Invesco client services representative at 800 959 4246. For Invesco-related questions or comments, please email me directly at phil@invesco.com.
Thank you for investing with us.
Sincerely,
Philip Taylor
Senior Managing Director, Invesco Ltd.
iPad is a trademark of Apple Inc., registered in the US and other countries. App Store is a service mark of Apple Inc. Invesco Distributors, Inc. is not affiliated with Apple Inc.
4 Invesco International Core Equity Fund
Schedule of Investments
April 30, 2014
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco International Core Equity Fund
Investment Abbreviations:
| ADR | – American Depositary Receipt |
Notes to Schedule of Investments:
| (a) | All or a portion of this security was out on loan at April 30, 2014. |
| (b) | Non-income producing security. |
| (c) | The money market fund and the Fund are affiliated by having the same investment adviser. |
| (d) | 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. The following table presents the Fund’s gross and net amount of assets available for offset by the Fund as of April 30, 2014. |
| Counterparty | Gross Amount of Securities on Loan at Value |
Cash Collateral Received for Securities Loaned* |
Net Amount |
|||||||||
| State Street Bank and Trust Co. |
$ | 13,602,062 | $ | (13,602,062 | ) | $ | — | |||||
| * | Amount does not include excess collateral received. |
Portfolio Composition
By sector, based on Net Assets
as of April 30, 2014
| Financials |
19.2 | % | ||
| Consumer Discretionary |
14.8 | |||
| Consumer Staples |
13.6 | |||
| Industrials |
12.2 | |||
| Health Care |
11.6 | |||
| Energy |
8.7 | |||
| Information Technology |
6.0 | |||
| Materials |
5.3 | |||
| Telecommunication Services |
3.9 | |||
| Utilities |
1.4 | |||
| Money Market Funds Plus Other Assets Less Liabilities |
3.3 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco International Core Equity Fund
Statement of Assets and Liabilities
April 30, 2014
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco International Core Equity Fund
Statement of Operations
For the six months ended April 30, 2014
(Unaudited)
| Investment income: |
| |||
| Dividends (net of foreign withholding taxes of $162,237) |
$ | 2,016,391 | ||
| Dividends from affiliated money market funds (includes securities lending income of $33,106) |
34,048 | |||
| Total investment income |
2,050,439 | |||
| Expenses: |
||||
| Advisory fees |
496,576 | |||
| Administrative services fees |
24,795 | |||
| Custodian fees |
25,390 | |||
| Distribution fees: |
||||
| Class A |
51,989 | |||
| Class B |
11,170 | |||
| Class C |
60,234 | |||
| Class R |
5,207 | |||
| Investor Class |
17,013 | |||
| Transfer agent fees — A, B, C, R, Y and Investor |
124,749 | |||
| Transfer agent fees — R5 |
174 | |||
| Transfer agent fees — R6 |
563 | |||
| Trustees’ and officers’ fees and benefits |
14,621 | |||
| Other |
115,511 | |||
| Total expenses |
947,992 | |||
| Less: Fees waived and expense offset arrangement(s) |
(2,943 | ) | ||
| Net expenses |
945,049 | |||
| Net investment income |
1,105,390 | |||
| Realized and unrealized gain (loss) from: |
||||
| Net realized gain (loss) from: |
||||
| Investment securities (net of foreign taxes of $9,490) |
7,316,893 | |||
| Foreign currencies |
(55,237 | ) | ||
| 7,261,656 | ||||
| Change in net unrealized appreciation (depreciation) of: |
||||
| Investment securities (net of foreign taxes on holdings of $9,426) |
(2,779,856 | ) | ||
| Foreign currencies |
12,808 | |||
| (2,767,048 | ) | |||
| Net realized and unrealized gain |
4,494,608 | |||
| Net increase in net assets resulting from operations |
$ | 5,599,998 | ||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
8 Invesco International Core Equity Fund
Statement of Changes in Net Assets
For the six months ended April 30, 2014 and the year ended October 31, 2013
(Unaudited)
| April 30, 2014 |
October 31, 2013 |
|||||||
| Operations: |
|
|||||||
| Net investment income |
$ | 1,105,390 | $ | 2,579,095 | ||||
| Net realized gain |
7,261,656 | 37,098,687 | ||||||
| Change in net unrealized appreciation (depreciation) |
(2,767,048 | ) | (1,291,216 | ) | ||||
| Net increase in net assets resulting from operations |
5,599,998 | 38,386,566 | ||||||
| Distributions to shareholders from net investment income: |
||||||||
| Class A |
(699,534 | ) | (710,340 | ) | ||||
| Class B |
(22,302 | ) | (30,084 | ) | ||||
| Class C |
(119,182 | ) | (118,668 | ) | ||||
| Class R |
(29,524 | ) | (31,854 | ) | ||||
| Class Y |
(25,535 | ) | (28,913 | ) | ||||
| Investor Class |
(234,807 | ) | (255,659 | ) | ||||
| Class R5 |
(67,893 | ) | (197,847 | ) | ||||
| Class R6 |
(1,303,221 | ) | (5,230,104 | ) | ||||
| Total distributions from net investment income |
(2,501,998 | ) | (6,603,469 | ) | ||||
| Share transactions–net: |
||||||||
| Class A |
(717,496 | ) | (2,345,965 | ) | ||||
| Class B |
(479,704 | ) | (1,013,721 | ) | ||||
| Class C |
(684,065 | ) | (1,189,913 | ) | ||||
| Class R |
(10,174 | ) | (302,488 | ) | ||||
| Class Y |
569,876 | (321,805 | ) | |||||
| Investor Class |
(1,430,112 | ) | (1,607,037 | ) | ||||
| Class R5 |
(255,994 | ) | (5,431,002 | ) | ||||
| Class R6 |
(86,191 | ) | (166,619,388 | ) | ||||
| Net increase (decrease) in net assets resulting from share transactions |
(3,093,860 | ) | (178,831,319 | ) | ||||
| Net increase (decrease) in net assets |
4,140 | (147,048,222 | ) | |||||
| Net assets: |
||||||||
| Beginning of period |
136,073,144 | 283,121,366 | ||||||
| End of period (includes undistributed net investment income of $385,897 and $1,782,505, respectively) |
$ | 136,077,284 | $ | 136,073,144 | ||||
Notes to Financial Statements
April 30, 2014
(Unaudited)
NOTE 1—Significant Accounting Policies
Invesco International Core Equity Fund (the “Fund”) is a series portfolio of AIM International Mutual Funds (Invesco International Mutual Funds) (the “Trust”). The Trust is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company consisting of eight separate portfolios, each authorized to issue an unlimited number of shares of beneficial interest. The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each portfolio or class will be voted on exclusively by the shareholders of such portfolio or class.
The Fund’s investment objective is long-term growth of capital.
The Fund currently consists of eight different classes of shares: Class A, Class B, Class C, Class R, Class Y, Investor Class, Class R5 and Class R6. Investor Class shares of the Fund are offered only to certain grandfathered investors. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met and under certain circumstances load waived shares may be subject to contingent deferred sales charges (“CDSC”). Class C shares are sold with a CDSC. Class R, Class Y, Investor Class, Class R5 and Class R6 shares are sold at net asset value. Effective November 30, 2010, new or additional investments in Class B shares are no longer permitted. Existing shareholders of Class B shares may continue to reinvest dividends and capital gains distributions in Class B shares until they convert to Class A shares. Also, shareholders in Class B shares will be able to exchange those shares for Class B shares of other Invesco Funds offering such shares until they convert to Class A shares. Generally, Class B shares will automatically convert to Class A shares on or about the month-end, which is at least eight years after the date of purchase. Redemption of Class B shares prior to the conversion date will be subject to a CDSC.
9 Invesco International Core Equity Fund
The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.
| A. | Security Valuations — Securities, including restricted securities, are valued according to the following policy. |
A security listed or traded on an exchange (except convertible securities) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).
Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
Debt obligations (including convertible securities) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate (for unlisted equities), yield (for debt obligations), quality, type of issue, coupon rate (for debt obligations), maturity (for debt obligations), individual trading characteristics and other market data. Debt obligations are subject to interest rate and credit risks. In addition, all debt obligations involve some risk of default with respect to interest and/or principal payments.
Foreign securities’ (including foreign exchange contracts) prices are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange-traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that the Adviser determines are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities’ prices meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including corporate loans.
Securities for which market quotations are not readily available or became unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a 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 of the Fund’s 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 economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
| B. | Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. |
The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the 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 Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
10 Invesco International Core Equity Fund
| C. | Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted. |
| D. | Distributions — Distributions from 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 to each share class based on relative net assets. Sub-accounting fees attributable to Class R5 are charged to the operations of the class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses relating to all other classes are allocated among those classes based on relative net assets. All other expenses are allocated among the classes based on relative net assets. |
| G. | Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print. |
| H. | Indemnifications — Under the 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 money market funds and is shown as such on the Schedule of Investments. 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. Lending securities entails a risk of loss to the Fund if, and to the extent that, the market value of the securities loaned were to increase and the borrower did not increase the collateral accordingly, and the borrower failed to return the securities. Upon the failure of the borrower to return the securities, collateral may be liquidated and the securities may be purchased on the open market to replace the loaned securities. The Fund could experience delays and costs in gaining access to the collateral. The Fund bears the risk of any deficiency in the amount of the collateral available for return to the borrower due to any loss on the collateral invested. Dividends received on cash collateral investments for securities lending transactions, which are net of compensation to counterparties, is included in Dividends from affiliated money market funds on the Statement of Operations. The aggregate value of securities out on loan is shown as a footnote on the Statement of Assets and Liabilities, if any. |
| J. | Foreign Currency Translations — Foreign currency is valued at the close of the NYSE based on quotations posted by banks and major currency dealers. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at date of valuation. Purchases and sales of portfolio securities (net of foreign taxes withheld on disposition) and income items denominated in foreign currencies are translated into U.S. dollar amounts on the respective dates of such transactions. The Fund does not separately account for the portion of the results of operations resulting from changes in foreign exchange rates on investments and the fluctuations arising from changes in market prices of securities held. The combined results of changes in foreign exchange rates and the fluctuation of market prices on investments (net of estimated foreign tax withholding) are included with the net realized and unrealized gain or loss from investments in the Statement of Operations. Reported net realized foreign currency gains or losses arise from (1) sales of foreign currencies, (2) currency gains or losses realized between the trade and settlement dates on securities transactions, and (3) the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the 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.
11 Invesco International Core Equity Fund
| K. | Forward Foreign Currency Contracts — The Fund may enter into 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. A forward foreign currency contract is an obligation to purchase or sell a specific currency for an agreed-upon price at a future date. The use of forward foreign currency contracts does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with forward foreign currency contracts include failure of the counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities. |
| L. | Collateral — To the extent the Fund has pledged or segregated a security as collateral and that security is subsequently sold, it is the Fund’s practice to replace such collateral no later than the next business day. This practice does not apply to securities pledged as collateral for securities lending transactions. |
NOTE 2—Advisory Fees and Other Fees Paid to Affiliates
The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:
| Average Daily Net Assets | Rate | |||||
| First $500 million |
0 | .75% | ||||
| Next $500 million |
0 | .65% | ||||
| From $1 billion |
0 | .55% | ||||
| From $2 billion |
0 | .45% | ||||
| From $4 billion |
0 | .40% | ||||
| From $6 billion |
0 | .375% | ||||
| Over $8 billion |
0 | .35% | ||||
Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Canada Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide(s) discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).
The Adviser has contractually agreed, through at least June 30, 2015, to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver and/or expense reimbursement (excluding certain items discussed below) of Class A, Class B, Class C, Class R, Class Y, Investor Class, Class R5 and Class R6 shares to 2.25%, 3.00%, 3.00%, 2.50%, 2.00%, 2.25%, 2.00% and 2.00%, respectively, of average daily net assets. 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. Unless Invesco continues the fee waiver agreement, it will terminate on June 30, 2015. The fee waiver agreement cannot be terminated during its term. The Adviser did not waive fees and/or reimburse expenses during the period under this expense limitation.
Further, the Adviser has contractually agreed, through at least June 30, 2016, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash (excluding investments of cash collateral from securities lending) in such affiliated money market funds.
For the six months ended April 30, 2014, the Adviser waived advisory fees of $2,816.
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 April 30, 2014, expenses incurred under the agreement are shown in the Statement of Operations as Administrative services fees.
The Trust has entered into a transfer agency and service agreement with Invesco Investment Services, Inc. (“IIS”) pursuant to which the Fund has agreed to pay IIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IIS for certain expenses incurred by IIS in the course of providing such services. IIS may make payments to intermediaries that provide omnibus account services, sub-accounting services and/or networking services. All fees payable by IIS to intermediaries that provide omnibus account services or sub-accounting are charged back to the Fund, subject to certain limitations approved by the Trust’s Board of Trustees. For the six months ended April 30, 2014, expenses incurred under the agreement are shown in the Statement of Operations as Transfer agent fees.
The Trust has entered into master distribution agreements with Invesco Distributors, Inc. (“IDI”) to serve as the distributor for the Class A, Class B, Class C, Class R, 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 B, Class C, Class R 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 B and Class C shares, 0.50% of the average daily net assets of Class R shares and 0.25% of the average daily net assets of Investor Class shares. Of the Plan payments, up to 0.25% of the average daily net assets of each class of shares may be paid to furnish continuing personal shareholder services to customers who purchase and own shares of such classes. Any amounts not paid as a service fee under the Plans would constitute an asset-based sales charge. Rules of the Financial Industry Regulatory Authority (“FINRA”) impose a cap on the total sales charges,
12 Invesco International Core Equity Fund
including asset-based sales charges, that may be paid by any class of shares of the Fund. For the six months ended April 30, 2014, expenses incurred under the Plans are shown in the Statement of Operations as Distribution fees.
Front-end sales commissions and CDSC (collectively, the “sales charges”) are not recorded as expenses of the Fund. Front-end sales commissions are deducted from proceeds from the sales of Fund shares prior to investment in Class A shares of the Fund. CDSC are deducted from redemption proceeds prior to remittance to the shareholder. During the six months ended April 30, 2014, IDI advised the Fund that IDI retained $4,000 in front-end sales commissions from the sale of Class A shares and $12, $622 and $165 from Class A, Class B and Class C shares, respectively, for CDSC imposed on redemptions by shareholders.
Certain officers and trustees of the Trust are officers and directors of the Adviser, IIS and/or IDI.
NOTE 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 or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an 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 Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information. |
The following is a summary of the tiered valuation input levels, as of April 30, 2014. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
During the six months ended April 30, 2014, there were transfers from Level 1 to Level 2 of $7,265,385 and from Level 2 to Level 1 of $7,389,042, due to foreign fair value adjustments.
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Australia |
$ | — | $ | 3,692,081 | $ | — | $ | 3,692,081 | ||||||||
| Canada |
15,840,079 | — | — | 15,840,079 | ||||||||||||
| China |
1,387,894 | — | — | 1,387,894 | ||||||||||||
| Finland |
— | 2,434,581 | — | 2,434,581 | ||||||||||||
| France |
6,972,541 | 10,076,128 | — | 17,048,669 | ||||||||||||
| Germany |
8,638,289 | 438,181 | — | 9,076,470 | ||||||||||||
| Ireland |
1,916,558 | 1,486,003 | — | 3,402,561 | ||||||||||||
| Israel |
1,990,654 | — | — | 1,990,654 | ||||||||||||
| Italy |
— | 2,832,340 | — | 2,832,340 | ||||||||||||
| Japan |
10,334,533 | 3,675,331 | — | 14,009,864 | ||||||||||||
| Netherlands |
2,574,621 | 4,740,214 | — | 7,314,835 | ||||||||||||
| Singapore |
1,493,520 | 1,923,451 | — | 3,416,971 | ||||||||||||
| Spain |
— | 718,208 | — | 718,208 | ||||||||||||
| Sweden |
— | 5,654,152 | — | 5,654,152 | ||||||||||||
| Switzerland |
5,975,166 | 5,818,926 | — | 11,794,092 | ||||||||||||
| Taiwan |
— | 2,173,691 | — | 2,173,691 | ||||||||||||
| United Kingdom |
8,042,333 | 14,337,236 | — | 22,379,569 | ||||||||||||
| United States |
24,951,494 | — | — | 24,951,494 | ||||||||||||
| Total Investments |
$ | 90,117,682 | $ | 60,000,523 | $ | — | $ | 150,118,205 | ||||||||
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 April 30, 2014, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $127.
13 Invesco International Core Equity Fund
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 State Street Bank and Trust Company, the custodian bank. Such balances, if any at period end, are shown in the Statement of Assets and Liabilities under the payable caption Amount due custodian. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.
NOTE 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. Capital losses generated in years beginning after December 22, 2010 can be carried forward for an unlimited period, whereas previous losses expire in 8 tax years. Capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Capital loss carryforwards with no expiration date will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss 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 October 31, 2013, which expires as follows:
| Capital Loss Carryforward* | ||||||||||||
| Expiration | Short-Term | Long-Term | Total | |||||||||
| October 31, 2017 |
$ | 11,001,492 | $ | — | $ | 11,001,492 | ||||||
| Not subject to expiration |
4,572,292 | 1,560,686 | 6,132,978 | |||||||||
| $ | 15,573,784 | $ | 1,560,686 | $ | 17,134,470 | |||||||
| * | Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code and may be further limited depending upon a variety of factors, including the realization of net unrealized gains or losses as of the date of any reorganization. |
NOTE 8—Investment Securities
The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the six months ended April 30, 2014 was $108,162,680 and $111,168,613, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed federal income tax reporting period-end.
| Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis | ||||
| Aggregate unrealized appreciation of investment securities |
$ | 10,075,990 | ||
| Aggregate unrealized (depreciation) of investment securities |
(2,382,306 | ) | ||
| Net unrealized appreciation of investment securities |
$ | 7,693,684 | ||
Cost of investments for tax purposes is $142,424,521.
14 Invesco International Core Equity Fund
NOTE 9—Share Information
| Summary of Share Activity | ||||||||||||||||
| Six months ended April 30, 2014(a) |
Year ended October 31, 2013 |
|||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||
| Sold: |
||||||||||||||||
| Class A |
213,748 | $ | 2,410,963 | 555,347 | $ | 5,942,173 | ||||||||||
| Class B |
5,789 | 64,514 | 17,830 | 190,884 | ||||||||||||
| Class C |
69,259 | 764,041 | 186,878 | 1,971,690 | ||||||||||||
| Class R |
53,559 | 604,843 | 51,394 | 545,008 | ||||||||||||
| Class Y |
83,824 | 958,954 | 40,986 | 443,049 | ||||||||||||
| Investor Class |
25,923 | 296,079 | 77,150 | 849,117 | ||||||||||||
| Class R5 |
5,799 | 65,930 | 5,211 | 62,790 | ||||||||||||
| Class R6 |
141,123 | 1,579,401 | 303,590 | 3,190,475 | ||||||||||||
| Issued as reinvestment of dividends: |
||||||||||||||||
| Class A |
61,809 | 668,156 | 67,198 | 679,375 | ||||||||||||
| Class B |
2,006 | 21,844 | 2,866 | 29,204 | ||||||||||||
| Class C |
10,054 | 106,576 | 10,612 | 105,270 | ||||||||||||
| Class R |
2,721 | 29,524 | 3,138 | 31,854 | ||||||||||||
| Class Y |
2,057 | 22,564 | 2,676 | 27,450 | ||||||||||||
| Investor Class |
20,654 | 226,785 | 24,114 | 247,648 | ||||||||||||
| Class R5 |
6,302 | 67,746 | 19,646 | 197,834 | ||||||||||||
| Class R6 |
121,343 | 1,303,221 | 519,891 | 5,230,104 | ||||||||||||
| Automatic conversion of Class B shares to Class A shares: |
||||||||||||||||
| Class A |
30,474 | 345,684 | 63,299 | 673,135 | ||||||||||||
| Class B |
(30,304 | ) | (345,684 | ) | (63,015 | ) | (673,135 | ) | ||||||||
| Reacquired: |
||||||||||||||||
| Class A |
(366,853 | ) | (4,142,299 | ) | (913,757 | ) | (9,640,648 | ) | ||||||||
| Class B |
(19,410 | ) | (220,378 | ) | (53,237 | ) | (560,674 | ) | ||||||||
| Class C |
(140,035 | ) | (1,554,682 | ) | (318,934 | ) | (3,266,873 | ) | ||||||||
| Class R |
(56,534 | ) | (644,541 | ) | (82,934 | ) | (879,350 | ) | ||||||||
| Class Y |
(35,667 | ) | (411,642 | ) | (74,071 | ) | (792,304 | ) | ||||||||
| Investor Class |
(169,869 | ) | (1,952,976 | ) | (250,611 | ) | (2,703,802 | ) | ||||||||
| Class R5 |
(34,236 | ) | (389,670 | ) | (536,200 | ) | (5,691,626 | ) | ||||||||
| Class R6 |
(263,963 | ) | (2,968,813 | ) | (16,433,366 | ) | (175,039,967 | ) | ||||||||
| Net increase (decrease) in share activity |
(260,427 | ) | $ | (3,093,860 | ) | (16,774,299 | ) | $ | (178,831,319 | ) | ||||||
| (a) | 47% of the outstanding shares of the Fund are owned by affiliated mutual funds. Affiliated mutual funds are other mutual funds that are also advised by Invesco. |
15 Invesco International Core Equity Fund
NOTE 10—Financial Highlights
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
| Net asset value, beginning of period |
Net investment income(a) |
Net gains (losses) on securities (both realized and unrealized) |
Total from investment operations |
Dividends from net investment income |
Net asset value, end of period(b) |
Total return(c) |
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(d) |
|||||||||||||||||||||||||||||||||||||
| Class A |
| |||||||||||||||||||||||||||||||||||||||||||||||
| Six months ended 04/30/14 |
$ | 11.45 | $ | 0.08 | $ | 0.38 | $ | 0.46 | $ | (0.19 | ) | $ | 11.72 | 4.15 | % | $ | 42,999 | 1.61 | %(e) | 1.61 | %(e) | 1.49 | %(e) | 84 | % | |||||||||||||||||||||||
| Year ended 10/31/13 |
9.87 | 0.13 | 1.63 | 1.76 | (0.18 | ) | 11.45 | 18.11 | 42,703 | 1.65 | 1.65 | 1.20 | 25 | |||||||||||||||||||||||||||||||||||
| Year ended 10/31/12 |
10.02 | 0.18 | (0.05 | ) | 0.13 | (0.28 | ) | 9.87 | 1.40 | 39,044 | 1.59 | 1.59 | 1.86 | 20 | ||||||||||||||||||||||||||||||||||
| Year ended 10/31/11 |
10.96 | 0.30 | (1.11 | ) | (0.81 | ) | (0.13 | ) | 10.02 | (7.46 | ) | 43,983 | 1.54 | 1.54 | 2.71 | 26 | ||||||||||||||||||||||||||||||||
| Year ended 10/31/10 |
10.34 | 0.17 | 0.62 | 0.79 | (0.17 | ) | 10.96 | 7.68 | 40,422 | 1.51 | 1.51 | 1.59 | 39 | |||||||||||||||||||||||||||||||||||
| Year ended 10/31/09 |
8.63 | 0.14 | 1.87 | 2.01 | (0.30 | ) | 10.34 | 24.35 | 61,810 | 1.62 | 1.62 | 1.63 | 43 | |||||||||||||||||||||||||||||||||||
| Class B |
| |||||||||||||||||||||||||||||||||||||||||||||||
| Six months ended 04/30/14 |
11.47 | 0.04 | 0.38 | 0.42 | (0.11 | ) | 11.78 | 3.71 | 2,062 | 2.36 | (e) | 2.36 | (e) | 0.74 | (e) | 84 | ||||||||||||||||||||||||||||||||
| Year ended 10/31/13 |
9.87 | 0.05 | 1.65 | 1.70 | (0.10 | ) | 11.47 | 17.35 | 2,488 | 2.40 | 2.40 | 0.45 | 25 | |||||||||||||||||||||||||||||||||||
| Year ended 10/31/12 |
10.00 | 0.11 | (0.05 | ) | 0.06 | (0.19 | ) | 9.87 | 0.67 | 3,085 | 2.34 | 2.34 | 1.11 | 20 | ||||||||||||||||||||||||||||||||||
| Year ended 10/31/11 |
10.92 | 0.22 | (1.11 | ) | (0.89 | ) | (0.03 | ) | 10.00 | (8.16 | ) | 4,654 | 2.29 | 2.29 | 1.96 | 26 | ||||||||||||||||||||||||||||||||
| Year ended 10/31/10 |
10.30 | 0.09 | 0.62 | 0.71 | (0.09 | ) | 10.92 | 6.88 | 6,906 | 2.26 | 2.26 | 0.84 | 39 | |||||||||||||||||||||||||||||||||||
| Year ended 10/31/09 |
8.54 | 0.08 | 1.86 | 1.94 | (0.18 | ) | 10.30 | 23.26 | 9,864 | 2.37 | 2.37 | 0.88 | 43 | |||||||||||||||||||||||||||||||||||
| Class C |
| |||||||||||||||||||||||||||||||||||||||||||||||
| Six months ended 04/30/14 |
11.16 | 0.04 | 0.38 | 0.42 | (0.11 | ) | 11.47 | 3.82 | 12,102 | 2.36 | (e) | 2.36 | (e) | 0.74 | (e) | 84 | ||||||||||||||||||||||||||||||||
| Year ended 10/31/13 |
9.61 | 0.05 | 1.60 | 1.65 | (0.10 | ) | 11.16 | 17.30 | 12,458 | 2.40 | 2.40 | 0.45 | 25 | |||||||||||||||||||||||||||||||||||
| Year ended 10/31/12 |
9.74 | 0.11 | (0.05 | ) | 0.06 | (0.19 | ) | 9.61 | 0.69 | 11,896 | 2.34 | 2.34 | 1.11 | 20 | ||||||||||||||||||||||||||||||||||
| Year ended 10/31/11 |
10.65 | 0.21 | (1.09 | ) | (0.88 | ) | (0.03 | ) | 9.74 | (8.28 | ) | 15,597 | 2.29 | 2.29 | 1.96 | 26 | ||||||||||||||||||||||||||||||||
| Year ended 10/31/10 |
10.04 | 0.09 | 0.61 | 0.70 | (0.09 | ) | 10.65 | 6.96 | 20,110 | 2.26 | 2.26 | 0.84 | 39 | |||||||||||||||||||||||||||||||||||
| Year ended 10/31/09 |
8.33 | 0.07 | 1.82 | 1.89 | (0.18 | ) | 10.04 | 23.25 | 22,854 | 2.37 | 2.37 | 0.88 | 43 | |||||||||||||||||||||||||||||||||||
| Class R |
| |||||||||||||||||||||||||||||||||||||||||||||||
| Six months ended 04/30/14 |
11.47 | 0.07 | 0.38 | 0.45 | (0.16 | ) | 11.76 | 4.06 | 2,063 | 1.86 | (e) | 1.86 | (e) | 1.24 | (e) | 84 | ||||||||||||||||||||||||||||||||
| Year ended 10/31/13 |
9.88 | 0.10 | 1.65 | 1.75 | (0.16 | ) | 11.47 | 17.87 | 2,016 | 1.90 | 1.90 | 0.95 | 25 | |||||||||||||||||||||||||||||||||||
| Year ended 10/31/12 |
10.01 | 0.15 | (0.03 | ) | 0.12 | (0.25 | ) | 9.88 | 1.29 | 2,016 | 1.84 | 1.84 | 1.61 | 20 | ||||||||||||||||||||||||||||||||||
| Year ended 10/31/11 |
10.95 | 0.27 | (1.11 | ) | (0.84 | ) | (0.10 | ) | 10.01 | (7.76 | ) | 2,885 | 1.79 | 1.79 | 2.46 | 26 | ||||||||||||||||||||||||||||||||
| Year ended 10/31/10 |
10.33 | 0.14 | 0.62 | 0.76 | (0.14 | ) | 10.95 | 7.41 | 3,028 | 1.76 | 1.76 | 1.34 | 39 | |||||||||||||||||||||||||||||||||||
| Year ended 10/31/09 |
8.61 | 0.12 | 1.86 | 1.98 | (0.26 | ) | 10.33 | 23.88 | 2,697 | 1.87 | 1.87 | 1.38 | 43 | |||||||||||||||||||||||||||||||||||
| Class Y |
| |||||||||||||||||||||||||||||||||||||||||||||||
| Six months ended 04/30/14 |
11.65 | 0.10 | 0.38 | 0.48 | (0.22 | ) | 11.91 | 4.26 | 1,911 | 1.36 | (e) | 1.36 | (e) | 1.74 | (e) | 84 | ||||||||||||||||||||||||||||||||
| Year ended 10/31/13 |
10.03 | 0.16 | 1.67 | 1.83 | (0.21 | ) | 11.65 | 18.53 | 1,284 | 1.40 | 1.40 | 1.45 | 25 | |||||||||||||||||||||||||||||||||||
| Year ended 10/31/12 |
10.18 | 0.21 | (0.05 | ) | 0.16 | (0.31 | ) | 10.03 | 1.67 | 1,411 | 1.34 | 1.34 | 2.11 | 20 | ||||||||||||||||||||||||||||||||||
| Year ended 10/31/11 |
11.14 | 0.33 | (1.12 | ) | (0.79 | ) | (0.17 | ) | 10.18 | (7.23 | ) | 1,354 | 1.29 | 1.29 | 2.96 | 26 | ||||||||||||||||||||||||||||||||
| Year ended 10/31/10 |
10.51 | 0.19 | 0.64 | 0.83 | (0.20 | ) | 11.14 | 7.91 | 1,839 | 1.26 | 1.26 | 1.84 | 39 | |||||||||||||||||||||||||||||||||||
| Year ended 10/31/09 |
8.75 | 0.18 | 1.88 | 2.06 | (0.30 | ) | 10.51 | 24.61 | 1,983 | 1.37 | 1.37 | 1.88 | 43 | |||||||||||||||||||||||||||||||||||
| Investor Class |
| |||||||||||||||||||||||||||||||||||||||||||||||
| Six months ended 04/30/14 |
11.63 | 0.08 | 0.39 | 0.47 | (0.19 | ) | 11.91 | 4.18 | 13,609 | 1.61 | (e) | 1.61 | (e) | 1.49 | (e) | 84 | ||||||||||||||||||||||||||||||||
| Year ended 10/31/13 |
10.02 | 0.13 | 1.66 | 1.79 | (0.18 | ) | 11.63 | 18.14 | 14,726 | 1.65 | 1.65 | 1.20 | 25 | |||||||||||||||||||||||||||||||||||
| Year ended 10/31/12 |
10.16 | 0.18 | (0.04 | ) | 0.14 | (0.28 | ) | 10.02 | 1.48 | 14,181 | 1.59 | 1.59 | 1.86 | 20 | ||||||||||||||||||||||||||||||||||
| Year ended 10/31/11 |
11.12 | 0.30 | (1.13 | ) | (0.83 | ) | (0.13 | ) | 10.16 | (7.53 | ) | 16,009 | 1.54 | 1.54 | 2.71 | 26 | ||||||||||||||||||||||||||||||||
| Year ended 10/31/10 |
10.49 | 0.17 | 0.63 | 0.80 | (0.17 | ) | 11.12 | 7.67 | 19,438 | 1.51 | 1.51 | 1.59 | 39 | |||||||||||||||||||||||||||||||||||
| Year ended 10/31/09 |
8.75 | 0.14 | 1.90 | 2.04 | (0.30 | ) | 10.49 | 24.35 | 21,500 | 1.62 | 1.62 | 1.63 | 43 | |||||||||||||||||||||||||||||||||||
| Class R5 |
| |||||||||||||||||||||||||||||||||||||||||||||||
| Six months ended 04/30/14 |
11.45 | 0.12 | 0.37 | 0.49 | (0.26 | ) | 11.68 | 4.46 | 2,813 | 1.03 | (e) | 1.03 | (e) | 2.07 | (e) | 84 | ||||||||||||||||||||||||||||||||
| Year ended 10/31/13 |
9.89 | 0.19 | 1.63 | 1.82 | (0.26 | ) | 11.45 | 18.71 | 3,010 | 1.04 | 1.04 | 1.81 | 25 | |||||||||||||||||||||||||||||||||||
| Year ended 10/31/12 |
10.04 | 0.24 | (0.04 | ) | 0.20 | (0.35 | ) | 9.89 | 2.15 | 7,656 | 0.90 | 0.90 | 2.55 | 20 | ||||||||||||||||||||||||||||||||||
| Year ended 10/31/11 |
10.99 | 0.37 | (1.11 | ) | (0.74 | ) | (0.21 | ) | 10.04 | (6.85 | ) | 208,295 | 0.91 | 0.91 | 3.34 | 26 | ||||||||||||||||||||||||||||||||
| Year ended 10/31/10 |
10.37 | 0.23 | 0.63 | 0.86 | (0.24 | ) | 10.99 | 8.35 | 228,027 | 0.91 | 0.91 | 2.19 | 39 | |||||||||||||||||||||||||||||||||||
| Year ended 10/31/09 |
8.70 | 0.20 | 1.86 | 2.06 | (0.39 | ) | 10.37 | 25.10 | 241,432 | 0.94 | 0.94 | 2.31 | 43 | |||||||||||||||||||||||||||||||||||
| Class R6 |
| |||||||||||||||||||||||||||||||||||||||||||||||
| Six months ended 04/30/14 |
11.45 | 0.12 | 0.37 | 0.49 | (0.26 | ) | 11.68 | 4.48 | 58,517 | 1.02 | (e) | 1.02 | (e) | 2.08 | (e) | 84 | ||||||||||||||||||||||||||||||||
| Year ended 10/31/13 |
9.88 | 0.19 | 1.64 | 1.83 | (0.26 | ) | 11.45 | 18.84 | 57,388 | 1.03 | 1.03 | 1.82 | 25 | |||||||||||||||||||||||||||||||||||
| Period ended 10/31/12(f) |
10.05 | 0.03 | (0.20 | ) | (0.17 | ) | — | 9.88 | (1.69 | ) | 203,831 | 0.87 | (g) | 0.87 | (g) | 2.58 | (g) | 20 | ||||||||||||||||||||||||||||||
| (a) | Calculated using average shares outstanding. |
| (b) | Includes redemption fees added to shares of beneficial interest for Class A, Class B, Class C, Class R, Class Y, Investor Class and Class R5 shares, which were less than $0.005 per share for the fiscal years ended October 31, 2012 and prior. |
| (c) | Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable. |
| (d) | Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable. |
| (e) | Ratios are annualized and based on average daily net assets (000’s omitted) of $41,936, $2,253, $12,147, $2,100, $1,542, $13,723, $2,928 and $56,890 for Class A, Class B, Class C, Class R, Class Y, Investor Class, Class R5 and Class R6 shares, respectively. |
| (f) | Commencement date of September 24, 2012 for Class R6 shares. |
| (g) | Annualized. |
16 Invesco International Core Equity 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 November 1, 2013 through April 30, 2014.
Actual expenses
The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled “Actual Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical example for comparison purposes
The table below also provides information about hypothetical account values and hypothetical expenses based on the 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.
| Class | Beginning Account Value (11/01/13) |
ACTUAL | HYPOTHETICAL (5% annual return before expenses) |
Annualized Expense Ratio |
||||||||||||||||||||
| Ending Account Value (04/30/14)1 |
Expenses Paid During Period2 |
Ending Account Value (04/30/14) |
Expenses Paid During Period2 |
|||||||||||||||||||||
| A | $ | 1,000.00 | $ | 1,041.50 | $ | 8.15 | $ | 1,016.81 | $ | 8.05 | 1.61 | % | ||||||||||||
| B | 1,000.00 | 1,037.10 | 11.92 | 1,013.09 | 11.78 | 2.36 | ||||||||||||||||||
| C | 1,000.00 | 1,038.20 | 11.93 | 1,013.09 | 11.78 | 2.36 | ||||||||||||||||||
| R | 1,000.00 | 1,040.60 | 9.41 | 1,015.57 | 9.30 | 1.86 | ||||||||||||||||||
| Y | 1,000.00 | 1,042.60 | 6.89 | 1,018.05 | 6.80 | 1.36 | ||||||||||||||||||
| Investor | 1,000.00 | 1,041.80 | 8.15 | 1,016.81 | 8.05 | 1.61 | ||||||||||||||||||
| R5 | 1,000.00 | 1,044.60 | 5.22 | 1,019.69 | 5.16 | 1.03 | ||||||||||||||||||
| R6 | 1,000.00 | 1,044.80 | 5.17 | 1,019.74 | 5.11 | 1.02 | ||||||||||||||||||
| 1 | The actual ending account value is based on the actual total return of the Fund for the period November 1, 2013 through April 30, 2014, 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 181/365 to reflect the most recent fiscal half year. |
17 Invesco International Core Equity Fund
Invesco mailing information
Send general correspondence to Invesco Investment Services, Inc., P.O. Box 219078, Kansas City, MO 64121-9078.
Important notice regarding delivery of security holder documents
To reduce Fund expenses, only one copy of most shareholder documents may be mailed to shareholders with multiple accounts at the same address (Householding). Mailing of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact Invesco Investment Services, Inc. at 800 959 4246 or contact your financial institution. We will begin sending you individual copies for each account within 30 days after receiving your request.
Fund holdings and proxy voting information
The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The most recent list of portfolio holdings is available at invesco.com/completeqtrholdings. Shareholders can also look up the Fund’s Forms N-Q on the SEC website at sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are shown below.
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 959 4246 or at invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.
| Information regarding how the Fund voted proxies related to its portfolio securities during the most recent 12-month period ended June 30 is available at invesco.com/proxysearch. The information is also available on the SEC website, sec.gov. Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the US distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd. |
|
| SEC file numbers: 811-06463 and 033-44611 | I-ICE-SAR-1 | Invesco Distributors, Inc. |
|
| ||||
|
Semiannual Report to Shareholders
|
April 30, 2014 | ||
|
| ||||
| Invesco International Growth Fund
| ||||
| Nasdaq: | ||||
| A: AIIEX n B: AIEBX n C: AIECX n R: AIERX n Y: AIIYX n R5: AIEVX n R6: IGFRX | ||||
| ||||
|
| ||||
|
2 Fund Performance
| ||||
| 4 Letters to Shareholders
| ||||
| 5 Schedule of Investments
| ||||
| 7 Financial Statements
| ||||
| 9 Notes to Financial Statements
| ||||
| 16 Financial Highlights
| ||||
| 17 Fund Expenses | ||||
| For the most current month-end Fund performance and commentary, please visit invesco.com/performance. | ||||
| Unless otherwise noted, all data provided by Invesco. | ||||
| This report must be accompanied or preceded by a currently effective Fund prospectus, which contains more complete information, including sales charges and expenses. Investors should read it carefully before investing. | ||||
|
| ||||
| NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE | ||||
Fund Performance
2 Invesco International Growth Fund
| 3 Invesco International Growth Fund |
Letters to Shareholders
|
Bruce Crockett |
Dear Fellow Shareholders: Members of the Invesco Funds Board work continually to oversee how the Invesco Funds are performing in light of ever-changing and often unpredictable economic and market conditions. In light of market conditions over the last few years, the financial news media have given increased attention to “alternative investment strategies” of late. Still, many investors don’t know very much about these types of investments. After a careful and thorough examination of the potential risks and potential benefits of alternative investment strategies, the Invesco Funds Board has approved the launch of several new alternative funds for the Invesco product lineup, to be managed by teams we determined have the depth and experience to pursue the funds’ investment objectives. That’s especially important, given that alternative products typically hold more non-traditional investments and employ more complex trading strategies, including hedging and leveraging through derivatives, |
short selling and opportunistic strategies that change with market conditions. Investors considering alternatives should be aware of their unique characteristics and the additional risks of the strategies they use. Like all investments, performance will fluctuate. You can lose money.
Your financial adviser is a good source of information about alternative investment strategies; he or she can explain the risks associated with them as well as their potential benefits. This type of professional guidance is why Invesco believes it’s so important that individual investors work with trusted, experienced financial advisers.
Be assured that the Invesco Funds Board will continue working on your behalf and on behalf of all our fund shareholders, keeping your needs and interests uppermost in our minds.
As always, please contact me at bruce@brucecrockett.com with any questions or concerns you may have. On behalf of the Board, we look forward to continuing to represent your interests and serving your needs.
Sincerely,
Bruce L. Crockett
Independent Chair
Invesco Funds Board of Trustees
|
Philip Taylor |
Dear Shareholders: This semiannual report includes information about your Fund, including performance data and a list of its investments as of the close of the reporting period. I hope you find this report of interest. Our website, invesco.com/us, offers a wide range of market insights and investment perspectives. On the website, you’ll find detailed information about our funds, including prices, performance, holdings and portfolio manager commentaries. You can access information about your individual Invesco account whenever it’s convenient for you; just complete a simple, secure online registration. Use the “Login” box on our home page to get started. Invesco’s mobile app for iPad® (available free from the App StoreSM) allows you to obtain the same detailed information about your Fund and the same investment insights from our investment leaders, market strategists, economists and retirement experts on the go. Also, you can obtain timely updates to help you stay informed about the markets, the economy |
and investing by connecting with Invesco on Twitter, LinkedIn or Facebook. You can access our blog at blog.invesco.us.com or by visiting the “Intentional Investing Forum” on our home page.
For questions about your account, feel free to contact an Invesco client services representative at 800 959 4246. For Invesco-related questions or comments, please email me directly at phil@invesco.com.
Thank you for investing with us.
Sincerely,
Philip Taylor
Senior Managing Director, Invesco Ltd.
iPad is a trademark of Apple Inc., registered in the US and other countries. App Store is a service mark of Apple Inc. Invesco Distributors, Inc. is not affiliated with Apple Inc.
4 Invesco International Growth Fund
Schedule of Investments
April 30, 2014
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco International Growth Fund
Investment Abbreviations:
| ADR | – American Depositary Receipt | |
| NVDR | – Non-Voting Depositary Receipt |
Notes to Schedule of Investments:
| (a) | Non-income producing security. |
| (b) | The money market fund and the Fund are affiliated by having the same investment adviser. |
Portfolio Composition
By sector, based on Net Assets
as of April 30, 2014
| Consumer Discretionary |
20.3 | % | ||
| Financials |
15.4 | |||
| Information Technology |
12.4 | |||
| Industrials |
10.0 | |||
| Health Care |
9.7 | |||
| Consumer Staples |
9.3 | |||
| Energy |
8.4 | |||
| Materials |
3.6 | |||
| Telecommunication Services |
1.1 | |||
| Utilities |
0.9 | |||
| Money Market Funds Plus Other Assets Less Liabilities |
8.9 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco International Growth Fund
Statement of Assets and Liabilities
April 30, 2014
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
7 Invesco International Growth Fund
Statement of Operations
For the six months ended April 30, 2014
(Unaudited)
| Investment income: |
||||
| Dividends (net of foreign withholding taxes of $6,181,982) |
$ | 89,608,904 | ||
| Dividends from affiliated money market funds |
112,807 | |||
| Total investment income |
89,721,711 | |||
| Expenses: |
||||
| Advisory fees |
31,071,745 | |||
| Administrative services fees |
348,861 | |||
| Custodian fees |
1,338,144 | |||
| Distribution fees: |
||||
| Class A |
3,317,855 | |||
| Class B |
181,794 | |||
| Class C |
802,794 | |||
| Class R |
254,014 | |||
| Transfer agent fees — A, B, C, R and Y |
4,643,895 | |||
| Transfer agent fees — R5 |
784,509 | |||
| Transfer agent fees — R6 |
6,155 | |||
| Trustees’ and officers’ fees and benefits |
140,258 | |||
| Other |
898,551 | |||
| Total expenses |
43,788,575 | |||
| Less: Fees waived and expense offset arrangement(s) |
(356,847 | ) | ||
| Net expenses |
43,431,728 | |||
| Net investment income |
46,289,983 | |||
| Realized and unrealized gain from: |
||||
| Net realized gain (loss) from: |
||||
| Investment securities |
144,791,477 | |||
| Foreign currencies |
(509,391 | ) | ||
| 144,282,086 | ||||
| Change in net unrealized appreciation of: |
||||
| Investment securities (net of foreign taxes on holdings of $1,201,759) |
184,228,128 | |||
| Foreign currencies |
102,768 | |||
| 184,330,896 | ||||
| Net realized and unrealized gain |
328,612,982 | |||
| Net increase in net assets resulting from operations |
$ | 374,902,965 | ||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
8 Invesco International Growth Fund
Statement of Changes in Net Assets
For the six months ended April 30, 2014 and the year ended October 31, 2013
(Unaudited)
| April 30, 2014 |
October 31, 2013 |
|||||||
| Operations: |
|
|||||||
| Net investment income |
$ | 46,289,983 | $ | 64,402,286 | ||||
| Net realized gain |
144,282,086 | 127,776,516 | ||||||
| Change in net unrealized appreciation |
184,330,896 | 996,385,376 | ||||||
| Net increase in net assets resulting from operations |
374,902,965 | 1,188,564,178 | ||||||
| Distributions to shareholders from net investment income: |
||||||||
| Class A |
(28,925,252 | ) | (21,975,533 | ) | ||||
| Class B |
(183,328 | ) | (188,836 | ) | ||||
| Class C |
(759,542 | ) | (568,367 | ) | ||||
| Class R |
(917,629 | ) | (724,598 | ) | ||||
| Class Y |
(29,609,780 | ) | (18,141,196 | ) | ||||
| Class R5 |
(25,890,985 | ) | (17,685,492 | ) | ||||
| Class R6 |
(4,443,470 | ) | (3,042,814 | ) | ||||
| Total distributions from net investment income |
(90,729,986 | ) | (62,326,836 | ) | ||||
| Share transactions–net: |
||||||||
| Class A |
21,054,123 | 109,823,580 | ||||||
| Class B |
(6,230,382 | ) | (13,117,436 | ) | ||||
| Class C |
12,044,033 | (3,624,211 | ) | |||||
| Class R |
(1,352,279 | ) | (856,318 | ) | ||||
| Class Y |
231,424,787 | 397,523,737 | ||||||
| Class R5 |
(26,060,463 | ) | 330,067,322 | |||||
| Class R6 |
25,178,007 | 26,805,828 | ||||||
| Net increase in net assets resulting from share transactions |
256,057,826 | 846,622,502 | ||||||
| Net increase in net assets |
540,230,805 | 1,972,859,844 | ||||||
| Net assets: |
||||||||
| Beginning of period |
7,348,819,531 | 5,375,959,687 | ||||||
| End of period (includes undistributed net investment income of $14,338,650 and $58,778,653, respectively) |
$ | 7,889,050,336 | $ | 7,348,819,531 | ||||
Notes to Financial Statements
April 30, 2014
(Unaudited)
NOTE 1—Significant Accounting Policies
Invesco International Growth Fund (the “Fund”) is a series portfolio of AIM International Mutual Funds (Invesco International Mutual Funds) (the “Trust”). The Trust is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company consisting of eight separate portfolios, each authorized to issue an unlimited number of shares of beneficial interest. The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each portfolio or class will be voted on exclusively by the shareholders of such portfolio or class.
The Fund’s investment objective is long-term growth of capital.
The Fund currently consists of seven different classes of shares: Class A, Class B, Class C, Class R, Class Y, Class R5 and Class R6. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met and under certain circumstances load waived shares may be subject to contingent deferred sales charges (“CDSC”). Class C shares are sold with a CDSC. Class R, Class Y, Class R5 and Class R6 shares are sold at net asset value. Effective November 30, 2010, new or additional investments in Class B shares are no longer permitted. Existing shareholders of Class B shares may continue to reinvest dividends and capital gains distributions in Class B shares until they convert to Class A shares. Also, shareholders in Class B shares will be able to exchange those shares for Class B shares of other Invesco Funds offering such shares until they convert to Class A shares. Generally, Class B shares will automatically convert to Class A shares on or about the month-end, which is at least eight years after the date of purchase. Redemption of Class B shares prior to the conversion date will be subject to a CDSC.
9 Invesco International Growth Fund
The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.
| A. | Security Valuations — Securities, including restricted securities, are valued according to the following policy. |
A security listed or traded on an exchange (except convertible securities) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).
Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
Debt obligations (including convertible securities) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate (for unlisted equities), yield (for debt obligations), quality, type of issue, coupon rate (for debt obligations), maturity (for debt obligations), individual trading characteristics and other market data. Debt obligations are subject to interest rate and credit risks. In addition, all debt obligations involve some risk of default with respect to interest and/or principal payments.
Foreign securities’ (including foreign exchange contracts) prices are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange-traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that the Adviser determines are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities’ prices meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including corporate loans.
Securities for which market quotations are not readily available or became unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a 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 of the Fund’s 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 economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
| B. | Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. |
The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the 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 Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
10 Invesco International Growth Fund
| C. | Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted. |
| D. | Distributions — Distributions from 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 to each share class based on relative net assets. Sub-accounting fees attributable to Class R5 are charged to the operations of the class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses relating to all other classes are allocated among those classes based on relative net assets. All other expenses are allocated among the classes based on relative net assets. |
| G. | Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print. |
| H. | Indemnifications — Under the 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 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.
| J. | Forward Foreign Currency Contracts — The Fund may enter into 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. A forward foreign currency contract is an obligation to purchase or sell a specific currency for an agreed-upon price at a future date. The use of forward foreign currency contracts does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with forward foreign currency contracts include failure of the counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities. |
11 Invesco International Growth Fund
NOTE 2—Advisory Fees and Other Fees Paid to Affiliates
The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:
| Average Daily Net Assets | Rate | |||||
| First $250 million |
0 | .935% | ||||
| Next $250 million |
0 | .91% | ||||
| Next $500 million |
0 | .885% | ||||
| Next $1.5 billion |
0 | .86% | ||||
| Next $2.5 billion |
0 | .835% | ||||
| Next $2.5 billion |
0 | .81% | ||||
| Next $2.5 billion |
0 | .785% | ||||
| Over $10 billion |
0 | .76% | ||||
Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Canada Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide(s) discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).
The Adviser has contractually agreed, through at least June 30, 2015, to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver and/or expense reimbursement (excluding certain items discussed below) of Class A, Class B, Class C, Class R, Class Y, Class R5 and Class R6 shares to 2.25%, 3.00%, 3.00%, 2.50%, 2.00%, 2.00% and 2.00%, respectively, of average daily net assets. 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. Unless Invesco continues the fee waiver agreement, it will terminate on June 30, 2015. The fee waiver agreement cannot be terminated during its term. To the extent that the annualized expense ratio does not exceed the expense limitation, the Adviser will retain its ability to be reimbursed for such fee waivers or reimbursements prior to the end of each fiscal year. The Adviser did not waive fees and/or reimburse expenses under this expense limitation.
Further, the Adviser has contractually agreed, through at least June 30, 2016, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market funds.
For the six months ended April 30, 2014, the Adviser waived advisory fees of $355,885.
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 April 30, 2014, expenses incurred under the agreement are shown in the Statement of Operations as Administrative services fees.
The Trust has entered into a transfer agency and service agreement with Invesco Investment Services, Inc. (“IIS”) pursuant to which the Fund has agreed to pay IIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IIS for certain expenses incurred by IIS in the course of providing such services. IIS may make payments to intermediaries that provide omnibus account services, sub-accounting services and/or networking services. All fees payable by IIS to intermediaries that provide omnibus account services or sub-accounting are charged back to the Fund, subject to certain limitations approved by the Trust’s Board of Trustees. For the six months ended April 30, 2014, expenses incurred under the agreement are shown in the Statement of Operations as Transfer agent fees.
The Trust has entered into master distribution agreements with Invesco Distributors, Inc. (“IDI”) to serve as the distributor for the Class A, Class B, Class C, Class 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 B, Class C and Class R 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 B and Class C shares and 0.50% of the average daily net assets of Class R shares. Of the Plan payments, up to 0.25% of the average daily net assets of each class of shares may be paid to furnish continuing personal shareholder services to customers who purchase and own shares of such classes. Any amounts not paid as a service fee under the Plans would constitute an asset-based sales charge. Rules of the Financial Industry Regulatory Authority (“FINRA”) impose a cap on the total sales charges, including asset-based sales charges, that may be paid by any class of shares of the Fund. For the six months ended April 30, 2014, expenses incurred under the Plans are shown in the Statement of Operations as Distribution fees.
Front-end sales commissions and CDSC (collectively, the “sales charges”) are not recorded as expenses of the Fund. Front-end sales commissions are deducted from proceeds from the sales of Fund shares prior to investment in Class A shares of the Fund. CDSC are deducted from redemption proceeds prior to remittance to the shareholder. During the six months ended April 30, 2014, IDI advised the Fund that IDI retained $396,680 in front-end sales commissions from the sale of Class A shares and $5,351, $9,426 and $4,083 from Class A, Class B and Class C shares, respectively, for CDSC imposed on redemptions by shareholders.
Certain officers and trustees of the Trust are officers and directors of the Adviser, IIS and/or IDI.
12 Invesco International Growth Fund
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 or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an 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 Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information. |
The following is a summary of the tiered valuation input levels, as of April 30, 2014. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
During the six months ended April 30, 2014, there were transfers from Level 1 to Level 2 of $1,164,059,028 and from Level 2 to Level 1 of $1,215,615,626, due to foreign fair value adjustments.
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Australia |
$ | — | $ | 257,554,714 | $ | — | $ | 257,554,714 | ||||||||
| Belgium |
— | 116,583,676 | — | 116,583,676 | ||||||||||||
| Brazil |
293,390,200 | — | — | 293,390,200 | ||||||||||||
| Canada |
641,152,532 | — | — | 641,152,532 | ||||||||||||
| China |
220,783,025 | — | — | 220,783,025 | ||||||||||||
| Denmark |
— | 194,547,005 | — | 194,547,005 | ||||||||||||
| France |
— | 376,917,924 | — | 376,917,924 | ||||||||||||
| Germany |
582,156,817 | — | — | 582,156,817 | ||||||||||||
| Hong Kong |
— | 248,214,132 | — | 248,214,132 | ||||||||||||
| Ireland |
— | 138,174,161 | — | 138,174,161 | ||||||||||||
| Israel |
136,180,393 | — | — | 136,180,393 | ||||||||||||
| Japan |
346,099,566 | 114,068,041 | — | 460,167,607 | ||||||||||||
| Mexico |
141,279,638 | — | — | 141,279,638 | ||||||||||||
| Netherlands |
— | 91,933,051 | — | 91,933,051 | ||||||||||||
| Singapore |
315,220,674 | — | — | 315,220,674 | ||||||||||||
| South Korea |
117,316,762 | 126,287,856 | — | 243,604,618 | ||||||||||||
| Spain |
— | 87,914,661 | — | 87,914,661 | ||||||||||||
| Sweden |
— | 169,839,986 | — | 169,839,986 | ||||||||||||
| Switzerland |
85,119,504 | 647,830,741 | — | 732,950,245 | ||||||||||||
| Taiwan |
— | 143,266,252 | — | 143,266,252 | ||||||||||||
| Thailand |
— | 82,173,902 | — | 82,173,902 | ||||||||||||
| Turkey |
88,560,049 | — | — | 88,560,049 | ||||||||||||
| United Kingdom |
68,818,712 | 1,358,685,690 | — | 1,427,504,402 | ||||||||||||
| United States |
673,570,456 | — | — | 673,570,456 | ||||||||||||
| Total Investments |
$ | 3,709,648,328 | $ | 4,153,991,792 | $ | — | $ | 7,863,640,120 | ||||||||
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 April 30, 2014, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $962.
13 Invesco International Growth Fund
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 State Street Bank and Trust Company, the custodian bank. Such balances, if any at period end, are shown in the Statement of Assets and Liabilities under the payable caption Amount due custodian. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.
NOTE 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. Capital losses generated in years beginning after December 22, 2010 can be carried forward for an unlimited period, whereas previous losses expire in 8 tax years. Capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Capital loss carryforwards with no expiration date will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss 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 October 31, 2013, which expires as follows:
| Capital Loss Carryforward* | ||||||||||||
| Expiration | Short-Term | Long-Term | Total | |||||||||
| October 31, 2017 |
$ | 169,768,428 | $ | — | $ | 169,768,428 | ||||||
| * | Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code and may be further limited depending upon a variety of factors, including the realization of net unrealized gains or losses as of the date of any reorganization. |
NOTE 8—Investment Securities
The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the six months ended April 30, 2014 was $848,189,662 and $791,772,028, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed federal income tax reporting period-end.
| Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis | ||||
| Aggregate unrealized appreciation of investment securities |
$ | 2,186,716,650 | ||
| Aggregate unrealized (depreciation) of investment securities |
(42,111,451 | ) | ||
| Net unrealized appreciation of investment securities |
$ | 2,144,605,199 | ||
Cost of investments for tax purposes is $5,719,034,921.
14 Invesco International Growth Fund
NOTE 9—Share Information
| Summary of Share Activity | ||||||||||||||||
| Six months ended April 30, 2014(a) |
Year ended October 31, 2013 |
|||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||
| Sold: |
||||||||||||||||
| Class A |
9,395,937 | $ | 312,608,916 | 19,383,355 | $ | 583,441,582 | ||||||||||
| Class B |
29,657 | 912,953 | 57,203 | 1,594,247 | ||||||||||||
| Class C |
835,968 | 25,695,006 | 941,432 | 26,514,706 | ||||||||||||
| Class R |
493,562 | 16,279,191 | 1,097,072 | 32,445,830 | ||||||||||||
| Class Y |
11,337,912 | 378,075,171 | 25,383,682 | 765,865,426 | ||||||||||||
| Class R5 |
6,429,962 | 218,219,574 | 20,803,776 | 634,081,306 | ||||||||||||
| Class R6 |
896,508 | 29,896,907 | 3,109,748 | 95,344,081 | ||||||||||||
| Issued as reinvestment of dividends: |
||||||||||||||||
| Class A |
783,877 | 25,272,199 | 761,301 | 21,575,264 | ||||||||||||
| Class B |
5,818 | 173,790 | 7,035 | 184,937 | ||||||||||||
| Class C |
23,015 | 688,159 | 20,481 | 539,064 | ||||||||||||
| Class R |
28,368 | 905,491 | 25,521 | 716,367 | ||||||||||||
| Class Y |
739,626 | 23,870,700 | 514,305 | 14,595,975 | ||||||||||||
| Class R5 |
650,436 | 21,261,697 | 544,290 | 15,626,551 | ||||||||||||
| Class R6 |
136,136 | 4,443,470 | 106,058 | 3,042,814 | ||||||||||||
| Automatic conversion of Class B shares to Class A shares: |
||||||||||||||||
| Class A |
132,462 | 4,450,295 | 235,973 | 7,101,209 | ||||||||||||
| Class B |
(143,271 | ) | (4,450,295 | ) | (255,211 | ) | (7,101,209 | ) | ||||||||
| Reacquired: |
||||||||||||||||
| Class A |
(9,659,412 | ) | (321,277,287 | ) | (16,687,815 | ) | (502,294,475 | ) | ||||||||
| Class B |
(93,031 | ) | (2,866,830 | ) | (281,625 | ) | (7,795,411 | ) | ||||||||
| Class C |
(466,205 | ) | (14,339,132 | ) | (1,107,919 | ) | (30,677,981 | ) | ||||||||
| Class R |
(562,002 | ) | (18,536,961 | ) | (1,150,554 | ) | (34,018,515 | ) | ||||||||
| Class Y |
(5,109,170 | ) | (170,521,084 | ) | (12,615,179 | ) | (382,937,664 | ) | ||||||||
| Class R5 |
(7,856,223 | ) | (265,541,734 | ) | (10,518,958 | ) | (319,640,535 | ) | ||||||||
| Class R6 |
(270,361 | ) | (9,162,370 | ) | (2,326,358 | ) | (71,581,067 | ) | ||||||||
| Net increase in share activity |
7,759,569 | $ | 256,057,826 | 28,047,613 | $ | 846,622,502 | ||||||||||
| (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. |
15 Invesco International Growth Fund
NOTE 10—Financial Highlights
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
| Net asset value, beginning of period |
Net investment income(a) |
Net gains on securities |
Total from investment operations |
Dividends from net investment income |
Net asset value, end of period(f) |
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 04/30/14 |
$ | 33.30 | $ | 0.18 | $ | 1.44 | $ | 1.62 | $ | (0.36 | ) | $ | 34.56 | 4.95 | % | $ | 2,786,257 | 1.33 | %(d) | 1.34 | %(d) | 1.11 | %(d) | 11 | % | |||||||||||||||||||||||
| Year ended 10/31/13 |
27.96 | 0.26 | 5.37 | 5.63 | (0.29 | ) | 33.29 | 20.31 | 2,662,962 | 1.33 | 1.34 | 0.87 | 21 | |||||||||||||||||||||||||||||||||||
| Year ended 10/31/12 |
26.43 | 0.26 | 1.59 | 1.85 | (0.32 | ) | 27.96 | 7.13 | 2,132,503 | 1.37 | 1.38 | 0.99 | 21 | |||||||||||||||||||||||||||||||||||
| Year ended 10/31/11 |
26.99 | 0.36 | (0.65 | ) | (0.29 | ) | (0.27 | ) | 26.43 | (1.10 | ) | 2,056,979 | 1.38 | 1.39 | 1.29 | 25 | ||||||||||||||||||||||||||||||||
| Year ended 10/31/10 |
23.41 | 0.21 | 3.66 | 3.87 | (0.29 | ) | 26.99 | 16.68 | 1,958,940 | 1.43 | 1.44 | 0.85 | 25 | |||||||||||||||||||||||||||||||||||
| Year ended 10/31/09 |
19.04 | 0.24 | 4.52 | 4.76 | (0.39 | ) | 23.41 | 25.65 | 1,734,895 | 1.49 | 1.51 | 1.24 | 26 | |||||||||||||||||||||||||||||||||||
| Class B |
| |||||||||||||||||||||||||||||||||||||||||||||||
| Six months ended 04/30/14 |
30.69 | 0.05 | 1.34 | 1.39 | (0.15 | ) | 31.93 | 4.56 | 34,015 | 2.08 | (d) | 2.09 | (d) | 0.36 | (d) | 11 | ||||||||||||||||||||||||||||||||
| Year ended 10/31/13 |
25.81 | 0.03 | 4.96 | 4.99 | (0.11 | ) | 30.69 | 19.41 | 38,858 | 2.08 | 2.09 | 0.12 | 21 | |||||||||||||||||||||||||||||||||||
| Year ended 10/31/12 |
24.41 | 0.06 | 1.47 | 1.53 | (0.13 | ) | 25.81 | 6.31 | 44,873 | 2.12 | 2.13 | 0.24 | 21 | |||||||||||||||||||||||||||||||||||
| Year ended 10/31/11 |
24.95 | 0.14 | (0.60 | ) | (0.46 | ) | (0.08 | ) | 24.41 | (1.85 | ) | 57,683 | 2.13 | 2.14 | 0.54 | 25 | ||||||||||||||||||||||||||||||||
| Year ended 10/31/10 |
21.68 | 0.02 | 3.40 | 3.42 | (0.15 | ) | 24.95 | 15.83 | 51,950 | 2.18 | 2.19 | 0.10 | 25 | |||||||||||||||||||||||||||||||||||
| Year ended 10/31/09 |
17.52 | 0.09 | 4.20 | 4.29 | (0.13 | ) | 21.68 | 24.72 | 61,649 | 2.24 | 2.26 | 0.49 | 26 | |||||||||||||||||||||||||||||||||||
| Class C |
| |||||||||||||||||||||||||||||||||||||||||||||||
| Six months ended 04/30/14 |
30.72 | 0.05 | 1.34 | 1.39 | (0.15 | ) | 31.96 | 4.55 | 173,107 | 2.08 | (d) | 2.09 | (d) | 0.36 | (d) | 11 | ||||||||||||||||||||||||||||||||
| Year ended 10/31/13 |
25.83 | 0.03 | 4.97 | 5.00 | (0.11 | ) | 30.72 | 19.44 | 154,313 | 2.08 | 2.09 | 0.12 | 21 | |||||||||||||||||||||||||||||||||||
| Year ended 10/31/12 |
24.43 | 0.06 | 1.47 | 1.53 | (0.13 | ) | 25.83 | 6.31 | 133,529 | 2.12 | 2.13 | 0.24 | 21 | |||||||||||||||||||||||||||||||||||
| Year ended 10/31/11 |
24.97 | 0.14 | (0.60 | ) | (0.46 | ) | (0.08 | ) | 24.43 | (1.85 | ) | 145,944 | 2.13 | 2.14 | 0.54 | 25 | ||||||||||||||||||||||||||||||||
| Year ended 10/31/10 |
21.70 | 0.02 | 3.40 | 3.42 | (0.15 | ) | 24.97 | 15.81 | 142,898 | 2.18 | 2.19 | 0.10 | 25 | |||||||||||||||||||||||||||||||||||
| Year ended 10/31/09 |
17.53 | 0.09 | 4.21 | 4.30 | (0.13 | ) | 21.70 | 24.76 | 139,000 | 2.24 | 2.26 | 0.49 | 26 | |||||||||||||||||||||||||||||||||||
| Class R |
| |||||||||||||||||||||||||||||||||||||||||||||||
| Six months ended 04/30/14 |
32.91 | 0.14 | 1.43 | 1.57 | (0.29 | ) | 34.19 | 4.83 | 107,400 | 1.58 | (d) | 1.59 | (d) | 0.86 | (d) | 11 | ||||||||||||||||||||||||||||||||
| Year ended 10/31/13 |
27.64 | 0.19 | 5.31 | 5.50 | (0.23 | ) | 32.91 | 20.03 | 104,712 | 1.58 | 1.59 | 0.62 | 21 | |||||||||||||||||||||||||||||||||||
| Year ended 10/31/12 |
26.13 | 0.20 | 1.57 | 1.77 | (0.26 | ) | 27.64 | 6.85 | 88,726 | 1.62 | 1.63 | 0.74 | 21 | |||||||||||||||||||||||||||||||||||
| Year ended 10/31/11 |
26.70 | 0.28 | (0.64 | ) | (0.36 | ) | (0.21 | ) | 26.13 | (1.38 | ) | 112,091 | 1.63 | 1.64 | 1.04 | 25 | ||||||||||||||||||||||||||||||||
| Year ended 10/31/10 |
23.18 | 0.15 | 3.62 | 3.77 | (0.25 | ) | 26.70 | 16.36 | 115,237 | 1.68 | 1.69 | 0.60 | 25 | |||||||||||||||||||||||||||||||||||
| Year ended 10/31/09 |
18.80 | 0.20 | 4.49 | 4.69 | (0.31 | ) | 23.18 | 25.44 | 63,544 | 1.74 | 1.76 | 0.99 | 26 | |||||||||||||||||||||||||||||||||||
| Class Y |
| |||||||||||||||||||||||||||||||||||||||||||||||
| Six months ended 04/30/14 |
33.42 | 0.22 | 1.45 | 1.67 | (0.44 | ) | 34.65 | 5.10 | 2,510,441 | 1.08 | (d) | 1.09 | (d) | 1.36 | (d) | 11 | ||||||||||||||||||||||||||||||||
| Year ended 10/31/13 |
28.05 | 0.34 | 5.37 | 5.71 | (0.34 | ) | 33.42 | 20.59 | 2,188,960 | 1.08 | 1.09 | 1.13 | 21 | |||||||||||||||||||||||||||||||||||
| Year ended 10/31/12 |
26.53 | 0.33 | 1.59 | 1.92 | (0.40 | ) | 28.05 | 7.39 | 1,464,295 | 1.12 | 1.13 | 1.24 | 21 | |||||||||||||||||||||||||||||||||||
| Year ended 10/31/11 |
27.08 | 0.42 | (0.64 | ) | (0.22 | ) | (0.33 | ) | 26.53 | (0.83 | ) | 741,428 | 1.13 | 1.14 | 1.54 | 25 | ||||||||||||||||||||||||||||||||
| Year ended 10/31/10 |
23.48 | 0.27 | 3.67 | 3.94 | (0.34 | ) | 27.08 | 16.94 | 173,313 | 1.18 | 1.19 | 1.10 | 25 | |||||||||||||||||||||||||||||||||||
| Year ended 10/31/09 |
19.04 | 0.32 | 4.52 | 4.84 | (0.40 | ) | 23.48 | 26.05 | 62,343 | 1.24 | 1.26 | 1.49 | 26 | |||||||||||||||||||||||||||||||||||
| Class R5 |
| |||||||||||||||||||||||||||||||||||||||||||||||
| Six months ended 04/30/14 |
33.84 | 0.24 | 1.46 | 1.70 | (0.48 | ) | 35.06 | 5.12 | 1,940,562 | 0.99 | (d) | 1.00 | (d) | 1.45 | (d) | 11 | ||||||||||||||||||||||||||||||||
| Year ended 10/31/13 |
28.39 | 0.38 | 5.44 | 5.82 | (0.37 | ) | 33.84 | 20.74 | 1,899,117 | 0.97 | 0.98 | 1.23 | 21 | |||||||||||||||||||||||||||||||||||
| Year ended 10/31/12 |
26.86 | 0.37 | 1.61 | 1.98 | (0.45 | ) | 28.39 | 7.52 | 1,285,743 | 0.99 | 1.00 | 1.37 | 21 | |||||||||||||||||||||||||||||||||||
| Year ended 10/31/11 |
27.41 | 0.48 | (0.66 | ) | (0.18 | ) | (0.37 | ) | 26.86 | (0.68 | ) | 1,457,494 | 0.97 | 0.98 | 1.70 | 25 | ||||||||||||||||||||||||||||||||
| Year ended 10/31/10 |
23.77 | 0.31 | 3.72 | 4.03 | (0.39 | ) | 27.41 | 17.12 | 1,228,916 | 1.02 | 1.03 | 1.26 | 25 | |||||||||||||||||||||||||||||||||||
| Year ended 10/31/09 |
19.36 | 0.35 | 4.58 | 4.93 | (0.52 | ) | 23.77 | 26.32 | 917,297 | 1.01 | 1.03 | 1.72 | 26 | |||||||||||||||||||||||||||||||||||
| Class R6 |
| |||||||||||||||||||||||||||||||||||||||||||||||
| Six months ended 04/30/14 |
33.84 | 0.26 | 1.44 | 1.70 | (0.50 | ) | 35.04 | 5.14 | 337,267 | 0.91 | (d) | 0.92 | (d) | 1.53 | (d) | 11 | ||||||||||||||||||||||||||||||||
| Year ended 10/31/13 |
28.38 | 0.40 | 5.45 | 5.85 | (0.39 | ) | 33.84 | 20.85 | 299,898 | 0.90 | 0.91 | 1.30 | 21 | |||||||||||||||||||||||||||||||||||
| Year ended 10/31/12(g) |
28.83 | 0.04 | (0.49 | ) | (0.45 | ) | — | 28.38 | (1.56 | ) | 226,291 | 0.92 | (e) | 0.93 | (e) | 1.44 | (e) | 21 | ||||||||||||||||||||||||||||||
| (a) | Calculated using average shares outstanding. |
| (b) | Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable. |
| (c) | Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable. For the period ended October 31, 2011, the portfolio turnover calculation excludes the value of securities purchased of $690,712,747 and sold of $131,009,072 in the effort to realign the Fund’s portfolio holdings after the reorganization of Invesco Van Kampen International Growth Advantage Fund and Invesco Van Kampen International Growth Fund into the Fund. |
| (d) | Ratios are annualized and based on average daily net assets (000’s omitted) of $2,676,245, $36,672, $161,848, $102,460, $2,311,429, $1,847,090 and $313,831 for Class A, Class B, Class C, Class R, Class Y, Class R5 and Class R6 shares, respectively. |
| (e) | Annualized. |
| (f) | Includes redemption fees added to shares of beneficial interest for Class A, Class B, Class C, Class R, Class Y and R5 shares, which were less than $0.005 per share for the fiscal years ended October 31, 2012 and prior. |
| (g) | Commencement date of September 24, 2012. |
16 Invesco International Growth Fund
Calculating your ongoing Fund expenses
Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, if any; and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period November 1, 2013 through April 30, 2014.
Actual expenses
The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled “Actual Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical example for comparison purposes
The table below also provides information about hypothetical account values and hypothetical expenses based on the 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.
| Class | Beginning Account Value (11/01/13) |
ACTUAL | HYPOTHETICAL (5% annual return before expenses) |
Annualized Expense Ratio |
||||||||||||||||||||
| Ending Account Value (04/30/14)1 |
Expenses Paid During Period2 |
Ending Account Value (04/30/14) |
Expenses Paid During Period2 |
|||||||||||||||||||||
| A | $ | 1,000.00 | $ | 1,049.80 | $ | 6.76 | $ | 1,018.20 | $ | 6.66 | 1.33 | % | ||||||||||||
| B | 1,000.00 | 1,045.60 | 10.55 | 1,014.48 | 10.39 | 2.08 | ||||||||||||||||||
| C | 1,000.00 | 1,045.90 | 10.55 | 1,014.48 | 10.39 | 2.08 | ||||||||||||||||||
| R | 1,000.00 | 1,048.30 | 8.02 | 1,016.96 | 7.90 | 1.58 | ||||||||||||||||||
| Y | 1,000.00 | 1,051.00 | 5.49 | 1,019.44 | 5.41 | 1.08 | ||||||||||||||||||
| R5 | 1,000.00 | 1,051.50 | 5.04 | 1,019.89 | 4.96 | 0.99 | ||||||||||||||||||
| R6 | 1,000.00 | 1,051.70 | 4.63 | 1,020.28 | 4.56 | 0.91 | ||||||||||||||||||
| 1 | The actual ending account value is based on the actual total return of the Fund for the period November 1, 2013 through April 30, 2014, 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 181/365 to reflect the most recent fiscal half year. |
17 Invesco International Growth Fund
Invesco mailing information
Send general correspondence to Invesco Investment Services, Inc., P.O. Box 219078, Kansas City, MO 64121-9078.
Important notice regarding delivery of security holder documents
To reduce Fund expenses, only one copy of most shareholder documents may be mailed to shareholders with multiple accounts at the same address (Householding). Mailing of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact Invesco Investment Services, Inc. at 800 959 4246 or contact your financial institution. We will begin sending you individual copies for each account within 30 days after receiving your request.
Fund holdings and proxy voting information
The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The most recent list of portfolio holdings is available at invesco.com/completeqtrholdings. Shareholders can also look up the Fund’s Forms N-Q on the SEC website at sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are shown below.
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 959 4246 or at invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.
| Information regarding how the Fund voted proxies related to its portfolio securities during the most recent 12-month period ended June 30 is available at invesco.com/proxysearch. The information is also available on the SEC website, sec.gov. Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the US distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd. |
|
| SEC file numbers: 811-06463 and 033-44611 | IGR-SAR-1 | Invesco Distributors, Inc. |
|
| ||||
|
Semiannual Report to Shareholders
|
April 30, 2014 | ||
|
| ||||
| Invesco Select Opportunities Fund
| ||||
| Nasdaq: | ||||
| A: IZSAX n C: IZSCX n R: IZSRX n Y: IZSYX n R5: IZSIX n R6: IZFSX | ||||
| ||||
|
| ||||
|
2 Fund Performance
| ||||
| 3 Letters to Shareholders
| ||||
| 4 Schedule of Investments
| ||||
| 5 Financial Statements
| ||||
| 7 Notes to Financial Statements
| ||||
| 13 Financial Highlights
| ||||
| 14 Fund Expenses | ||||
| For the most current month-end Fund performance and commentary, please visit invesco.com/performance. | ||||
| Unless otherwise noted, all data provided by Invesco. | ||||
| This report must be accompanied or preceded by a currently effective Fund prospectus, which contains more complete information, including sales charges and expenses. Investors should read it carefully before investing. | ||||
|
| ||||
| NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE | ||||
Fund Performance
2 Invesco Select Opportunities Fund
Letters to Shareholders
|
Bruce Crockett |
Dear Fellow Shareholders: Members of the Invesco Funds Board work continually to oversee how the Invesco Funds are performing in light of ever-changing and often unpredictable economic and market conditions. In light of market conditions over the last few years, the financial news media have given increased attention to “alternative investment strategies” of late. Still, many investors don’t know very much about these types of investments. After a careful and thorough examination of the potential risks and potential benefits of alternative investment strategies, the Invesco Funds Board has approved the launch of several new alternative funds for the Invesco product lineup, to be managed by teams we determined have the depth and experience to pursue the funds’ investment objectives. That’s especially important, given that alternative products typically hold more non-traditional investments and employ more complex trading strategies, including hedging and leveraging through derivatives, |
short selling and opportunistic strategies that change with market conditions. Investors considering alternatives should be aware of their unique characteristics and the additional risks of the strategies they use. Like all investments, performance will fluctuate. You can lose money.
Your financial adviser is a good source of information about alternative investment strategies; he or she can explain the risks associated with them as well as their potential benefits. This type of professional guidance is why Invesco believes it’s so important that individual investors work with trusted, experienced financial advisers.
Be assured that the Invesco Funds Board will continue working on your behalf and on behalf of all our fund shareholders, keeping your needs and interests uppermost in our minds.
As always, please contact me at bruce@brucecrockett.com with any questions or concerns you may have. On behalf of the Board, we look forward to continuing to represent your interests and serving your needs.
Sincerely,
Bruce L. Crockett
Independent Chair
Invesco Funds Board of Trustees
|
Philip Taylor |
Dear Shareholders: This semiannual report includes information about your Fund, including performance data and a list of its investments as of the close of the reporting period. I hope you find this report of interest. Our website, invesco.com/us, offers a wide range of market insights and investment perspectives. On the website, you’ll find detailed information about our funds, including prices, performance, holdings and portfolio manager commentaries. You can access information about your individual Invesco account whenever it’s convenient for you; just complete a simple, secure online registration. Use the “Login” box on our home page to get started. Invesco’s mobile app for iPad® (available free from the App StoreSM) allows you to obtain the same detailed information about your Fund and the same investment insights from our investment leaders, market strategists, economists and retirement experts on the go. Also, you can obtain timely updates to help you stay informed about the markets, the |
economy and investing by connecting with Invesco on Twitter, LinkedIn or Facebook. You can access our blog at blog.invesco.us.com or by visiting the “Intentional Investing Forum” on our home page.
For questions about your account, feel free to contact an Invesco client services representative at 800 959 4246. For Invesco-related questions or comments, please email me directly at phil@invesco.com.
Thank you for investing with us.
Sincerely,
Philip Taylor
Senior Managing Director, Invesco Ltd.
iPad is a trademark of Apple Inc., registered in the US and other countries. App Store is a service mark of Apple Inc. Invesco Distributors, Inc. is not affiliated with Apple Inc.
3 Invesco Select Opportunities Fund
Schedule of Investments
April 30, 2014
(Unaudited)
Notes to Schedule of Investments:
| (a) | Non-income producing security. |
| (b) | The money market fund and the Fund are affiliated by having the same investment adviser. |
Portfolio Composition
By sector, based on Net Assets
as of April 30, 2014
| Information Technology |
25.1 | % | ||
| Industrials |
13.6 | |||
| Consumer Discretionary |
12.4 | |||
| Materials |
10.8 | |||
| Energy |
10.0 | |||
| Health Care |
7.1 | |||
| Financials |
6.4 | |||
| Money Market Funds Plus Other Assets Less Liabilities |
14.6 |
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
4 Invesco Select Opportunities Fund
Statement of Assets and Liabilities
April 30, 2014
(Unaudited)
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
5 Invesco Select Opportunities Fund
Statement of Operations
For the six months ended April 30, 2014
(Unaudited)
| Investment income: |
| |||
| Dividends (net of foreign withholding taxes of $6,902) |
$ | 77,691 | ||
| Dividends from affiliated money market funds |
920 | |||
| Total investment income |
78,611 | |||
| Expenses: |
||||
| Advisory fees |
61,377 | |||
| Administrative services fees |
24,795 | |||
| Custodian fees |
3,650 | |||
| Distribution fees: |
||||
| Class A |
11,699 | |||
| Class C |
5,789 | |||
| Class R |
249 | |||
| Transfer agent fees — A, C, R and Y |
15,100 | |||
| Transfer agent fees — R5 |
24 | |||
| Transfer agent fees — R6 |
4 | |||
| Trustees’ and officers’ fees and benefits |
12,807 | |||
| Registration and filing fees |
34,883 | |||
| Professional services fees |
26,607 | |||
| Other |
11,255 | |||
| Total expenses |
208,239 | |||
| Less: Fees waived and expenses reimbursed |
(96,499 | ) | ||
| Net expenses |
111,740 | |||
| Net investment income (loss) |
(33,129 | ) | ||
| Realized and unrealized gain (loss) from: |
||||
| Net realized gain (loss) from: |
||||
| Investment securities |
494,935 | |||
| Foreign currencies |
(8,556 | ) | ||
| 486,379 | ||||
| Change in net unrealized appreciation of: |
||||
| Investment securities |
994,557 | |||
| Foreign currencies |
750 | |||
| 995,307 | ||||
| Net realized and unrealized gain |
1,481,686 | |||
| Net increase in net assets resulting from operations |
$ | 1,448,557 | ||
See accompanying Notes to Financial Statements which are an integral part of the financial statements.
6 Invesco Select Opportunities Fund
Statement of Changes in Net Assets
For the six months ended April 30, 2014 and the year ended October 31, 2013
(Unaudited)
| April 30, 2014 |
October 31, 2013 |
|||||||
| Operations: |
|
|||||||
| Net investment income (loss) |
$ | (33,129 | ) | $ | 49,867 | |||
| Net realized gain |
486,379 | 87,467 | ||||||
| Change in net unrealized appreciation |
995,307 | 1,191,989 | ||||||
| Net increase in net assets resulting from operations |
1,448,557 | 1,329,323 | ||||||
| Distributions to shareholders from net investment income: |
||||||||
| Class A |
(27,341 | ) | (9,673 | ) | ||||
| Class C |
(2,287 | ) | (244 | ) | ||||
| Class R |
(332 | ) | (76 | ) | ||||
| Class Y |
(23,626 | ) | (7,928 | ) | ||||
| Class R5 |
(283 | ) | (78 | ) | ||||
| Class R6 |
(77 | ) | (73 | ) | ||||
| Total distributions from net investment income |
(53,946 | ) | (18,072 | ) | ||||
| Distributions to shareholders from net realized gains: |
||||||||
| Class A |
(46,698 | ) | (11,089 | ) | ||||
| Class C |
(6,231 | ) | (296 | ) | ||||
| Class R |
(652 | ) | (88 | ) | ||||
| Class Y |
(32,687 | ) | (8,938 | ) | ||||
| Class R5 |
(391 | ) | (89 | ) | ||||
| Class R6 |
(107 | ) | (82 | ) | ||||
| Total distributions from net realized gains |
(86,766 | ) | (20,582 | ) | ||||
| Share transactions–net: |
||||||||
| Class A |
8,529,821 | 3,169,496 | ||||||
| Class C |
2,855,547 | 395,832 | ||||||
| Class R |
60,335 | 48,911 | ||||||
| Class Y |
2,121,752 | 1,993,912 | ||||||
| Class R5 |
474 | 28,137 | ||||||
| Net increase in net assets resulting from share transactions |
13,567,929 | 5,636,288 | ||||||
| Net increase in net assets |
14,875,774 | 6,926,957 | ||||||
| Net assets: |
||||||||
| Beginning of period |
9,283,415 | 2,356,458 | ||||||
| End of period (includes undistributed net investment income (loss) of $(40,675) and $46,400, respectively) |
$ | 24,159,189 | $ | 9,283,415 | ||||
Notes to Financial Statements
April 30, 2014
(Unaudited)
NOTE 1—Significant Accounting Policies
Invesco Select Opportunities Fund (the “Fund”) is a series portfolio of AIM International Mutual Funds (Invesco International Mutual Funds) (the “Trust”). The Trust is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company consisting of eight separate portfolios, each authorized to issue an unlimited number of shares of beneficial interest. The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each portfolio or class will be voted on exclusively by the shareholders of such portfolio or class.
The 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 R, Class Y, Class R5 and Class R6. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met and under certain circumstances load waived shares may be subject to contingent deferred sales charges (“CDSC”). Class C shares are sold with a CDSC. Class R, Class Y, Class R5 and Class R6 shares are sold at net asset value.
7 Invesco Select Opportunities Fund
The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.
| A. | Security Valuations — Securities, including restricted securities, are valued according to the following policy. |
A security listed or traded on an exchange (except convertible securities) is valued at its last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded, or lacking any sales or official closing price on a particular day, the security may be valued at the closing bid price on that day. Securities traded in the over-the-counter market are valued based on prices furnished by independent pricing services or market makers. When such securities are valued by an independent pricing service they may be considered fair valued. Futures contracts are valued at the final settlement price set by an exchange on which they are principally traded. Listed options are valued at the mean between the last bid and ask prices from the exchange on which they are principally traded. Options not listed on an exchange are valued by an independent source at the mean between the last bid and ask prices. For purposes of determining net asset value per share, futures and option contracts generally are valued 15 minutes after the close of the customary trading session of the New York Stock Exchange (“NYSE”).
Investments in open-end and closed-end registered investment companies that do not trade on an exchange are valued at the end of day net asset value per share. Investments in open-end and closed-end registered investment companies that trade on an exchange are valued at the last sales price or official closing price as of the close of the customary trading session on the exchange where the security is principally traded.
Debt obligations (including convertible securities) and unlisted equities are fair valued using an evaluated quote provided by an independent pricing service. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices, and may reflect appropriate factors such as institution-size trading in similar groups of securities, developments related to specific securities, dividend rate (for unlisted equities), yield (for debt obligations), quality, type of issue, coupon rate (for debt obligations), maturity (for debt obligations), individual trading characteristics and other market data. Debt obligations are subject to interest rate and credit risks. In addition, all debt obligations involve some risk of default with respect to interest and/or principal payments.
Foreign securities’ (including foreign exchange contracts) prices are converted into U.S. dollar amounts using the applicable exchange rates as of the close of the NYSE. If market quotations are available and reliable for foreign exchange-traded equity securities, the securities will be valued at the market quotations. Because trading hours for certain foreign securities end before the close of the NYSE, closing market quotations may become unreliable. If between the time trading ends on a particular security and the close of the customary trading session on the NYSE, events occur that the Adviser determines are significant and make the closing price unreliable, the Fund may fair value the security. If the event is likely to have affected the closing price of the security, the security will be valued at fair value in good faith using procedures approved by the Board of Trustees. Adjustments to closing prices to reflect fair value may also be based on a screening process of an independent pricing service to indicate the degree of certainty, based on historical data, that the closing price in the principal market where a foreign security trades is not the current value as of the close of the NYSE. Foreign securities’ prices meeting the approved degree of certainty that the price is not reflective of current value will be priced at the indication of fair value from the independent pricing service. Multiple factors may be considered by the independent pricing service in determining adjustments to reflect fair value and may include information relating to sector indices, American Depositary Receipts and domestic and foreign index futures. Foreign securities may have additional risks including exchange rate changes, potential for sharply devalued currencies and high inflation, political and economic upheaval, the relative lack of issuer information, relatively low market liquidity and the potential lack of strict financial and accounting controls and standards.
Securities for which market prices are not provided by any of the above methods may be valued based upon quotes furnished by independent sources. The last bid price may be used to value equity securities. The mean between the last bid and asked prices is used to value debt obligations, including corporate loans.
Securities for which market quotations are not readily available or became unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Issuer specific events, market trends, bid/ask quotes of brokers and information providers and other market data may be reviewed in the course of making a good faith determination of a 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 of the Fund’s 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 economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
| B. | Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. |
The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the 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 Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
8 Invesco Select Opportunities Fund
| C. | Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted. |
| D. | Distributions — Distributions from 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 to each share class based on relative net assets. Sub-accounting fees attributable to Class R5 are charged to the operations of the class. Transfer agency fees and expenses and other shareholder recordkeeping fees and expenses relating to all other classes are allocated among those classes based on relative net assets. All other expenses are allocated among the classes based on relative net assets. |
| G. | Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print. |
| H. | Indemnifications — Under the 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 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.
| J. | Forward Foreign Currency Contracts — The Fund may enter into 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. A forward foreign currency contract is an obligation to purchase or sell a specific currency for an agreed-upon price at a future date. The use of forward foreign currency contracts does not eliminate fluctuations in the price of the underlying securities the Fund owns or intends to acquire but establishes a rate of exchange in advance. Fluctuations in the value of these contracts are measured by the difference in the contract date and reporting date exchange rates and are recorded as unrealized appreciation (depreciation) until the contracts are closed. When the contracts are closed, realized gains (losses) are recorded. Realized and unrealized gains (losses) on the contracts are included in the Statement of Operations. The primary risks associated with forward foreign currency contracts include failure of the counterparty to meet the terms of the contract and the value of the foreign currency changing unfavorably. These risks may be in excess of the amounts reflected in the Statement of Assets and Liabilities. |
9 Invesco Select Opportunities Fund
NOTE 2—Advisory Fees and Other Fees Paid to Affiliates
The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:
| Average Daily Net Assets | Rate | |||
| First $250 million |
0.80% | |||
| Next $250 million |
0.78% | |||
| Next $500 million |
0.76% | |||
| Next $1.5 billion |
0.74% | |||
| Next $2.5 billion |
0.72% | |||
| Next $2.5 billion |
0.70% | |||
| Next $2.5 billion |
0.68% | |||
| Over $10 billion |
0.66% | |||
Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Canada Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide(s) discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).
The Adviser has contractually agreed, through at least February 28, 2015, to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver and/or expense reimbursement (excluding certain items discussed below) of Class A, Class C, Class R, Class Y, Class R5 and Class R6 shares to 1.51%, 2.26%, 1.76%, 1.26%, 1.26% and 1.26%, respectively, of average daily net assets. 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, litigation expenses; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless Invesco continues the fee waiver agreement, it will terminate on February 28, 2015. The fee waiver agreement cannot be terminated during its term. To the extent that the annualized expense ratio does not exceed the expense limitation, the Adviser will retain its ability to be reimbursed for such fee waivers or reimbursements prior to the end of each fiscal year.
Further, the Adviser has contractually agreed, through at least June 30, 2016, to waive the advisory fee payable by the Fund in an amount equal to 100% of the net advisory fees the Adviser receives from the affiliated money market funds on investments by the Fund of uninvested cash in such affiliated money market funds.
For the six months ended April 30, 2014, the Adviser waived advisory fees and reimbursed fund level expenses of $81,371 and reimbursed class level expenses of $9,247, $1,144, $98, $4,611, $24 and $4 of Class A, Class C, Class R, Class Y, Class R5 and Class R6 shares, respectively.
The Trust has entered into a transfer agency and service agreement with Invesco Investment Services, Inc. (“IIS”) pursuant to which the Fund has agreed to pay IIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IIS for certain expenses incurred by IIS in the course of providing such services. IIS may make payments to intermediaries that provide omnibus account services, sub-accounting services and/or networking services. All fees payable by IIS to intermediaries that provide omnibus account services or sub-accounting are charged back to the Fund, subject to certain limitations approved by the Trust’s Board of Trustees. For the six months ended April 30, 2014, expenses incurred under the agreement are shown in the Statement of Operations as Transfer agent fees.
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 April 30, 2014, expenses incurred under the agreement are shown in the Statement of Operations as Administrative services 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, 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 0.50% of the average daily net assets of Class R shares. Of the Plan payments, up to 0.25% of the average daily net assets of each class of shares may be paid to furnish continuing personal shareholder services to customers who purchase and own shares of such classes. Any amounts not paid as a service fee under the Plans would constitute an asset-based sales charge. Rules of the Financial Industry Regulatory Authority (“FINRA”) impose a cap on the total sales charges, including asset-based sales charges, that may be paid by any class of shares of the Fund. For the six months ended April 30, 2014, expenses incurred under the Plans are shown in the Statement of Operations as Distribution fees.
Front-end sales commissions and CDSC (collectively, the “sales charges”) are not recorded as expenses of the Fund. Front-end sales commissions are deducted from proceeds from the sales of Fund shares prior to investment in Class A shares of the Fund. CDSC are deducted from redemption proceeds prior to remittance to the shareholder. During the six months ended April 30, 2014, IDI advised the Fund that IDI retained $7,712 in front-end sales commissions from the sale of Class A shares and $5 from Class C shares for CDSC imposed upon redemptions by shareholders.
Certain officers and trustees of the Trust are officers and directors of the Adviser, IIS and/or IDI.
10 Invesco Select Opportunities Fund
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 or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an 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 Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information. |
The following is a summary of the tiered valuation input levels, as of April 30, 2014. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
During the six months ended April 30, 2014, there were transfers from Level 1 to Level 2 of $956,734 and from Level 2 to Level 1 of $175,336, due to foreign fair value adjustments.
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Brazil |
$ | 1,236,131 | $ | — | $ | — | $ | 1,236,131 | ||||||||
| Canada |
990,050 | — | — | 990,050 | ||||||||||||
| China |
1,251,564 | — | — | 1,251,564 | ||||||||||||
| Hong Kong |
414,751 | — | — | 414,751 | ||||||||||||
| France |
929,731 | 852,277 | — | 1,782,008 | ||||||||||||
| Ireland |
984,053 | 956,734 | — | 1,940,787 | ||||||||||||
| Netherlands |
752,074 | 783,254 | — | 1,535,328 | ||||||||||||
| Norway |
— | 906,570 | — | 906,570 | ||||||||||||
| United Kingdom |
1,170,265 | — | — | 1,170,265 | ||||||||||||
| United States |
12,134,109 | — | — | 12,134,109 | ||||||||||||
| Total Investments |
$ | 19,862,728 | $ | 3,498,835 | $ | — | $ | 23,361,563 | ||||||||
NOTE 4—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 5—Cash Balances
The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with State Street Bank and Trust Company, the custodian bank. Such balances, if any at period end, are shown in the Statement of Assets and Liabilities under the payable caption Amount due custodian. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.
11 Invesco Select Opportunities Fund
NOTE 6—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. Capital losses generated in years beginning after December 22, 2010 can be carried forward for an unlimited period, whereas previous losses expire in 8 tax years. Capital losses with an expiration period may not be used to offset capital gains until all net capital losses without an expiration date have been utilized. Capital loss carryforwards with no expiration date will retain their character as either short-term or long-term capital losses instead of as short-term capital losses as under prior law. The ability to utilize capital loss 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 October 31, 2013.
NOTE 7—Investment Securities
The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the six months ended April 30, 2014 was $13,656,313 and $1,063,072, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed federal income tax reporting period-end.
| Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis | ||||
| Aggregate unrealized appreciation of investment securities |
$ | 2,452,900 | ||
| Aggregate unrealized (depreciation) of investment securities |
(151,862 | ) | ||
| Net unrealized appreciation of investment securities |
$ | 2,301,038 | ||
Cost of investments is the same for tax and financial reporting purposes.
NOTE 8—Share Information
| Summary of Share Activity | ||||||||||||||||
| Six months ended April 30, 2014(a) |
Year ended October 31, 2013 |
|||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||
| Sold: |
||||||||||||||||
| Class A |
1,167,513 | $ | 17,175,322 | 294,065 | $ | 3,669,108 | ||||||||||
| Class C |
199,988 | 2,921,775 | 40,288 | 508,655 | ||||||||||||
| Class R |
4,180 | 59,526 | 4,190 | 52,101 | ||||||||||||
| Class Y |
153,470 | 2,197,910 | 178,443 | 2,176,694 | ||||||||||||
| Class R5 |
— | — | 2,374 | 28,137 | ||||||||||||
| Issued as reinvestment of dividends: |
||||||||||||||||
| Class A |
3,856 | 52,561 | 321 | 3,496 | ||||||||||||
| Class C |
496 | 6,719 | 35 | 379 | ||||||||||||
| Class R |
58 | 809 | — | — | ||||||||||||
| Class Y |
707 | 9,666 | 38 | 416 | ||||||||||||
| Class R5 |
35 | 474 | — | — | ||||||||||||
| Reacquired: |
||||||||||||||||
| Class A |
(583,985 | ) | (8,698,062 | ) | (39,476 | ) | (503,108 | ) | ||||||||
| Class C |
(5,240 | ) | (72,947 | ) | (9,979 | ) | (113,202 | ) | ||||||||
| Class R |
— | — | (238 | ) | (3,190 | ) | ||||||||||
| Class Y |
(5,804 | ) | (85,824 | ) | (14,293 | ) | (183,198 | ) | ||||||||
| Net increase in share activity |
935,274 | $ | 13,567,929 | 455,768 | $ | 5,636,288 | ||||||||||
| (a) | There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 86% of the outstanding shares of the Fund. IDI has an agreement with these entities to sell Fund shares. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as securities brokerage, distribution, third party record keeping and account servicing. The Fund has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially. |
| In addition, 21% of the outstanding shares of the Fund are owned by the Adviser. |
12 Invesco Select Opportunities Fund
NOTE 9—Financial Highlights
The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.
| Net asset value, beginning of period |
Net investment income (loss)(a) |
Net gains (losses) on securities (both realized and unrealized) |
Total from investment operations |
Dividends from net investment income |
Distributions from net realized gains |
Total distributions |
Net asset value, end of period |
Total return(b) |
Net assets, end of period (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 04/30/14 |
$ | 13.70 | $ | (0.03 | ) | $ | 1.51 | $ | 1.48 | $ | (0.07 | ) | $ | (0.12 | ) | $ | (0.19 | ) | $ | 14.99 | 10.89 | % | $ | 14,299 | 1.48 | %(d) | 2.74 | %(d) | (0.46 | )%(d) | 9 | % | ||||||||||||||||||||||||
| Year ended 10/31/13 |
10.63 | 0.11 | (e) | 3.13 | 3.24 | (0.08 | ) | (0.09 | ) | (0.17 | ) | 13.70 | 30.84 | 5,019 | 1.47 | 6.17 | 0.84 | (e) | 10 | |||||||||||||||||||||||||||||||||||||
| Period ended 10/31/12(f) |
10.00 | (0.00 | ) | 0.63 | 0.63 | — | — | — | 10.63 | 6.30 | 1,186 | 1.48 | (g) | 15.54 | (g) | (0.07 | )(g) | 7 | ||||||||||||||||||||||||||||||||||||||
| Class C |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Six months ended 04/30/14 |
13.59 | (0.08 | ) | 1.49 | 1.41 | (0.04 | ) | (0.12 | ) | (0.16 | ) | 14.84 | 10.48 | 3,474 | 2.23 | (d) | 3.49 | (d) | (1.21 | )(d) | 9 | |||||||||||||||||||||||||||||||||||
| Year ended 10/31/13 |
10.62 | 0.01 | (e) | 3.12 | 3.13 | (0.07 | ) | (0.09 | ) | (0.16 | ) | 13.59 | 29.87 | 527 | 2.22 | 6.92 | 0.09 | (e) | 10 | |||||||||||||||||||||||||||||||||||||
| Period ended 10/31/12(f) |
10.00 | (0.02 | ) | 0.64 | 0.62 | — | — | — | 10.62 | 6.20 | 90 | 2.23 | (g) | 16.29 | (g) | (0.82 | )(g) | 7 | ||||||||||||||||||||||||||||||||||||||
| Class R |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Six months ended 04/30/14 |
13.66 | (0.05 | ) | 1.51 | 1.46 | (0.06 | ) | (0.12 | ) | (0.18 | ) | 14.94 | 10.78 | 137 | 1.73 | (d) | 2.99 | (d) | (0.71 | )(d) | 9 | |||||||||||||||||||||||||||||||||||
| Year ended 10/31/13 |
10.63 | 0.07 | (e) | 3.12 | 3.19 | (0.07 | ) | (0.09 | ) | (0.16 | ) | 13.66 | 30.44 | 68 | 1.72 | 6.42 | 0.59 | (e) | 10 | |||||||||||||||||||||||||||||||||||||
| Period ended 10/31/12(f) |
10.00 | (0.01 | ) | 0.64 | 0.63 | — | — | — | 10.63 | 6.30 | 11 | 1.73 | (g) | 15.79 | (g) | (0.32 | )(g) | 7 | ||||||||||||||||||||||||||||||||||||||
| Class Y |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Six months ended 04/30/14 |
13.74 | (0.01 | ) | 1.51 | 1.50 | (0.08 | ) | (0.12 | ) | (0.20 | ) | 15.04 | 11.06 | 6,183 | 1.23 | (d) | 2.49 | (d) | (0.21 | )(d) | 9 | |||||||||||||||||||||||||||||||||||
| Year ended 10/31/13 |
10.64 | 0.14 | (e) | 3.13 | 3.27 | (0.08 | ) | (0.09 | ) | (0.17 | ) | 13.74 | 31.11 | 3,610 | 1.22 | 5.92 | 1.09 | (e) | 10 | |||||||||||||||||||||||||||||||||||||
| Period ended 10/31/12(f) |
10.00 | 0.00 | 0.64 | 0.64 | — | — | — | 10.64 | 6.40 | 1,049 | 1.23 | (g) | 15.29 | (g) | 0.18 | (g) | 7 | |||||||||||||||||||||||||||||||||||||||
| Class R5 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Six months ended 04/30/14 |
13.74 | (0.01 | ) | 1.51 | 1.50 | (0.08 | ) | (0.12 | ) | (0.20 | ) | 15.04 | 11.06 | 51 | 1.23 | (d) | 2.39 | (d) | (0.21 | )(d) | 9 | |||||||||||||||||||||||||||||||||||
| Year ended 10/31/13 |
10.64 | 0.14 | (e) | 3.13 | 3.27 | (0.08 | ) | (0.09 | ) | (0.17 | ) | 13.74 | 31.12 | 46 | 1.22 | 5.90 | 1.09 | (e) | 10 | |||||||||||||||||||||||||||||||||||||
| Period ended 10/31/12(f) |
10.00 | 0.00 | 0.64 | 0.64 | — | — | — | 10.64 | 6.40 | 11 | 1.23 | (g) | 15.35 | (g) | 0.18 | (g) | 7 | |||||||||||||||||||||||||||||||||||||||
| Class R6 |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Six months ended 04/30/14 |
13.73 | (0.01 | ) | 1.51 | 1.50 | (0.08 | ) | (0.12 | ) | (0.20 | ) | 15.03 | 11.07 | 14 | 1.23 | (d) | 2.34 | (d) | (0.21 | )(d) | 9 | |||||||||||||||||||||||||||||||||||
| Year ended 10/31/13 |
10.64 | 0.13 | (e) | 3.13 | 3.26 | (0.08 | ) | (0.09 | ) | (0.17 | ) | 13.73 | 31.02 | 13 | 1.22 | 5.89 | 1.09 | (e) | 10 | |||||||||||||||||||||||||||||||||||||
| Period ended 10/31/12(f) |
10.80 | 0.00 | (0.16 | ) | (0.16 | ) | — | — | — | 10.64 | (1.48 | ) | 10 | 1.23 | (g) | 11.37 | (g) | 0.18 | (g) | 7 | ||||||||||||||||||||||||||||||||||||
| (a) | Calculated using average shares outstanding. |
| (b) | Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable. |
| (c) | Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable. |
| (d) | Ratios are annualized and based on average daily net assets (000’s omitted) of $9,437, $1,167, $101, $4,705, $49 and $13 for Class A, Class C, Class R, Class Y, Class R5 and Class R6 shares, respectively. |
| (e) | Net investment income (loss) per share and the ratio of net investment income (loss) to average net assets includes significant dividends received during the period. Net investment income (loss) per share and the ratio of net investment income (loss) to average net assets excluding the significant dividends are $(0.04) and (0.37)%, $(0.14) and (1.12)%, $(0.08) and (0.62)%, $(0.01) and (0.12)%, $(0.01) and (0.12)%, $(0.02) and (0.12)%, for Class A, Class C, Class R, Class Y, Class R5 and Class R6 shares, respectively. |
| (f) | Commencement date of August 3, 2012 for Class A, Class C, Class R, Class Y and Class R5 shares and September 24, 2012 for Class R6 shares, respectively. |
| (g) | Annualized. |
13 Invesco Select 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 November 1, 2013 through April 30, 2014.
Actual expenses
The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled “Actual Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical example for comparison purposes
The table below also provides information about hypothetical account values and hypothetical expenses based on the 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.
| Class | Beginning Account Value (11/01/13) |
ACTUAL | HYPOTHETICAL (5% annual return before expenses) |
Annualized Expense Ratio |
||||||||||||||||||||
| Ending Account Value (04/30/14)1 |
Expenses Paid During Period2 |
Ending Account Value (04/30/14) |
Expenses Paid During Period2 |
|||||||||||||||||||||
| A | $ | 1,000.00 | $ | 1,109.70 | $ | 7.74 | $ | 1,017.46 | $ | 7.40 | 1.48 | % | ||||||||||||
| C | 1,000.00 | 1,104.80 | 11.64 | 1,013.74 | 11.13 | 2.23 | ||||||||||||||||||
| R | 1,000.00 | 1,108.60 | 9.04 | 1,016.22 | 8.65 | 1.73 | ||||||||||||||||||
| Y | 1,000.00 | 1,110.60 | 6.44 | 1,018.70 | 6.16 | 1.23 | ||||||||||||||||||
| R5 | 1,000.00 | 1,110.60 | 6.44 | 1,018.70 | 6.16 | 1.23 | ||||||||||||||||||
| R6 | 1,000.00 | 1,110.70 | 6.44 | 1,018.70 | 6.16 | 1.23 | ||||||||||||||||||
| 1 | The actual ending account value is based on the actual total return of the Fund for the period November 1, 2013 through April 30, 2014, 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 181/365 to reflect the most recent fiscal half year. |
14 Invesco Select Opportunities Fund
Invesco mailing information
Send general correspondence to Invesco Investment Services, Inc., P.O. Box 219078, Kansas City, MO 64121-9078.
Important notice regarding delivery of security holder documents
To reduce Fund expenses, only one copy of most shareholder documents may be mailed to shareholders with multiple accounts at the same address (Householding). Mailing of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact Invesco Investment Services, Inc. at 800 959 4246 or contact your financial institution. We will begin sending you individual copies for each account within 30 days after receiving your request.
Fund holdings and proxy voting information
The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The most recent list of portfolio holdings is available at invesco.com/completeqtrholdings. Shareholders can also look up the Fund’s Forms N-Q on the SEC website at sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are shown below.
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 959 4246 or at invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.
| Information regarding how the Fund voted proxies related to its portfolio securities during the most recent 12-month period ended June 30 is available at invesco.com/proxysearch. The information is also available on the SEC website, sec.gov. Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the US distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd. |
|
| SEC file numbers: 811-06463 and 033-44611 | SOPP-SAR-1 | Invesco Distributors, Inc. |
| ITEM 2. | CODE OF ETHICS. |
There were no amendments to the Code of Ethics (the “Code”) that applies to the Registrant’s Principal Executive Officer (“PEO”) and Principal Financial Officer (“PFO”) during the period covered by the report. The Registrant did not grant any waivers, including implicit waivers, from any provisions of the Code to the PEO or PFO during the period covered by this report.
| ITEM 3. | AUDIT COMMITTEE FINANCIAL EXPERT. |
Not applicable.
| ITEM 4. | PRINCIPAL ACCOUNTANT FEES AND SERVICES. |
Not applicable.
| ITEM 5. | AUDIT COMMITTEE OF LISTED REGISTRANTS. |
Not applicable.
| ITEM 6. | SCHEDULE OF INVESTMENTS. |
Investments in securities of unaffiliated issuers is included as part of the reports to stockholders filed under Item 1 of this Form.
| ITEM 7. | DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. |
Not applicable.
| ITEM 8. | PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. |
Not applicable.
| ITEM 9. | PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. |
Not applicable.
| ITEM 10. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. |
None.
| ITEM 11. | CONTROLS AND PROCEDURES. |
| (a) | As of May 23, 2014, an evaluation was performed under the supervision and with the participation of the officers of the Registrant, including the Principal Executive Officer (“PEO”) and Principal Financial Officer (“PFO”), to assess the effectiveness of the 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 May 23, 2014, 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 second fiscal quarter of the period covered by the report that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting. |
| ITEM 12. | EXHIBITS. |
| 12(a) (1) | Not applicable. | |
| 12(a) (2) | Certifications of principal executive officer and principal financial officer as required by Rule 30a-2(a) under the Investment Company Act of 1940. | |
| 12(a) (3) | Not applicable. | |
| 12(b) | Certifications of principal executive officer and principal financial officer as required by Rule 30a-2(b) under the Investment Company Act of 1940. | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Registrant: AIM International Mutual Funds (Invesco International Mutual Funds)
| By: | /s/ Philip A. Taylor | |
| Philip A. Taylor | ||
| Principal Executive Officer | ||
| Date: |
July 7, 2014 | |
Pursuant to the requirements of the Securities and Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
| By: | /s/ Philip A. Taylor | |
| Philip A. Taylor | ||
| Principal Executive Officer | ||
| Date: |
July 7, 2014 | |
| By: | /s/ Sheri Morris | |
| Sheri Morris | ||
| Principal Financial Officer | ||
| Date: |
July 7, 2014 | |
EXHIBIT INDEX
| 12(a) (1) | Not applicable. | |
| 12(a) (2) | Certifications of principal executive officer and Principal financial officer as required by Rule 30a-2(a) under the Investment Company Act of 1940. | |
| 12(a) (3) | Not applicable. | |
| 12(b) | Certifications of principal executive officer and Principal financial officer as required by Rule 30a-2(b) under the Investment Company Act of 1940. | |